Meme Tokens 2.0 or ICO 2.0?

In the bull market, when BTC goes up and breaks its all-time high (ATH), the accumulation process for a new ATH is underway. This is good for altcoins, which go up next. SOL and ETH are the first altcoins to start moving, just like many other Layer 1’s. Investors are looking for ways to maximize their returns on ETH because of gas fees and exploring alternative options, which brings us to Layer 2. Projects like BASE & ARBITRIUM, DOGECHAIN, OPTIMISM, POLYGON, and others that are built on ETH are starting to grow too. Once these altcoins start to gain traction, investors start looking for ways to diversify their profits.

Things started to change this year. Once ETFs were approved for BTC, altcoins didn't see much growth. They rarely took off. While some meme tokens saw huge gains (up to 10x), altcoins tried to triple their value and then fell back to their original levels. The same thing happened again after the second big spike, this time with an ETF for ETH. Once again, while ETH peaked, altcoins stayed at the bottom. And yes, meme tokens were making waves again.

Crypto wallet activity is at an all-time high, and it is still on the rise. Over the course of the year, it has tripled, compared to previous cycles that saw a tenfold increase. I'm seeing the greatest increase in wallet activity on Solana and Base. This suggests that the alt season hasn't started yet, and could indirectly confirm the BTC supercycle theory.

The rise of decentralized launchpads has been a major driver of the growth of these networks. You don't need to know any coding to create a token. But launchpads have some technical limitations, they're great for creating template tokens. It's worth noting that the only category of template tokens that can attract a large community are meme tokens! That's why the most successful and first Launchpads is based on Solana and was designed to run meme tokens. Solana is where a lot of memes started. Is that just a coincidence? It's not a coincidence. It's a trend. Many memes launched on pump.fun are later launched as analogs on other networks, where some of them become more successful than the original projects. The second most popular moonshot launchpad from dexscreener also started on Solana and now supports Base. ETH saw little change in developers’ activity from year to year (though it's still the leader in this area). BTC and its L2s, on the other hand, have seen a significant increase in development activity, doubling in the past year. This growth is likely to continue and set new trends in the coming year.

To avoid confusion, I will refer to the new Meme tokens currently trending in the short-term market as "Memes 2.0". There are several differences between Memes 2.0 and Meme tokens from previous cycles. The main difference is how the tokens were launched. Memes 2.0 launch on launchpads using the Bonding Curve, which we call a fair launch. What makes this launch different is how the tokens are distributed after they're listed on the dex. Specifically, only a small percentage of the supply is available for purchase in the liquidity pool. This means that if you try to sell a large number of tokens, the price will drop dramatically. In fact, 99.999% of these tokens going to 0 after being listed on dex. This is an important point. I like to think of this as natural selection. If meme 2.0 has a strong narrative and a healthy community by the time when whales and/or developers are out, a CTO (community token owned) is created. The community takes ownership of the project's development. With a strong community, the project is already more likely to succeed than at the Bonding Curve level. A short-term speculative meme 2.0 can become a long-term meme. So the main things that differentiate memes 2.0 from those of previous cycles are how popular the CTOs are, how the tokens are distributed, and how they're launched. Some good examples are GOAT, Michi, FWOG, and MOODENG.

On top of that, memes 2.0 have become a kind of tokenized representation of everything that happens in the world. It's like a news channel. If you want to see what's trending, just go to pump.fun and look at the top active tokens :)

Murad's theory of the memcoin supercycle suggests that we may soon see a cycle in which memcoins surpass traditional coins. This will be based on community sentiment, emotion, and the speculative lure of getting rich quickly. Memcoins are different from traditional projects because they grow through hype and the ability to rally large communities.

The main things to watch out for are:

• The popularity of meme launchpads (pump.fun, moonshot) and the fact that you can deploy memtokens almost for free without any programming skills or blockchain knowledge.
• Many moonboys on X and other socials
• More and more people are looking to invest in high risk assets like memcoins due to the instability in the world and high inflation across the board
• We're seeing a shift where communities driven by profit are replacing those driven by blockchain and technology.
• Major exchanges like Binance and Coinbase are listing more and more meme tokens, fueling a speculative frenzy.

Meme token supercycle theory has no real fundamentals like memcoins itself. They attract traders with the promise of quick profits. There's no real utility or technology behind them. It's just people chasing the dream of becoming a millionaire with just $10. It reminds me of the ICO boom I was a part of. Even the most obvious scams raised money. They had fake profiles of team members, renamed social networks, made beautiful websites, and that was it. They just sold the standard tokens and out. Yes, there were some real projects, but only a few. Investors were just as fixated on quick profits as they are today. After the whole system crashed, most of them lost their money. Then they started thinking about technology and utility. It seems that the new generation of investors hasn’t learned from our mistakes and is falling into the same traps we did.

Memcoins like Dogecoin, Pepe, and Shiba Inu will probably benefit from this hype around memes either way. On the other hand, most Meme 2.0 will experience a rug pool, not a supercycle:) Given the current market conditions, it's likely that the surviving 2.0 memtokens will see zero value due to their low liquidity and high FDV.

References

• State of Crypto Report 2024
• The case for a 2024 bull run