Memecoins are NFTs and Vice-Versa
Speedrunning the NFT Mania of 2021 in 10x speed and scale
I’ve seen all kinds of mental gymnastics from market participants trying to figure out what to make of memecoins, the potential winners, and their place within the broader crypto space. However, I think the roadmap for what they will look like is relatively straightforward: simply study NFTs. I’ll briefly walk you through their history, how current memecoin leaders look eerily similar to the early stages of leading NFT projects, and how to identify potential winners. Some of the winners have been obvious, in my opinion. All you needed to do was be versed in NFT history. Just remember this: memecoins are NFTs and NFTs are memecoins.
Brief & Simplistic NFT History
The history of NFTs, for the most part, goes something like this1:
In the early stages, no one really paid attention to NFTs, people liked or bought them mainly because they found the projects interesting and the communities that formed around them appealing. There was no roadmap, nor any promise of utility. They were relatively niche, and they rarely went viral outside of the community.
As more people started showing up, speculators arrived, realizing there was money to be made. A few of these projects started becoming valuable. More and more NFT projects started popping up.
Participants, realizing that some early NFT projects were already expensive, began creating derivative projects.
Think pieces started sprouting up from threadooors and VCs about how NFT technology was the future. Creators, creator economies, communities, and GTM had been solved.
Eventually, we reached a point where new NFTs launched daily, and mints were impossible to keep up with. Creators were running out of animals. Mints would routinely go 10-20-30x overnight. If you minted the wrong animal on the wrong chain, you ended up broke while watching your timeline make gen wealth.
Some of these early NFTs continued to hold strong - some got stronger - even though the flavor of the day NFTs took the spotlight for days or weeks at a time.
Random old NFTs got dug up: “the first cats minted on ETH”, “the first ERC-whatever minted”. Most of these faded over time. People started getting more desperate to find the next major play.
People continued piling on as prior gains gave the illusion to the average participant that anyone could hit the next 100x. When in reality, the game had gotten harder / more sophisticated. Insider groups, pump-and-dumps, whitelists, and rug pulls all became more common.
They kinda quieted down until we got a final run with some newer narratives; phytigal was big, NFTs as access passes, etc.
As the bull market came to an end, a majority died a slow death. Only a few winners endured through the bear.
I probably missed a few parts, but the general point is a lot of this sounds awfully similar to the dynamic we’re watching play out real time on Solana and Base. Simply re-read the above and replace the word NFT with memecoin. Now this is not to say everyone thought they were the future; plenty felt NFTs were simply memecoins and nothing more. But memecoins are currently following the path of NFTs.
Cobie inciting violence with his take: NFTs were simply altcoins with pictures.
Where Are We Now?
It’s important to know the metagame you’re playing in crypto and it feels like memecoins are somewhere around stages 4 through 6. It seems threadooors and VC’s have convinced themselves that memecoins are a new paradigm, ushering in an unseen era of consumer crypto. I’ve seen theses ranging from how memecoins are the best GTM strategy for protocols and ecosystems (remember when minting an NFT would get you a white list for a protocol or how you could airdrop NFTs to onboard potential users?) to how they’re the best way to invest in attention or culture (remember NFTs were the future of loyalty programs?). What none of them seem to realize is; the exact same things were written about NFTs.2
Now, I do think this memecoin mania will probably last longer, and the scale will far exceed what we saw from the prior NFT cycle. And this makes sense — it's obvious that memecoins, being fungible, move faster than NFTs did — there’s less friction to buy them (both from a fee + UI perspective).
But moving too fast can at times be a detriment. The communities that form around these coins take time, virality (more important staying viral) takes time, and building a holder base who’s in the project outside of a quick 100x is important (you need holders who aren’t going to yeet at the first 40% capitulation).
Parallels: How to Pick the Winners and What Memecoins Might Stick Around?
Writing this in April 2024, there are basically two ways to play memecoins, in my view. Either you continue to play shitcoin roulette, hoping for the 50-100x flavor of the day (which over time usually just ends up being -EV), or you can find the established memecoins that have i) community, ii) virality in the form of good memes, and iii) some semblance of history (this is crypto after all, a month can be a long time). You’re probably skipping out on the insane 1,000%+ gains, but I think some of these coins are still likely to 10-20x, if not much more. If what I think is true, we should be able to look to past NFTs to see what they looked like in their early stages, and compare them to memecoins today. We can then extrapolate that to make educated guesses at what else might have sticking power.
I’d largely agree with this and think (1) and (3) are most important, but would add two very important criteria:
Some sort of organic price action and / or participants who are in it regardless of the monetary game. You need holders who for better or worse, will never sell their bag. You need a holder base willing to withstand massive -50% drawdowns, maybe even multiple 30-50% drops (just check how many WIF went through).
