2024 Meme Sector Analysis: From Viral Spread to Ecosystem Beachhead

CoinVoiceOct 31, 2024

2024 Meme Sector Analysis: From Viral Spread to Ecosystem Beachhead

Abstract

Based on analysis of the meme coin sector, this paper probes into the current state and developmental characteristics of the meme coin sector in 2024. It mainly covers the meme coin trends, the rise of platforms, dissemination methods, and market strategies. The key points are as follows:

1.Meme Coin Boom and Dissemination Patterns: In 2024, the meme coin market experienced cyclical spikes, especially at the start of the year and during the second quarter. The spread of meme coins is highly contagious, relying on social media and community dissemination, often showing exponential growth. New trends have emerged this year.

2. Emergence of Meme Coin Platforms: Memecoin Launchpads represent a game-changer in this cycle. Platforms like Pump.fun and SunPump have streamlined the creation and trading of Meme coins, attracting a large user following. Each platform has its unique strengths, whether in user demographics, revenue models, or ecosystem support.

3. Market Liquidity and Investment Strategies: Meme coins have been embraced as “bridgehead” for ecosystem development by major public chains and projects. This is one of the biggest changes in this round. Meme coins are seen as pioneers in the development of various blockchain ecosystems, attracting market attention and funds that catalyze further ecosystem growth. Investment strategies in the meme sector primarily focus on trending coins, trading volume, and market sentiment.

4. Future Prospects for Meme Coins: With increased liquidity, direct participation from various ecosystems, and venture capital investment, the meme coin market is expected to continue its meteoric rise in the latter half of 2024. It is expected that more professional and transparent approaches to the investment and trading of meme coins will emerge.

New Characteristics of the Memecoin Sector in this Round

Cyclical Boom Continues

Unlike previous short-lived memecoin crazes, memecoins have become unprecedentedly popular in this round, particularly from February to April of this year.

Whether it’s the average 6-fold weekly surge across 20 popular coins like PEPE or the records of the fastest listings on CEXs by coins like WIF and BOME, one message is clear to cryptocurrency investors: The meme coin frenzy is back.

The dissemination of internet memes is in many ways similar to the spread of infectious diseases. Just like a virus, a meme depends on its “hosts” — the users who share and distribute it — to rapidly spread. Once a meme hits a popular social network, it can quickly spread by “infecting” a large number of users, especially when it is met with strong emotional responses or features elements that are easy to imitate. Examples such as ORDI in early 2024 and the SOL meme craze in the second quarter all reflect this characteristic.

This dissemination of memes is often characterized by exponential growth. At first, only a few people are exposed to the meme, but it reaches a vast audience only after a short period. In addition, the dissemination of memes is also influenced by network nodes, which are much like “superspreaders” of diseases. Users with a huge fan base can substantially accelerate the dissemination of memes, thus broadening their scope of influence. This model mirrors the spread of infectious diseases in many aspects, that is, relying on close interpersonal connections and interactions, as shown in the figure below:

The dissemination of internet memes is similar to the spread of infectious diseases, as shown by this SIR model. Red=Susceptible, Green=Infectious, Blue=Recovered

The Rise of Meme Coin Platforms Is a Defining Feature of This Round

One standout feature of this rise of the meme coin sector has been memecoin launchpads, such as emerging platforms like Pump.fun and SunPump. In this round, memecoin platforms have streamlined the process of creating and trading meme coins while seamlessly integrating with major blockchains, thus attracting a substantial user base. These platforms are distinctive in areas such as user positioning, daily issuance, profitability, project success rates, ecosystem integration, marketing, and community engagement.

As the crypto industry continues to evolve, the memecoin space is rife with opportunities and challenges, which makes innovation especially critical. The key to success for memecoin platforms lies in offering unique selling propositions that combine cultural trends with technological innovations.

Comparative Analysis of Launchpads

Source: Tiger-Research

Target Audience

In terms of user bases of the two representative memecoin platforms, the earlier one, Pump.fun, primarily caters to the Western audiences, while Justin Sun’s SunPump has been more popular in Asia. At the same time, SunPump’s strong marketing on platforms like X, driven by Sun and his team, has made it stand out on TRON.

Revenue & Fees

Despite being a latecomer, SunPump had generated approximately $567K in revenue by the end of August, with around 7,500 memecoins issued daily. Meanwhile, Pump.fun, which issues roughly 7,000 coins daily, is not far behind.

