Under the influence of investment masters such as Graham and Buffett, people generally agree with the principle of "value investing" and tend to use the discounted cash flow method to evaluate the value of assets and look for assets with a margin of safety and that are undervalued.
However, in the crypto space, this valuation method clearly does not apply. Philosophical thinking about the market value, demand and value of cryptocurrencies cannot be limited simply to the definition of "cash income".
In this regard, for memes, we need to combine narrative and numbers to build a complete valuation structure.
When estimating the value of a meme, we can use the following formula: Meme Valuation = Narrative + Number.
For memes, narrative is the product, culture is the product, and community is the product. The "narrative" in the formula refers to the meme product itself, while the "number" is a difficult-to-calculate metric that includes multiple biasing factors. Although it is difficult for us to accurately calculate the chemical reactions of these deviation factors using mathematical models, when we cannot measure any data, we can open up the imagination.
Specifically, the valuation of a meme can be synthesized from the following multiple factors: the size of the narrative (the size of the impact on the market), the frequency of emotional arousal, celebrity effect (KOL recognition and ability to bring goods), SOV (media proportion) share) and so on. These factors work together to form the comprehensive valuation of the meme.
Of course, for these deviation factors, we can currently only pursue fuzzy accuracy, and it is difficult to accurately calculate the chemical reactions using mathematical models. However, even if we are faced with immeasurable data, we can still use our rich imagination to do our best to assess the value of memes.
Therefore, for memes, valuation is not just a simple discounted cash flow calculation process, but a complex valuation model that integrates narrative and numbers.
