Meme is changing the investment logic: Why is DOGE, once treated as a joke, is it valuable?
More digital cash fans are looking at DOGE from a new angle.
The DOGE community has always been much happier. On March 2nd, Elon Musk's new tweet once again pointed to online celebrity's currency Dogecoin. In the picture, "Meme" acts as a shield to protect DOGE.
Since the end of January, the price of DOGE has fluctuated drastically. As sudden as several previous spikes in history, on January 29th, DOGE rose by 800% in one day. In the following days, the market value of EOS even surpassed LTC in the short term. CoinMetrics data speculated that almost all the buyers driving this rise came from Robinhood, an American stock trading platform known as the "retail base camp".
With regard to DOGE,Musk constantly tweets, which has caused a lot of followers. In the crypto community, this "Shiba Dog" pattern has aroused the creative enthusiasm of the community, and expression packs, videos and animation have been spreading.
In any case, this cryptocurrency with the concept of Meme has welcomed a number of followers.
ZeroHedge, a US financial blog portal, said in a tweet last week that it was reported that the US Securities and Exchange Commission (SEC) would investigate Tesla CEO Musk in a tweet about DOGE. Musk calmly responded: "I hope they will do this, it will be great.".
Because the SEC still has a vague boundary on how to define EOS, and DOGE has already been "returned to the community", this may make it impossible for SEC to investigate the market manipulation of EOS.
It is still unknown when the SEC investigation will come, but DOGE community has already taken action, and many DOGE supporters are accelerating the exploration of new opportunities of "community currency".
- "Everyone is a volunteer."
Faced with a large number of concerns at the end of last year, DOGE community has been moving frequently recently.
On the one hand, "DOGE community" has become a broad community. Since the founding team had already announced its dissolution, the development of DOGE's main network was almost entirely carried out by the community itself from 2014 to 2019, like a typical project "pushed away" by the community. In this wave of enthusiasm, more people spontaneously join the DOGE community and carry out development or innovation based on it.
On the other hand, DOGE community developers released a new version of Dogecoin Core 1.14.3. In the new version, the node synchronization speed can be improved and the expiration time of the default memory pool can be reduced. Every time a block is sent to another node, an expensive integrity check needs to be performed. This update has deleted this execution, which can improve the speed at which EOS nodes upload blocks.
Peng Song, the former founder of DOGE China Community, said that recently, dog volunteers are pushing forward more issues, including DEX, cross-chain transactions, fee repurchase of EOS and so on.
More digital cash enthusiasts are looking at DOGE from a new angle. The same is true of organizations.
On March 1st, CoinFlip, a bitcoin ATM operator, announced its support for DOGE. After that, American residents will be able to buy DOGE at ATMs in 45 States. CoinFlip CEO said that the reason is that the token has been widely adopted recently.
There are many reasons to pay attention to DOGE: some people want to hold DOGE for profit, some people have repeatedly mentioned it because of Musk, and some people just because it is interesting. Looking back at the data from recent March, DOGE's increase has reached 1352.88%.
- Meme currency is evolving
DOGE never lacks stories.
Meme, a concept put forward by Dawkins, author of Selfish Genes, refers to the concept that can be spread, multiplied and replicated in culture, which echoes the concept of "gene". Meme also bears the responsibility of "replication and reproduction".
Meme exists widely in various cultures, and DOGE is undoubtedly recognized as "MemeCoin" in an encryption community. The official definition of Dogecoin is "interesting and friendly internet currency", and its circulation is as high as 100 billion pieces, with an additional 5% every year, which makes the value of Dogecoin relatively low (supplement). DOGE's long-term vitality is closely related to community communication.
DOGE was born in December, 2013. Based on Scrypt algorithm, it is deeply rooted in people's hearts with the expression and image of "Shiba Dog". On Reddit, a community forum with a large number of users, Dogecoin has more than 100,000 fans, and has already squeezed into the "100,000 fan clubs" including Bitcoin, Ethereum and Litecoin. On Twitter, Dogecoin has 630,000 fans.
