Writing: Armonio, AC capital

Introduction

Humans pursue trends, and trends create value. This is a recurring theme in human history.

Tulip bubble = Trend + Limited Supply

This is the most famous and earliest super meme. In the 21st century, the information age has transitioned from the unlimited replication of web 2.0 to the limited information of Web3.0.

Information can spread at the speed of light on the internet, and the entities that carry popular value, such as offline handbags, luxury watches, and cars, have transformed into a string of non-replicable data online. Payment scenarios are accompanied by mobile terminals spreading to every corner of the world. Bong! The meme explosion has given rise to a bizarre meme world.

In the world of Meme coins, creating trends, especially internet trends, can directly monetize popularity through tokens.

So, how do we create trends? This article first presents the theory of Meme popularity, and then uses this theory to deconstruct the rise of BTC and Bome.

The Secret of Cryptocurrency Popularity

The popularity of information is essentially no different from the spread of diseases. In the field of communication studies, the models for information dissemination and virus transmission both use the SIR model. Interested students can refer to this, but I won't delve into the details here:

The process of information dissemination is divided into two parts: information infection and information immunity.

Information infection: We transform ordinary people into followers of popular information.

Information immunity: Followers of popular information break free from its influence and become outsiders.

The key to making information popular is to ensure that the infection rate exceeds the immunity rate. As long as the number of people infected exceeds the number of immune individuals within a unit of time, the number of followers of popular information will increase, and the information will continue to spread. Conversely, popularity will decline. So, how do we increase the infection rate and reduce the immunity rate?

Undoubtedly, if information can reach more new people (those who have not encountered the information before), the infection rate will increase. The higher the quality of the information, the greater its stickiness, making it easier to spread and harder to shake off. Drawing on communication studies and social psychology, I have summarized four important external factors for the success of a meme:

Four Key Elements

Content:

Content refers to information. It is the subject of dissemination and determines the attributes of the dissemination. The target audience for dissemination and the priority dissemination nodes are all determined by the information itself. For example, $People naturally has a left-wing color, and left-wing individuals naturally have emotional attachment to it. Using this concept to appeal to the left-wing audience naturally has advantages. Similarly, $Doge has an affinity for dog lovers. This kind of affinity is long-lasting.

The stickiness of content. Some concepts have a limited shelf life, such as memes related to recent political figures or sports events. Once the political elections or sports events are over, the real-world popularity ends, and the fuel for the spread of online information derived from real-world popularity is lost, potentially transitioning from a state of infection > immunity to infection = immunity.

The affinity of content includes the ability for secondary dissemination. A good dissemination event must lower the dissemination threshold. The simpler and more direct it is, the more it can be spread by ordinary people, leading to wider dissemination.

Environment:

The environment consists of two parts: time and space.

Time: Cryptocurrency Market Cycles

Time refers to the unique economic cycles of the cryptocurrency industry. The outbreak of a meme must coincide with industry attention and the willingness of users to participate in speculation. Previously, memes only shone in the middle to late stages of a bull market, when all project stories became uninteresting, and pure cultural dissemination memes emerged. The meme craze sparked by the inscription this time is a significant turning point. Industry attention is now driven by memes themselves, and cultural dissemination is no longer an alternative for projects with uninteresting content but has become a way to attract traffic. Of course, the backdrop for BTC's inscription meme is 1. the imminent approval of the BTC ETF, making BTC a mainstream asset and gaining attention from the mainstream world, and 2. the upcoming BTC halving, which is expected to trigger a bull market and attract attention.

Space: Community

Space refers to communities. A community is defined as a group of people with a common purpose. Having a common purpose means that this group of people shares common attributes. If the disseminated content aligns with these attributes, it can achieve faster dissemination efficiency. Just as different diseases spread at different rates in different populations, malaria is more likely to spread in places with poor sanitation, such as Africa, than in other places.

KOL Matrix

Scientifically, different individuals have different abilities to spread popularity. Some individuals are particularly good at conveying their views to others and are particularly adept at convincing those around them. These individuals are super individuals, or KOLs. The more KOLs we have, the more we can form a KOL matrix and influence more groups of people. KOLs are closely connected to communities, and KOCs who have influence on communities are truly valuable nodes. If they cannot reach the target audience, the value of KOLs is greatly diminished.

Wealth Effect

In the cryptocurrency industry, attention is led by the wealth effect. The so-called "rising prices attract people" is the use of financial facts to assist in the dissemination of information. Therefore, memes exhibit self-reinforcement between coin prices and cultural dissemination. The higher the meme's price, the wider the cultural dissemination, and the more steadfast the believers. Conversely, the lower the meme's price, the less favorable the cultural dissemination, and the more believers become detached. Therefore, meme coins often exhibit extreme price fluctuations.

Analysis of Meme Operations

In this section, we will combine two case studies to review projects and explain the above theories.

BTC

Many people do not recognize BTC as a meme coin. But that's not important. The definition of a meme originates from Darwin's theory of evolution, which states that like biological organisms, the spread of information also involves replication, variation, and selection. From a macro perspective, the consensus spread of BTC is no different from the path of other meme coins. The only difference lies in the content being disseminated.

