YBB Capital: Understanding MEME, Understanding Web3 Pop Culture
Original Author: YBB Capital Researcher Zeke
Introduction
Recently, with the approval of the BTC spot ETF, market enthusiasm has gradually reached its peak. Led by the inscriptions and Solana community, MEME Coins have once again swept in, with various myths of making thousands or even tens of thousands of times in profit going viral on social media, and retail investors who missed out on the rally are continuously flooding into the market.
So, how are the recent MEME Coins different from those in the past? In a market filled with "meme coins," how can one select a MEME Coin with potential?
What is a MEME Coin?
The concept of "MEME" was first proposed by British evolutionary biologist Richard Dawkins in his 1976 book "The Selfish Gene." Dawkins used the term MEME to describe units of cultural information that spread from person to person, similar to how genes propagate in biology. His aim was to explain the process of cultural transmission. If the basic unit of biological evolution relies on the inheritance of genes, then the basic unit of cultural thought transmission is the MEME. Its forms are diverse, ranging from a sentence, a story, an allusion, to an image; anything that can carry a certain cultural idea can be called a MEME.
Although the term MEME was initially a serious academic concept, it was redefined in the internet age to encompass various forms of internet meme culture, akin to the term "梗" in Chinese internet culture.
The so-called MEME Coin, as the name suggests, is a cryptocurrency based on MEME culture, with Dogecoin often considered the first MEME Coin. Dogecoin was created in 2013 by Billy Markus and Jackson Palmer as a parody token, replicating Litecoin's code and featuring a Shiba Inu meme, mocking BTC (which they viewed as just "air"). However, the subsequent development was more ironic; Dogecoin not only did not become a worthless air token but was also wildly embraced by Reddit, and a comment from billionaire Elon Musk stating, "Dogecoin might be my favorite cryptocurrency, it's cool," sent it "To Da Moon." Dogecoin's market cap began to skyrocket, turning a nonsensical joke into a legendary billion-dollar asset in the crypto market.
The Hottest MEMEs of 2023
In the 21 years since Dogecoin shot to the moon, various imitation tokens adorned with animal images have sprung up like mushrooms after rain, all hoping to become the next Dogecoin. At that time, the community had a fun nickname for these tokens—"zoo coins." However, only a few standout tokens like Shib and Floki survived, while the remaining 99% of "zoo coins" essentially vanished in the subsequent bear market. It seems that finding a MEME Coin that could become the next Dogecoin is akin to finding a needle in a haystack. So how should one select a MEME Coin that appears to have no fundamentals to analyze? In a new bull market sparked by inscriptions, how should we shift our thinking? Let's first look back at the MEME Coins from 2023 that left a lasting impression during the bear market (selected from some tokens that I found memorable) and see what commonalities and innovations they share.
PEPE
Pepe the Frog (PEPE) was created by American cartoonist Matt Furie in 2005 for his comic "Boy's Club." Although this frog-headed character has been a perennial favorite in Western social networks, there was no corresponding PEPE Coin in the MEME space (in fact, the PEPE token known today is not the first; other PEPE tokens never gained traction). On April 4, 2023, a Twitter account named pepecoineth posted a meme of PEPE wearing a hat, but no new tweets followed for the next ten days.
When the next tweet was posted on April 14, it announced the creation of PEPE Coin, a Telegram group, and an official website (the domain pepe.vip had been purchased back in March). On April 16, just two days after the token launch (allowing two days for insiders to buy), some influencers on Twitter suddenly began promoting PEPE Coin, leading to a surge in both the price and follower count of the PEPE token over the next two days. After attracting the first wave of traffic, the official PEPE Twitter account began to release memes mocking other MEME Coins to maintain momentum. By April 18, Shaurya Malwa, the leader of Coindesk's Asia data team, published a short report titled "'Pepe the Frog' Meme Coins Rocket as Crypto Twitter Moves Over Dogecoin Obsession," giving PEPE even more exposure. Just a day later, on April 19, several first- and second-tier exchanges began tweeting and voting related to Frog, with many exchanges even listing PEPE directly.
