Murad Mahmudov - The Memecoin Supercycle - TOKEN2049 Singapore 2024

I'm here to talk about the mcoin super cycle why it's happening and why it will continue so the mcoin supercycle is not just a prediction about the future it's already happening if you look at the year-to-date performance of all the major crypto categories they are mixed bag with a lot of disappointments and a lot of under underperforming tokens but if you look at the bottom right of the screen you will see that mem coins in particular are dominating uh in terms of outperformance right now old memes are doing well and new memes are doing particularly

amazing the era of all crypto assets moving up in unison is over um we're all going to make it is dead this is a natural step in the evolution of the space um if you look at the first three pages of coin market cap you will see that only 43 tokens have outperformed Bitcoin year-to date and does any category stand out you will see that 13 out of the top 20 are meme coins so why is the mem coin cycle happening there's reasons internal to the space and reasons external to the space so first of

all there's a massive overproduction of tokens right um there's 600,000 new tokens being launched uh in 2024 and this was just as of April uh and there's over 5 half th000 tokens being launched per day um they extremely inflated altcoin valuations at centralized exchange listing time right Let's ignore the software for a moment Founders get zero cost basis on the token VCS and Angels get to buy a large percentage of the token cheaply and then centralized exchanges market makers Twitter K's Twitter th artists telegram callers YouTubers they all get either tokens Supply or dollars in

order to talk about the token right and ultimately retail is the exit liquidity for this when you're launching A10 billion valuations um retail is the exit liquidity that ultimately gets dumped on all of the altcoin price appreciation has been relegated to the private rounds uh this is what you typically see in tier one VCB infrastructure tokens this year all of the all of the fdv grows it happens in the shadows it happens in the private Market by the time something gets listed it gets listed at 5 10 15 billion valuation so retail does not get

to benefit from this at all um so they deliberately I believe they deliberately list altcoins at extremely high initial valuations so that after even after the initial negative 90% which is inevitable the seed investors are still up 100x while retail mistakenly think that it's a discounted bargain um all of the 2024 Launches on binance are literally down only every single one except two one of them is whiff which is barely up since listing and the other is Jupiter which is obviously mcoin trading infrastructure like that in and of itself should be sending a signal here

gamey just as a sample category not looking particularly great either um there's very few non-speculative daps that have been hits in this industry and we've had smart contracts for 10 years so if you look at Unis swap pump fund poly Market fantasy top Jupiter Phantom dydx GMX hyper liquid roll bit Shuffle blur tensor salana and big parts of defi literally all of this and these are probably the highest pmf products in crypto history right they're all either directly related to or dependent on speculation 99% of altcoins don't justify their valuations and they often say that

it's regulations which is the main reason why they don't Revenue share but it's not in their interest to do so because there are many projects that literally make $500 in fees per day while trading at5 to1 billion uh valuations right and goes without saying that these infr tokens aren't going to become monetary stores of value either so if these tokens make it easy for to be valued in Microsoft Excel by investment banker types then it will be obvious to everybody that they are 100x overvalued they need the narrative they need the mimetic premium to support

their overvalued market caps and the crypto token markets don't seem to Value Revenue over hype either this is a list of tokens that are most frequently hyped as kind of like large and legitimate Revenue producers which they are but their respective tokens they haven't been they haven't been doing particularly well either this year the two exceptions are banana which people use to trade meme coins and AA which obviously benefited from bases mem coin season as well so Revenue creates a floor but it also creates a ceiling um and this is probably the most important binance

research themselves have pointed that there are $155 billion worth of unlocks coming in the next 5 years that is a huge headwind to anything technological VCS can publicly embrace the mcoin thesis because it would pose risk to the valuations of tech alts a lot of which haven't even launched yet right and so just a reminder mem coins are already fully circulating and they have no unlocks last but not least Doge shib Pepe and whiff have already proven to the market Consciousness that these things can go to 550 or even a hundred billion doll type valuations

