Reviewing the surge of PEPE and AIDOGE, how do we dance with meme coins?

Author: Misty Sea, PANews

"On-chain monitoring detected an address that bought $250 worth of PEPE, which just turned into $1.8 million," "A few days ago, I claimed the AIGOGE tokens from the ARB airdrop address and didn't sell; I just saw that the tokens from a single address can now be sold for $500. Oh right, I only claimed from 1,000 addresses."

In the community and on social media, such voices have been rising and falling over the past two days. Some lament missed opportunities, others slap their thighs in frustration, and some sold what they received for a meal of pig's trotters, only to find it was actually an electric bike. As this information continues to spread, the market has begun to witness a resurgence reminiscent of past events: seeing a contract address prompts people to invest. The meme season in the crypto market has quietly arrived.

In this article, PANews will explain the characteristics of recent meme season phenomenon projects and how to seize opportunities while avoiding potential risks.

AIDOGE: Decreasing Airdrop, Lucky Draw Increases Market Speculation

Long before AIDOGE became popular, there was an automated market maker project called Auragi based on the Velodrome ve(3,3) mechanism that airdropped tokens to addresses eligible for the ARB token airdrop. Its airdrop tokens have already been fully claimed, and the token price has performed modestly, echoing the saying circulating in the community, "Airdrop a meal of pig's trotters." Observing the gameplay of this project, it is clear that the operators do not understand the market as well as those behind AIGOGE.

According to the official introduction, ArbDogeAI is an experiment within the Arbitrum ecosystem. AIDOGE launched on April 15, with a total token supply of 210,000,000,000,000,000 (2.1 quadrillion), and 95% of the tokens can be claimed for free by addresses eligible for the ARB token airdrop, while the remaining 5% is used to incentivize user invitations. Inviting addresses will receive 10% of the total tokens claimed by the invited addresses, until the 5% reward pool is exhausted.

It is worth mentioning that its distribution method differs from the average distribution method of other projects, as it adopts a mechanism where the earlier you claim, the more you receive. This has, to some extent, continuously reduced market selling pressure and incentivized early users. The number of tokens claimed by the first 60,000 addresses is double that of the 90,000th address that started claiming.

Additionally, AIDOGE has designed a transaction burn tax mechanism. Each time a user transacts on-chain, there is a 15% burn tax: 3% is used for ecological development; 1% will be destroyed; 2% rewards liquidity providers; 3% is used to purchase ARB for subsidizing protocol games and voting (in the early stages, some ARB tokens will be directly used to encourage users to increase liquidity pool funds); and 3% is used for staking dividends for AIDOGE holders. Another 3% is allocated for lucky drops, which will be converted into ARB tokens and deposited into a lucky pool.

Thus, the demand for AIDOGE has emerged. First, it can be used for mining, with an annual yield of up to 2,360% when compounded. Second, it can provide liquidity, with an annual yield of up to 1,039,940,246% when compounded. Additionally, when users buy AIDOGE tokens worth between $100 and $1,000 on-chain, they will qualify for participation in lucky drops, which occur every half hour. This frequency and probability stimulate users' gambling instincts and increase market speculation.

The lucky drop weight is proportionally increased based on the value of AIDOGE purchased by a single address, with a minimum of 1 (for a $100 purchase) and a maximum of 10 (for a $1,000 purchase). The lucky weight is rounded down; for example, if an address buys AIDOGE tokens worth $180, its lucky weight will be 1. After each round ends, the lucky tickets will be reset. According to official data, the number of ARB tokens distributed through lucky drops currently stands at 159,000, with a total of 9,500 participating addresses and 177 addresses receiving lucky drops.

According to the official plan, an AI NFT series will be launched in the future for training, creation, and production. There will also be AICODE and DAO. These are currently expectations that are keeping market sentiment high but have not yet materialized. AIDOGE has also gradually launched on centralized exchanges like MEXC and Bitget. Currently, there are 109,000 addresses holding AIDOGE on-chain, with the top 100 addresses holding up to 81% of the total token supply. The trading volume on centralized exchanges in the last 24 hours reached $172 million, while the trading volume on decentralized exchanges was $8.4 million, with the current fully diluted market cap reaching $57 million.

Pepe: Pure Meme Token, Pepe's Comeback Journey

Pepe has attracted more market attention due to a rags-to-riches story. According to Lookonchain data, an address swapped 0.125 ETH (approximately $251) for 59 trillion PEPE on Uniswap four days ago. Based on the PEPE price of $0.0000003145 on April 20, the value of the 59 trillion PEPE held by that address has reached $1.85 million. If sold at the current price (which has not yet been sold), the investment return would reach 7,370 times. This is undoubtedly another wealth story that has made countless people envious, and thus it has spread widely in the market.

Looking back at Pepe itself, according to Pepe's official Twitter, it posted its first tweet on April 5, when it had very few followers, and launched the PEPE token on April 15. The concept promoted by Pepe is "Make memecoins great again; in the face of the endless derivative meme tokens like ShibaCumGMElonKishuTurboAssFlokiMoon, it's time to change the status quo." Pepe was secretly launched without a presale, zero burn tax, LP tokens destroyed, and contract permissions relinquished.

The total supply of PEPE tokens is 420,690,000,000,000, of which 93.1% were sent to the liquidity pool, and the remaining 6.9% are stored in a multi-signature wallet, only for future centralized exchange listings, bridging, and liquidity pools.