Both SunPump and Pump.fun charges an exchange fee of 1%.

Ecosystem Support

Pump.fun was developed by a third party and initially launched on the Solana blockchain. Around May and June of this year, it was integrated with the Base chain and later with the Blast chain. In contrast, SunPump primarily operates on the TRON blockchain, which is backed by its payment system (with a large user base for USDT payments) and exchange infrastructure.

Other Memecoin Platforms

Source: Rootdata, ChainCatcher

Apart from the above-mentioned Pump.fun and SunPump, there are other launchpads for different sectors. For example, Memehub.ai is an AI-driven launch platform, Wonton.fun is the exclusive launchpad on the TON chain, and Satspumpfun caters to the Bitcoin ecosystem.

These platforms support different public chains and functionalities, as shown in the table above.

Memecoin Ecosystem and Liquidity

Memecoins have been a standout in this round, capturing much of the market’s attention. One salient feature is how various market participants have integrated liquidity with the memecoin ecosystem, using memecoins as pioneers to ignite and lead market enthusiasm, liquidity, and ecosystem development. This is mainly evident in the following two aspects:

· Memecoins have been embraced as “bridgehead” for ecosystem development by major public chains and projects. From Solana’s founder dressed in a costume embodying the “Silly Dragon” to the recent Pump.fun and NOT’s “fascia gun sector”, memecoins have consistently led the charge. Memecoins are akin to the hook products in Web2 ecosystems. They can initially break into the market, drawing in funds through memecoins, and are later absorbed by the ecosystem’s infrastructure, such as products like DeFi and lending. Attracting funds through memecoins and subsequently launching utility-driven products is one of the strategic paths that ecosystem and project teams are pursuing this cycle.

· The time lag in dissemination provides liquid time for liquidity. There is a time lag between traditional outsiders’ perceptions and those of the Web3 community. When some people enter the crypto space, the first high-reward, get-rich-quick myth they encounter is often the memecoin sector. High volatility means they can yield substantial returns in a short period. Individual investors who enter the space may be enticed by the chance of overnight wealth. In addition, many memecoins are priced lower than Bitcoins, allowing individual investors to purchase large quantities of coins with relatively small investments. For individual investors with budget constraints, these low-barrier investments are more appealing.

Case Studies: Memecoins as Ecosystem Liquidity

As mentioned above, memecoins have been used as pioneers for liquidity by various chains, projects, and ecosystems, with numerous cases. For example,

· Linea Chain: $Foxy.

Backed by the Linea chain’s official foundation, $Foxy was a memecoin launched by MetaMask’s parent company. Although not much was revealed early on, the Linea chain and its relevant parties were the driving force behind it. $Foxy delivered a return of around 40x on its first day of trading, fueled by a combination of KOL investments and promotional efforts.

· Base Chain: $Degen, $Enjoy, and $High.

Countless memecoins have been launched on the Base chain. Among these, $Degen, which performed impressively in February and March 2024, is the most representative. $Degen was initially a community-driven meme project and a pure memecoin. As its “top hat gentleman” icon became more widely recognized, it evolved into a tipping coin on the Farcaster social platform after the official app granted it utility. However, its memecoin attribute remains unchanged. It is 80% meme-based and 20% utility-based. Furthermore, Farcaster and the various Base ecosystems have later supported $Degen. As for $High, it serves as the memecoin for the Zora blockchain.

There are many other cases, as shown below:

· Manta Chain: In June 2024, Manta announced a $10 million “Moon Mission Meme Grants” program.

· Avalanche Chain: $COQ, $KIMBO, $TECH, $GEC. The liquidity-driven memecoin strategy was primarily released in the first half of 2024, supported by the official Avalanche Foundation.

· Fantom: It unveiled Meme Season on Sonic, which started in June.

· zkSync: Its meme mascot is Zeekcoin $MEOW.

Major Types of Memecoin Projects in 2024

Institutional Investor-Controlled Coins

Eg. BOME/SLERF/MEW/MANEKI

Coins in large pools are categorized as institutional investor-controlled coins. They are characterized by massive pools and rapid price hikes. These coins can accommodate large investments and offer high multipliers, but they often reach high market caps quickly, making it challenging for latecomers to enter the market.