and so people are finally waking up to the idea that the token is the real product and the crypto industry is a token production industry that is masquerading as the software production industry many new launches look like this 80% of the supply in the hands of insiders this is completely broken um go go without saying that this does not build community on the other end of the spectrum you have something that's much more organic if you look at the most organic and bottom up meme coins you will see that they effectively enabled poor hodlers to

get rich who subsequently become unpaid full-time evangelists for the project and I think in the next couple of years you're essentially going to see this ideological war uh and for for a crypto industry that's so obsessed with decentralization it's crazy how centralized some of the out coin Holdings have become so the entire token Market cannot sustain itself without retail inflows but the vast majority of retail never cared about technology why would they care about that what does retail care about some blockchain being slightly more private no do they care about some blockchain being slightly faster

no do they care about ZK snarks no what do they care about let's be real they care about making money they care about having fun and they care about belonging somewhere so memecoins are not a vampire attack against crypto Tech mcoins are vampire attack against cryptotech tokens big difference so both memecoins and altcoins are actually selling you the same product it's the token not the software and mem coins are a Counterattack of the trenches right all tokens doesn't matter if it's a tech token or a meme token they're tables at the casino so why should

we play at your tables when we can create our own tables right meme coins are a spiritual Reincarnation of the 2017 Ico wave but in a new form and uh even cryptotech projects if you if you look at past history that managed to create cult-like communities and outperformed for a couple of Cycles in a row are those that either had an Ico or had some other way to let retail buy cheap before a major runup why does this matter because when you're trading attention a Relentless Community is the secret sauce that you need to look

for and if you don't enable poor people to get rich then you have no community and in my opinion air drops don't build community either so there's also external reasons for all this even four years even from four years ago the world is changing the world outside of crypto inflation is going rampant money supply is growing fast the prices of everyday goods are skyrocketing um AI is going to be coming for your jobs not even stem degrees or computer science degrees are a safe way out anymore um wealth and in income inequality are as high

as they've ever been and the situation outside of the developed world is even worse um accelerating loneliness accelerating sexlessness accelerating mental health issues all of these are going up um the amount of time spent online obviously growing year by year uh there's competition everything is becoming hyper competitive there's few remaining perceived ways to make it by people right especially young people um there's diminishing influence of religion in society this is just an undebatable fact um and last but not least all of this is essentially a crisis of meaning and I believe that all of the

above is bullish crypto it's especially bullish mcoins and it's especially bullish cult meme coins last but not least stories create Trends right for Trends to emerge there need to be stories that are percolating across the industry and the World At Large about people making large gains in a particular new category without naming any names we already seen four or five of these with Pepe we've seen four or five of these with Bonk we've seen four or five of these with whiff this cycle right and all of the Phantom wallet screenshots that you see of people

finally making it they don't come from utility alts they don't come from Tech alts they come from memes and this is why momentum is important if you study past Cycles because of momentum and reflexivity the things that outperform in the first half of the cycle are is the same thing that outperforms in the second half of the cycle again mem coins are the outperformance thus far we've seen this with ethereum it pumped in 2016 it it pumped twice more in 2017 Verge pumped in 2016 pumped twice more in 2017 uh salana pumped in 2020 pumped

twice more in 2021 you've even seen this with nfts pumped in 2020 pumped twice more in 2021 right so this momentum is important and I believe that the me Mania quote unquote we had in March of 2024 I think that was just the first of the three pumps and I think there's two Giant pumps coming in 2025 um so if you look at the top 20 new memes it's only 8 billion that just all of the new memes are still cheaper than a single VC backed vaporware right so altcoins are 800 billion unlocks are 155

billion memes overall are 40 billion I don't think Doge and Sh matter anymore the new stuff is 8 billion that is unbelievably cheap and money especially retail money it naturally wants to pump something that is easiest to pump and that is going to be the new memes every cycle the crypto asset category that outperforms the most is the one that is new weird and misunderstood and parabas are much more likely to occur in assets that are difficult to Value so not having a revenue is actually an advantage with each cycle the main altcoin narrative is

