Attention is the lifeblood of Dogecoin (DOGE) and other memecoins. Much like earnings drive the price of corporate shares, the size and quality of attention captured by memecoins drive their price action.
Successful crypto traders understand that DOGE and its kin are not just chips in the “great shitcoin casino” but are, in fact, tradable derivatives of human attention. They are tradable assets backed by zeitgeists.
Trading memecoins isn’t just about spinning the wheel but about weighing the coin’s valuation against the amount of attention it’s receiving. As crypto influencer Cobie said, “Smart traders start selling as ownership and valuation have caught up with attention.”
This means that human attention is being viewed increasingly as one of the scarcest commodities in the world, which is true. In fact, we’ve known this for so long that it’s now a cliche to talk about the “attention economy.”
In the 2000s, Web2 companies like Facebook and Snapchat learned to monetize attention. They created apps that captured people’s attention and tracked their behaviors, which allowed them to farm and sell attention to advertisers.
I know this might sound like undergraduate hooey, but as our economic system changes and evolves, it’s only natural that the types of things we value should expand. If human attention is powerful enough to drive the bottom line of huge companies like Meta and Google, then why not trade it directly?
Memecoins are a way of valuing and trading the attention commodity in a decentralized manner. Using blockchains and automated market makers, anyone can trade on people’s attention and enthusiasm.
Remember when Joe Rogan got into hot water earlier this year about comments he made on his popular The Joe Rogan Experience podcast? Within 24 hours, maybe a dozen Rogan-themed memecoins were launched, with one, Marshall Rogan Inu (MRI), surpassing a $50 million market capitalization.
How could the market cap get so high? Well, at that moment, MRI was the top trending coin across trading platforms like DEX Screener, it was blowing up on Twitter, and it had sponsored a mixed martial arts fighter. Its valuation had to catch up with the amount of hype surrounding the project.
Or take DOGE, which pumped following Elon Musk’s Twitter takeover. The higher valuation was not only due to the rational, if risky, play that Musk might integrate the crypto token into Twitter in the future, but it was also a function of crypto traders betting that Musk’s tweets would drive attention to DOGE and increase its price.
Unlike small memecoins that live and die on how much interest there is in the story, memecoin stalwarts like Shuba Inu (SHIB) and Dogecoin also have fundamentals contributing to their value. Indeed, DOGE’s market cap is currently over $16 billion, and it’s one of the largest proof-of-work blockchains following Ethereum’s switch to proof-of-stake in September.
DOGE’s valuation is therefore based on its fundamentals plus attention, whereas memecoins like Will Smith Inu (WSI), which pumped after Will Smith slapped Chris Rock at the Oscars, are valued only on attention and are forgotten when the news cycle moves on.
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While it’s easy to dismiss all this as meaningless gambling — and I don’t deny the speculative aspect — that would miss the change underneath the hood. Memecoins aren’t based on random dice rolls — they track the human attention commodity.
Given the headwinds faced by the world economy, the creation of new means of speculation and investing is not surprising. Our economies are in danger of grinding to a halt due to declining productivity and scarcer natural resources.
In the future, we will see an uptick in ephemeral aspects of culture becoming tradable commodities. Fractionalized music albums and intellectual property rights are on the way, and thanks to memecoins, people can now trade derivatives based on jokes and tabloid scandals.
The massive market cap of DOGE and the constant parade of microcap memecoins show that our concept of value is shifting from real-world commodities that come out of the ground to the ephemeral qualities that produce culture. And remember, if everyone decides something is valuable, it might well be.
Nathan Thompson is the lead tech writer for Bybit. He spent ten years as a freelance journalist mostly covering Southeast Asia before turning to crypto during the Covid-19 lockdowns. He holds joint honors in communication and philosophy from Cardiff University.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.