Mechanism Capital co-founder Andrew Kang has highlighted the potential profitability of a new breed of memecoins, termed “culture coins,” which delve into deeper cultural values like politics, religion, and lifestyle, beyond the typical animal-themed and humor-based meme tokens.
In a post on X dated April 7, Kang pointed out that these culture-centric memecoins could outperform traditional memecoins such as Dogecoin or Shiba Inu by leveraging the strong values and identities of their communities.
“Communities with strong values and identities naturally try to convert others to their beliefs and publicly display what it is they love about their lifestyle.
“They are inherently viral,” Kang explained.
Highlighting the virality and ideological breadth of these coins, Kang noted, “The ideologies of these communities can be purely about politics, religion, consumer goods, sport, way of life or can be a mixture of all.”
He cited the rapid growth of two Solana-based memecoins, Jeo Boden (BODEN) and Doland Tremp (TREMP), as evidence of the appeal of culture coins, especially among communities with specific political inclinations.
BODEN, in particular, has seen its value skyrocket by over 700,000% since its launch on March 9, achieving a market cap of $473 million.
TREMP, while not as explosive as BODEN, has also seen considerable gains, boasting a $73 million market cap.
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Beyond politics, Kang sees potential in memecoins associated with consumer brands, such as ZYN and MOUTAI, which Mechanism Capital has invested in.
He argues these brand-affiliated coins could leverage the lifestyles associated with the brands for added virality, contrasting them with animal-themed coins for their added advantage.
Kang equates investing in memecoins with investing in traditional assets, noting that the most substantial returns often come from assets that garner widespread belief.
Yet, the crypto industry remains divided on memecoins’ impact.
BitMEX co-founder Arthur Hayes views them as a “net positive” for blockchain networks, while critics argue they represent a speculative hazard that undermines blockchain’s foundational principles.
Despite these diverging opinions, memecoins have proven to be a lucrative sector within the cryptocurrency market, with the top ten memecoins averaging gains of 1,312.6% in the first quarter of 2024.
This performance was notably higher than other crypto narratives, making memecoins the most profitable sector in the crypto industry for that period, as reported by CoinGecko analyst Lim Yu Qian.
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