How High Can $WEN Go? A Dive into Jupiter, Fractional NFTs & Bluechip Memecoins
Market Cap & Market Dominance Analysis
Making cryptocurrency price predictions is a form of dark art.
Unlike the discounted cashflow model for equities/shares, there’s no consensus on how to value cryptocurrencies.
Different use cases and classes of cryptocurrencies call for different approaches.
Broadly speaking, cryptocurrencies can be classified as:
- Bitcoin. Use case: store of value asset that competes with gold.
- Altcoins. Use cases: smart contracts, dApps, DeFi, NFTs and so on.
- Memecoins. No real fundamentals. Gambling and speculation.
Common methods to value crypto include: hash rate, network effect, number of dApps, developer activity, TVL, Metcalfe’s Law and so on.
However, current crypto prices are ultimately influenced by the balance between market buy-side and sell-side pressure. Meanwhile, future price projections heavily rely on narratives and the ability of crypto teams to execute on their promises. External factors such as central bank interest rates also play a significant role, as I wrote about here.
To keep things simple, investors use market capitalisation as a guide for valuation and forecasting.
WEN’s current market cap is around $36 million, making it a small cap altcoin. If this valuation sounds cheap to you, then it could be a buy signal. If it’s expensive, it might be a time to get out.
Crypto investors also commonly use ratios to assess the altcoin project against the blockchain on which the project sits.
In the case of WEN, a memecoin on the Solana blockchain, the $WEN/$SOL ratio and WEN/SOL relative market dominance are techniques to evaluate when WEN is overbought and oversold.
In this article, I’ll dive into:
- What is WEN?
- Jupiter & Fractional NFTs;
- WEN as a ‘bluechip’ memecoin;
- Price predictions using market cap, price ratios and market dominance ratios.
Let’s dive in!
WEN’s Wholesome Origin Story
The story begins with Jupiter (jup.ag), a platform which lies at the centre of Solana’s DeFi ecosystem.
Jupiter started off as swap aggregator in late 2021. The beauty of aggregators for token swaps means rather than needing to trawl different Solana DEXs to find the best price for token swaps, Jupiter does it for you. So successful has Jupiter become that as of January 2024, the platform accounts for a whopping 80% of organic volume for all Solana DEXs.
It’s the one-stop shop to swap tokens.
But Jupiter isn’t just a swap machine — it has built out an array of features that leverage Solana’s state-of-the-art technology, delivering a CEX-like experience in DeFi. You can now set limit orders, DCA and even trade perpetuals.
At Solana Breakpoint in September 2023, Jupiter co-founder and technical maestro weremeow announced the next milestone in the project’s development — it’s own governance token, JUP.
It was the biggest airdrop in Solana history.
A billion tokens was given out to ~955,000 wallets on Jan 31. And that’s just the first round. I personally scored 8,800 JUP tokens, currently worth about $6,000 USD, just by using Jupiter throughout 2022 and 2023. Nice.
Launching JUP required a cutting-edge platform that could handle a huge volume of transactions over a short amount of time. There were going to be a lot of bloody people on Jan 31 collecting their free money!
So the Jupiter team developed its own LFG Launchpad, where WEN was launched as a memecoin just days before the JUP launch. This served as a large-scale stress-test for the new launchpad, setting the stage for the successful launch of JUP.
The name WEN came from weremeow being constantly hassled on Discord by the eager Jupiter community dying to know when JUP was going to launch.
Wen lambo? Nah, wen JUP!
His reply was this poem to his beloved community:
Fractional NFTs
The design of the WEN memecoin was ingenious.
The Jupiter team collaborated with the Ovols NFT team, specialists in fractionalising NFTs, to tokenise weremeow’s poem by minting it as an NFT. They then broke it into a trillion fungible tokens known, which we know of as WEN.
As decrypt explained:
A poem written by @weremeow was turned into an NFT and divided into one trillion pieces. Each of those pieces has become a WEN token, which is why the team behind the new Solana memecoin is calling this the first ever community coin based on fractional NFTs.
Fractional NFTs aren’t new.
During the 2021 bull run, you could fractionalise Ethereum NFTs (minted using the ERC-721 token standard) into thousands or millions of ordinary fungible ERC-20 tokens.
