How to Win in Memecoins (Hint: It's Not "Cults")

OnlyApes Trench Report #1

Welcome Ape!

If you’ve signed up to this blog you’re about to be one of the elite few who actually understand how to win in the memecoin arena (along with occasional updates on what we’re doing at OnlyApes more broadly).

This series will be your no-BS guide to traversing the memecoin/shitcoin/culture coin world.

The series assumes:

1. You have a working understand of onchain crypto (I will not be explaining how to setup and use wallets, manage private keys, etc.).

2. You are already interested in memecoins and know what they are at a high level

3. You are looking to learn not be force fed (I will use coins as examples but will not be giving “signals”)

The first post of the series will start off intentionally broad to get everyone up to speed and set the stage for how I think about memecoins, then drill into specific frameworks.

Our Goal

The goal with this series is simple: we are looking to reduce randomness in memecoin selection by clearly defining the type of coins we would buy and the ones we would fade.

By doing so, we increase our odds of buying coins that have potential for outsized success (10-100x) and avoid the thousands of coins launched per day that never had a chance.

The strategy is to assemble a portfolio of high quality coins by using the Memecoin Arena as the testing ground for rising metas and narratives.

We are making bets on coins we believe can gain substantial mindshare adoption in a peak bull market scenario while taking some profit along the way.

If you think you’ve already missed the memecoin run, you couldn’t be more wrong. The best is yet to come.

Why Listen to Me?

If you’re here early you likely know me through my work on DeFi Education, a newsletter with over 35,000 focused on deep dives on crypto projects and all around coverage of the tech-driven side of the crypto ecosystem.

While I don’t talk about it much on DeFi Ed, I cut my teeth in the “Trenches” trading NFTs in 2021. I had a natural affinity for finding good plays. That affinity has extended to memecoins, with the added benefit of more liquidity and easy-to-use tooling. I’ve had 6-figure weeks trading memecoins in broader choppy conditions and, while being in the right place at the right time (i.e. just after a coin is launched) is certainly helpful, I wouldn’t be writing this series if I wasn’t confident that:

• I’m well suited to pass on this knowledge based on my own personal track record with memecoins

• The knowledge could potentially be used by a wide range of people to at minimum improve their odds, and perhaps with some luck find plays that can net them significant gains with small amounts of capital

I didn’t choose the meme life, the meme life chose me.

Important Disclaimer

Memecoins are simultaneously both the most fun and most risky possible thing you can trade in crypto. What can feel like the beginning of a new, culturally defining narrative one day can be a -90% the following day. There’s absolutely no reason to be allocating a ton of capital and “full porting” into memecoins on day one. Think of trading newly launched memecoins like buying Bitcoin on 50x leverage. Without a high success rate, you are going to lose money very quickly.

Let’s dive in.

Lay of the Land

There are two big buckets I segment my meme process into:

1. The Arena

2. The Memefolio

The principles I will share over the course of this series are applicable to both buckets. The only thing that changes is how I manage capital allocation, profit taking, etc.

The Arena is the testing ground for my memefolio, and my memefolio is where I put my higher conviction bets. When I’m in The Arena I’m trying to find coins that can make their way into my memefolio, or inform my broader thesis/perspective on my memefolio.

I consider both buckets to be crucial to my process of finding new narratives early. The Arena also allows you to benefit from randomness, as sometimes some of your small leftover “dust” leftover bags go on to do huge multiples without occupying any mental capacity on your end.

The Arena

The Arena is what is often referred to as the memecoin “Trenches.” Here you will find memecoins that are new launches, low market cap, and have high probability of sudden death even if your thesis is strong. Structurally what this consists of is Telegram group chats, Twitter, and onchain sleuthing of newly launched coins.

I prefer the term arena over trenches as you are more like a gladiator (solo player) rather than part of an army (team). While it’s still recommended to work in groups and group chats to scan coins and share ideas, the reality is that most group chats still require you fend for yourself entirely. It’s not nefarious per se, it’s just an unspoken rule of the game that if a coin looks dead you don’t typically have a duty to the other members to inform people you’re selling (just don’t actively try and create situations where you dump on people obviously).

Coins I purchase in The Arena require:

1. High expected attention after purchase (early to a meta or increase in viewership)

2. Low market cap entries (subject to exceptions)

3. Fits my “Meme Framework” (full future post dedicated to this)

The Arena is where you’re looking for newly launched coins that have the potential to reach escape velocity to $1-$10M+ market cap from very low market caps (<$500K).

Sidenote: If you find this publication helpful and you or someone you know is planning to launch a memecoin on Ethereum, Base, or Blast, launch with OnlyApes. Feel free to reach out if you have any questions.

The coins I buy in The Arena are purchased with the intention of being short-term holds and I am usually derisking initials relatively quickly. However, if I find something promising I have no problem buying more at a higher market cap. If you find a coin at $500K market cap and buy a small amount and that coin truly takes off, your upside is reaching market caps of $10-$100+ million. I have no issue with buying a coin early in small size, then adding more at $1-$2 million as more information reveals itself, the community develops, and I develop a more coherent thesis around it.

