Why does Meme only cut you? An article explaining its true growth mechanism

Author: danny

Original Title:

Why do the Meme you buy only fall? — Deconstructing the Growth Spiral and Volume of Meme with First Principles

In most people’s eyes, Meme coins are irrational celebrations, a gamble in a casino. But from a mathematical perspective, the birth of every thousandfold myth is no accident; it is actually a middle school-level spatial geometric evolution problem.

This article presents a disruptive perspective: the market capitalization of Meme coins is not “raised” but “supported.” The value of Meme can be calculated!

We are accustomed to focusing on the fluctuations along the Z-axis (price height), but we ignore that what determines life and death is the base radius jointly constructed by X (narrative density) and Y (distribution nodes). A Meme with only height and no base is just a very thin “needle,” easily toppled by the wind; only by continuously expanding the consensus radius can it, under the gravity of capital, support a stable, geometrically growing wealth cone.

Note: This article is a popular science piece on “Financial Physics,” not a rigorous econometrics paper. It offers a new perspective for understanding Meme.

1. The Beginning of Theory: The 3D Coordinate System of Meme

In the current cryptocurrency market, Meme coins are often seen as irrational celebrations. But is that really the case?

If we strip away emotional noise, KOL shoutouts, and community hype, we will find that the birth and demise of every phenomenal Meme follow a strict mathematical logic.

The essence of Meme coins is tokenization of attention economy. Their market cap is not determined by traditional discounted cash flow (DCF), but by the breadth of narratives, resonance within the community, and the explosive power of capital.

For better discussion, we define these factors as the XYZ 3D growth spiral model.

These three axes are not just independent variables; they are strongly reflexive — meaning a change in one variable amplifies another, forming a positive feedback loop.

Let’s now explain these parameters:

X-axis: Narrative Density and Cultural Memes

Definition: The “genes” of Meme. Includes core memes (like Doge), origin stories (like CZ’s pet name), cultural symbols (like Pepe the Sad Frog), and the richness of community-created content.

Key indicators: Originality of narratives, reproducibility, emotional resonance.

Y-axis: Propagation Potential and Node Network

Definition: The information transmission pipeline. From top nodes (CZ, Elon Musk) to secondary nodes (Alpha Callers, KOLs), and down to end nodes (ordinary retail investors).

Key indicators: Node weight, coverage of dissemination, shoutout frequency.

Z-axis: Capital Flow and Liquidity Vehicles

Definition: The monetization result of attention. Includes on-chain capital inflows, liquidity depth — i.e., the accumulated value or total sell orders that can be absorbed.

Key indicators: Market cap, trading volume, turnover rate, and liquidity (most important).

2. Growth Curve Illustration of the Interaction of XYZ Axes

If we plot these three axes in a 3D space, a successful Meme growth trajectory generally shows a spiral upward trend: (as shown below)

Bottom (Start): X, Y, Z all close to zero.

Ignition (Ignition): Y axis surges (KOL shoutouts), driving Z axis (price) to jump. The trajectory tilts toward the Y-Z plane.

Spinning (Spin): Z axis growth attracts more Y (more discussions), Y stimulates X’s creative content (rich content). The trajectory begins to rotate around the X-Y-Z axes.

Ascension (Ascension): As X upgrades (X’), the cone’s base area expands (broader consensus), Z axis (market cap) reaches new heights.

Failed Meme (Rug Pull): Usually shows a burst in Y axis, a brief rise in Z axis, but X axis fails to upgrade (lack of narrative), leading to Z collapsing rapidly back to zero, with the trajectory forming an inverted V drop.

3. Evolution of Growth Curves: Spiral Rise in Four Stages

From the previous section, we know that the Meme lifecycle is not linear but a vortex revolving around the Z axis (capital flow) that continuously expands. In this section, we analyze based on the four development stages of Meme.

The following diagram shows its standard evolution path: (I was also amazed—AI drew this so cool?!