The Story Behind the Meme Wealth Explosion: Hype or a New Economic Model? | TrendX Research Institute

As of December 1st, the TrendX platform's data statistics for BTC, ETH, and TON are as follows:

The number of discussions about BTC last week was 14.31K, a decrease of 26.18% from the previous week; the price last Sunday was $96,743, a decrease of 1.7% from the previous Sunday.

The number of discussions about ETH last week was 5.11K, an increase of 7.53% from the previous week; the price last Sunday was $3,699, an increase of 6% from the previous Sunday.

The number of discussions about TON last week was 785, a decrease of 1.1% from the previous week; the price last Sunday was $6.63, an increase of 20% from the previous Sunday.

From Ethereum's smart contracts to EOS's public chain, and then to Layer 2, cross-chain, metaverse, and blockchain games, technology continues to advance, and new concepts emerge constantly. However, with the increase in airdrops transforming into point systems and high-threshold activities, retail investors may feel confused, limiting the growth of new users. In contrast, the narrative of the Meme project is simple and direct, relying on shared cultural genes to build consensus without the need for in-depth understanding of technical details. With the rise of Solana and the popularity of one-click coin issuance platforms like Pump.fun, the participation difficulty of the Meme project has decreased, code vulnerability issues have been resolved, allowing core features such as cultural attributes, funds, and communities to play a more direct role.

The above changes reveal two trends in the crypto community: on one hand, new projects are becoming increasingly complex, with higher barriers to entry; on the other hand, the Meme project has lowered the barriers to entry through minimalism and specialized division of labor. In a market with limited funds and users, the market seems to be tilting towards the Meme project.

With the growing interest of retail investors in Meme coins, institutional investors have also begun to shift their focus to this area. Wintermute, known for its high hit rate of Meme coins listed, has been continuously increasing its holdings of NEIRO on Ethereum since September 6th. As of October 15th, Wintermute held approximately $10.52 million worth of PEPE, becoming its third largest holding token, and also held approximately $3.48 million worth of NEIRO, becoming the market maker with the most public holdings. Three other market makers and a venture capital firm also hold NEIRO_ETH tokens. Jump Trading also holds approximately $1.2 million worth of SHIB.

From a capital perspective, the motivation to invest in Meme coins is obvious. Compared to traditional value projects, venture capital (VC) requires a large initial investment and a long wait for project development and operation. Meme coin investment is more direct, allowing the selection of market-validated targets, holding tokens without the need for lock-up, and using capital advantages for trading, achieving instant liquidity and high returns, which better aligns with the pursuit of capital interests.

Do not understand the wealth effect of Meme coins as a derogatory concept of mindless nouveau riche. This is a neutral and eye-catching feature of Meme coins, attracting capital and retail investors at a rapid pace, reaching every participant in the crypto industry.

Recently, LBank released a poster on social media showing the recent surge in Meme coin prices. The poster shows that since GOAT was first listed on the platform, its highest increase reached an astonishing 10,599.20%, and the average increase of newly listed Meme coins also reached 1,895.81%. Although the traditional track of the crypto field has cast doubt on holding Meme coins, making some users feel frustrated, it has instead motivated them to seek social recognition and data support. They are not only actively promoting Meme coins in the community but also building emotional connections with like-minded people in the process.

According to official data from LBank, the platform listed more than 50 Meme coins in the third quarter, with 28 of them having an increase of over 200%, 14 with an increase of over 500%, and 9 with an increase of over 1,000%.

However, it is also worth noting that while some make money, others lose everything. A recent report by CoinWire shows that two-thirds of the over 1,500 Meme coins promoted by hundreds of KOLs are "dead," with a drop of over 90%. In contrast, Wintermute's market-making Meme coin TOP25 holdings have 64% of the tokens already listed on Binance, with a frighteningly high listing rate. Tokens such as PEPECOIN, NEIRO, GOAT, POPCAT, and REKT are among its top holdings.

