What makes memecoin so valuable

Source: Four Pillars; Compilation: White Water, Bit Chain Vision Realm

1. The composition of tokens value

Source: DEFILLAMA (Pump.fun)

Since the beginning of this year, the encryption industry has witnessed Memecoin’s enthusiasm, which marks the “MEMECOIN super cycle” many people call.The scale of this movement is obvious in the success of pump.fun. Pump.fun is a Memecoin startup platform that generates more than $ 1 million a day and promotes the issuance of 20,000 tokens.Solana has become the center of this Memecoin Revolution, and its DEX transaction volume has now surpassed Ethereum and other major chains.The surge in this activity is further reflected in the significant success of the Phantom wallet, and its peak period reaches 700 million MAU.

The influence of Memecoin far exceeds the imagination of only attracting encrypted enthusiasts -they have become the most powerful portable portal to introduce the newbies to the novice.However, this success is also accompanied by doubt.Critics believe that Memecoin is only for speculation, pointing out that they have high volatility and obvious lack of inherent value.This has triggered an important issue in the encrypted community: how should we truly understand and evaluate the value of Memecoin in today’s market?

In the encrypted ecosystem, the value of the tokens consists of three main parts:

• Value storage:Similar to Gold or Bitcoin, tokens can play a role in hedging inflation, and maintain their purchasing power over time.This is the most basic but challenging value form, because it requires a wide range of trust and consensus between users.

• Cash flow and transaction demand:This value stems from practicality -whether it is through transaction fees (such as ETH and SOL), charging income (such as DEFI token), or token destruction and other value cumulative mechanisms.It is very similar to traditional stocks. These tokens can be evaluated based on their business models and capabilities that generate sustainable cash flow.

• Formation, narrative and attention value:This component is driven by community interests and participation.In the encrypted market, the ability of the project to attract attention and establish a strong community usually becomes a key value -driven factor.The scope of narrative from technological innovation to financial infrastructure, as well as more and more cultural and social elements, such as modeling for coins.

It is worth noting that these elements do not exclude each other.Token usually reflects the unique combination of these three elements, and with the maturity and development of the project, this balance may change.The following is some noteworthy examples, which shows how these value elements are reflected in practice:

• Bitcoin:It reflects all three value components, but it is mainly recognized by its value storage attributes.In addition, it also has the actual use of payment and cross -border transfer. At the same time, it has a loyal community composed of Bitcoin extremists. They have strengthened the cultural significance of Bitcoin.

• Ethereum/Solana:The value of the two mainly comes from them as the basic currency of online transactions and operations. The increase in online activities directly promotes the needs of the tokens.Their established economic existence and network effects also help them develop reliable value storage.

• Dog coin:Although it originated from a MEME -driven tokens, its development has surpassed its initial attractiveness.Through its focus community and continuous correlation, it has reached a certain degree of stability, so that it can be stored as the value of its loyal holder group.

• Bonk:It was originally the MEME token in the Solana ecosystem, and later expanded its practicality through various applications such as Bonkbot and Moonwalk.This evolution has helped it develop sustainable value through real transaction demand and value.

Among the thousands of tokens, less than 20 agreements may really obtain recognition as a means of stable value storage, or to achieve a market fit required to generate continuous demand.The market value of most tokens in circulation mainly comes from the third element -the leading status, narrative intensity, and the ability to attract market attention.

2. What is the value of memecoin

As we discussed above, the fundamental factor that determines the value of Memecoin is fundamentally similar to other cryptocurrencies.In addition to the actual utility that includes the use of stablecoins for payment and transfer, the real potential of encryption lies in the concept of tokenization itself.In essence, encryption is good at transforming community participation and cultural value into tangible economic value, creating new markets, and establishing incentive -driven networks and communities.

This is why other encrypted infrastructure or platform originally existed -from DEFI protocols such as Uniswap and Jupiter to the middleware solutions such as prophet and re -pledge, and even basic infrastructure such as RollUps and DA layers.They all help promote the economic activities of tokens and interaction around it.

Source: Understand the rise of Memecoin

Most infrastructure and DEFI projects emphasize technology and financial innovation through their tokens, but their value mainly comes from narrative and attention economics, rather than as value storage or cash mobo.The uniqueness of almed currency is that they deliberately get rid of these traditional cryptocurrency narrative games, instead to embrace the basic value of community and entertainment.By doing so, they put forward ironic views on the limitations of venture capital and inside -drive market -driven markets and their usual superficial utility claims.

“In the short term, the market is a voting machine, but in the long run, it is a heavy machine.” – Benjamin Graham

Market events and investors’ emotions promote short -term price fluctuations, but as time goes by, assets usually return to their true basic value.This principle is not unique to stock -it is suitable for all assets, including physical assets, tokens and models.

Source: memecoinrace.xyz

Yes, compared with other assets, the volatility of the coin is greater and the response to market events is stronger.But their success or failure cannot be explained only with short -term transactions and speculation.Among thousands of aluminum coins, only a few successfully established a long -lasting community and maintained its value.The rest disappeared shortly after the initial speculation disappeared.

What caused this difference?The key is to understand that the factors are not just speculative tools -they are the tokenization expression of community and cultural value.In order to better understand this, let’s take a look at the three key factors that affect the value of the coin, or to say more widely, affect the cause value of the tokens:

1. Background and narrative

Powerful origin stories and fascinating narratives are the key elements to promote Memecoin’s initial success.Similar to genes, the cause of the cause is spread and evolved -but in the countless causes that appear, only those causes with a truly powerful narrative can obtain influence and appeal.

