Musk Sparks Meme Craze Again, What's Behind the Meme Takeoff?

Recently, with the support of Elon Musk on Twitter, meme assets such as Troll and Zuzalu have skyrocketed in popularity. So, what exactly are memes? Why are meme assets in high demand? How should we view meme assets?

What are meme assets

The term “meme” originates from Richard Dawkins’ book “The Selfish Gene” and refers to the basic unit of human culture. It can take the form of various types of information, ideas, or behaviors that are transmitted between people through imitation and dissemination. The purpose of “meme” is to convey specific phenomena, themes, or meanings and resonate within society. With the development of the internet, “meme” now extends beyond traditional text or images and includes digital forms such as tokens and NFTs.

These “memes” are rapidly, widely, and amusingly disseminated through social media and the internet, becoming an integral part of internet culture and popular culture. They can express people’s emotions, opinions, humor, and irony, while also reflecting current social trends and cultural phenomena.

The core concept and appeal of meme assets come from meme culture. Meme assets attract investors’ attention by using humorous and entertaining meme images, concepts, or ideas. They are a social infrastructure that rapidly spreads within an industry through community promotion and viral dissemination. What makes meme assets unique is their community-driven nature, with a fair distribution relative to institutional currencies. Community members actively participate in and drive the development of meme assets, and the success of meme assets is closely related to the level of community engagement.

Why meme assets are so popular

The development of the blockchain industry is no longer the reckless stage it was a few years ago.A few years ago, if you worked on multiple projects, investors would consider this a sign of lack of focus and unreliability, but now it is just the opposite. Launching a new project is actually a good thing, because it has the endorsement of previous projects, so the new project It’s not bad, everyone can better understand the relevant situation, euphemistically called ecosystem.

In such an environment, the industry has long been dominated by giants, with complex relationships. Early institutions have gradually grown into behemoths, with numerous institutions standing side by side, each backed by a string of vested interests. If you have no background or resources, no one will pay attention to you, retail investors will not understand you, and institutions will not trust you.The same product is completely different whether it is backed by an organization or not. For example, if well-known institutions like Pradigm, BN and other institutions invest in you, no matter how bad the product is, everyone will pursue it. After all, with institutional endorsement, even if it’s poor, they have resources and various connections. But if you have a product with nothing to offer, how can you compete with them?

Part of the leading institutions are dedicated to managing various assembly line projects online. The total market value of these projects is in the tens of billions of dollars range. In the Web2 world, projects with a valuation of over one billion dollars are known as “unicorns”. While high-quality projects with large market value continue to grow, low circulation projects are being dumped. However, the prices of these projects remain stagnant, leaving ordinary investors unable to profit. They end up being left out, catching only a small portion of the gains.

In this environment, meme assets have replaced the cottage coins of a few years ago, becoming an important part of the entire industry. The rise of meme assets can be considered inevitable and is closely linked to the anti-VC movement among retailers. The increase in BRC20 assets this year can be attributed to the bitcoin ecosystem and the relatively decentralized nature of project chips, which ensures a “fair distribution” without a single institution profiting exclusively. Instead, retail investors benefit from this profit, leading to a wealth effect and increased popularity.

Elon Musk, Godfather of Memes

To understand the development of memes, if there is one person who cannot be ignored, it is undoubtedly Musk. There is a close relationship between Musk and memes. It can be said that the current meme leader, Dogecoin, owes its development to Musk’s promotion. He has publicly supported Dogecoin multiple times, and every tweet of his will inevitably trigger extensive discussion and attention. Since Dogecoin skyrocketed in the last bull market and reached the top ten in market value, Musk’s reputation and influence in the blockchain industry have reached their peak. One of his tweets can cause significant fluctuations in the price of memes, and sometimes even trigger market frenzy. Due to his frequent tweets related to cryptocurrencies and memecoins, he has become one of the key focal points for retail investors in the industry.

Currently, Musk has nearly 169 million followers on Twitter. A small number of people will keep an eye on his Twitter 24 hours a day in order to discover on-chain projects or mass-produce meme tokens for the first time. Each of his tweets is published, or Twitter When the display settings are changed, several idiots named after Twitter content will be generated on the chain (mainly in Ethereum) in just a minute or two. For some projects that have special significance or are mentioned repeatedly, in just a few days, the market value of the project may soar from dozens of dollars to tens of millions or even hundreds of millions of dollars. The more representative ones are Q*, grok and recently troll.

Of course, these memecoins are very dependent on Musk. You can look at their historical trends. Most of them are in a wave unless Musk mentions them again. Before BRC20 broke out last year, most people liked to play on Ethereum, and Musk’s Twitter was one of the objects they focused on. They would even go so far as to find out why he posted it like this and what was the background source?