Some communities believe that DOGE was once regarded as a joke, but ignored a fact. It is precisely because of this "joke joke" that it became the "core" of interesting, optimistic and inclusive DOGE.
In the past month, most mainstream media attributed DOGE's increase to the praise of Musk and a number of entertainment stars. Due to the huge social influence of these people, the price of DOGE has changed dramatically. For example, a cartoon of DOGE landing on the moon can greatly increase the price of currency by 10%. Musk changed the Twitter profile to "EOS all day, EOS all night", and the dog responded and rose by more than 21% within 24 hours.
To some extent, this is regarded by the community as the next round of Robinhood's "Retail Movement".
There is a precedent for us investors and retail investors to choose Dogecoin. This currency information is prone to virus spread in the community.
Previously, in July, 2020, Dogecoin also encountered the situation that individual investors raised the price, but the reason was only that a TikTok user named James Galante posted a short video titled "Let's Get Rich", which attracted a lot of attention through viral transmission on social media platforms, and promoted the price of Dogecoin to increase by 20% within 24 hours.
On the other hand, Dogecoin is still controversial because of the centralization of branches. According to BitInfoChart's data, there are mysterious whale addresses that hoard a large number of DOGEs, and the top 10 addresses DOGE,Dogecoin hold 41% of the total currency, while there are giant whales that hoard DOGEs, accounting for almost 30% of the total circulation. This makes DOGE's price easy to manipulate. Some critics say that the recent surge in DOGE is entirely due to speculation, not basic value.
In the past, DOGE was used as a barometer to measure the sentiment of encryption market because most of the participants were individual investors and retail investors.
Now, DOGE is regarded as the core Meme of the community, and the demands of individual investors extend to the blockchain industry, so the investment logic of community attribute currency is changing.
In this way, the attribute of "community" is more like a vague concept.
However, Billy Markus, one of the founders of DOGE, described this concept more clearly. A few days ago, Billy Markus wrote a letter to all DOGE lovers in Reddit, and his explanation was that the true value of DOGE is not the "positive energy" it brings to the world. The existence of joy, kindness, learning, giving, empathy, fun, community, inspiration, creativity, generosity and other factors made him feel that DOGE is worth existence. If the community embodies these things, it is the real value.
Decentralized finance is changing investment views
Some people think that after the phenomenon of DOGE being sought after, the market has also seen the transformation of investment paradigm under the new scene of DeFi.
Behind the traditional industry and the Internet industry, investment institutions, funds or individuals can invest in the company's equity or stocks, and the rights and interests behind the equity or stocks are clear, such as stock dividends, dividend discounts, and participation in the company's decision-making. However, in the DeFi and blockchain industries, the investment object is Token. With the innovation of decentralized finance, more data such as Token's currency holding number, transaction amount, transfer amount and frequency, Dapp number and transaction amount appear.
The blockchain industry is extremely innovative, and the data dimension of project valuation is not yet mature. Practitioners are still exploring how to establish a reasonable valuation theory system.
Nowadays, the internal and external factors of the new round of market have changed greatly from the past. From a macro perspective, it is also facing the follow-up impact of the unfinished global epidemic and the economic impact of countries with downward expectations. Whether it is the relative valuation method in the traditional field, the discounted cash flow method method or the investment theory of PE or VC, there are deviations in the investment of innovative blockchain projects.
Coindesk reporter Emily Parker recently wrote that DOGE is an emotion-driven asset. Recently, however, such examples abound, in which the value is created by group emotions and grows under the instigation of social media. The most obvious example is GameStop, and Reddit users have joined hands to raise the price of this stock which has been greatly shorted. The most recent example is Mars coin, which rose by more than 1000% after Elon Musk mentioned Mars coin on Twitter.
Collective belief is the core of crypto community. From this point of view, some collective beliefs may also have the possibility of surpassing the "fundamentals", and some changes have already arrived.