Trumpcoin may have become the pinnacle of the Memecoin craze; should we shift our focus to SocialFi?

Author: Tulip King

Translation by: Shenchao TechFlowAlpha 

The overall health of the priority market is healthy, but there are signs of over-expansion, and the next wave of mainstream investment direction is still unclear. Trumpcoin may have reached the peak of the Memecoin craze—should we shift our focus to SocialFi? Emerging hotspots such as SocialFi, AI, and Dinocoins are vying for market attention.

Market Conditions
Despite recent market volatility, I believe the overall market remains healthy. Looking at the three core indicators of the crypto market, performance is very positive.

Bitcoin Consolidating at High Levels
Bitcoin continues to consolidate near the top of its range, indicating a strong rather than weak market sentiment. Under current conditions, approximately $105,000 seems to be a key price level for Bitcoin. This level reflects the market's confidence in the long-term development of cryptocurrencies while avoiding the risks of excessive optimism. Bitcoin is consolidating at high levels, showing healthy market signals. 

Although we have not seen some major news—such as a strategic Bitcoin reserve (BSR) or comprehensive tax incentives for cryptocurrencies—the market has still made some slight progress. For example, the pardon of Ross Ulbricht is a low-key yet significant signal indicating that the Trump administration has not completely abandoned its support for cryptocurrency policies. While the progress in regulatory transparency has been slow, the overall trend is positive.

Stablecoin Supply Steady Growth
Another positive signal is the continuous growth of stablecoin supply. Historical data suggests that an increase in stablecoin supply is often a reliable precursor to enhanced institutional interest and market liquidity. It’s worth pondering: who is minting these stablecoins on such a large scale? The continuous growth of stablecoin supply releases bullish signals. From the scale of minting, institutions are indeed entering the market. If you have doubts about this, you can check the data from @whale_alert and other on-chain monitoring tools.

Although this has not yet been significantly reflected in altcoin performance, capital is flowing into the market.

Expansion of Total Market Capitalization
The total market capitalization of cryptocurrencies continues to grow. Ultimately, the total market capitalization of the crypto market is still expanding. This growth, combined with Bitcoin's strong performance and the increase in stablecoin supply, further indicates that the market is not on the verge of collapse. Instead, the market is consolidating its foundations, preparing for the next phase of growth, regardless of how this phase presents itself. Currently, the market does not resemble an apocalyptic scenario.

Narrative Risk: Loss of Market Direction
One important reason for the current lack of significant volatility in the altcoin market is the absence of a clear narrative direction. This is known as "narrative risk"—as the market has lost its way, capital may flow into the wrong investment themes, increasing risks. Take the recent Memecoin craze as an example. Although Trump did not announce a strategic Bitcoin reserve (BSR) or other major news, he did launch a Memecoin. Subsequently, Melania also launched a similar token, and there are even rumors that Barron may be involved as well. Traders have shown tremendous enthusiasm for these opportunities, myself included. 

However, this sudden Memecoin craze has filled the market with uncertainty, leaving more questions than answers. Is this a super cycle for Memecoins, or a top signal? Should we refocus on AI tokens? Why does XRP's price chart look so strong? Including the market itself, it seems no one can clearly point out where funds should be concentrated at this moment.

Memecoins: The Craze May Be Nearing Its End
I regret to inform everyone that trading in Memecoins may have entered its final wave. Trump's involvement has captured overwhelming attention and market share in this field, and this influence is hard to underestimate. The question now is: who else can launch a Memecoin on a similar scale? The answer is likely "no one." In Kel's words, we have exhausted our "attention resources." 

The essence of Memecoins is to transform attention into tokenized assets. They rely on attracting public attention and converting it into speculative capital. Over the years, this model has driven explosive growth in the Memecoin market. However, with Trump's participation, this model may have peaked. Trump is not just an ordinary celebrity or internet personality; he represents the vast majority of attention globally. No other figure or event can compete with his dominance in culture and media. Thus, Memecoins as an asset class may have reached its peak. The growth space for attention tokenization has been fully tapped.

Of course, Trumpcoin may still see further gains and could even lead other Memecoins for one last parabolic rise. But this feels more like an epilogue rather than a new chapter.

