How does the Whale analyze the evolution of meme coins? What is the best strategy for trading meme coins? How can SocialFi create a win-win situation for creators, platforms, and fans or supporters?
Title: Analysis of the Evolution of Meme Coins
The Relationship Between Meme Coins and Exchanges
It is observed that exchanges lose their popularity when they list meme coins. Trading meme coins does not necessarily require the involvement of big players.
Choosing the Best Meme Coin Trading Strategy
The key to successful meme coin trading lies in concentration and patience.
Controversial Whales Unite! A Space event was held by Dynamic Zone on the evening of the 2nd of November, with the theme “Zero-Sum Game: How Controversial Whales Profit from Meme Coins and SocialFi”. The event invited heavyweight guests, well-known figures in the crypto world, Mr. Maji and Su Zhu, co-founder of Three Arrows Capital, to discuss meme coins and the market situation of SocialFi.
Background Information: Exclusive Interview with Zhu Su After His Release from Prison: Insider Stories about FTX’s Closure, Halving Market Analysis, Re-pledging, and the USDe Cycle
Evaluating the Meme Coin Track
The discussion starts with the question about the opinions of Mr. Maji and Su Zhu on the meme coin track, considering their long experience in the market and its differences from the past. Su Zhu’s perspective is that there is not much difference compared to the past, except that it is easier now to create meme coins. In 2014 and 2015, there were already meme coins like Litecoin. However, meme coins became more prevalent in DeFi, such as Shiba Inu. The current wave of meme coins is easier to create, attracting many retail investors who believe they can enter the market early. Additionally, investors perceive meme coins as an opportunity to still be early in the market when they might not be early adopters of Bitcoin, Ethereum, or Solana.
Machi adds that in 2017, they had already explored the SocialFi meme coin, and during the DeFi era, they also created Cream, a lending protocol. Recently, meme coins on Solana, such as Bonk and Pump.Fun, have gained popularity. Machi states that he used to be an ETH-maxi, but now he sees the potential in meme coins on Solana. He believes that many investors are tired and feel left behind as early investors and that they might end up trapped at high prices, especially when tokens are unlocked and dumped on the market. He also mentions unethical behaviors he has observed in the crypto market.
The Relationship Between Meme Coins and Exchanges
The discussion then shifts to the relationship between meme coins and exchanges. Mr. Maji explains that getting listed on exchanges has become more difficult, even for meme coins. He mentions the rise of decentralized exchanges (DeX) like UniSwap, SushiSwap, and Curve, which have weakened the influence of centralized exchanges. While centralized exchanges still serve as fiat gateways, their power is gradually diminishing. He also highlights the fair launch approach of meme coins like Pepe, which gain traction due to their high trading volume, even without being listed on exchanges.
Su Zhu adds that the influence of exchanges has indeed decreased. He mentions that many funds are now on-chain, and platforms like MoonPay make it easier and safer to purchase Solana and meme coins. The focus of exchanges has shifted to regulatory compliance, and trading volume is no longer a significant factor when considering listing. He gives examples of meme coins like Trump, which have significant trading volume on Ethereum but are not listed on exchanges due to fair launch practices and locked liquidity pools.
Choosing a Fun Meme Coin Community
The conversation then turns to the importance of meme coin communities when selecting meme coins. Su Zhu suggests looking at the movements of smart money and the storytelling aspect of a project. He believes it is unnecessary to focus on which big players are promoting which meme coins. He advises individuals to consider whether they find the project and community enjoyable and engaging. Many meme coins can unexpectedly perform well without the backing of prominent influencers. He mentions examples like Slerf and Pepe, which have demonstrated success through community-driven initiatives.
Machi emphasizes the potential of SocialFi and Friend.tech. He sees SocialFi as an opportunity to recreate the success of Web2 platforms in Web3, where creators, platforms, and supporters can all benefit monetarily. He appreciates Friend.tech’s fair distribution model, which made him invest in the project. He believes that finding a balance where all parties can win is crucial for the success of SocialFi and challenging traditional Web2 platforms.
Machi’s perspective on Starting a SocialFi Project
When asked why he doesn’t start his own SocialFi project in Web3, Machi compares entrepreneurship to making music. Success in one project does not guarantee success in another. He mentions his previous attempts at creating an NFT exchange, which did not gain traction due to a lack of a trigger point. He continues to search for opportunities and invests when he feels it is the right time.
Impact of ETFs on Meme Coins
Regarding the potential impact of ETFs on meme coins, Machi states that in previous bull and bear markets, Bitcoin leads the way, followed by Ethereum, and then other cryptocurrencies. He mentions his strategy of focusing on three to five coins he trusts, rather than diversifying across multiple coins. He avoids getting influenced by short-term market trends and focuses on long-term investments.
Su Zhu agrees that meme coins may not initially outperform Ethereum, but their volatility can be significant. As Ethereum reaches new highs, many individuals start buying meme coins, leading to their rapid growth. He believes that meme coins’ performance is related to the enthusiasm of their communities and the speculative nature of the market. He also notes that meme coins and the blockchain have a positive feedback loop, where a strong blockchain performance can drive the popularity of meme coins and vice versa.
In conclusion, the discussion highlights the evolution of meme coins, the changing dynamics between exchanges and meme coins, the importance of community engagement, and the potential of SocialFi in creating a win-win situation for all stakeholders.