The most successful Memecoin has the ability to read the market and tap what attracts people’s attention.PEPE was launched during the dark period of the cryptocurrency market in early 2023. It brought urgent humor and relaxation, helping to change market emotions and trigger a wider MEMECOIN rejuvenation.After the FTX collapsed, Bonk became the hope lighthouse in the Solana ecosystem, reflecting the resistance to centralized power and the toughness of the community.Recently, Goat has established a narrative through MEMECOIN driven by AI -driven AI driven by Marc Andreessen, which has opened up its unique position.

The differences of these successful Memecoin are not only in their entertainment value, but also that they can make up the story that attracts the public’s imagination through the stories that resonate with market emotions and to win.

Influential characters usually play a key role in shaping Memecoin’s stories and success.Take Doge and Elon Musk as an example, WIF and ANSEM or SPX and Murad.These key figures are not only advocates; they have transformed into community pillars, which supports the growth of tokens, but also shaped its basic vision and values.

However, even the most striking story and the most powerful leadership cannot guarantee lasting success.Look at the MEMECOIN super cycle in early 2024 -despite being excited at the beginning, most of the issuance quickly became unrelated.Although the initial hype and FOMO may temporarily push the price, what happened next is often foreseeable: once the momentum stagnates, it will become a desperate exit competition.Previously, the value of the tokens plummeted to zero.This rising cycle has become a very common model in the field of Memecoin.

2. Community and brand

In “A Brief History of Humanity”, Uvar Herram pointed out a decisive characteristic of human beings: we believe in the ability of fictional things.As more and more people believe in these fictional things, they will become more powerful and authentic.Models are roughly the same as the operation of the community.They spread through the most viral ideological forms (fun and culture). As more and more people participate in it, they will form a powerful network effect and real cultural value.

Source: Milady Maker

In order to convert Memecoin’s initial heat and capital into real success -sustainable value -it must build a strong community and brand foundation.Tokens like BONK and WIF, as well as NFTs like Pudgy Penguins, Cryptopunk, and Milady, have evolved from simple Meme to cultural symbols and well -known brands.Just as luxury goods and fashion brands represent certain lifestyle and values, these digital assets give the holders a unique identity and sense of belonging.When people hold these tokens and participate in their communities, they are not just speculative -they are participating in a new form of cultural consumption.

Compared with traditional brands or cultural groups, the uniqueness of the encrypted community is how they combine cultural value with economic incentives.Take DEGEN as an example -it directly rewards the content creation and social participation of the early Farcaster community.Participants are not just consumers; they are active value creators.This has formed a positive feedback cycle. Earlier and more active participation will bring greater returns, and encourage early adoption and long -term community loyalty.

3. Organic growth and fairness

Source: Guiding principle with credibility and neutrality

Decentralization is not only important for the blockchain network, but also the basic requirement for Memecoins to build an organic community.This is consistent with the “credible neutral” as Vitalik Buterin.People are highly sensitive to discriminatory conditions or interests that are conducive to specific groups or individuals.Taking Vitalik as an example: When the social media platform reviews specific political ideology or content, people will feel angry, but when takeaway applications filter out the restaurant with lower scores, they will not complain.

As mentioned earlier,The real value of Memecoin depends on how many people resonate with the MEME culture and community and hope to participate.Therefore, organic growth and fairness are not only moral requirements, but also actual necessities.How the tokens are fair and transparently distributed and distributed as a key criterion for winning people’s trust and inspiring them to participate.

This is especially important for community participation.The success of the tokens issuing platforms such as pump.fun lies not only to reduce the threshold for token issuance, but also to respond to the market’s demand for early token investment fairness and transparency.

Source: x (@mustStopmurad)

The demand for fairness and organic growth can be measured through quantitative indicators of the token community.Murad emphasized that Memecoin’s community, he emphasized the ranking of medium holders and the HHI (HHI (Herfenidal-Helhman Index) index) to evaluate the fair allocation of tokens and the loyalty of the holder.HHI was originally aimed at measuring the degree of market monopoly to determine the concentration between tokens.

Summarize

Those who are still skeptical of Web3 and cryptocurrencies may regard blockchain and tokens as gambling and speculative carriers.However, under this layer of appearance, there is an ideological form aimed at establishing decentralized, better financial systems and new Internet structures.No matter what kind of goodwill, speculative demand has undoubtedly become a powerful catalyst for the birth and development of the industry.After countless repeated experiments, we have reached such a stage:The predictable market can replace traditional media. Stablecoin has attracted attention as the next -generation payment network, and blockchain applications have become available.

Memecoins also has a deeper meaning under its seemingly worthless and unopened gambling and speculative appearance -they represent the integration of tokens, communities and culture.Memecoins reflects the purest form of decentralization and fair ideal of encrypted ecosystems.They show that they can create sustainable value through community participation and transparent operations without complicated technology or financial products.This shows,In addition to simply speculative fanaticism, there are more possibilities, blockchain technology can achieve new social networks and services.

More Memecoin will continue and die.Through these innovations and failures, we gradually discovered the reason why the digital community’s booming development, and how the tokened economy is better consistent with human behavior and social dynamics.Although this continuous evolution is volatility, it is steadily guiding us to a more complicated and sustainable community -driven value creation model in the digital age.