Thus began PEPE's unstoppable ascent. Unlike its two Shiba Inu predecessors, which took years to achieve success, the "carefully planned" PEPE skyrocketed to fame in just four days, achieving an astonishing increase of up to 375,000 times in the following months.
Silly Dragon (summarized from "Reviewing the Journey of Silly Dragon's Ten Thousand Times")
Silly Dragon is a MEME Coin that took off alongside the resurgence of Solana, and this silly dragon has now become a spiritual symbol within the community. The origin of this silly dragon dates back to the Solana Breakpoint conference on October 30, 2023, where Solana co-founder Anatoly appeared dressed as a green dragon. Anatoly first joked about being a silly dragon and then provided a profound explanation of his outfit: "I stand here in a dragon costume, which is crucial for our discussion about what we are building and why we are building it. We need to know what our goals are and what we want to achieve."
For Solana, which has risen from the ashes during the bear market, this silly dragon seems to carry many special "meanings." Twenty days after the conference, a Twitter account named DrakoSolana posted its first tweet, featuring a modified meme image of the silly dragon. DrakoSolana gained significant attention during this wave, but unfortunately, although it was the first silly dragon on Twitter, the token was delayed in launching, allowing an account named Silly Dragon to seize the opportunity.
Silly Dragon initially had no advantage in terms of attention or timing, but they cleverly released their token SILLY first. After the token launch, Silly Dragon's popularity quickly surged, and with the influx of traffic, they capitalized on the momentum by hosting a silly dragon art contest.
It was during this event that Silly Dragon caught Anatoly's attention. Although the token price had not yet skyrocketed, on December 16, Anatoly tweeted: "We urgently need silly dragon MEME memes; Samsung and Apple have 1 billion device sales, while Solana phones only have 20,000." This tweet instantly ignited community enthusiasm, and the price of SILLY began to soar, creating a new myth of ten-thousand-fold gains.
Harry Potter Obama Sonic 10 Inu
This may be the longest token name you've ever seen, Harry Potter Obama Sonic 10 Inu (due to the absurd length of the name, it will be referred to as HPOS 1 I hereafter, although their own token name is Bitcoin). This token highlights its parody nature right in its name, but the absurdity doesn't stop there. HPOS 1 I gained popularity on May 10, 2023, when the token was deployed with a hilariously crude parody website filled with videos, images, and stories parodying Harry Potter, former U.S. President Obama, Sonic the Hedgehog (the protagonist of a well-known parkour game), cryptocurrency, the Illuminati, and more. It was a direct shot at various classic hot topics in Western social networks.
HPOS 1 I's development approach is also quite unique; the project's ownership has been relinquished, and there are no developers, with the community leading the development. This is one of the project's unique selling points, representing a purely community-driven approach to the development of MEME culture. As various MEME images spread wildly across social networks, the price of HPOS 1 I steadily climbed, reaching a peak of $0.1783 in August 2022, achieving a miraculous hundred-fold gain during the bear market.
Pogai
The slogan from Pogai states: "The most ridiculous meme in history, the most flamboyant panda person, and the most nostalgic for our youthful days." Its image is the panda person most familiar to the Chinese internet community. It is a token with no fees, no copyright, and no development roadmap, driven purely by the community. The community can decide the future direction, and all tokens are distributed, with the founder retaining only one hundred million Pogai tokens to create a silly panda family with the community.
The project gained attention through flamboyant and humorous promotional methods, continuously making waves in the Chinese Twitter community, coupled with the familiar panda head meme, leaving a strong impression. The project was launched on May 2, 2023, at a price of $0.000008, reaching a maximum price of $0.0005. Although it didn't have the exaggerated growth of other MEME Coins, the token still made a memorable impact.
SATS
In December 2022, Bitcoin developer Casey Rodarmor released an open-source software called ORD, which runs on top of Bitcoin Core. ORD allows users to mint Bitcoin inscriptions in two steps: entering any information, such as a string of text or an image, on the Bitcoin blockchain (the "inscription") and linking the uploaded inscription to a specific Satoshi. A Satoshi is the smallest unit of Bitcoin. 1 BTC = 100,000,000 satoshi. The final product is a Satoshi with an inscription, known as a Bitcoin inscription.