SocialFi (Clout and Yapster)
If the narrative of Memecoins is to continue evolving, it needs to shift towards a more sustainable and scalable model. This is where the potential of SocialFi lies. By combining speculative enthusiasm with deeper, more personalized interactions, SocialFi has the potential to extend the Memecoin story. Rather than betting on cultural phenomena or celebrity tokens, SocialFi offers an opportunity to invest in personal relationships and community dynamics. From this perspective, it is a natural evolution of the Memecoin concept—moving from mere attention conversion to more meaningful interactions and long-term value creation.

Why SocialFi is Worth Watching
SocialFi is a potential hotspot worth paying attention to. Successful projects in this field may integrate elements of social media and online gaming to create a hybrid platform that is both engaging and profitable. It can be envisioned as a combination of "social platforms and online entertainment," with substantial potential for widespread application. Currently, there are two projects to watch:

Clout: Clout focuses on tokenizing social influence, allowing users with a large following (over 10,000) to create personal tokens.Built on Solana, it combines the monetization features of Friend.tech while simplifying token issuance and integrating with decentralized exchanges like Raydium. Clout has already achieved early success, with its first token $PASTERNAK reaching a market cap of $80 million in just a few hours. The seamless registration process through credit cards and Apple Pay significantly lowers the entry barrier for Web2 users. However, its open structure disperses liquidity among multiple influencers, which may weaken community cohesion.

Yapster: Yapster is another innovative SocialFi project built on Solana that integrates social media, gaming, and cryptocurrency. In contrast, Yapster’s approach is more centralized, focusing on uniting the community around a common goal rather than dispersing liquidity among multiple influencers. Users can participate in daily game shows, paying a registration fee of 0.25 SOL to create and vote on Memes. Winning Memes can even be minted into tokens, with their distribution linked to participants' scores. This model focuses on a single Meme rather than many influencers, creating a more robust and unified flow of liquidity. Yapster's invite-only Beta testing further fosters a closely-knit, actively engaged community. A notable example is that its first token reached a market cap of $25 million in just 10 minutes, showcasing its strong user engagement and value creation capabilities.

@yapsterxyz: We understand that many users are experiencing lag and other issues during game runs! We are currently working around the clock to fix these issues and hope to resolve them as soon as possible. Thank you very much for your understanding and patience while experiencing the Beta version. Stability issues caused by excess demand are often bullish signals for the market. While Clout offers many advantages for influencers in terms of scalability and operational simplification, I prefer Yapster’s centralized mechanism and community-driven design. It focuses on converting the public's attention into real value, making this model more sustainable and attractive compared to dispersing liquidity among numerous individuals.

Dinocoins (XRP, HBAR, XLM) "Things that are dead never die; they come back stronger." — George R. R. Martin
Dinocoins (including XRP, HBAR, and XLM) are typical "hated trades" in this cryptocurrency cycle. This trading pattern is effective because it reveals the emotional biases of market participants. The skepticism and disregard for these assets often mean that investors are under-allocated to them, leading to a significant amount of capital still on the sidelines. When these assets start to rebound, investors are often forced to buy in, further driving prices up.

Bitcoin and XRP price charts. Twitter users in the cryptocurrency circle have long viewed Dinocoins as outdated antiques, believing they have lost competitiveness in the face of newer, more attractive narratives. However, it is this very disdain that creates opportunities for their unexpected resurgence.

Why should we pay attention now? Despite their poor reputation on Twitter, Dinocoins have shown significant strength in price performance and institutional adoption. Here are the reasons they are worth watching:

Institutional recognition: These tokens have reinforced a "more formal" positioning in the cryptocurrency space, focusing on real-world application scenarios and partnerships. For example, Ripple's new stablecoin RLUSD showcases its efforts toward mainstream financial integration. The partnership between XRP and Santander and the collaboration between HBAR and the World Gemological Institute further affirm their commitment to institutional adoption. (An atypical XRP Army account — this is a bullish viewpoint from an excellent research team.)

Regulatory landscape: With expectations for a more favorable cryptocurrency regulatory environment, these tokens are in a favorable position. The ISO 20022 compliance of XRP and XLM (a standard closely related to compatibility with traditional financial systems) enhances their credibility. Furthermore, rumors surrounding ETFs (exchange-traded funds) for XRP and HBAR add another layer of appeal, although Bitcoin ETFs remain the main focus of the market. This contrast is striking: on one hand, many cryptocurrency enthusiasts scoff at them; on the other hand, institutions may quietly embrace these tokens. Whether you like them or hate them, Dinocoins are taking action that could redefine their role in the market. Their focus on compliance, partnerships, and real-world application scenarios could ultimately become a winning strategy, especially if they can win favor with regulators.

