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  • Writer's pictureJeevan Song

Memecoin 2.0

1. Does a memecoin have fundamental value?

Yes, It has. Someone probably argues that memecoin doesn't create any value for society. Let me think about a question. Do entertainment, sports, computer games and Bitcoin generate any value for the world? Nope, but it makes people happy. Hence, making people happy is a value for society. As long as it can make a community or particular people happy, it can gain consensus from people playing. It's easy to under the value of memecoin if you consider it a computer game. As long as players are engaged, the memecoin is valuable. 

2. What is the feature of a perfect memecoin? 

Imagine you are playing a PvP game or sport, and what do you expect from the game? Fairness! Whether it is a soccer competition or a computer game, no one would enter to play without fairness. Therefore, there are a lot of rules for the fairness of competition. 

Let's look at memecoins; with investors who want to make money, a meme coin with more fairness and transparency would attract more investors to play. For example, the memecoins $COQ and $SILLY, which put all the tokens in liquidity without any allocation and distribution, succeeded in the last several months. 

3. Are existing memecoins fair for investors?

NO! Founders take advantage of memecoins that generate unfairness. 

The problem with memecoin is that the founder would buy a lot of the token cheaply and gain 200x profits within 10 days. With this massive profit within a few days, the problem is how long the founder can stay with the memecoin. The answer is simple: in the last month, 90% of memecoins created in the Solana chain have lived less than 24 hours. Hence, with this unfairness for memecoin investors, many players consider memecoin a scam!

Therefore, creating a new structure of memecoin 2.0 intends to keep the founders motivated to stay with the memecoins! In other words, create an environment for memecoin and let it constantly grow.

To achieve this goal, we need to make 4 points for a memecoin 2.0: 

1) Fairness: Reduce the profit for memecoin founders and put more rewards for early players!

To reach this point, more advertising should be done before the launch of the memecoin. The current memecoin founders are used to only letting a few people know when it would launch. What if we make a group before the launch in 2 weeks and tell everyone the launch time to buy at the cheapest price? 

Of course, memecoin founders are unwilling to do this against their profits. On the other hand, investors and players would play with this kind of memecoin because they have a fair chance to buy at the lowest price.

Therefore, following the will of customers and players, if there is no founder who wants to create a fair memecoin launching for players, let's do it!

  • Kill the possibility of rug pull.

Without an excellent profit for founders, the founders cannot rug pull. They need to buy the coins like the other players. Don't worry if no founder wants to create this kind of memecoin; as long as the memecoin can grow its price, the founder, as one of the earliest players, can still get profits. In this situation, founders would not run away because they need to hold the memecoin for profit. 

2)For new investors: make a DAO governance

The biggest problem with current memecoin like $SILLY and $COQ is that the developing team is not motivated to manage the memecoin in the long run because they probably sell all their coins within a few days. After the first pumping, think about a question: Why should they still spend time managing the memecoin if they sold out their coins? 

The problem is that even if some big holders of the memecoin want to manage the memecoin, without control of the website, code, twitter account, and telegram group, they are challenged to manage the memecoin. Hence, most members died when the founders left. 

If we want a memecoin to last longer, we need to have new investors. However, most existing meme coins have already put 100% of tokens in the liquidity pool. The consequence of this setting is after several months, no one would like to develop and promote the meme coin. 

To address this problem, the meme coin needs 2% more coins to be automatically issued every year. 0.5% is the salary for the governance, which is elected by coin holders every half year. The other 0.5% is for a marketing budget, which should be used for listing CEX or advertising. 

With the governance and marketing budget, the memecoin DAO is able to practice many activities for new investors. With the hope of new investors entering in the future, more holders could be patient to hold this token. 

3) For holders: staking system

How to secure more holders in a meme coin is the most important for the coin's survival. To scale the big holders to invest, especially in an information asymmetry environment, we should give them yield for staking their memecoin. 

The solution is automatically issuing 0.5% of coins yearly to stakers who put their meme coin to stake in the system. With more TLV (total locked value), the price of the meme coin could be more stable.

4)For never dead: create a treasury 

An existing meme coin without a treasury could die because everyone knows it has no real value to support its market cap. What if a meme coin's treasury has 200 BTC or 2000 ETH inside? It's attractive to buy!

The solution is that the developing team should put 20% of your meme coin as the treasury when they initiate the memecoin. 

Let's use $Shiba (SHIB) as an example to explain how important a treasury is: 

SHIB's highest market cap reached $43 billion in 2021 and kept at about $15 billion for more than half a year.

If $SHIB has a treasury with 20% token, which bought $ETH in 2021-2022, Shiba should have 3 billion in $ETH in 2022 and about $1.5 billion in $ETH now. 

In this case, we can see that the public chain ($ETH) is always more stable than memecoins in a bear market. In other words, $SHIB's market cap reduced by 90% from $43 billion to $5.5 billion. Meanwhile, $ETH's market has declined by about 50% from $550 billion to $260 billion. 

Overall, the meme coin can keep its value in the bear market and let the holders and new investors know it's more stable than the memecoin 1.0. 

Besides putting the treasury on-chain, with DAO to manage the treasury, the treasury also can set a rule to buy back the meme coin in the bear market. With this strategy and transparency, no one would scale to invest. 

In summary

You will see a sustainable memecoin with a growing price by practicing the strategy of memecoin 2.0. 

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