Author: ZENECA; Translation: MetaCat
To be honest, the majority of NFT projects/communities are reimagined meme coins, shit coins, altcoins, or whatever you want to call them.
Let’s take a walk down memory lane and compare NFTs with meme coins to see their similarities, differences, and what we can learn from them.
Cobie (to some extent) is right
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Cobie once said, “NFTs are just image-backed altcoins.” At the time, the NFT community had a negative reaction to this statement, but now more and more people are starting to realize that what he said might be true.
When we compare what is happening in the meme coin space now with what was happening in the NFT space in late 2021 and 2022, it is easy to see the accuracy of his viewpoint.
Yes, I know there are exceptions.
I will talk about some exceptional cases later. We know that not all NFTs are garbage. On the contrary, NFTs have tremendous potential, utility, and advantages that ERC-20 tokens cannot match. However, for the NFT projects currently being released, more than 99% of them are almost certainly Ponzi air projects.
Think about those 10k PFP series, they all have a team, a dream, and a “community”. Apart from a few exceptions, aren’t these tokens similar to $PEPE, $DOGE, $SHIBA, $TURBO, $BEN, or any other unsuccessful ERC-20 tokens?
Oh, you don’t believe me?
“Oh, but my project has a plan, a roadmap, a vision, and a team that is working.”
Do you think meme coins don’t have roadmaps? Take a look at SafeMoon’s roadmap, one of the most popular meme coins in early 2021:
Looks familiar, right?
Yes!
The roadmap of most NFT projects is usually just a more polished version of the meme coin roadmap.
The internal structure of most meme coins and most NFT projects is basically the same:
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You have an idea
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You start promoting this idea
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In the bullish/hype phase, this is usually accompanied by “presale” or “whitelist,” creating an illusion of high demand and generating FOMO for those who didn’t buy in
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There’s usually a “roadmap”
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After you sell, the majority of buyers/holders immediately try to list it for sale at a price higher than the purchase price
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97-99% of holders hope for a price increase and sell to the next fool
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The 1-3% of holders who stay do so because they actually believe in the idea/community/vision/project or something else
The lifecycle looks essentially the same:
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Start;
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There is a lot of hype before Mint/release;
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After release, there is an attempt to further boost the momentum; in a bull market, this can become crazy;
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An inevitable major accident;
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Maybe there is a need for a second pump, but usually there isn’t;
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Slowly bleeding to death, some stubborn fans try to revive the project, but most people have already left;
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Meanwhile, “holders” keep saying things like, “Wow, look at how many holders we have”, “Look at who just bought”, “Why are people selling”, “Buy the dip”, “The team is working” etc;
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Looks familiar, right? If you’ve spent some time in NFT Discord servers or Meme coin Discord/Telegram, this shouldn’t come as a surprise;
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The atmosphere is remarkably similar. Again, I know there are exceptions. I know this doesn’t apply to all projects.
Differences:
One strange phenomenon is that when it comes to NFT projects, people seem to hold the team more responsible than Meme coin teams. Perhaps it’s because with Meme coins, people already expect the team to disband and the token to go to zero, while with NFT projects, there is no such expectation.
It’s not that people don’t want the founders of Meme coins to be held accountable, but in most cases, these expectations ultimately turn into a rug pull.
I think people actually know that Meme coins are gambling games, because that’s essentially what Meme coins are. The same mentality doesn’t apply to NFT projects, possibly because there are more exceptions to the rule.
This often means that the lifecycle of NFT projects is much longer than that of Meme coins, and compared to the quick death of most Meme coins, we see more “slow rugs” in NFT projects.
We also see many actually legitimate projects with longer lifespans and a greater likelihood of establishing a sustainable business model + ecosystem that can break the Ponzi scheme and truly create value.
A deeper study of the differences will reveal that NFTs are fundamentally non-fungible.
This uniqueness makes potential innovations, products, and solutions possible, which cannot be achieved with fungible tokens.
Whenever discussing the possibilities and future of NFTs, I like to quote @punk6529’s image. We are still in the early stages of crypto. NFTs are still largely in the realm of art + collectibles, but there is also a place for games, metaverses, brands, culture, and intellectual property, and exciting things are happening in these areas.
