Want to buy dogs, first buy Nvidia: Are meme stocks the engine of the bull market?

The scene is lively, but there are few real people.

Written by: Clow

To buy a dog coin, you first need to buy Nvidia stock.

This is not a joke, it is currently the most popular way to play on the Robinhood chain. The dog is called Artificial Inu, and on the opposite side of the pool is the tokenized NVDA. On August 1, its market value was 1.5 million dollars, on August 30 it rose to 135 million, and at the beginning of September it briefly soared past 320 million.

The chain has gone crazy too. In about two months, DeFi TVL increased from nearly zero to 700–800 million dollars; according to DefiLlama's statistics, on September 3, the single-day DEX transaction volume was 1.686 billion dollars.

In two months, three records, and a new term: Coin Stock Meme.

Thus, some people began to shout: The engine of this bull market has been found. The last round was the ETFs bringing Wall Street money into the crypto circle, and this round is turning Wall Street stocks directly into chips on the chain.

Some also said, this is just Pump.fun with a new skin, only this time the skin is printed with Nvidia.

An engine needs two things: a continuous supply of fuel and an unstoppable RPM. Whether this machine exists or not has to be examined.

01 Want to buy a dog, buy Nvidia first

The story starts with a cat.

The Robinhood chain launched its mainnet on July 1, using the Arbitrum Orbit architecture, with gas fees paid in ETH, and block times of about 100 milliseconds. The official idea is to build a 24-hour highway for tokenized stocks and RWA.

The first to bring retail investors in was not stocks, but CASHCAT. It borrowed the name of the two Robinhood founders' initial company in 2010 and has no relation to the official entity, once reaching a market value over 300 million dollars. The CEO of Robinhood didn’t mind either, posting that this chain “is also very useful for memes.”

It proved one thing: as long as the story is about getting rich quickly, retail investors are willing to cross chains, willing to use new wallets, and willing to act as liquidity in a strange contract.

Next came Pons, a token issuance assembly line. Issuing, pricing, and building the pool are packaged into a standard process; once the shares on the curve are sold out, it automatically throws the money raised and allocated tokens into Uniswap V4 for permanent locking.

As of August 31, Pons had issued about 389,000 tokens, collecting 46.27 million dollars in fees, of which 10.23 million dollars went to the protocol, and about 3.61 million dollars was used to buy back and destroy PONS. On August 30 alone, the transaction volume of PONS itself reached 67.38 million dollars, and its market value soared to 233 million.

Money transformed from betting on individual memes to betting on the casino itself.

Then came the third step: Coin Stock Meme.

The meaning is very straightforward: a meme coin, not paired with ETH, not paired with stablecoins, directly paired with a tokenized US stock.

Artificial Inu came about this way. To buy it, you first need to buy the NVDA token and throw it into the pool, each purchase order creates demand for Nvidia's token.

SPACEHOOD paired with SPCX capitalizes on Musk. MOO paired with Micron's MU, making use of homophony and the "memory super cycle." The dollar price of these coins has two variables: community enthusiasm for dogs and the fluctuations of the underlying stock itself. Buying it means betting on both.

The Index is more direct, taking 3% from both sides of the transaction, using it to buy a basket of stock tokens for holders, with cumulative fees exceeding 1.7 million dollars.

The traditional RWA problem is that once bought, no one trades, the stock tokens are like locked away in a safe. Coin Stock Meme brings it out, forcing it to act as chips. Each time dog coins change hands, they create trading volume for the underlying stock.

02 The opening bell is the final market maker

In the past few days, everyone has seen enough of HIMS' excitement, here we only highlight the broken bone it exposes.

According to The Defiant statistics, there are only 58,700 HIMS tokens on the chain, corresponding to a real circulating volume of 233 million shares at 0.025%. A meme called BONER locked 31,200 of those tokens in its own pool, accounting for 53%.

On Sunday night, HIMS was bought on the chain for 132.64 dollars, while the New York Stock Exchange's closing price on Friday was 28.84 dollars.

A premium of 4.6 times, why is no one arbitraging?

Because no one can cash out. According to Robinhood's design, only the sole authorized participant, BBVI, can mint new tokens; this role is the Bitstamp entity of Robinhood itself in the prospectus. The prerequisite for minting is to buy stocks in the real market for hedging first. The New York Stock Exchange is closed on the weekend, and no one is willing to conjure up a new HIMS out of thin air.