Hedge fund liquidity token operations If you still believe in the concept of "fair launch," then you need to face a reality: the lifecycle of most tokens is not as democratic as it appears on the surface. 

Team-developed projects: Project teams typically develop projects with a vision of decentralized finance or infrastructure and create a token as part of the ecosystem. 

VCs provide funding in exchange for locked tokens: Venture capital firms (VCs) fund projects in exchange for locked or phased unlocking tokens. This arrangement theoretically binds the interests of VCs to the long-term success of the project since the tokens cannot be sold immediately. 

VCs sell unlocked tokens OTC to liquidity funds: When tokens begin to unlock or are released in phases, VCs typically sell these tokens to liquidity funds through over-the-counter (OTC) transactions. These liquidity funds are usually well-capitalized institutions that buy these tokens in bulk at a discount. 

Liquidity funds sell tokens when market volume is high (you are currently in this stage): After acquiring these tokens, liquidity funds will try to create or capitalize on market euphoria.They promote narratives through platforms like Twitter to attract market attention and increase trading volume, thereby profiting by selling tokens at high prices under favorable conditions. The reality is exemplified by Raydium, whose tokens now seem to be mostly unlocked. From 2021 to 2023, a significant influx of venture capital has entered the crypto market, especially into DeFi and infrastructure projects. These investments often take the form of locked or phased-released tokens. However, with most tokens now unlocked, VCs need to liquidate these assets to deliver investment returns to their limited partners (LPs). Starting from mid-2024, many well-known VCs have begun calling for more liquidity to be raised. This liquidity is obtained through over-the-counter (OTC) purchases of these illiquid tokens, providing a market for VCs to liquidate unlocked tokens. Rather than blaming participants, it is better to understand the rules themselves. VCs are pushing for people to raise liquidity to take over their tokens via OTC, thereby starting to allocate profits from the previous cycle to LPs. The relationship between VCs, liquidity, and the market is not malicious but rather a natural phenomenon of capital movement within the crypto ecosystem. VCs need to rely on well-funded liquidity to take over their tokens, which are often sold at low prices due to lack of liquidity. In turn, liquidity providers attempt to create or amplify market narratives through platforms like Twitter to attract market attention and increase trading volume, enabling them to profit by selling these tokens at high prices when market conditions are favorable. The alignment of market narratives with timing is crucial. This is not necessarily a malicious act; I have even bought some of these tokens myself. But you need to understand your counterparties and have a clear understanding of the lifecycle of the tokens. AI agents and DeFAI may replace many existing crypto tools. If enough functional integration is achieved, a DeFAI router could serve simultaneously as a yield aggregator, decentralized exchange (DEX), perpetual contract aggregator, portfolio management tool, and more. However, I remain skeptical of those AI agents that claim to "help you make money." Market dynamics determine that excess returns (alpha) gradually decay over time. Nevertheless, DeFAI still has the potential to provide significant support to individual investors by simplifying personal trading strategies and portfolio management. Currently, AI is at a critical development juncture. The AI hotspot has gone through several phases: first infrastructure projects like Bittensor, followed by agent projects like AIXBT, then agent launch platforms (such as Virtuals) and frameworks (like AI16Z). Today, the latest trend revolves around DeFAI. A significant trend that is forming is undoubtedly AI, which is one of the most important market hotspots of this cycle, but its long-term development direction remains unclear. The rise of DeFAI is particularly noteworthy as it does not promise a magical "money-making AI," but focuses more on practical functionalities, such as streamlining the processes of yield optimization, trading, and portfolio management. What sets DeFAI apart is its potential to integrate the fragmented ecosystem of current crypto tools. Imagine a router that can seamlessly integrate various financial tools, significantly reducing user friction. While the idea of a "money-making AI agent" may sound unrealistic, DeFAI's advantage lies in helping users execute their strategies more efficiently. The ever-changing market trend, like all major market hotspots, is rapidly evolving under the influence of hype and experimentation. From the initial promise of AI bringing financial freedom to the practical functionalities provided by DeFAI today, this shift reflects that the market is gradually moving from fantasy to practical applications. It is foreseeable that AI will continue to be a core theme, but the ultimate winners will be those projects that can meet actual needs and avoid over-promising. The crypto market remains full of unknowns. Market hotspots change rapidly, and future winners will be those participants who can predict where public attention is heading in advance. Stay sharp and flexible while keeping an eye on the bigger picture, and do not be misled by short-term fluctuations.