Since the beginning of this bull market cycle, MEME coins, inscriptions, and airdrop promotions have been capturing attention, while previously mainstream tokens have failed to see the anticipated surges. Airdrops from several star projects have also disappointed the community due to lower-than-expected results or declining prices.

In contrast, MEME coins have gradually evolved from a niche segment into a significant indicator for the entire cryptocurrency industry. Why have once-popular mainstream coins lost their appeal? Why are more mainstream institutions beginning to shift their holdings toward MEME coins? What potential changes have occurred during the rise of MEME over the past year? Can this boom be sustained? With these questions in mind, PANews conducted a study and reflection on the development of MEME.

MEME Offers Greater Wealth Creation Potential Compared to Mainstream Coins

Over the past year, mainstream coins have largely underperformed our expectations, and several highly anticipated airdrop projects have fallen short. In this context, the wealth creation stories surrounding MEME coins continue to emerge, raising the question: is investing in mainstream value coins truly unprofitable?

According to a report by Keyrock, most airdrop project prices in 2024 collapsed within 15 days, with 88% of tokens experiencing significant declines within three months.

To conduct a comprehensive comparison, PANews analyzed the performance of several previously popular tokens across categories such as mainstream public chains, blockchain games, the metaverse, inscriptions, airdrops, and established meme coins from January 1, 2024, to October 15, 2024. From the data, it’s evident that only established meme coins and mainstream public chains have shown an upward trend this year. In contrast, the average decline for this year’s popular airdrops and early-year inscriptions is around 50%, while blockchain games and the metaverse sectors have seen declines of 23% and 52%, respectively.

It can be asserted that, except for a few prominent public chains such as SUI, TON, and BNB, the performance of other mainstream tokens has not approached that of Bitcoin. This comparison excludes emerging meme coins, as these newly popular tokens inherently leverage their price appreciation to garner attention. Given their relatively low market capitalization in the early stages, they are capable of generating returns of a hundredfold or even a thousandfold. Consequently, the primary reason meme coins are supplanting mainstream tokens lies in their more attractive market performance.

Narrative Logic and Changing Barriers

For a long time, the narrative of mainstream projects has seemed to be their most crucial foundation. From Ethereum’s smart contracts to EOS’s third-generation public chains, and later to Layer 2 solutions, cross-chain technologies, the metaverse, and blockchain games, we now see the emergence of restaking, the Bitcoin ecosystem (inscriptions and rune parallel chains), social platforms, artificial intelligence, and more. A significant change is that the technology appears increasingly advanced, with a constant influx of new terms and innovative approaches. These shifts stem from the overcrowding in mature sectors, which necessitates the creation of new niches to facilitate better funding.

On the other hand, airdrops have evolved into point systems, and the rising barriers of engaging in inscriptions or coding have left retail investors feeling bewildered and unclear, hindering the entry of more new users.

In contrast, the narrative surrounding meme coins is entirely different. It is centered around a simple story—an image, a term, a symbol—that unites consensus based on a shared cultural DNA. People don’t need to grasp the technical logic behind it or exhaust themselves investigating whether the project team has truly delivered on those technological innovations.

On the other hand, with the rise of Solana, the prevalence of code vulnerabilities such as honey pots, pi xiu (a type of malicious contract), and inflation in the Ethereum ecosystem has significantly decreased, making it easier for ordinary users to engage with meme coins. This year, an increasing number of tools for the meme sector have further enhanced the user experience. Tools like Dexscreener and Birdeye have successively supported more tokens across different chains.

The popularity of one-click token issuance platforms like Pump.fun has made a substantial contribution to the meme coin landscape. As these tools become mainstream, it seems that the meme coins have effectively addressed the issue of code vulnerabilities, allowing their unique characteristics—cultural relevance, capital, and community—to play a more direct role. (Related reading: “Pump, We.Rich Drive a Token Issuance Wave: What Steps Are Needed to Create a Meme Coin Worth Over a Billion?“)

These changes reflect two trends within the crypto community: on one end of the scale, new projects are becoming increasingly complex with rising barriers to entry; on the other end, meme coins are simplifying the process through minimalism and specialization, thereby lowering the barriers.

In a market where available funds and users are limited, the scale now tilts toward meme coins.

Public Choice and Capital Following Suit

As retail investors show a growing enthusiasm for meme coins, institutional capital seems to be reallocating its resources accordingly. According to Lookonchain, Wintermute has been accumulating NEIRO (a token on Ethereum) since September 6, having amassed 62.45 million NEIRO (valued at approximately $7.39 million), which represents 6.25% of the total supply. NEIRO is one of Wintermute’s largest holdings in meme coins. As of October 11, The Data Nerd reported that, in addition to Wintermute, three other market makers and one venture capital firm also hold $NEIRO_ETH tokens.