Based on whether the input information is text or an image, Bitcoin inscriptions can be divided into two categories. Text-based inscriptions are mainly used to create tokens, such as the BRC-20 standard, while image-based inscriptions are primarily used to create NFTs, such as various cartoon characters.
SATS is a MEME inscription based on the BRC-20 standard (I personally prefer to call inscriptions "splittable text NFTs," but there is now a more accurate term for inscriptions, which is semi-fungible token). Its full name is Satoshi, the smallest unit of Bitcoin, commonly referred to as "聪" or "Nakamoto." 1 BTC is equivalent to 100 million "聪," with a total supply of 21 trillion, equivalent to 21 million BTC.
The minting process for SATS took nearly six months, with the inscription deployed on the blockchain in March and the entire minting completed by September. Unlike the parody and rebellious culture of traditional MEME Coins, SATS is quite special, as it signifies "聪" or Nakamoto (the basic unit of Bitcoin and its founder). The total supply corresponds to the total amount of BTC, carrying deep meanings of homage to BTC and commemoration of Nakamoto. The successful minting of such a vast total supply reflects the strong consensus around this inscription. The popularity of SATS only grew, and on December 12, 2023, the day it was listed on Binance, its market cap doubled, soaring to $1.15 billion, even surpassing the first inscription, ORDI, ultimately achieving a maximum increase of 25,000 times.
The Diversification of MEME Coins
From the MEME Coins discussed above, it is not difficult to see that MEME Coins have shifted from being dominated by dog-themed tokens to a more diversified development direction. The current categories can be divided into the following four types:
Classic MEME: Tokens representing classic MEME images like PEPE and Pogai. Many classic MEME images that have not yet been tokenized or have failed to do so still exist, such as Trollface, Grumpy Cat, Success Kid, and Kermit the Frog.
Crypto-native MEME: MEMEs derived from crypto-native "jokes," represented by BONK and Silly Dragon, both originating from the Solana community. There are also some imitative MEME Coins, such as Polygon's "Polygon Dragon."
Inscription MEME: Inscription MEMEs represented by SATS and RATS. Due to the unique issuance method of inscriptions, these MEMEs may not even have image representations and instead use text as their medium. Most carry meanings of homage, commemoration, and satire, such as SATS paying tribute to BTC and Nakamoto (which can also be considered part of crypto-native culture), while RATS has a satirical meaning related to "whales" and exchanges.
Original MEME: MEMEs represented by HPOS 1 I and Ladys, which have a unique original style, differing from the simple imitation of past MEME Coins.
What Elements Are Needed for the Success of a MEME Coin?
Determining whether a MEME Coin can succeed is a very challenging task. As a product of parody culture, the source of its value is often debated. Personally, I believe the success of a MEME Coin comes from cultural recognition, promotional ability, and narrative direction. Below, I will share my insights using representatives from MEME Coins.
The Carrier of MEME is Important
In the crypto market, we often hear various wealth myths created by MEMEs, but in reality, only three MEME projects rank in the top 100 by market cap: Dogecoin, PEPE, and Shib. Here, we will first discuss the former two (while Shib is essentially an imitation of Dogecoin and uses the classic Shiba Inu image, its success is more attributed to grassroots culture and external environmental factors, so we won't elaborate on it here). The biggest commonality between Dogecoin and PEPE is that they both utilize already classic MEME images. Hannah Arendt once said that only things that are widely discussed and have a broad public base possess vibrant life; everything else is fleeting and unworthy of mention. This statement applies equally to MEME Coins, as the extent of the audience determines the upper limit of a MEME Coin (though it does not determine the lower limit). During the last bull market, there were many non-dog-themed MEME Coins that were extremely popular, such as Pig, Feg, and various animal tokens. Why didn't they survive? The main reason is that the factors driving the public to buy them were the FOMO emotions and herd mentality brought about by various wealth myths. The MEME elements of these tokens primarily came from images or stories created by the project team. The true audience for these MEME elements is very small, and token holders are merely looking to profit, showing little interest in these unfamiliar MEME elements. Once the market turns bearish, these MEME Coins are not far from zero.
