Interpreting the MEME Token Phenomenon from the Perspective of Game Theory: The Rise of AI, DeSci, and Memes

Author: Revc, Golden Finance

The uniqueness of MEME tokens such as DOGE, PEPE, and SHIB stems from complex speculative motives, community collaborative behaviors, meme culture dissemination, and the impact of emerging technologies (like AI) on the market. From a game theory perspective, MEME tokens exhibit multiple interactions of collective belief, coordinated behavior, and market speculation, providing new insights for analyzing financial market behavior.

The Application of Game Theory in the MEME Token Phenomenon

1. Speculation and the Prisoner's Dilemma

The decisions faced by investors often reflect the "prisoner's dilemma":

• Short-term profit maximization: Many investors choose to sell quickly at peaks to avoid the risk of market crashes.
• Long-term value creation: If investors can reach a consensus and hold the tokens together, their price may stabilize or grow. However, any single investor's selling behavior threatens overall stability.

Case Study: The Rise and Volatility of DOGE

The price volatility of DOGE heavily relies on community trust and celebrity endorsements (such as Elon Musk's tweets). This speculative phenomenon reveals the conflict between short-term and long-term interests in the game.

2. Coordination Games: The Self-Realization of Value

Successful MEME tokens often depend on the coordinated efforts of the community.

For example, the success of the GOAT token is attributed to the community's strong promotion of its narrative and the support of AI tools (like "Truth Terminal") for market dynamics. This collaboration reflects the essence of coordination games: as long as the majority acts together, the growth of the token's value may become a reality.

3. Signaling Games: The Role of Authority Endorsement

When well-known institutions or individuals (such as venture capital firm a16z or its founder Marc Andreessen) support a token, they send a signal to the market. This signaling effect strengthens the market's recognition of the token's value, triggering more investment behavior.

Example: PEPE garnered significant attention in its early days through influencer support and cultural symbolism, despite its limited practical use, leading to a price surge.

4. Common Sense and Collective Action

Many MEME tokens rely on a collectively assumed consensus: "This is a meme token." This shared understanding drives market behavior and value inflation. A consensus on price growth is established through viral dissemination, but this growth often detaches from its actual utility.

AI-Driven MEME Tokens: The Interaction of Technology and Emotion

1. AI and Market Dissemination

AI technology is changing the generation and dissemination patterns of MEME tokens by optimizing meme content and monitoring emotions.

• Efficient narrative creation: Generative AI can quickly produce highly engaging content, driving viral meme dissemination.
• Sentiment analysis and feedback: AI tools provide real-time analysis of market sentiment, offering strategy adjustment suggestions to investors, thereby influencing market behavior.

Truth Terminal is an AI chatbot created by Andy Ayrey, designed to explore AI's performance and impact in social media environments. Initially, this project operated on X, inspired by unsupervised conversations between two Claude AI models, aiming to study how AI generates content without human intervention. Truth Terminal interacts with users through its X account, primarily discussing a fictional religious concept called "Goat Gospel," whose humor and quirky nature attracted significant attention.

In July 2024, venture capitalist Marc Andreessen donated $50,000 in Bitcoin to Truth Terminal, after which the AI showed interest in issuing tokens, leading to the birth of the $GOAT (Goatseus Maximus) token based on the Solana blockchain. Although Truth Terminal did not directly create $GOAT, its promotional activities significantly enhanced the market value of this meme token, sparking widespread discussion, particularly regarding how AI influences market dynamics, social media culture, and cryptocurrency investment trends.

Truth Terminal is not just an AI chatbot but also a unique case study of how AI self-presents in social networks, influencing followers and markets. It reveals the potential of AI at the intersection of culture, finance, and society.

2. The Intersection of MEME and Life Sciences

The application of MEME tokens in the DeSci track showcases an innovative combination of cutting-edge scientific exploration and community finance. The life sciences field, represented by longevity research, has attracted the attention of crypto whales. Through MEME tokens, experimental research like RIF (Rifampicin) and URO (Urolithin A) has received direct funding from decentralized communities. These tokens not only carry the financial tool attributes of scientific research but also stimulate community emotional participation through on-chain transparency and real-time experimental data, injecting funds and social attention into areas like longevity research and mental health.

Meanwhile, MEME projects like SCIHUB reflect social issues of academic freedom and inequality through the combination of narrative and social sentiment. These projects raise funds and disseminate narratives through decentralized platforms, triggering market FOMO sentiment and achieving significant market capitalization increases in a short time.

Behavioral Economics and Meme Culture: The Drivers of Irrational Exuberance

1. Market Sentiment and Irrational Exuberance

As behavioral economist Robert Shiller proposed in his theory of "irrational exuberance," the price fluctuations of MEME tokens are driven more by market sentiment than by intrinsic value.

Elon Musk has repeatedly ignited DOGE's price fluctuations through social media, highlighting the role of celebrity effects in stimulating market sentiment.

2. The Deep Impact of Meme Culture

MEME tokens often attach to memes deeply rooted in internet culture, such as the PEPE frog image and the SHIB Shiba Inu theme. These cultural symbols create a strong emotional resonance for the tokens within the community.

Conclusion

From the perspective of game theory, the MEME token phenomenon demonstrates the complex interplay of collective belief, market behavior, and technological impetus.

Investors face choices between short-term profits and long-term consensus. Community coordination and external signals play a crucial role in value growth.

The combination of AI, biosciences, and meme culture has given rise to new trends in MEME tokens, forming a new track worthy of attention.