Of course, there are already individuals and companies creating amazing things related to NFTs: reward/loyalty programs, ticketing, POAP, membership, etc.
Of course, encrypted art is one of the best use cases for this technology. Digital artists all over the world finally have a way to sell their works, and collectors finally have a way to collect digital art.
Another big difference between meme coins and NFT projects is the role played by the “team”. For NFT projects, the team is often heavily scrutinized and held accountable by the community if the project does not progress well (I believe every NFT project founder can relate to this).
For meme coins, however, completely anonymous projects still manage to gain trading volume and reach crazy market valuations. And more commonly, project teams openly deceive you.
Clearly, the intentions of many NFT project founders are much purer than those of most meme coin founders. Many of them sincerely believe in their ideas and have put in tremendous effort to go from 0 to 1. This is also a big reason why I am still bullish on NFT technology and why I choose to stay here.
Defending Meme
It seems like I am completely devaluing meme coins, but in fact, I don’t dislike them. On the contrary, I believe Meme is very important.
Meme is the most powerful thing in the world. Meme rules everything, everything is a Meme. Meme is not just doge, pepe; religion is a Meme, diet is a Meme, and all fashion is actually a Meme.
Meme is culture.
Source: http://slideplayer.com/slide/14009958/
Many meme coins have their own lives. It is interesting to watch them evolve, mutate, and spread within the community. I think it is a mistake to immediately abandon them; there is a lot to learn from meme coins.
However, unfortunately, there are side effects. One of the side effects is the cognitive problem they cause. It is easy for people to view the entire meme coin space as a huge scam. Although I know it is not the case, and you also know it is not the case, we hope that everyone in the world will eventually know this.
Just because most meme coins are scams does not mean the ERC-20 standard is useless.
Just because most NFTs are scams does not mean the ERC-721 or ERC-1155 standard is useless.
Just because most L1s are scams does not mean BTC or ETH is useless.
Meme coins are the main beneficiaries/canaries in the mining events or bull markets. I think maybe they are!
Meme coins are a simple way for retail investors to get involved in the field and start consuming, especially when they are added to exchanges. Perhaps many people who have been watching decide to start with Meme coins.
So is it worth investing in Meme coins?
You can earn huge amounts of money by trading Meme coins, just like you did with NFTs. There is no other market on earth where you can consistently see returns of 100 to 1000 times. No risk, no reward. No courage, no glory. The reason for such high returns is largely because the risks are so high.
The downside is that in 90-100% of cases, there is a huge negative return!
Meme coins are a microcosm of asymmetric bets. Think about the scenario of a 100x return. In order to achieve a balanced income and expenditure in your 100x return investment strategy, you may have to bear the expenses of 99 projects.
One thing to remember is: the odds are always against you, the players and the whales always have the advantage. This doesn’t mean you can’t win at all, but you are playing two different games.
Trading Meme coins is gambling.
Gambling can make money; you can even have an advantage and become a profitable gambler. Just be clear about the field you are entering, understand the risks, and gamble only with what you can afford to lose.
Most people should not engage in such trading.
Everyone overestimates their ability to be a profitable trader. In fact, everyone would do better by regularly investing in BTC + ETH without doing anything else.
How do you know if you should trade Meme coins?
When I was a professional poker player, people always asked me, “Should I become a professional poker player?”
My answer was always the same: If you have to ask, the answer is no.
If you have to ask if you should trade Meme coins, if you need someone else to validate it for you, then you shouldn’t trade Meme coins. You need to know your advantage, but the obvious fact is that most people don’t have an advantage.
Happy Treadmill
Take a step back and think about why you might want to trade Meme coins, NFTs, or anything else. What is the ultimate goal? Is it to make more money? If so, what is the purpose? Why are you here? When is enough enough? What is the goal? What is the real goal?
Finally, here are two fables for you to ponder:
Source: https://cmcbp.co.uk/the-mexican-fisherman-what-can-we-learn-from-it/
Source: https://www.reddit.com/r/simpleliving/comments/lbjbpd/enough/
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