Headline-Associated Coins

EG. GME/BODEN/TREMP/DJT/NCAT

There are often on-chain memecoins that correspond to headlines involving the words and actions of high-profile figures like Elon Musk, Donald Trump, or Roaring Kitty. However, this type of memecoins also experiences significant price fluctuations due to various news events. For example, DJT (a Trump-themed coin), attracted many speculators due to a rumor that Barron Trump, Donald Trump’s youngest son, was involved. However, revelations from well-known crypto accounts on X like Zach XBT and GCR caused the price to plummet. Similarly, $GME’s price soared because of Roaring Kitty’s return post, only to crash after his live stream turned out to be empty rhetoric.

Community Coins

EG. POPCAT/ MICHI/ SC/NEIRO

Community coins, often featuring cats and dogs, are the type of memecoins that can potentially offer high returns but also come with high risk of failure. They can yield high returns because these coins often have long periods of low prices during which cheap tokens can be accumulated. However, due to their lack of scarcity, they are also prone to failure. Having an eye-catching logo is essential for these coins, but the community atmosphere is even more critical.

Additionally, community memecoins tend to gradually build consensus among individual investors during favorable market conditions, slowly driving up prices. However, when market conditions deteriorate, these coins often crash fast due to factors such as large amounts of dispersed market capitalization.

Celebrity Coins

EG. MOTHER/RNT/PAJAMES

Celebrity coins have become popular on Solana in recent weeks, but most celebrities are not interested in long-term involvement with their coins, so many are just fleeting opportunities. Still, if celebrities with huge fan bases outside of crypto are willing to operate the community, these coins could have good potential. The most successful celebrity coin so far has been $MOTHER, launched by rapper Iggy Azalea, who has tens of millions of fans to promote the token. She has also actively interacted with crypto accounts on X and engaged with community members, which has been the reason why the coin has remained popular for so long.

Other Coins

EG. WEN/BONK/WIF

Apart from those mentioned above, there are many other popular types of memecoins. For instance, $WEN, launched by the Jupiter team, and $BONK, rumored to have been introduced by the Solana Foundation to revive Solana, both reached high market caps thanks to the support from legitimate teams. In addition, $WIF, the largest Solana memecoin by market cap and also the bellwether for Solana memecoins, is the hardest to classify. Although initially a community coin, it has later attracted significant capital and become the strongest memecoin in this bull market cycle.

Outlook for the Memecoin Sector in the Second Half of the Year

Altcoin Season at its Lowest

Apart from the favorable factors mentioned above, the memecoin explosion in the second half of 2024 can be viewed from the broader macroeconomic cycle. The Altcoin Season Index is currently at 35, and this trend is another key reason why the memecoin sector is expected to make a comeback in the latter half of the year.

Ecosystem Participation and Established Memecoin sector consensus

With the launch of platform memecoins, ecosystem memecoins, and various memecoin launchpads, the memecoin sector has not only become popular among individual investors but also gained recognition and participation from various ecosystems. Between May and August of this year, several ecosystems served as launch platforms and announced their own ecosystem memecoins. The consensus within the memecoin sector has grown stronger compared to the previous cycle.

As pioneers, memecoins are expected to influence ecosystem building and project development in four key aspects.

First, major memecoin foundations, support programs, or community initiatives will continue to be established, contributing to memecoin development within respective ecosystems, often through innovation funds.

Second, VC investors will get involved. From the second half of 2024, many VCs have announced that they will invest in memecoins infrastructure, marking a shift from memecoins resisting VC influence to being embraced by VCs.

Third, the strategies regarding memecoins will be more professional and transparent.

Fourth, as liquidity is created, there will be more supporting mechanisms, which means memecoin-based secondary products will usher in new development. For example, memecoin management tools, meme creation and secondary transmission platforms, and memecoin-based re-creation tools will see further growth.

Increased Liquidity and a Better Environment for Memecoins

With Interest rates expected to trend downward in the second half of 2024 and the first half of 2025, we are moving toward a more relaxed macro environment. Memecoins are poised for growth attributable to their small market caps, quick recognition, and low participation barriers.

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About Us

This article is a product of diligent work by the HTX Research Team that is currently under HTX Ventures. HTX Ventures, the global investment division of HTX, integrates investment, incubation, and research to identify the best and brightest teams worldwide. With a decade-long history as an industry pioneer, HTX Ventures excels at identifying cutting-edge technologies and emerging business models within the sector. To foster growth within the blockchain ecosystem, we provide comprehensive support to projects, including financing, resources, and strategic advice.

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