Both Dogecoin (the source of the image) and PEPE have been popular MEME images in Western networks for over a decade (since they do not align with Chinese MEME culture, we often notice these tokens only when they are surging; however, the emergence of Pogai in 2023 also indirectly confirms the importance of the MEME audience). Various parody memes about them have already penetrated people's hearts, with a very broad audience (and they can easily latch onto influential celebrities), naturally leading to strong viral transmission.
Why Did PEPE Succeed?
As mentioned earlier, the PEPE we know today is not the first PEPE Coin. So why did the earlier PEPE (there's an even earlier PEPE inscription on BRC 20) fail? The fundamental reason lies in the lack of promotional ability. Excellent promotional capability not only accelerates the success of a MEME Coin but also determines its lower limit.
For example, in our daily lives, the more well-known a brand is, the more it invests in advertising. For any product, its advertising audience can be divided into high-frequency consumers, low-frequency consumers, and non-consumers. The mechanisms of advertising's effect on these three types of people differ. The logic of advertising effectiveness stems from four aspects—informing, persuading, reminding, and reinforcing. The promotional logic of MEME Coins should be similar, solidifying community members and speculative buyers while bringing in more potential buyers. Therefore, in addition to selecting the right carrier, the method of "spreading the word" is equally important.
PEPE's rapid success can be attributed to its adept use of human nature in its promotional methods. Looking back at the PEPE section, it is not hard to see that these influencers had already quietly purchased PEPE tokens. The bundling of interests drove these influencers to promote vigorously. Additionally, the pre-planned domain name and token strategy (with team members coordinating with exchanges) caused the price and holding addresses to skyrocket in a short period. Coupled with PEPE's ready-made viral memes and these positive news, the explosive viral transmission began. The intensity of a fire depends on the amount of fuel; PEPE's fire certainly burned with a sweeping momentum. Thus, PEPE's emergence was not merely a stroke of luck; how the project team coordinated and planned to create an extreme herd effect without fizzling out is quite complex. (Readers interested in this can compare the early tweets related to $pepe.BRC-20 and PEPE.)
A MEME That Doesn't Want to Be a MEME—Shib
Rewinding a few years, I remember asserting that Shib would definitely fail. In the Web3 space, it seemed like a pipe dream for an imitation token to challenge an OG. However, Shib later slapped me with a harsh reality check. Looking back at Shib's comeback, I still believe it was a miracle driven by multiple factors. If we set aside some luck factors (such as the economic stimulus and relevant tweets from Musk), I personally think Shib's uniqueness lies in its excellent community culture and bold narrative direction.
All dog-themed MEME Coins face a fatal problem: since these tokens are merely simple derivatives of Dogecoin, they suffer from severe homogeneity. The MEME expressions created by the project team and community have very weak dissemination power on social networks. As mentioned earlier, their true audience is very small. Shib also faced this issue; whether in terms of recognition in Western internet culture or celebrity influence, Dogecoin had an absolute advantage, and a derivative Shiba Inu cartoon image could never become the "Dogecoin killer."
Thus, Shib's narrative direction had to be ecological—a MEME Coin with expectations of Swap, cross-chain bridges, Layer 2, and the metaverse suddenly seems much more upscale. Although Shib's development direction faced many doubts, I personally believe this was the correct and only way to sustain its vitality as a Dogecoin killer.
Conclusion
The MEME Coin market is always full of temptation but also comes with high risks. According to CoinMarketCap data, there are 1,467 tokens in the MEME space, but if we only count the top 300 by market cap, there are only 9, resulting in a success rate of less than 1%. Currently, with the evolution of MEME Coins and the addition of inscription-based MEMEs, the complexity of selection is increasing. If you genuinely want to purchase some MEME Coins today, you need to do your homework on some unique aspects of crypto culture and Western MEME culture. A potentially successful MEME project should at least possess cultural recognition, promotional capability, narrative direction, and community engagement.