Those who want to be Musk

Recently, with the increasing popularity of the industry, many project founders have started to promote meme projects, which are mostly focused on creating hype and empty promises. Here, let’s briefly look at a few well-known ones and follow their Twitter accounts. In the early stages, they profited from the hype, but later they faced criticism and had to take over the projects. Let’s have a basic understanding of some characteristics of memecoins.

1) Matt Fury: Matt, The creator of Pepe, Matt Furie. Last year, the hottest memes were Pepe and later Bonk, both surpassing a market cap of over 1 billion USD at their peak. Pepe relied on its highly popular sad frog image and excellent team marketing to briefly gain popularity, even published on BN.

The founder of Pepe has also attracted everyone’s attention under this situation. During mid-2023, whenever the founder changed his profile picture, updated the signature, or tweeted, there would be related memecoins appearing on the blockchain, some of them with market caps ranging from tens of thousands to tens of millions of dollars, such as Dorkl and Fine. However, because he promoted too many projects, the profit effect eventually weakened, resulting in a decrease in influence. Nevertheless, he still occasionally promotes some projects.

2）Toly: Anatoly, the founder of Solana. Last year, SOL’s outstanding performance drew everyone’s attention to the development of its ecosystem. In this context, the first dog meme on the Solana ecosystem, Bonk, emerged. Silly, a memecoin, is a meme project repeatedly supported by Anatoly on Twitter. During the Solana Breakpoint conference, Anatoly appeared in a dragon costume, igniting the popularity of Silly. Additionally, due to SOL’s own popularity, Anatoly’s retweets on Twitter gained attention.

3）Sandeep Nailwal: The founder of Polygon. After Silly gained popularity, the Polygon network also launched a memecoin called Pory. On the day of its release, Polygon founder Sandeep retweeted related content, and Pory reached a peak market cap of over 40 million USD. Several Polygon team members publicly supported it, but its price has since experienced a significant correction, settling at just a few million dollars.

In addition to these, there are also Coq, Bear, and Inscription Market on the AVAX network, all of which have been publicly supported by AVAX officials or relevant personnel, leading to a large number of FOMO investors entering the market in the short term. Recently, project founders such as Lup and Bake have personally joined in.

It can be seen that most memetic assets only experience short-term popularity and quickly cool down after a wave. There are few that can sustain long-term success. Without the ability to sustain “controversy,” it’s easy to lose momentum, and newcomers take over. Most of the people mentioned here have their own followers and make targeted calls for specific purposes.

Factors that make it popular

Meme assets place more emphasis on the concept itself rather than the strength of the technology or financial system. As a result, the barrier to entry for issuing meme assets is low, which is both an advantage and a disadvantage. This means that anyone can issue meme assets, resulting in numerous projects being created, but few actually succeed. What factors contribute to the popularity of memes? Based on known projects, let’s review some reasons and feel free to add more.

1) Attracting users outside the circle: Since memecoins are essentially “air,” marketing becomes crucial. The best way to market is to allow people to make money. When people earn money, they will spread the word. If you ask people outside the crypto community, some may not have heard of mainstream assets like ETH or BNB, but most of them know about Dogecoin. Why is BRC20 so hot? One reason is its connection to the Bitcoin ecosystem, and another important factor is that people are making money, attracting more participants.

2) Simplicity and ease of understanding: A classic example is “Bitcoin is gold, Litecoin is silver.” Previously, it was mentioned by a teacher that Litecoin became popular simply because it had a catchy name. A well-crafted slogan can easily resonate with people and save a lot of explanation.

3) Familiarity and ease of dissemination: This industry is very similar to the entertainment industry, where having popularity leads to 80% success. The Pepe meme, for example, is widely known and circulated. Various well-known founders’ pet concepts, Musk-related concepts, BRC20’s “sats,” “piin,” and more.

4) Innovation: The stories behind these memes are novel and have innovative aspects. Memecoins like HarryPotterObamaSonic 10 Inu combine elements from Harry Potter, Obama, and Sony, while AIdoge was distributed to Arbitrum users at a 1:1 ratio. Rats had unique distribution models in its early stages, and so on.

5) Fairness: Fairness here is relative and refers to the initial distribution of tokens. It provides retail investors with the opportunity to obtain cheap tokens, which applies to most BRC20 tokens.

These are some characteristics of meme assets that have gained temporary popularity. Everything revolves around the term “popularity,” but regardless, there are people behind these projects driving them forward.

Summary

Although meme assets have high returns, only a few projects can truly succeed. Most of them are short-lived projects. After a wave, the popularity sharply declines, and then there is no more follow-up. Later participants take over from the previous ones, and only a few projects can truly succeed. Meme assets have become an important part of this industry, and understanding meme culture is crucial for tracking and conducting in-depth research in the crypto industry.

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