The Birth of Meme Wealth

Introduction

Humans chase trends, and trends create value. This is a recurring theme throughout human history.

Tulips = Trend + Limited Supply

This is the most famous and earliest super meme. In the 21st century, as we transitioned from the unlimited replication of Web 2.0 to the limited information of Web 3.0.

Information can spread at the speed of light on the Internet, and entities that carry pop value, from offline handbags, watches, and luxury cars, have become an uncopyable string of data online. Payment scenarios accompany mobile terminals reaching every corner of the world. Bong! The Meme explosion has given rise to a bizarre world of memes.

In the world of Meme coins, creating trends, especially internet trends, can directly monetize trends through tokens.

So, how do you create trends? This article first presents the theory of Meme popularity, and then deconstructs BTC and Bome’s rise using this theory.

The Secret to Cryptocurrency Popularity

The spread of information is essentially no different from the spread of diseases. In the field of communication, the model of information dissemination and viral transmission adopts the SIR model. Interested students can refer to it, but I won’t go into detail here.

The process of information dissemination is divided into two parts: information infection and information immunity.

Information infection: We transform ordinary people into followers of viral information.

Information immunity: Followers of viral information free themselves from the influence of viral information and become outsiders.

The key to making information go viral is to ensure that the infection rate exceeds the immunity rate. As long as the number of people infected exceeds the number of immune people in a unit of time, the number of followers of viral information increases, and the information spreads. Conversely, the trend declines. So how do you increase the infection rate and reduce the immunity rate?

Undoubtedly, if information can reach more new people (who have not yet been exposed to information), the infection rate will increase. The higher the quality of the information, the greater its stickiness, making it easier to spread and harder to shake off. Here, combining communication theory and social psychology, I summarize four important external factors for the success of memes:

Four Key Elements

Content

Content refers to information, which determines the attributes of dissemination. The preferred audience for dissemination and the priority selection of dissemination nodes are determined by the information itself. For example, $People naturally leans towards a leftist hue, and leftists naturally have feelings towards it. Using such a concept to appeal to left-leaning audiences has a natural advantage. Similarly, $Doge has an affinity for dog lovers, creating a bond that lasts over time.

Content stickiness: Some concepts are time-sensitive, such as memes about recent political figures or sports events. Once the political elections or sports events are over, real-world popularity diminishes, and the popularity of online memes driven by real-world information loses fuel. The state of infection surpassing immunity may gradually shift to infection falling below immunity.

Content affinity includes the ability for secondary dissemination. A good dissemination event must lower the dissemination threshold, making it simple and direct enough for ordinary people to spread it, thereby increasing the scope of dissemination.

Environment

The environment consists of two parts: time and space.

Time: Cryptocurrency market cycles

Time pertains to the unique economic cycles of the cryptocurrency circle. The outbreak of memes occurs when there is industry attention and users are willing to participate in gambling. Previously, memes about pure culture emerged in the middle to later stages of a bull market, after all project narratives have become stale. The recent meme craze sparked by inscriptions represents a significant change. Industry attention is drawn by memes themselves, and cultural dissemination is no longer an alternative when project content cannot be further elaborated, but rather becomes a way to attract traffic. Of course, the backdrop of Bitcoin’s inscription meme is: 1. The imminent approval of the BTC ETF, making BTC a mainstream asset that attracts mainstream attention. 2. The imminent halving of BTC, with an expected bull market after the halving, which will attract attention.

Space: Communities

Space refers to communities. A community is defined as a group of people with a common purpose. Having a common purpose means that this group of people has common attributes. If the disseminated content matches these attributes, it can achieve faster dissemination efficiency. Just as different diseases spread at different rates in different populations, malaria is more likely to spread in places with poor sanitary conditions, such as Africa, than in other places.

KOL Matrix

Science shows that different individuals have different abilities to spread popularity. Some people are particularly good at conveying their views to others and are especially persuasive to those around them. These people are super individuals, KOLs. The more KOLs we have, the more KOL matrixes we can form, influencing more groups of people. KOLs are closely connected to communities, and KOCs (Key Opinion Consumers) that have influence on communities are truly valuable nodes. If they cannot radiate the target audience, the value of KOLs will be greatly reduced.

Wealth Effect

The characteristic of the cryptocurrency circle is that the wealth effect leads attention. The so-called “rising trend persuades people” is using financial facts to assist in disseminating information. Therefore, memes exist with a self-reinforcing cycle between coin price and cultural dissemination. The higher the meme coin price rises, the wider the cultural dissemination, and the more steadfast the believers become. Conversely, the lower the meme coin price falls, the less favorable the cultural dissemination, and the more hesitant the believers become. Therefore, meme coins often exhibit attributes of extreme volatility.

Meme Operations Analysis

In this section, we will combine two cases to review projects and explain the theories mentioned above.

BTC

Many people do not recognize BTC as a meme coin. But that’s not important. The definition of meme originates from Darwin’s theory of evolution, which refers to the replication, mutation, and selection of information, similar to biological evolution. From a macro perspective, the consensus diffusion of BTC does not differ from the path of other meme coins. The only difference lies in the content being disseminated.

The content of BTC revolves around the fear of centralized financial collapse. In its genesis block, a news summary titled “British Chancellor on Brink of Second Bailout for Banks” was added. This news served as an anchor, becoming an anecdote. With each dissemination, the fear of centralized collapse was reinforced through this anecdote. Every financial storm reinforces the consensus of BTC. The stickiness of BTC’s consensus is extremely strong. Those who believe in BTC often find it difficult to abandon their faith. This stickiness of belief is widely recognized in the industry.