becoming crazier my theory is that this is is a byproduct of inflationary pressures on society and its Collective mental and hormonal well-being so anxiety essentially pushes the Swarm further down the risk curve and you're seeing this with the main topics that are essentially in Vogue with each cycle right here's what you need to understand every single altcoin out there is actually working on three products they're working on the software they're working on the community and they're working on the token mem coins are working on two products the community and the token people do not need

technology or even a promise of future dividends to purchase a crypto coin all they need is to like it and to see people talking about it any of you who are on crypto Twitter I'm sure you understand which topic is being discussed the most right now on utility a lot of VCS and thought leaders are gaslighting you into believing that mem coins don't have any utility at all I strongly disagree and I believe that the best mem coins actually have more utility than almost all Tech alts what do they offer having fun loneliness reduction identity

hope provisioning friendships being a part of Cutting Edge culture sense of belonging a guild in the mmor RPG that is crypto experience of teamwork greater sense of participation they are what Dows were supposed to be relatability emotional connection Mission and meaning entertainment and being happy charity Collective artistic expression Collective imagined reality storytelling and lore building and it's just hilarious to think about the even the possibility of getting rich off of memes so it kind of becomes a reflexive self-fulfilling prophecy and all of this is before we discuss the token itself right so we can debate

how much utility memes have but it's not zero and it doesn't matter that there's no Revenue people are paying for these services and participating by simply buying the token uh this doesn't all of this logic doesn't just apply to memec coins the same logic applies to altcoins as well but memes do it better because of structural toonomic and emotional reasons and here's here's my controversial opinion altcoins are not about technology and mcoins are not about memes what they actually are they're tokenized communities um they're tokenized communities that use different narratives and techniques to recruit people

and get the price to go up and DJ Spartan has this famous infographic right whether even if even there's quote unquote fundamentals it's still predominantly mimetic in nature I edited that to display how I see it right so the actual utility of any altcoin is probability times magnitude of future dividends for token holders right we know most of most most of the time it's not going to lead to anything but 90% is still mimetics and speculation for mem coins it's actually similar there is some nonzero emotional value but 80 90% of it is still mimetic

and speculative and what I think is happening in the industry right now and what you will see in 2025 is that Meme coins are stealing the mimetic and uh speculative Premia away from altcoins right people are realizing it was never about the tech it was always about the tokens themselves so the tokens are just gambling chips and mem coins are a much better product they are much purer product which much greater product Market fit than any Tech Al so here's what you need to understand any crypto asset that doesn't distribute cash flows to your wallet

or is a store of value is a mem coin period so 99.999% of altcoins were mem coins all along altcoins are simply meme coins with more steps it doesn't matter if a token is a tech token or a meme token so what does actually matter the these are the factors that I believe actually matter to catch the next outperformer Community poor people getting rich perceived maximum upside token distribution attention fairness organic prize Discovery eliminating class Warfare and bitterness within the token holders no unlocks no Supply overhang focusing on new coins which can Enterprise Discovery and

avoiding old coins which have back holders price action obviously positive momentum evangelism and Community participation where can you buy it authenticity holder growth rates no VCS and VCS having to buy at Market no cabal and cabal having to buy at Market who the whales are who the K's are who's talking about this on social media obviously the concept and the meme itself but it's only a small part of it as you can see the message decentralization of all kinds cess people not selling simple uh emotion a good story it needs to be a good narrative

a freshness of the narrative you want people to be want to be a part of that thing that group that movement right inspiration Trends and cultural zist outside of crypto participation stickiness and probably the most important is what I call free C labor and notice how not a single one of these has anything to do with software Revenue these are the factors that actually matter you are focused on technology but the crypto industry is not a technology first industry it's an asset first industry even the name of this conference is token 249 instead of tech

you should be focused on Human Condition retail motivation and asset distribution mem coins are here to stay people ask me there's going to be billions of them I say that's totally fine uh 99.999% of them are going to be in the PVP category AKA hyper gambling you want to look out for those that want to be multicycle you want to be out you want to be uh buying those that are trying to be the next Doge trying to build a long-lasting cult trying to be a brand right and if you ignore the current crop of