The hard part? You never really know in advance what will happen to a high-speed attention driven coin outside of rare situations like Neiro, Fwog, SCF, etc where it’s obvious there’s a flood of mindshare incoming. Even in these cases there was a ton of unpredictability in the moment (team could sell, have a falling out, competing coins, etc.). Knowing when to add, derisk, sell and repurchase lower, or hold on for dear life is a case-by-case judgment call. I’ll do my best to breakdown how I think about it in this series.

The Memefolio

The Memefolio is where most of your gains will come from especially if you have a larger capital base to start with. It’s also where you will get the most ROI on time invested. My memefolio consists of:

1. Thesis-driven bets: coins with a very clearly outlined reasoning for why the coin will trade multiples higher in the medium to longer term (cultural potential, rabid community, strong narratives, influential support, etc.). These are my bread and butter and the focus of most of this series.

2. Event-driven bets: coins I expect will appreciate in value as we approach a key date or high-attention event (e.g. elections, FOMC, some famous person like Elon mentioning it, etc.). The political memecoin meta disappointed but political coins would be a prime example.

3. "Cycle top” bets: strongest and largest memecoins that I believe will be carried upward alongside the broader crypto market. I simply hold until I am ready to derisk my broader cryptofolio. These are the memecoins you can tell your mom to buy, like Pepe, Wif, Bonk, Popcat.

As mentioned the Arena and my memefolio are synergistic. Almost every memecoin in my memefolio came from The Arena or narratives I observed by being in it. The Arena is like the team you play in the regular season and the memefolio is the championship squad.

Why I Don’t Look for Cults

Everyone is now pushing to demonstrate how their coin is a “cult.” I do not use “cults” as a way to identify which coins are going to be successful. Frankly, I think using cults as a heuristic to discern valuable memecoins is full of holes and blindspots.

Here’s what is required in a true cult:

1. A cult leader

2. Indoctrination into the cult

3. Polarizing beliefs

4. Shared vernacular/memes

5. Proof of affiliation

The only crypto communities I believe have achieved cult status are the Milady community and perhaps its spinoff Retardio community. These communities (particularly Miladies) are groups where the asset is simply a way to demonstrate participation in a broader set of values / beliefs. Real cult communities with a cult leader to boot.

Here’s how the Milady community stacks up against my definition of Cult:

1. Cult leader: Alias “Charlotte Fang”

2. Indoctrination: Consuming Milady beliefs/content and aligning on social media (I’m not close to the communtiy but this seems to be the underlying process by which someone joins)

3. Polarizing beliefs: Spin through Charlotte Fang’s highlights

4. Shared vernacular/memes: Saying “Milady”, engaging in online psyops, own style of memes, “schizo” style of content, etc.

5. Proof of affiliation: Milady profile pics/NFT

Meanwhile leading memecoins like Dogecoin or Pepe or Wif do not have leaders, there’s no indoctrination (anyone can join regardless of alignment of beliefs), are not polarizing (they’re just animals and cartoons), and members do not provide any proof of affiliation. Some of the leading coins like SHIB and Floki don’t even have shared vernacular or memes, despite being memecoins.

My point is: a memecoin does not need to be a cult to perform extremely well. If you are looking for cults before buying, you will be sorely disappointed when dozens of memecoins fly past huge market caps and you missed them. I would argue the only larger memecoin people push as a “cult” that could become one is the Gigachad coin.

Dogecoin, SHIB, Safemoon, and many other multi-billion dollar coins were not cults. Most of the coins being espoused as cults today are not cults either. Simply having a lot of holders that do raids and talk in chat rooms does not qualify as a cult. Bullievers are important. But that bullief has nothing to do with becoming a cult.

We will not be looking for “cults” when searching for quality memecoins. What exactly are we looking for? That’s the topic for the next post which I believe will shed light on exactly how to screen memecoins to buy.

So today we covered:

1. An intro to the Trench Series

2. The Arena and the Memefolio approach

3. Why you don’t need to look for “cults”

Housekeeping

You should outright avoid any advice from people who are just now capitulating to the meme thesis after shunning it all year. These engagement farmers will ensure you will be exit liquidity either for the person sharing it, or for the source of their information (exit liquidity rolls down hill, like shit). There are also lots of people on Crypto Twitter with a knack for plagiarism. I’m sure some of them will try to pass off content from this series as their own unique ideas without any credit. If I see this occurring I will end the series immediately as I find that kind of behavior despicable, so call it out if you see it.

The reason I’m confident in what I share with you guys in this series is because it has worked for me. I have not seen anyone break down memecoins the way I am about to so you are probably best off just ignoring everyone else if what I share works for you.

This will not require any connections or insider access. Everything you will need will be covered in this series. If you find new and interesting ways to approach memecoins based on what I share, I welcome any input as I’m always seeking to improve my own frameworks.

If you found this post valuable, all I ask is that you spread the good word of OnlyApes so we can continue to make the memecoin space more accessible and viable to retail and less of an insider game. This will promote a memecoin ecosystem where the best communities are rewarded appropriately for their efforts and the “KOLs” have to actually be skilled to make money (they won’t!).

See you in the next one.

Disclaimer: The content provided on this blog is for informational and entertainment purposes only. Memecoins are highly volatile, speculative, and come with significant risks. The information shared on this blog should not be considered as financial, investment, or trading advice. We are not financial advisors, and you should not rely on any information here to make financial decisions.

By accessing this blog, you agree to use the information at your own risk.