If we want to draw Parallels to NFTs that: i) were unique, ii) rode a rising NFT wave, and iii) had some sort of organic community / price action, we can look at what they looked like in the early stages (granted still massively down since the peak). For brevity’s sake, I’ll just include three projects at a high level and what early days looked like.
Cyptopunks: These were completely unique at the time. Humans, zombies, aliens, hats, beards, etc. Pretty straightforward. Punks were under 1 ETH for years after launch, and even under 5 ETH well into February 2021.
BAYC (lol): At the time of mint, there really weren’t many ape PFP projects. The mint took 10hrs+ to mint out and Pranksy minted hundreds of Apes to help get it over the finish line. They were under 1ETH for almost a month (I would know, I sold mine for a combined ~0.6ETH).
Pudgy Penguins: History of this is pretty clear to anyone who’s paid attention but for a year after mint they hovered around 1-3 ETH.
What’s interesting, and something they all have in common: none were overnight successes.
The below is Cryptopunks’ marketcap (via Coingecko). You can see multiple periods of consolidation. They ranged around 2-5ETH from October 2020 → February 2021 and after a short spike, hung around 20ETH in late Feb 2021 through July 2021. At both of these points it was easy to think it had pumped, or that it wasn’t worth buying someones 20-50-100x, but there was still plenty of room left to run.
Now, let’s look at two of the most successful memecoins currently capturing everyone’s attention: WIF and Boden.
Boden: This moved pretty fast, but seemed to hit a ceiling, hanging around $40mm market cap for some time. It then hung around $200mm for a bit before finally exploding to ~$500mm where it currently sits today. It didn’t go to $200-400mm+ overnight (ala BOME, MFer, etc.). During the entire consolidation, dips got bought, believers dug their feet in, and memes continued to get churned out.
WIF: WIF has had multiple periods of consolidation, not really breaking $100mm MC until late Dec. / early Jan, and then hovering around $300mm MC from January → March. At multiple points, it was easy to say the most dreaded words in crypto, “its too late, its already pumped”. When in reality, buying anytime prior to March still would have netted you a ~10x at current prices. Since inception; dips got bought, and the hat stayed on.
Whats also interesting to note is the amount of derivative meme plays that have been created during the consolidation phase on both these coins. There’s an “XYZ wifhat” and every member of the Boden family on chain. Similarly, we saw punks on basically every L1 / L2, and multiple derivatives / rip offs of BAYC. Not that this is a negative. If anything, the more derivatives of an OG meme / coin, the more credibility it lends to the original.
What’s Next & Outlook
It’s going to be hard for memecoins to maintain attention - there’s almost zero chance they’re the main narrative over the next 6-12 months. Not to say they can’t be the overarching theme of this cycle, but there will be mini-cycles over the next year; AI, RWA, Gaming, Modular, etc. all will probably have their moment in the sun. During this period a lot of memecoins won’t survive. But we’ll inevitably have another memecoin cycle with new narratives.
You can tell me the rising memecoin tide will lift all boats and that your $10mm Cat in a Hat memecoin is the future, but to that I say good luck after being bombarded by the 150th modular rollup decentralized AI chain while Chat GPT5 is making headlines and Sam Altman is talking about raising $20 trillion dollars.
This is not to say there won’t be winners; there will be a lot. Some of the winners will be massive. Boden and WIF marketcaps will probably far exceed most targets given we have no clue how to value these things, but guess what - we had no idea how to value NFTs or what collections should in aggregate be worth. The best educated guesses for memecoins that I’ve seen is = SHIB ATH and = DOGE ATH (and yes, I do think WIF will probably eclipse both). Outside of that its anyones guess.
Now if you want to pick the winners that can replicate moves like Doge, WIF and Boden (my favorites: Popcat, Keyboard Cat, Costco Hotdog, Seiyan, Pups), you have to bet on the memes that can withstand that pressure from outside forces. Which communities are tried and tested? Which have charts that have grinded up with holders not selling even after watching their coin go -50% → +500% → do nothing for 3 weeks → -40% → +300%? Study the charts, study the communities, and remember, study NFTs. Find communities that have hung around through the dips. Look at unique memes not derivatives or “BeTA”. And remember: memecoins are NFTs, and NFTs are memecoins.
Feels like everyone at this point has read “Geeks, MOPs, and sociopaths in subculture evolution” but if you want an amazing read into how these communities grow, flourish, and then exit niche status, this is the article to read.
Sidenote: I do think memecoins are helpful for adoption as a percentage of people yeeting memecoins will likely stick around to invest / play-around with other stuff, similar to how NBA Topshot was an entry for many casuals into this bizarre world.