Its plan is to first launch as a memecoin on CoinGecko and CoinMarketCap, with 1,000 holding addresses and more mentions on Twitter. The second step is to Vibe and HODL, maintaining community partnerships through Pepe Times communications, providing exclusive Discord channels for holders, and launching on centralized exchanges with 10,000 holding addresses. The third step is to develop the token economy, create Pepe-themed merchandise that customers can purchase with PEPE tokens, with a portion of the proceeds being burned. Additionally, PEPE Academy and Pepe tools will be launched, along with listings on top-tier centralized exchanges and 100,000 holding addresses. They have also proposed to surpass Bitcoin.

From the on-chain data of its tokens, there are currently 21,400 holding addresses. The top 100 holding addresses own 44% of the total token supply. The trading volume on centralized exchanges in the last 24 hours was $14.87 million, while the trading volume on decentralized exchanges was $122 million, with the current fully diluted market cap reaching $120 million.

How to Seize the Meme Season?

1. Is there a free and fair distribution to a broader audience?

Whether it's the characteristics of past memecoins or the current Pepe and AIDOGE, their commonality lies in distributing tokens to a broader audience in a free and fair manner. The benefit of this approach is that it attracts more users, and when these users find that they can easily sell for a small profit, they will spread the word to more users.

Once this goal is achieved, the operators can attract market attention again by pumping the price. The users initially attracted by small profits become noise spreaders, either becoming free promoters for the project by complaining about missed opportunities or becoming stakeholders in the project by not selling and thus sharing wealth stories.

When the market discussion and holding community reach a certain scale, second-tier exchanges will follow suit and list the project for traffic, further amplifying the project's popularity, with some highly popular and enduring projects catching the attention of first-tier exchanges and getting listed.

Based on this, when we discover a project that distributes tokens freely and fairly to all market participants or to a group with a viral effect, we can actively participate after confirming that there are no contract authorization risks in claiming the tokens. If the value of the tokens received is low, there is no need to rush to profit and exit; instead, we can try to aim for bigger gains. We should continue to monitor the project's progress, and if the trading volume of the project's tokens on-chain is large and there are consistent buyers in the secondary market, it can be understood that there are operators behind it.

For users who did not receive the corresponding project tokens early on, they can decide whether to enter the market based on the heat of market discussions. For example, Auragi, which distributed tokens for free to ARB airdrop addresses early on, had little discussion except for a few individuals sharing personal invitation links. In contrast, AIDOGE had little discussion during its claiming period, but after enduring two days of selling pressure and maintaining a price that allowed latecomers to claim a meal of pig's trotters while early users saw the value of their claims rise, it attracted widespread promotion and discussion. At this point, in the early stages of dissemination, one can participate with proper position management and stop-loss measures.

2. Extremely high total token supply, many decimal places in price

Apart from the distribution method, another common feature of memecoins pursued by the market is their extremely high total token supply and the presence of many decimal places in the secondary market price. From a personal perspective, buying $100 worth of Bitcoin or other mainstream coins usually yields less than one coin, which does not create any impact on the individual; instead, it may deter small investors, as neither the expected price increase nor the personal experience meets their needs.

However, when users buy a token worth $100 and the quantity is calculated in the hundreds of millions or even billions, the impact on users or investors is significant, catering to their psychological needs.

As mentioned in a previous PANews article titled "++Want to Play with Meme Coins? These Underlying Logics and Investment Methodologies You Must Understand++," the author Ximi pointed out that the speculative direction of meme coins mainly stems from the skyrocketing prices of all mainstream coins, with BTC/ETH being too expensive, deterring outside investors, while the low price, fun, and easy-to-understand nature of meme coins are favored by new players. For just $1, one can buy millions or even billions of meme tokens, resulting in a low investment cost that gives new users a sense of achievement. Therefore, successful meme coins are often priced very low, usually under $1, and have a massive total supply.

3. Does it have innovative or easily spreadable topics?

The attributes of innovation or easily spreadable topics determine how many people a project can touch and how far it can spread. For example, when PEOPLE is mentioned, people immediately think of the DAO that auctioned the Constitution; the spreaders find it worth sharing, and the receivers find it entertaining. In contrast, a less successful example is the DAO to save Assange; upon first hearing such a story, one might wonder who Assange is and why he needs saving, requiring a search on Wikipedia, which already increases the barriers to dissemination. Today's hot topic, Pepe, revolves around abandoning garbage memes like Doge, claiming that PEPE will make memecoins great again, resonating with market sentiment, while PEPE itself is also a widely circulated MEME meme.

Innovative examples include the issuance of shit NFTs in 2022, which changed the previous paid minting rules of the NFT market, leading the way for free minting in the NFT market. By satirizing a number of blue-chip projects, it stimulated market sentiment, thus creating an easily spreadable topic effect. Another example is ClutDAO's slogan of decentralized venture capital.

Conclusion

Looking back at all phenomenon-level projects and summarizing them inevitably incurs the cost of hindsight, as whether a project can become a phenomenon involves an element of mystique. However, from another perspective, whether a project can rise is certainly related to its operators and more powerful stakeholders. To attract broader attention and more groups to know and engage, operators must consider how to make the project easily spreadable, how to encourage users to continue sharing, and why the users reached should buy in. Therefore, a rational retrospective of commonalities has practical significance.

When we see the next project, we should understand and imagine from the operator's perspective whether this project meets the criteria of free and fair distribution to a broad audience, whether it satisfies investors' purchasing psychology, whether it is innovative, whether it has easily spreadable topics, and whether it can evoke emotional resonance, etc. This will naturally enhance our ability to seize phenomenon-level or significantly appreciating projects.

But we must never forget that the premise of everything is a stable overall market performance with a low risk factor. Always set position management and take profit and stop-loss measures. Furthermore, every wave of meme market sentiment, whether long or short-term, can lead to a collapse of the overall market, so we must maintain risk awareness.