The content of BTC is the fear of the collapse of centralized finance. In its genesis block, a news summary was added, "The British Chancellor on the brink of second bailout for banks." This news served as an anchor and became an anecdote. Each time it was disseminated, it reinforced the fear of centralized collapse. Every financial storm reinforces the consensus of BTC. The stickiness of BTC's consensus is very strong. Those who believe in BTC are often reluctant to give up their faith. This stickiness of belief is widely recognized in the industry.

The use of fair mining in the consensus is a reciprocal design. In the early stages of the project, as long as computing power was invested, BTC could be obtained. Satoshi Nakamoto himself also airdropped to some users in the early days, which can also be seen as reciprocal. The act of investing computing power can be seen as a form of recognition of the BTC project. Through behavior, those who obtain BTC are psychologically accepting the project. In terms of supply, BTC has implemented a limit of 21 million coins through the program, making scarcity evident. In his documents, Satoshi Nakamoto also depicted BTC being accepted worldwide and reaching $1000. Although this seems conservative by today's standards, in the era when BTC had no price, this was a very enticing promise.

The early stage of a meme is very fragile, much like the early spread of a new virus. In the early spread of a meme, because the nodes available for dissemination are very limited, the likelihood of successful dissemination must be increased. The timing of the release of the BTC whitepaper in 2008, although not during a bull market, coincided with a time when centralized finance was in turmoil. Everyone was questioning the sustainability of centralized finance. This timing and narrative were highly necessary in the early stages of meme popularity.

The community chosen in the early stages of BTC was also carefully selected. Satoshi Nakamoto first chose the cryptocurrency community. The ideals of the cryptocurrency community and the design principles of BTC are highly aligned, and they have a sense of urgency and mission for decentralization. Developing them as seed users presented the least resistance.

BTC's initial spread KOL matrix was chosen by Satoshi Nakamoto from the crypto community's big names: Dai Wei, Fal Finney, Jon Matonis, Laszo Hanec, and others. Here's just one example: in an email from Satoshi Nakamoto to Dai Wei, it was indicated that the concept and design of BTC not only realized Dai Wei's ideas in his paper, but also gained the endorsement of Fal Finney for such a product. This obtained the product's credit endorsement. These individuals may not be well-known outside the crypto community, but they have a strong influence within the crypto circle. Their involvement helped BTC quickly take root in the crypto community.

Bome

Before its launch, whether intentionally or unintentionally, artist Dark Farm was well-prepared for the popularity of a meme. In terms of content, Bome is a book of memes, documenting the history of memes. In the current environment, this holds historical value. As I mentioned earlier, by issuing cultural coins, it has moved from being an alternative when there are no projects to lead the forefront of the entire industry this year. Whether it's Solana, Avalanche, or Ethereum, they all see memes as an important means of attracting new users. Investors are also gradually recognizing meme tokens as an asset. The Book of Meme is a culmination of meme culture and naturally receives attention. This concept also has a natural affinity for the meme crowd.

In terms of timing, the launch coincided with a bull market in the industry and ample funds. In terms of the community, Dark Farm had previously deeply cultivated meme culture in the ETH ecosystem, so the Book of Meme project was not a sudden idea. He has a certain influence in the meme community within the crypto circle. The fact that his previous representative work remained above the issuance price before the Book of Meme became popular indicates that his achievements were recognized by the community, and he had a certain level of visibility within the community. This community overlaps highly with the Dogecoin community.

Next, let's look at the reposting and dissemination behavior of Bome's release posts, many of which are supported by KOLs who are also artists. These artists, although not large, have real users and cohesion. When a meme reaches a certain stage of development, it can interact with other traffic, such as Beeple's promotion. As a meme artist on Twitter, DarkFarm also has a strong sense of traffic and is adept at leveraging super nodes to enhance the influence of his project.

The avatars of early promoters indicate that the initial promoters came from the SMOWL community. Having a community allowed Bome's meme to directly bypass the most vulnerable stage. This was also part of DarkFarm's plan, as his Bome manifesto image showed SMOWL and these initial KOLs mutually corroborating each other. After Bome's success, the floor price of SMOWL's NFT also soared to 0.7, giving these community members a generous return. The entire operation formed a perfect closed loop.

I have said before that the three pillars of internet-era projects are traffic, technology, and capital. In the world of memes, technology and products do not exist. The success of meme projects lies in the mutual matching of traffic and capital. Capital can drive up coin prices, but simply relying on increasing coin prices is not an effective way to attract retail investors.

This also indicates that for memes, an era can only have one Bome. From the perspective of traffic economics, all other memes are competitors of Bome. If Bome is diverted, it will collapse, and other secondary and tertiary memes will find it even more difficult to succeed. If Bome is not diverted, the secondary and tertiary memes are just small players.

Conclusion

Meme tokens are the most distinctive phenomenon in the attention economy of the Web3 era. Attention is directly assigned financial value. The matching of capital and attention creates meme tokens.

Creating attention involves dealing with people. In addition to the unique wealth effect, emphasis on the KOL matrix, dissemination environment, and alignment of information content. Bringing all these factors together is not a simple matter. Therefore, creating an out-of-the-box meme is not an easy task. The birth and rise of a meme can be considered from these four factors.

When investing in meme tokens, attention feedback phenomena can be considered. For example, the Bome community has driven the value of the SMOWL community.

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