Original author: Ling Yun, Miss Cat
原文来源： AN Universe
Value investment is empty, and the meme is in the palace overnight. Today, AU Research will explain the economic principles of the Meme explosion and how to screen reliable targets.
01 What is a Meme?
The term meme was first proposed by the British scholar Dawkins in his book "The Selfish Gene", he believed that just like the genes in biology, culture also has a basic unit, carrying the information of cultural transmission.
The meme "meme", also translated as meme, mystery, etc., originally comes from the Greek word mimema, which means "something to be imitated". Biologist Richard Dawkins first mentioned it in his 1976 book The Selfish Gene and reduced it to the word "meme", which is similar to the sound of genes. In the context of "evolutionary theory" and "cultural change", the meme is formally defined as a small cultural unit that is genetically similar and is constantly copied and imitated from person to person. Mainland scholars He Tiantian and He Xuelin translated memes as "memes" in 2003.
Richard Dawkins draws an analogy to the evolutionary rules of biology. Memes encompass a wide range of religions, rumors, news, knowledge, ideas, habits, customs, and even slogans, proverbs, phrases, words, and jokes. The replication of meme is not as accurate as the replication of genes in nature, it is not only a process of imitation, but also a process of independent recreation, in which the principle of survival of the fittest is also followed.
Just as genes jump from one person to another in the gene pool, memes complete their own reproduction by mimicking from one person's mind to another's mind in the memetic pool. When a meme takes over a person's mind, it's like a virus infects a cell, turning the mind into a tool to carry the meme. Just as not all genes reproduce successfully, some memes have widespread effects, while others quickly disappear.
02 How memes are disseminated
Dawkins identified three key factors that affect a meme's survivability: survivability, fecundity, and replication loyalty.
Survivability is less important than the other two factors, because the survival of the meme depends largely on the viability of the carrier. When the owner of the brain that carries the meme dies, or when the "CD" that carries the message is destroyed, the meme disappears.
Fecundity is comparatively more important. If this meme is a scientific discovery, the chances of his survival are largely determined by how many people are able to learn about the discovery, which can be roughly estimated by counting the number of times he has been cited in a reputable academic journal and the number of sales of the magazine. The stronger a meme's ability to reproduce, the more widely it can be spread and the better the chance of survival.
The loyalty of replication refers to whether a meme can be completely kept as it is when it is copied and disseminated, and the copied and accepted memes may be different due to the differences between the replicator and the recipient in terms of educational background, hobbies, age and gender, etc. In other cases, this is due to a conscious change made by the copied person when propagating the meme. A typical example is that in an academic paper, in order to match the author's point of view, only one aspect of a certain meme is selected to be elaborated, or analyzed from a new perspective, or it is combined with other memes to form a new meme. Copies with high loyalty can be preserved intact.
03 Meme爆火靠什么?
To put it simply, it can spread quickly by "conforming to the laws of communication". Therefore, to study MEME, we must first study the laws of communication, study market sentiment, and understand "how to mobilize people's emotions". This brings us to the SIR propagation model.
This is an epidemiological transmission model, but it is also applicable to information dissemination. The red line represents the person who is easily infected, the green line represents the person who is infected, the blue line represents the person who has recovered, and the horizontal axis represents time.
The core of information dissemination is to let the rate of infection exceed the speed of recovery, so that the number of infected people will continue to expand. Combining information and communication science and psychology, it means that more new people will be exposed to this information, and there will be a chance to infect more people.
Next, we will combine psychology and communication to find the law of meme distribution, and we will analyze these four core elements: MEME content, environmental atmosphere, KOL promotion, and wealth creation effect.
Main content: The essence of meme is to use pictures to tell stories and use pictures to convey emotions. For example, $Doge, for dog lovers, is affinity, and the long-tail effect is very sufficient, that is, many people will be attracted to cute and interesting puppies, and the more they look at them, the more they like them. $PEPE sad little frog was a much-loved meme before it became a meme. Sloths are also very popular in Zootopia. In terms of emotional transmission, the more straightforward and easy to understand, the better, there is a saying to evaluate "The Three-Body Problem", every time you add a formula, there will be 10,000 fewer viewers. That's it, the more down-to-earth it is, the easier it is to spread, and over-professionalism can only attract peers. To sum it simply, the cute, traditional world is liked, simple and straightforward, and easy to fire.
Environmental factors: This environment includes the macro environment, economic cycles. This bull market has brought a large number of outsiders into the industry, and they can't understand complex technologies, what oracles, what re-pledges, what security measures, and smart contracts. And meme is something they can understand and the price is very cheap, 10U can buy thousands, in case of a zero, that is ten times the coin, how many earth dogs can be more than zero in an hour, easy to use.
