Recent astronomical gains in meme tokens like Shiba Inu or Floki simultaneously frustrate and entertain those who dabble in cryptocurrency.
To be fair, cryptocurrency is all about storytelling, starting with Bitcoin. Altcoins valuations are usually justified by storytelling as well. Here are some popular crypto specific memes:
- privacy coins/chains — Blockchains which claim to allow anonymous transactions.
- layer 1s (brand new blockchains where the token is used as the utility token for transactions) — specifically that layer 1’s achieve $1B Marketcaps with a successful mainnet release
- NFTs — exchange, creation, utility via embedding other cryptos in the NFT.
- Defi coins with valuations compared to the total amount of capital locked in the protocol (for example the token is worth $1M, but the capital locked in the protocol is $12M. So the ratio of the Total Value Locked (TVL) to Market Cap of the token is 12,
- Utility coins — which unlock or provide some service for a platform.
- anonymous v. doxxed team
- Venture Capital Supported coins
- Enterprise business
- Supply Chain
There are additional crypto memes, but those are some examples. Meme tokens themselves are generally simpler stories. The coin generally focuses around a character, theme, or show. The tokens currently use the utility meme to add an aura of sophistication (haha). The main utility is through taxing mechanisms when people buy or sell the tokens themselves. The taxes then flow to token holders as a portion of those tokens bought or sold. This generally is a meme which goes to zero since the tokens are really volatile.
The characteristics a speculator looks at when buying meme tokens are as follows:
- Fair wallet distributions. Using a tool like etherscan, speculators will see what percentage of the tokens belong to which holders. Bad signs are tokens which are held mostly by one wallet. A distribution where many wallets owned 1% or less is seen as a really good sign. The presence of a future event like a token burn also effects this — if 50% of tokens are burned, the…