Title: A Comprehensive Guide to Different Types of Memecoins
Introduction:
This week, the cryptocurrency market continues to experience a downturn, with most token prices plummeting. Even newly launched coins like ZK Sync and LayerZero are not exempt from the downward trend. However, the most significant opportunities and hotspots in the market still revolve around Memecoins, with Solana Memecoins taking the lead. With low transaction costs and the emergence of Pump.fun, Solana has become the most active gambling platform in the blockchain world. According to data from syndica, a node service provider, 92% of the transactions on Raydium, Solana’s top DEX, are from Memecoins.
Types of Memecoins:
1. Market Maker Coins:
Coins like BOME, SLERF, MEW, and MANEKI fall under this category. These coins are characterized by large pools and rapid price surges. They offer the potential for overnight wealth, with large positions and high multipliers. However, due to their high market value, it can be challenging to enter these projects. When participating in such projects, it is crucial to consider the following points:
– Project Background: For example, BOME’s founder, Darkfarms, is a well-known artist in the crypto community, making the likelihood of a rug pull low.
– Pool Locking/Burning: Large pools can also be scams aiming to drain liquidity. SLERF, for instance, burned millions of dollars’ worth of liquidity, generating FOMO in the early stages.
– Trading Volume: Trading volume reflects market sentiment towards a project. Analyzing specific data can help determine the project’s popularity.
– Market Sentiment: This refers to the overall market trends and helps predict potential highs for the project.
It is worth noting that while Market Maker Coins experience rapid surges, they often have only one wave of market activity. Subsequent trends differ from the investment logic of Memecoins with small capital inputs and high multipliers. Therefore, it is not recommended to participate again with small funds, as the returns may be unsatisfactory.
2. Trending Memecoins:
Coins like GME, BODEN, TREMP, DJT, and NCAT fall under this category. These coins are associated with popular figures like Elon Musk, Donald Trump, or Roaring Kitty, and their price fluctuations are influenced by news events. To participate in these Memecoins, it is essential to track news updates and make corresponding trading decisions. For example, DJT, the most popular coin this week, experienced a surge due to rumors of Donald Trump’s son, Barron Trump, being involved in the project. However, it later plummeted following the exposure of insider information by reputable crypto influencers like Zach XBT and GCR. Similarly, GME experienced a frenzy after Roaring Kitty’s return post, but quickly dropped due to the lack of substantial evidence in his live stream video.
3. Community Coins:
Coins like POPCAT, MICHI, and SC fall under this category. These community tokens have the highest potential returns but also the highest failure rates. Their success depends on eye-catching token avatars and a vibrant community. Observing the level of enthusiasm among community members and monitoring the token’s presence on Twitter are crucial when participating in these projects. Additionally, community-based Memecoins tend to gather consensus among retail investors during favorable market conditions, leading to gradual price increases. However, they are also the quickest to drop during unfavorable market conditions due to the scattered nature of token holders.
4. Celebrity Coins:
Coins like MOTHER, RNT, and PAJAMES fall under this category. These coins have gained popularity on the Solana blockchain in recent weeks. However, most celebrity coins are short-lived and lack long-term dedication from the celebrities themselves. Nevertheless, if a celebrity with significant mainstream influence is willing to promote and engage with the community actively, the coin has immense potential. The most successful celebrity coin currently is $MOTHER, promoted by rapper Iggy Azalea, who has millions of fans. Her active involvement and interaction with crypto influencers and community members have sustained the coin’s popularity. When considering participating in celebrity coins, it is advisable to observe whether the celebrity shows a long-term commitment before joining, as this increases the chances of success.
Conclusion:
Given the ongoing avalanche in the Solana Memecoin market, it is not advisable to engage in any trading at the moment. Instead, it is a good opportunity to carefully evaluate projects, especially community coins and celebrity coins. Observing the resilience of community consensus during market downturns and the dedication of celebrities to their tokens after a few days can help make more informed decisions. It is important to note that Memecoins are not suitable for bottom-fishing or ambush-style trading strategies. Unlike traditional investments with underlying fundamentals, Memecoins rely more on attention economics, thriving when prices rise and capturing more attention. Therefore, it is more appropriate to select well-established projects and add them to a watchlist, waiting for the right moment to join when the wind starts blowing.