This round of bull market meme explosion is also affected by the downturn of the traditional economic cycle. To put it simply, it is a downgrade of consumption in the currency circle. Except for beautiful countries, most countries have experienced economic weakness in the past two years, and in this case, the public's desire to explore new technologies will be reduced, just like animals hibernating, living in a low-energy and easy-to-absorb behavior. In this case, the meme market will also be even hotter.
KOL promotion: the production of a meme, the issuance, the establishment of pools, the promotion of KOLs, and the promotion of the community are indispensable links. Regardless of their level, you will find that what they write and what they say is very incendiary and makes people feel willing to believe it. A lot of prices in the currency circle come from bubbles, and bubbles come from consensus, so the marketing of meme will inevitably have such means as KOL promotion and community communication.
Speaking of which, I would like to give you some risk warnings: you may see several community owners shouting at the same time to rush XX coins, and at this time, you will also be brainwashed by the overwhelming public accounts and think that a certain meme is particularly valuable. After rushing in, I found that it was either harvested by the selling trading robot, or the top of the mountain took over, or it was zeroed in ten minutes. Paying attention to KOLs in the English-speaking region and different countries will help you judge the cultural values behind memes, and cross-cultural consensus is the true consensus.
Wealth Creation Effect: The reason why Meme has developed into a mainstream track now is that it is easy to create wealth myths, and the FOMO (fear of missing opportunities) panic of missing opportunities must be mentioned. On the one hand, pulling the plate to convince people, on the other hand, promoting the myth of making wealth, who will make 30 million US dollars in two hours, and on the other hand, spreading FOMO fear in the community is also a common marketing method of meme, which is also very consistent with the laws of communication.
04 What is Meme Coin?
The reflection of meme culture in the crypto field is undoubtedly all kinds of memecoins and all kinds of meme NFTs. Memecoins, a subcategory of cryptocurrencies, focus on popular internet memes, pop culture references, and viral web trends. Notable examples of such memes include different versions of the Japanese Shiba Inu Kabosu and Pepe frog cartoons, and even extend to celebrities like Elon Musk.
According to a recent report by CoinGecko, the memecoin industry has become the most profitable sector so far this year.
The report shows that among the tokens with the highest market cap, Memecoin has the highest average return of 1,312.6%. By the end of the quarter, Memecoin, launched in March, had made it into the top 10 memecoin by market capitalization, including Book of Meme (BOME), Brett, and Cat in a Dogs World (MEW). Far beyond the RWA and AI tracks.
The creators of Memecoin utilize a variety of themes to attract the attention and trading volume of speculators in the crypto market. In many cases, well-known KOLs, as well as forums such as Reddit, have also joined the Memecoin craze. Unlike other cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH), which are primarily digital currencies, developers often only create memecoin as an easy social experiment, which brings limited technical value.
Many people consider Memecoin to be refreshingly different from the seriousness of traditional cryptocurrencies. Memecoins invites a new generation of users to blockchain technology in an approachable, unconventional way. However, there are also those who believe that Memecoins are extremely risky assets that undermine the legitimacy of ambitious blockchain projects. Whether you dare to rush at Meme or not, it's still important to understand how Memecoin works, where they're most commonly used, and some of the risks you should be aware of before jumping into the space. Today, we will discuss the correlation analysis between memes and cryptocurrencies.
05 memecoins的历史
The concept of memecoins can be traced back to the early days of cryptocurrencies, and it was not until 2013 that the original memecoin representative Dogecoin (DOGE) appeared, and memes came into the public eye. Dogecoin was created as a joke by software engineers Billy Markus and Jackson Palmer. Its logo is the popular Shiba Inu "Doge" at the time, and although it originated as a humorous attempt, Dogecoin's low unit price and fast block generation speed made it quickly popular in the coin circle.
Bitcoin is essentially the largest memecoin, and Bitcoin's value comes from people's consensus, which is based on decentralized beliefs and relies on cryptography to achieve it. At present, we usually call those cryptocurrencies that lack technological innovation due to pure consensus, jokes, and rapid propagation effects as meme coins.
From online tipping on sites such as popular community Reddit.com in Europe and the United States to charitable donations from international non-profit organizations, Dogecoin has become a common medium of exchange, not just a joke. With the success of Dogecoin came a slew of Memecoins inspired by web trends and jokes: coins like Pepe (PEPE) (inspired by the Sad Frog) and Shiba Inu (SHIB) have gained traction for their own merits and have taken the crypto community by fire.