But why fractionalise NFTs? What’s the utility in breaking what is meant to be a unique digital assets into a bunch of fungible tokens?
There are four reasons:
- Democratisation. Fractionalising NFTs opens up ownership to more people, particularly for expensive digital collectables. You can now have exposure to even a Bored Ape Yacht Club NFT that can cost thousands of Ether.
- Liquidity. Democratising NFT ownership brings more crypto users, and hence liquidity, into the market.
- Price discovery. Expensive NFTs often have very little transaction history, making it hard to work out a fair price. Fractionalising it makes it affordable, which introduces the trading volume needed for reliable price discovery.
- Visibility. NFTs that are broken into many pieces provide the opportunity for NFT creators to gain exposure with a bigger audience and more liquid market.
What’s amazing about WEN is that weremeow’s NFT poem was fractionalised using a brand new NFT standard — the Wen New Standard (WNS) — that leveraged a suite of 13 token extensions released by the Solana devs just days earlier.
Bluechip Memecoins
I rarely cover memecoins, but I feel WEN is something special.
I regard it as a member of a very exclusive club of ‘bluechip’ memecoins that should be able to hold its value well in the long-run.
This is in stark contrast to ordinary memecoins, where you want to get in fast, make a quick buck, and get the hell out.
What makes a memecoin bluechip? I’ve come up with a criteria I call the 4Cs.
- Conte, which means story in French. Does the token have a narrative?
- Culture. How memeworthy is the memecoin?
- Credibility. Most memecoins are associated with anon teams with untested credentials. Bluechip memecoins do better.
- Community. You want chain-wide or even crypto market-wide goodwill and recognition.
WEN satisfies all of these.
WEN, a crypto meme that requires no explanation, is a piece of worded art lovingly crafted for the Solana community by one of its leading innovators. It was created using the latest Solana technologies, and seeded in its entirety to the community.
You can’t get much better than an origin story like this.
For transparency, four of my wallets were eligible for WEN, giving me roughly 2.57 million WEN tokens. It’s currently worth about $200.
Alright, onto the price analyses. That’s why you’re here right?!
Price Predictions
Market Cap Approach
Predictions based on market cap are widely used to make ballpark cryptocurrency and stock predictions. They are also used for sanity checks that prevent silly predictions that defy logic.
A classic example of a bad price prediction that results from not performing a simple market cap sanity check were the masses of Shiba Inu (SHIB) holders in 2021–22 who fervently believed that SHIB could hit $1. Unfortunately, that would require a $400 trillion market cap, or 20 times all US dollars in circulation.
For WEN, we can make the following (fun!) speculations based the valuations hit by other bluechip memecoins.
Solana community favourite BONK did a 200x in Q4 2022 to hit a $1.5 billion market cap. WEN at the same market cap would mean a 40x from today’s price.
SHIB hit a whopping $43 billion market cap during the 2021 bull run. You’re looking at a 1000x if WEN can hit this valuation.
Finally, DOGE, which became associated with Elon Musk during the 2021 bull run, hit an astronomical $82 billion. WEN holders would be up at least 2000x at that value.
Price Ratio Approach ($WEN/$SOL)
The technique is to divide the price of a ‘smaller’ coin of interest by a ‘larger’ one, so that you can assess how your coin of interest is performing against a benchmark. This helps you work out when cryptocurrency prices are overbought and oversold.
A common price ratio you might have come across is the $ETH/$BTC ratio, where you construct a graph by dividing the price of ether by the price of bitcoin.
When the $ETH/$BTC ratio graph goes up, ether is outperforming bitcoin. This tends to occur during bull markets, as traders rotate bitcoin profits to riskier altcoins like ether in the quest to chase more profits.
When the $ETH/$BTC ratio graph goes down, ether is underperforming bitcoin. This tends to occur during bear markets, as traders seek the safety of bitcoin and stablecoins.
Riding the crypto money cycle and knowing when to rotate capital between assets within the crypto space is one of the skills that investors and traders often pick up over time.
For WEN, a good ratio to construct is the $WEN/$SOL ratio, which enables us to see how WEN is performing against the Layer 1 on which the project sits. If WEN’s going places, it will appreciate against the price of SOL, and conversely, if WEN’s hype dies, its price will bleed against $SOL.