On Monday after noon Eastern time, BBVI minted about 4,000 tokens to fill in, the premium collapsed, and the price returned to around 29 dollars.

Chain finance has boasted of being 24/7 for ten years, but the pricing power still belongs to the opening bell of New York. Those 4,000 tokens were genuine market-making instructions, and those executing the instruction had to wait for Wall Street to return to work.

This time it was an upward squeeze, a facade of prosperity. Conversely, if a panic sell occurred over the weekend, not only the meme would be smashed, but the stock tokens, which comprise half of the circulating volume in the pool, would be drained as well. And those restocking would have to wait until Monday.

An asset with a limited supply that also halts for two days each week is used to price something with infinite volatility. This is not an accident, it is the design itself.

When the opening bell rings, the weekend on the chain comes to an end.

03 The numbers are big, but where are the people?

Looking at all 63.5 million transactions from July 16 to July 28, what I see is a treadmill.

In 823,700 wallets, 61% appeared only for one day. Every day, 10,000 to 26,000 new tokens are issued, and 84% have never traded after the first day. The median transaction amount is 48.42 dollars.

Trading bots account for only 1.7% of wallet numbers but contribute 51.3% of transaction volume. The 9,003 wallets that were active for all 13 days accounted for 1.1% of the total, consuming 37.3% of the transaction volume.

However, the same data also has another side: the number of holders of tokenized stocks increased by 155% over 30 days, with cumulative DEX transaction volume exceeding 3 billion dollars. Next to the casino, serious counter customers are also increasing.

The distribution of money is equally fragmented. As of August 31, on-chain stablecoins were about 775 million dollars, with Paxos' USDG accounting for 57.6% and Ethena's USDe for 42%. Among the over 700 million TVL, 480 million lies on Morpho, earning about 7% annualized rates as advertised by Robinhood Earn, mainly from the USDG treasury managed by Steakhouse.

The capital actually changing hands in the casino is much smaller than the 1.5 billion dollars of daily transaction volume implies. The same money spins around many times in one day.

On the other side, Robinhood's tokenized stocks are completely blocked for residents of the US, Canada, UK, Switzerland, and the UAE.

Wall Street stocks cannot be bought by Wall Street people. Half of the trades on the chain are produced by scripts.

Back to the question: Will Coin Stock Meme become the engine of the bull market?

Those who are optimistic have their reasons. RWA has been discussed for three years; tokenized stocks have always been things locked in safes once purchased; Meme has given them real transaction depth for the first time.

The last round of Solana's rally was also sparked by memes first, with real applications following later. Nvidia, Musk, Apple—everyone understands these symbols, and they can bring people who have never touched the chain before into the fold, which is something ZK and re-staking cannot achieve.

Those who are pessimistic are watching two things.

First is fuel: The prerequisite for a bull market is a continuous net inflow of new off-exchange money; what the last Bitcoin spot ETF did was exactly this. However, Coin Stock Meme has blocked the most financially potent North American retail investors, relying instead on retail investors from Europe and the Asia-Pacific, plus the existing funds in Ethereum circulating hands.

Some have calculated that based on The Index, drawing 3% each from buying and selling means that entering and exiting costs a total of 5.9%, not counting slippage. In a negative-sum game without new money coming in, it burns its own fuel.

Second is RPM: 61% of wallets only come for one day, half of the volume is generated by bots, and every weekend they have to shut down and wait for the NYSE to open.

Regulation is the same sword hanging over both sides. Three divisions of the SEC previously issued a joint statement stating that tokenization does not change the substance of securities. The NVDA that retail investors buy on the chain is legally a debt instrument issued by Robinhood's special purpose entity on Jersey Island, with no voting rights and no direct claim to dividends.

How to classify something like The Index, which draws fees to buy stocks and then distributes them to token holders, is still not clearly defined.

Both sides have their points; the difference lies in how to define the engine: is it the match that ignites it, or the fuel that keeps burning?

Meme has changed its skin many times: animals, celebrities, and this time it has changed to stock codes. Each time it can ignite a fire; whether this fire can burn outside the chain depends on the coming months—whether the money comes in from outside the chain or circulates within it.

The fire has already been lit. Where the oil comes from has yet to be answered.