Author: Neptune Mutual Source: medium Translation: Shan Ouba, Golden Finance

In recent years, memecoins and NFTs have become important assets in the crypto world.

Memecoins, a cryptocurrency inspired by internet memes, have gained considerable popularity and gathered millions of followers. Community support and social media buzz have led to a significant increase in their prices. NFTs, on the other hand, are digital assets on the blockchain that represent ownership of unique items such as art, music or collectibles. Unlike memecoins, NFTs usually have some utility in their ecosystem.

Bull markets are known for their price appreciation and play a vital role in the growth of assets. During bull markets, investors are more willing to take risks on novel assets, leading to a surge in the popularity and value of memecoins and NFTs. This environment promotes innovation and brings a wider audience to these digital assets, highlighting their potential and pitfalls.

In this blog, we will explore the dynamics of memecoins and NFTs during the last bull run compared to the current one.

Memeccoins during the last bull run

The last bull run occurred in 2020-2021 and was known for institutional adoption of Web3. Bitcoin broke through the previous high and reached $64,000. This rise marked a shift in user perception, fueled speculation, and led to the adoption of cryptocurrencies by many institutions and organizations.

During this phase, memecoins such as Dogecoin and Shiba Inu became prominent players in the cryptocurrency space. Driven by social media frenzy and retail investors’ fear of missing out, the prices of these memecoins soared to extraordinary heights.

Dogecoin was originally created as a joke in 2013, but has gained huge traction in 2021. In fact, we’ve witnessed a massive 3,300% growth in Dogecoin, making it the tenth largest cryptocurrency by market cap. In May 2021, it reached an all-time high of $0.731. This is largely due to endorsements from celebrities like Elon Musk and Mark Cuban.

Shiba Inu, often referred to as the “Dogecoin Killer,” followed Dogecoin’s popularity and growing meme culture. Platforms like Reddit, Twitter, and TikTok played a key role in spreading the memes, sparking viral interest, and driving up prices.

Many investors view these coins as lottery tickets, hoping to take advantage of short-term gains rather than long-term investments. Media coverage has a strong influence, amplifying price movements through sensational headlines and viral tweets.

Memecoins in the Current Bull Run

Today’s bull run began around April 2024 and has seen a rise in popularity of new memecoins such as PEPE, which have joined the list of previous meme-inspired cryptocurrencies. PEPE, based on the “Pepe the Frog” meme, quickly gained traction for its interesting concept and active community.

The market dynamics have changed and investors have become more cautious. Instead of looking at any memecoin, they now focus on the potential uses of the coin, the strength of the community, and its financial model. This has made the memecoin market more stable compared to before.

Investor sentiment also seems to have changed. People are not only interested in quick profits, but also look at the long-term prospects and community activities of these coins. Memecoin communities are becoming stronger and more involved in promoting their currencies, sometimes even creating real-world projects and activities.

Despite users’ vigilance and caution, they have still fallen victim to multiple memecoin vulnerabilities. Take the hacks of NORMIE and rugpull, both operated by CONDOM.

NFTs in the Last Bull Run

During the last bull run, NFTs (non-fungible tokens) surged in popularity and became a major trend in the crypto world. While NFTs came to market in 2017 after the EIP-721 standard gained recognition and adoption, it was a year of experimentation and development. The launch of Cryptopunks and CryptoKitties was very notable during the period that helped the NFT ecosystem take shape.

The exponential boom in NFTs occurred during the 2020-2021 bull run. Major trends in this phase include the rise of digital art and collectibles. Platforms such as CryptoPunks and Bored Ape Yacht Club became very popular, offering digital avatars that users can own and trade. These NFTs often serve as status symbols and collectibles within digital communities.

Market growth has been explosive, supported by the novelty of owning digital assets and the ease of trading on blockchain platforms. Media coverage and celebrity endorsements have fueled public interest, bringing NFTs to the mainstream and encouraging more people to explore this new form of digital ownership.

High-profile sales have made headlines, with some NFTs selling for millions of dollars. Beeple’s digital artwork Everydays: The First 5000 Days sold for a record-breaking $69.3 million in March 2021. In 2021 alone, approximately $41 billion worth of cryptocurrency has been spent on the NFT market, demonstrating its rapid rise and huge market interest.

As for the exploit, Stazie lost approximately $1 million to a phishing scam in August 2021. Iconics, Evolved Apes, Bored Bunny, and Frosties are some of the scam projects after the bull run.

NFTs in the Current Bull Run

After the last bull run, the NFT market fell sharply, leading to the 2022 NFT crash. Many NFTs, including popular ones, fell and hit bottom prices.

While some interest re-emerges around 2023, the NFT market may see some degree of recovery in the 2024 bull run. However, it is unlikely that we will see the same hype and chart explosion as in 2021.

One ​​of the major developments in the current bull run is the evolution and new trend of NFTs and the expansion into areas such as gaming, the metaverse, and sports. This allows players to own and trade unique items in virtual worlds and games. Similarly, the entry of traditional brands into the NFT space is also likely to drive its development. For example, Starbucks launched its first paid NFT collection in March 2023, selling 2,000 digital stamps at $100 each in just 20 minutes.

Pudgy Penguins is a prominent example of an NFT project currently making waves. Although it was launched in August 2021, it gained the most attention in the first few months of 2024. These PFT-themed artworks have soared due to their attractive artwork and strong community.

Regardless, investors' attitudes are maturing, placing more emphasis on the actual returns of NFTs rather than speculative trading. In addition, there are now many smaller, more affordable, and more practical NFT projects, rather than just a few high-value collectibles as in 2021.

The industry still faces challenges such as pulls, phishing attacks, smart contract vulnerabilities, DeFi wallet issues, etc., which may affect user confidence. For example, in September 2023, a phishing attack against OpenSea exposed security issues that need attention.

Similarly, MetaDragon is one of the latest hacks caused by a smart contract vulnerability.

Comparative Analysis

Comparing the last and current bull runs, memecoins and NFTs show some similarities and differences.

During both periods, memecoins such as Dogecoin and PEPE relied heavily on social media hype and community support to drive interest and prices. However, current investors are more cautious and assess long-term value and community engagement rather than relying solely on hype.

The trend of NFTs is also evolving. The high-priced sales and general excitement of NFTs as collectibles have calmed down. Today, NFTs are more focused on games, practicality of virtual worlds, and integration with traditional brands, resulting in a more balanced growth model with smaller, more practical projects.

In terms of security, both markets have experienced hacks and scams resulting in millions of dollars in losses. During both bull runs, scams, phishing, and smart contract vulnerabilities were exploited to impact digital assets. Addressing these challenges remains critical to maintaining investor confidence in both assets.

Legitimate memecoin and NFT projects are continually strengthening their defenses through smart contract audits and vulnerability fixes. As a user, you need to remain vigilant and check projects for potential vulnerabilities. Checking a project’s community and user sentiment may be helpful.

In addition, the use of multi-signature wallets (transactions require multiple approvals), advanced consensus mechanisms, and hardware security modules are essential to building a more secure infrastructure.

For digital asset owners, another effective way to protect their assets is to consider DeFi insurance. It provides financial protection against losses caused by hacks, exploits, or other unforeseen security vulnerabilities.