Data from @thedefiedge shows that as of October 15, Wintermute held approximately $10.52 million worth of PEPECOIN, making it its third-largest token holding, alongside $3.48 million in NEIRO. Wintermute has become one of the most publicly recognized market makers in terms of holdings, while Jump Trading holds $1.2 million in SHIB.

Recently, Gotbit, which has been sued by the U.S. federal prosecutor, has been identified as a market maker for Neiro. Additionally, several meme projects, such as Beercoin, WaterCoin, and Hamster Kombat, have rushed to clarify or distance themselves from Gotbit following these events. These developments indicate that professional market makers’ involvement in meme coin markets has become quite common.

Moreover, according to multiple analyses by PANews on popular meme coins, to avoid being tracked by on-chain hunters, market makers often choose to manipulate meme markets by using decentralized wallets, making bulk purchases, transferring assets, and hiding their sell-offs. These practices have obscured the actual proportion of institutional holdings within meme coins.

From a capital perspective, the motivations behind these trends become apparent. In mainstream value project investments, venture capitalists not only need to make large one-time investments but must also wait a long time for project development and operations to materialize. After implementing strategies like airdrops and point systems to attract users, they often face extended lock-up periods before realizing profits. In contrast, investing in meme coins is relatively straightforward—investors can choose assets that have been market-tested, directly hold tokens without lock-up periods, and leverage their higher capital levels for trading, making it easier to realize gains. All these factors suggest that the current meme coin market better aligns with capital interests. (Related reading: “Meme Coins Become the Cake to Fight Over in the Bull Market: Pump.fun Data Inflated, TON, Jupiter, and Others Intensely Entering the Market“)

From Ansem to Murad: A New Generation of Legends

Recently, Murad has gained prominence due to his “Memecoin Supercycle” speech and his holdings of over $24 million in meme coins, establishing him as a new legend in this space. In contrast, the former meme deity, Ansem, seems to be facing skepticism. Beyond the achievements of these high-level meme players, we can observe some significant changes in the playing styles of meme investors.

Ansem originally built his success on the WIF token, and his overall style leaned towards a “diamond hands” approach, where he would enter with a small amount of capital after doing extensive groundwork, waiting for prices to peak before selling. This approach was quite prevalent among early meme investors, who concentrated their efforts on identifying potential meme coins and sought to buy in at the earliest stages. However, this method carries a considerable risk of error; a single encounter with a pi xiu scheme or malicious manipulation by issuers could result in significant losses. Ansem clearly excelled in this early style, consistently identifying and profiting from promising tokens.

Murad’s rise, on the other hand, signifies a shift toward a different operational style becoming mainstream. According to Murad, his criteria for selecting meme coins are as follows: mid-market cap coins ranging from $5 million to $200 million, based on Solana and Ethereum, with a history of at least six months. From these criteria, it’s evident that Murad prefers to seek out relatively mature tokens rather than aiming to buy in at the very beginning. Additionally, compared to Ansem’s frequent trading, Murad engages in far less trading activity, with many of his holdings lasting several months. This investment style closely resembles the approaches previously employed by institutions in mainstream value coin investments.

MEME Season: Decline or New Opportunity?

From an industry-wide perspective, mainstream value projects continue to be the backbone of the sector and are the investment targets most recognized by capital and institutions. As a result, many believe that the rise of meme coins will further undermine the values of the crypto world. If one can amass considerable wealth merely by manipulating prices and maintaining community engagement, how many people will be willing to exert themselves to achieve technological innovation and drive transformation in the industry, including the Web2 world?

This is indeed a concerning issue that merits attention. Looking back at the meme coins that have gained fame, it is rare to hear about any innovative technical solutions or governance models introduced by these tokens’ projects or communities to advance the broader crypto market. Instead, as meme coins have gained popularity, on-chain hackers, sandwich attackers, and meme marketing teams have reaped substantial rewards. Whether retail investors have genuinely seen an increase in their returns remains debatable. (Related reading: “Investigation of MEV Status Across Public Chains: Ethereum Focused on Arbitrage, While Sandwich Attacks Remain Serious on Solana“)

However, if we separate cryptocurrency from blockchain technology, we see that technology is distinct, while meme coins represent a trend in the development of cryptocurrency as an asset class. Behind mainstream value coins, projects with genuine technological innovation will still gain recognition from capital and the market. What meme coins have essentially eliminated are some fraudulent project coins masquerading as technological solutions. As Murad pointed out, ordinary investors are gradually realizing that the token itself is the product, not the software. He believes that the current crypto industry is still primarily focused on asset production, with technology being a subsidiary.

Therefore, the trend of meme coins becoming mainstream seems to be an established fact. For speculative players, profit-seeking is a natural goal. The decline of mainstream value coins presents a challenge to the existing VC value system, signalling that it is time for reflection and change to reclaim their prominence.

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