The use of fair mining in the consensus is a reciprocal design. In the early stages of the project, as long as computing power is invested, BTC can be obtained. Satoshi Nakamoto himself also airdropped to some users early on, which can also be seen as reciprocal. The act of investing computing power itself can be regarded as recognition of the BTC project. Through behavior, those who obtain BTC are psychologically recognized. In terms of supply, BTC achieves a limit of 21 million coins through programming, emphasizing scarcity. Satoshi Nakamoto’s document also depicts BTC being accepted worldwide, reaching $1000. Although this seems conservative today, in the era when BTC had no price, it was a tantalizing promise.

The early stage of a meme is as vulnerable as the initial spread of a new virus. In the initial spread of memes, because the number of nodes available for dissemination is very limited, the likelihood of successful dissemination must be increased. The release time node of the BTC whitepaper was in 2008, although it was not in a bull market, it was a time when centralized finance was in turmoil. Everyone was doubting the sustainability of centralized finance. Its time node and narrative content highly coincided with the early spread of memes, which was very necessary.

The community chosen for BTC in the early stages was carefully selected. Satoshi Nakamoto first chose the cryptocurrency community. The concept of the cryptocurrency community is highly consistent with the design concept of BTC, with a sense of urgency and mission for decentralization. Developing them as seed users had the least resistance.

The initial dissemination KOL matrix for BTC included top figures from the cryptocurrency community: Dai Wei, Fal Finney, Jon Matonis, Laszo Hanec, among others. Here is just one example: in an email Satoshi Nakamoto sent to Dai Wei, it was stated that the BTC concept and design not only realized Dai Wei’s ideas in his paper, but Fal Finney also endorsed such a product. This gained the product’s credibility endorsement. These people may not be well-known outside the crypto community, but they have strong influence within the crypto circle. Their involvement helped BTC quickly take root in the crypto community.

Bome

Before the launch of Bome, whether artist Dark Farm intended or not, he was well prepared for the popularity of a meme. In terms of content, Bome is a book of memes, documenting the history of memes. In today’s environment, this is of historical value. As I mentioned earlier, by issuing coins through culture, it has become a leading role in the industry this year, rather than just being an alternative when there are no projects to issue. Whether it’s Solana, Avalanche, or Ethereum, all consider memes as important means of attracting new users. Investors are also gradually recognizing meme tokens as assets. The Book of Memes is a culmination of meme culture and naturally receives attention. This concept also has a natural affinity for the meme-chasing crowd.

In terms of timing, the launch occurred during a bullish market in the industry, with ample funds available. Regarding the community, Dark Farm had previously been deeply involved in meme culture within the ETH ecosystem, so the creation of the Book of Memes project was not a random idea. He had a certain influence within the meme community in the crypto space. His previous notable works were already highly regarded within the community even before the popularity of the Book of Memes project. The fact that their floor price remained higher than the issuance price indicates that his achievements were recognized by the community, and he had a certain level of visibility within the community. This community overlaps significantly with the community of Dogecoin enthusiasts.

Then we look at the reposting and diffusion behavior of Bome’s posts. Many of them are supported by KOLs who are also artists. Although these artists are not big, they are more authentic and cohesive to the users. When Meme develops to a certain stage, it can gain interaction with other traffic, such as the promotion of Beeple. As a Meme artist on Twitter, DarkFarm also has a strong sense of traffic and is good at using super nodes to enhance the influence of his projects.

The avatars of early evangelists show that the original evangelists came from the SMOWL community. Having a community takes Bome’s meme right past its most vulnerable stage. This was also part of DarkFarm’s plan. In his Bome post, SMOWL appeared to corroborate with these initial KOLs. After Bome’s success, SMOWL’s NFT price also jumped to the floor price of 0.7, giving these community members generous returns. The entire trading behavior forms a perfect closed loop.

I’ve said before that the three pillars of projects in the Internet age are: traffic, technology, and capital. In the world of memes, technology and products do not exist. The success of meme projects lies in the mutual matching of traffic and capital. Capital can drive up token prices, but solely relying on increasing token prices is not effective in attracting retail investors.

This also indicates that for memes, there can only be one Bome in each era. From the perspective of the traffic economy, all other memes are competitors to Bome. If Bome’s traffic is diverted, Bome will collapse, making it even more difficult for other lesser-known memes to gain traction. If Bome is not diverted, the lesser-known memes will remain insignificant.

Summary

Meme tokens represent one of the most distinctive phenomena in the attention economy of the Web3 era. Attention is directly endowed with financial value. The matching of capital and attention creates meme tokens.

Creating attention involves interacting with people. In addition to the unique wealth effect, emphasizing the KOL matrix, dissemination environment, and alignment of information content are also important. Bringing all these factors together is not a simple task. Therefore, creating a viral meme is not an easy feat. When examining the birth and popularity of a meme, these four factors should be considered.

When investing in meme tokens, one can consider the phenomenon of attention feedback. For example, the Bome community has driven the value of the SMOWL community.

Statement:

1. This article originally titled “加密流行：Meme 财富的诞生” is reproduced from [marsbit]. All copyrights belong to the original author [Armonio]. If you have any objection to the reprint, please contact Gate Learn team, the team will handle it as soon as possible.

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