In the development since then, the rise of DeFi (decentralized finance) and the NFT (non-fungible token) boom have provided fertile ground for more Memecoin experimentation.
06 memecoin与NFT
Memecoin has also capitalized on the NFT craze to transform viral internet personas into one-of-a-kind digital assets that users can own and trade. For example, a Memecoin project might create limited-edition NFTs that contain popular elements associated with their token. Users can buy, sell, or trade these NFTs on various NFT marketplaces. This allows meme enthusiasts to not only keep a piece of the Internet's history alive, but also support their favorite meme projects. Rare Pepes, and the subsequent Fake Rares collection, are examples of some of the earliest NFT projects developed from viral internet memes.
Shiba Inu Coin (SHIB), one of the most popular meme projects in the cryptocurrency space today, has also launched its own "Shiboshis" NFT. The collection includes 10,000 Shiba Inu-inspired cartoon characters that holders can use to fight within Shiba Eternity, one of the more popular gold games in the SHIB project.
Like many other popular NFTs, Meme NFT holders have established private communities for their collections, with some allowing holders to attend exclusive offline events and have access to relevant merchandise.
07 memecoin与Defi
DeFi refers to a series of blockchain-based financial applications that reinvent traditional financial services in a decentralized way. Memecoins leverages DeFi protocols to create innovative ways for users to participate in the use of their tokens, not just for simple speculation, but also for staking, mining, and providing liquidity.
Staking: Memecoin holders can stake their tokens on DeFi platforms to earn rewards. These rewards can be in the form of additional Memecoin or other tokens, providing users with an incentive to hold and actively participate in the Memecoin ecosystem.
The Shiba Inu Coin project is a prime example of how Meme projects are thriving by incorporating DeFi elements into their protocols. SHIB token holders can use its ShibaSwap platform to swap ERC-20 tokens and perform various tasks to earn SHIB and two other native tokens, BONE and LEASH. DoggyDAO acts as a decentralized autonomous organization (DAO) that provides token holders with additional yield by granting them voting rights on key protocol decisions.
Mining: Mining is mainly about lending your Meme coins to others in exchange for interest through smart contracts. Memecoin's DeFi platform uses these loans to facilitate various activities, including trading or providing liquidity, and users are compensated for the meme coins mined for these contributions.
Provide liquidity: Memecoin can also create liquidity pools, and users can use their Meme tokens to provide to others to trade on decentralized exchanges. This process allows users to earn a portion of the transaction fees and contribute to the liquidity and efficiency of the Meme coin market, as well as receive corresponding compensation income.
08 Risks of Memecoin Investment
Due to the virality of Memecoins, many projects have previously gained significant gains, but some have suffered sudden crashes.
1. Extreme volatility: The value of a meme coin can soar one moment and plummet the next, leaving investors vulnerable to significant financial losses. It is highly speculative in nature, so it is particularly susceptible to sudden market changes influenced by a central figure (such as Elon Musk), news, or online trends.
2. Over-reliance on sentiment: Many new meme coins often lack underlying technology or tangible use cases, which can lead to their value being entirely dependent on market sentiment. While some meme coins find creative ways to integrate NFTs, decentralized finance (DeFi), or community-driven initiatives, many projects focus primarily on the emotional value of humor and satire. This lack of fundamental technical value still tends to make memes a castle in the air.
3. Market manipulation: The conceptually-driven nature of the meme coin may appeal to bad actors who want to capitalize on the hype. Sometimes it deliberately creates false market news and community segmentation to drive up the price of the coin and sell its holdings at the price high, which usually results in significant losses for unsuspecting investors. These plans take advantage of the speculative and emotional nature of Meme Coin trading, so investors need to be cautious when taking heavy positions in Meme Coins.
4. Scams are plentiful: Many meme projects are launched by anonymous or pseudonymous developers, which makes it difficult to assess the credibility and intent behind the token. Now there are a lot of pre-sale memes, and after a certain amount of payment, the development team runs away. There are also thefts of official accounts to modify the pre-sale collection address, which will bring great risks.
09 Conclusion
Overall, Memecoins represent an interesting blend of digital currency, internet culture, and humor. As Memecoin continues to attract attention and evolve, how will they shape the broader crypto landscape, how will they find amazing applications beyond their hilarious origins, how can they discover early value, and when is it better to balance risk and return? The AU Research team will continue to provide you with more detailed explanations of tools and technical lines.