To invest smartly in Meme coins, one must understand the driving factors behind the success of Meme coins that have multiplied hundreds or thousands of times.

We can analyze the driving factors behind the success of a Meme coin from the following four aspects:

• Emotional resonance triggered by narrative content:

Meme coins convey emotions and stories through images, such as the affinity of $Doge for dog lovers, and the images of the sad little frog and sloth of $PEPE, which were popular emoticons and movie characters before becoming memes. In terms of emotional transmission, the narrative of Meme coins is simple and direct, easy for the public to understand and accept. Similar to the evaluation of "The Three-Body Problem" that "for every additional formula, there will be ten thousand fewer readers," down-to-earth content is more likely to become popular, making it easy to build a simple but pure mass base.

• Macroeconomic and market environment:

The current bull market has indeed attracted many new investors, but they may feel confused and unable to start investing due to complex technical concepts. Meme coins, with their simplicity and low prices, provide an opportunity that is easy to understand and participate in. The downturn of the traditional economic cycle also promotes the popularity of Meme coins, as the weakness of the traditional economy reduces the public's desire to explore new technology, and Meme coins, with their low energy consumption and easy absorption, meet the market's demand.

• Promotion by KOLs and community dissemination:

KOLs play a key role in the creation, issuance, and promotion of Meme coins. Their statements have a strong provocative effect and can influence people's investment decisions. Community promotion is also an important part of Meme coin marketing. The interaction between KOLs and the community helps to form a consensus and drive the price bubble.

• Wealth effect and FOMO sentiment:

The development of Meme coins benefits from their myth of wealth creation and the FOMO panic of missed opportunities. Stories of rapid wealth through promotion and the FOMO sentiment spread in the community give a boost to Meme coins that are already prepared to take off, bringing multiple buffs and often causing prices to soar.

The integration of Meme and DeFi has opened up new avenues, allowing users to play more diverse roles in the token economy, surpassing mere market speculation and speculation. Users can now actively participate in the Meme ecosystem through various means such as staking, mining, and liquidity support.

Staking mechanism: Meme holders have the opportunity to stake their tokens on DeFi platforms in exchange for rewards. These rewards may be presented in the form of additional Meme or other tokens, providing incentives for users to hold and actively participate in the Meme ecosystem.

Mining process: Mining usually involves lending held Meme through smart contracts in exchange for interest income. On Meme's DeFi platform, these lending activities promote various activities such as trading and liquidity support, allowing users to earn profits from participating in these activities.

Liquidity support: Meme can also create liquidity pools, allowing users to deposit their held Meme tokens into the pool for trading on decentralized exchanges. This process not only allows users to share trading fees but also contributes to increasing the liquidity and trading efficiency of the Meme coin market, allowing users to receive corresponding rewards.

In summary, we can see that the success of Meme coins is not just hype but the result of multiple factors working together. When discussing the future development of Meme coins, we can approach their integration with DeFi with an open mind. This integration may provide Meme coin holders with more diverse participation opportunities, to some extent surpassing simple market speculation. This integration may indicate that Meme coins are not just short-term wealth creation tools but may develop into a new community-driven economic model. In the future, Meme coins may continue to attract more innovation and capital, bringing new vitality and possibilities to the global economy.

Research Report

Follow Us

TrendX is a profit strategy treasury powered by AI and DePIN, providing efficient one-click trading and investment solutions designed for layered net asset users. Since its establishment in 2022, TrendX has processed over 20TB of on-chain and off-chain data, and analyzed tens of billions of data points in real-time to discover investment opportunities. Adhering to the concept of "change is opportunity," TrendX allows users to directly obtain the best investment insights and execute on-chain transactions with one click.

Website: https://app.trendx.tech/

Twitter: https://twitter.com/TrendX_tech

Investment carries risks, and the project is for reference only. Please bear the risks on your own.