Here, I give three cases.
The Normal case assumes that the crypto market cap returns to the 2021 bull run high of $3 trillion and that $SOL returns to its ATH of $260. Not unreasonable, right? The markets need to be in good shape for this to happen, with Solana firing on all cylinders, so I assume that $WEN (which has a small market cap) can do a 10x against $SOL. That would equate to a ~$1 billion market cap for WEN, or a 25x from now.
The Bullish case assumes we hit the original and popular 2021 bull market target of a $10 trillion total crypto market cap. Here, $BTC would be hitting between $150K to $300K, and it would be reasonable for $SOL to hit $1,000. At such euphoric levels, strong small caps can absolutely skyrocket. For the projection, I assume that $WEN appreciates 100x against $SOL, which would mean a $36 billion market cap, or ~1000x from where we are today. If you think this is unreasonable, remember that both DOGE and SHIB hit a market cap higher than this in 2021.
The Bearish case assumes that we’re heading for a recession, or even generational stagflation like the 1970’s. The bond yield curve is already inverted and beginning to un-invert, which has historically been an extremely reliable indicator of a recession that causes the stock market to bottom. In this scenario, I assume that the crypto market cap dives back down to $1 trillion, $SOL dumps back down to $20, and $WEN pulls back 90% against $SOL. This would result in WEN receding into micro-cap territory — under $1 million — resulting in a 98%+ drawdown from current prices.
Relative Market Dominance Approach ($WEN.D/$SOL.D)
The final approach compares the market dominance between WEN and SOL, which tells you how much money has been poured by investors and traders into WEN compared to SOL.
Mathematically, it works out a lot like the Price Ratio approach above, with the benefit of more intuitive numbers.
For example, an $ETH/$BTC ratio of 0.8 doesn’t make much real-world sense. It simply says that the price of ether divided by the price of bitcoin is 2, which is a kind of abstract idea.
But a relative market dominance of ETH.D/BTC.D being equal to 0.8 effectively tells you that ether’s valuation (i.e. market cap) is now 80% of bitcoin’s.
Onto our predictions for $WEN.
Currently, Solana has a market cap of $43 billion, which gives it a market dominance of 2.6%. In other words, 2.6% of all the money in crypto right now ($1.6 trillion) is sitting in $SOL. Meanwhile small-cap $WEN has a market cap of $36 million, which means the relative market dominance WEN.D/SOL.D = $36m/$43b, or roughly 0.135%. Put it another way, WEN’s market cap is roughly 0.135% of $SOL’s. WEN is a small fish right now.
We then set out to project some prices for $WEN under the similar Normal, Bullish and Bearish cases as before.
The Normal case assumes the same numbers as earlier, where the crypto market cap hits the 2021 ATH and Solana hits is ATH market cap of $78 billion. Here, we assume that the market cap of WEN outperforms SOL so that WEN ends up being a whole 1% the market cap of SOL. Not unreasonable, I think. That would mean a market of $780 million for WEN, which translates to a 13x in price from here.
The Bullish case assumes that Solana hits a market cap of $500 billion against a total crypto market cap of $10 trillion. Here, we assume that by virtue of WEN’s bluechip memecoin status, things blow up and WEN ends up hitting a market cap that’s 10% of SOL’s. Doable? You decide. In this scenario, WEN hits a whopping $50 billion market cap, which sits between SHIB and DOGE’s market caps in the 2021 bull run. This equates to 1300x appreciation in WEN’s price from here.
The Bearish case assumes a recessionary scenario where market liquidity is exiting, the Solana market cap experiences a 80–90% and WEN’s own valuation dumps even harder. With a market cap of ~$1 million, bordering on the micro-cap, WEN would be hit with a 97–98% drawdown from current prices.
Final Words
I don’t write about memecoins often, because I think most of them are downright gambling. But WEN boasts an immaculate origin story that, to be honest, hasn’t given me so much confidence in a memecoin since BONK.
For that reason, I’ll be holding onto my 4 wallets of airdrops, and hoping for that 1000x.
As always, nothing here is financial advice. I encourage you to read widely, keep your emotions in check and make decisions that suit your risk profile and goals. G’luck!
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