MEME COIN: Opportunity or Risk? Community Consensus and Dark Side

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The term "meme" refers to a cultural concept or element that spreads rapidly through the internet via dissemination and imitation. Memes do not have a single carrier and can manifest in various forms, including images, GIFs, videos, or text, spreading widely on social media platforms. In some cases, the abstract meaning conveyed by memes can transcend language and cultural barriers, reaching a global audience.

The meaning of a meme is not fixed or exclusive, making it highly adaptable and variable. Different concrete memes may carry varying meanings in diverse contexts, time periods, or environments. Individuals can also add their own content or modify certain elements to create new memes based on existing ones.

A meme coin, also known as a meme token or meme coin, is a cryptocurrency that is inspired by or themed around an internet meme. Meme coins combine the abstract essence of memes with blockchain technology, ultimately creating a new form of virtual asset.

The origins of meme coins can be traced back to Dogecoin, which was launched in 2013 by software engineers Billy Markus and Jackson Palmer. The meme coin was inspired by the then-popular Kabosu Shiba Inu dog meme (also known as the "doge" meme). Initially intended to poke fun at the cryptocurrency market's speculative nature, Dogecoin quickly gained favor within the community, becoming the first widely recognized meme coin.

Unlike traditional cryptocurrencies, meme coins generally do not have any inherent value at the outset. While common cryptocurrencies typically feature clear technical innovations or use cases, such as Bitcoin's decentralized currency system or Ethereum's smart contract platform, meme coins often lack these attributes. Instead, their value foundation lies more in the enthusiasm of the community, the influence of social media, and overall market sentiment. Meme coins frequently have minimal technical support or clear application scenarios, and their value tends to fluctuate drastically, influenced largely by "hype" within the market.

Currently, Dogecoin ($DOGE) has attained a market valuation in the tens of billions of dollars. With the continuous emergence and spread of various meme coins, meme coins have collectively transformed into a vast ecosystem within the cryptocurrency market that cannot be overlooked.

When examining the narratives surrounding meme coins, we encounter a spectrum of possibilities, ranging from satire and protest to manipulation and monopoly tactics. On one end, meme coins can serve as tools for collective expression and activism within the crypto community.

During the US presidential election, a renowned squirrel sparked a wave of discourse within the meme narrative: The New York State Department of Environmental Conservation (DEC) breached a private residence without a search warrant and forcibly captured and euthanized a beloved squirrel named Peanut. This incident ignited a firestorm on social media, ultimately leading to the creation of the meme coin $Pnut.

Through meme coins, the MEME community transforms the actions of individual government agencies into narratives within the crypto market, essentially satirizing and protesting the improper conduct of those in power. In this case, $Pnut has become a symbol—a virtual embodiment of the fight against corruption and tyranny. Under this premise, community consensus has emerged as the primary driving force behind the growth of meme coin value. Like a flame, it ignites the emotions of investors, inspiring them to rally behind a shared cause. At the time of writing, $Pnut's market value has soared to an impressive $1.1 billion. At this juncture, $Pnut as a meme coin transcends the realm of mere investment; it carries the aspirations of investors for justice and freedom, ultimately becoming a manifestation of culture.

However, on the other end of the crypto market, the same narrative techniques are manipulated by those harboring ill intentions. On May 24, 2024, the passing of Kabosu, the canine prototype for $DOGE, evoked a wave of nostalgia within the crypto community. Following this event, another Shiba Inu named ねいろ (English translation: Neiro) rose to prominence, seemingly embodying the continuation and spiritual inheritance within meme coin culture. Yet, concealed beneath this superficial "sentiment" lay a meticulously crafted scheme to exploit investors.

On October 19, 2024, individuals within the crypto industry revealed that the lowercase $Neiro was backed by a massive "rat warehouse" team that had managed to acquire over 80% of the token supply. This team employed various tactics to win over key opinion leaders (KOLs) and market makers, swiftly driving up the price of the currency. Subsequently, they sold off their holdings at a high price, ultimately draining the funds of investors who had become deeply entangled in the "Neiro" narrative.

While community consensus has propelled $Pnut to become a highly spiritually symbolic meme coin, the lowercase $Neiro team has exploited investors through capital operations, albeit using a similar narrative technique. Investors are often drawn to the "feelings" and "beliefs" embodied in the meme coin narrative, but it can be challenging to discern whether the true value lies in the convergence of collective power or the manipulation of interest groups operating in the shadows.