hungry Zoomers on crypto Twitter you will understand that most retail doesn't actually want to gamble and constantly rotate they want to buy and hold something that they resonate with this is why PVE memes are going to succeed in the end they want to believe in something and the word mcoin is a misnomer it's only about 30% about the meme itself and it's 70% about the people again what mequin really are they're tokenized communities which use the meme as their symbol and their banner and there's going to be different flavors of them so the best PVE

memes are going to be Cults what is a cult it's a group of people that are extremely passionate about a cause if you've been U kind of studying any of the Silicon Valley blogs from early 2010s you will see many startups always trying to unbundle Craigslist and at the risk of being a little bit Blasphemous I think what you're going to see in the future is the unbundling of religion it is uh essentially a Swiss army knife um where which offers a bunch of products it offers identity culture Escape loneliness reduction Community hope and a

bunch of other things and I believe that religion is losing influence in the world and Brands experiences and communities are feeling that void you can already see that with uh video games music festivals yoga DMT Retreats CrossFit Soul cycle keto and obviously Financial assets right you know how culty Apple Tesla holders are how extremely culty Bitcoin holders are and I believe we're going to be seeing simil similar phenomena with memes so mem coins have shared values shared Lifestyles shared principles and understand that memes themselves are only a part of this right and so it doesn't

actually matter if something is a tech Al or a meme coin what actually matters is whether it's a cult most crypto out performance have always been Cults both Tech and non-tech Bitcoin ethereum uh Ripple cardano chain link Dogecoin ship Tow and a lot of people focus on money and attention but you also need to focus on time energy and labor and I don't think people are going to be putting their time energy and labor into VC funded Tech projects that are already at 10 billion because if and if you don't have Community your token is

dead so why is being a called desirable because people are not going to be selling people are going to have very high rates of particip you're going to have an army of skidos working for the coin 24/7 even while you sleep and you're essentially going to have holders some of which are Engineers designers and influencers providing labor for free so I always like this uh this tweet by sisifus from April 2024 he said meme coins are making people realize that nearly all of the tech in crypto is a smokees screen designed to sell you a

token that does nothing marked up 100x from the private round this is why VCS don't like meme coins it threatens their Core Business which is selling Vapor uh just briefly nfts I think meme coins are going to go much higher because instead of having 3,000 people promoting 10,000 illiquid jpegs you now have 100,000 people promoting one single liquid token this is how I see the mcoin space evolving you want to be focused on things that are going to become Cults brands or movements um how to Value them they're not Equity they're not debt they're not

currencies they're not quite like take alts either the best mem coins are emerging mini religions and need to be analyzed as such I see them as financialized vessels of faith and I see them as vessels collecting the satisfaction both within crypto but also with the word at large so if mem coins are a financialized middle finger to crypto movement coins are a financialized middle finger to the world and mem coins are simple and Tech Al are complex retail doesn't want to study about staking restak or impermanent loss and they're much more friendly to new people

so putting it all together mem coins are simpler than Tech alts they're more liquid than nfts they're safe than defi they have no inflation no unlocks they have no UND dumping on you uh you have better odds than with sports betting or casinos uh you have more volatility AKA excitement it's a fresher narrative it gives retail a chance to win and the community is much more passionate than in any other crypto asset class and the best crypto products don't require token and the best crypto tokens don't require product again mcoin cycle is not a prediction

it's already happening memes are dominating every metric every single metric so these are my predictions one trillion for meme coins uh market cap uh you're going to see two memes above 100 billion you're going to see 10 memes above 10 billion a quarter of the first page of coin market cap is going to be memes 10% meme coin dominance utility and VC backed alts will continue out underperforming fat protocol thesis will slowly die because building store value and casino number four number five is getting increasingly hard VCS will be buying Blue Chip meme coins Smart

Ones are already beginning to do so trafy will be buying meme coins Smart Ones are already beginning to do so and you will see hyper mecoin before hyperbitcoinization and a lot of people talking about economics of belief tokenization of faith and financialized new religions uh for more insights follow me on Twitter at must mad and remember stop trading and believe in something thank you