With the continuous evolution of the digital age, new technologies and application scenarios emerge one after another, profoundly changing people's lifestyles and modes of thinking, while giving birth to new cultural forms and dissemination mechanisms. In this context, a popular cultural phenomenon characterized by derivation, resonance, and viral replication—"Meme" culture—gradually emerges. Initially, memes were limited to April Fools' jokes or memes on the internet. However, with its close integration with the crypto world, meme coins as a new type of cryptocurrency asset are rapidly emerging.
1. Development History of Meme Coins
The origin of meme coins can be traced back to 2013 when an anonymous developer created a cryptocurrency named Meme based on Bitcoin blockchain technology. Its name derives from "Internet Meme" and aims to combine internet culture with cryptocurrency. Initially, Meme aimed to be a fun digital currency, using internet memes, emoticons, and other elements of internet culture to attract more people to participate in the cryptocurrency market.
Initial Stage (2009 to 2013): During this period, some of the earliest meme coins, such as Catcoin and Coino, did not have specific goals or use cases. They mainly relied on social media promotion to attract users and did not attract widespread attention in the entire crypto market. It was not until the emergence of DOGE coin that meme coins gained recognition in the crypto market. DOGE coin initially started as a joke, but due to its cute dog image and meme culture pattern, it quickly became popular on social platform Reddit. As the DOGE coin became widely accepted, a large number of dog-themed meme coins emerged, further demonstrating the viral replication characteristics of meme culture. During this period, the meme coin community was very active, and through the spread of internet social channels, meme coins began to rise in the crypto industry.
Development Stage (2013 to 2017): With the development of the crypto market, more and more meme tokens began to emerge. In addition to DOGE coin, which is dog-themed, there were other meme coins based on different elements, such as Pepe the Frog-themed Pepe Cash, cat-themed Nyancoin, and panda-themed PandaCoin. These tokens are usually promoted through social media to attract users and become part of internet culture to some extent. During this period, meme coins began to gain market attention. In addition, the emergence of innovative market mechanisms such as decentralized exchanges and airdrops also contributed to the development of the meme market.
Maturity Stage (2017 to 2020): The maturity stage is an important stage of meme development. During this period, the market capitalization of meme coins significantly increased, and some meme coins with high market values gradually became star tokens in the market, such as DOGE coin and Pepe Cash. In addition, some meme coins also obtained huge financing through ICOs, such as BAT (Basic Attention Token) and GNT (Golem Network Token). In this stage, meme coins began to explore community governance models to better manage projects and attract more users. At the same time, some tokens began to establish their own ecosystems and application scenarios to promote token usage and value appreciation.
Outbreak Stage (2020 to 2023): Thanks to the promotion of meme community members and the gradual maturity of the meme market, the market value of meme coins also reached new highs. Among them, DOGE, as a representative meme coin, reached an all-time high price of $0.74 in April 2021, with a total market value close to $50 billion. During this period, meme coins began to explore new fields and application directions, such as NFT-based games and art collections, as well as using blockchain technology to solve social issues such as decentralized management and identity verification. These new ideas and gameplay have brought new development directions and ideas for the entire cryptocurrency industry.
New Wave of Boom Period (2024): The current meme coin market is experiencing a new wave of boom. PEPE coin, as the biggest dark horse of the year, has surged by 579.9% in 30 days, with a total market value of $2,503,430,225 and a 24-hour trading volume of $2,858,981,839. In addition, for the first time in this round of meme coin boom, Solana's popularity has surpassed Ethereum.
2. Operation Mode of Meme Coins
Generally speaking, meme coins originate from the entertaining ideas conceived by a few people, use blockchain technology to set certain parameters, and issue cryptocurrencies on their own built blockchain ledger (such as DOGE) or establish cryptocurrencies on basic public chains such as Ethereum and Binance Smart Chain. These ideas or cultures are then rapidly disseminated through the internet, gradually becoming a consensus among a certain group of people, and attracting more and more people to participate in this kind of coin.
The operation of meme coins is essentially a community-driven model, or "viral marketing." In addition to the powerful viral diffusion power of memes themselves, the rapid formation of consensus in this cultural aspect also relies on human participation.
Strong Narrative and Speculation Capabilities
For meme coins, the narrative is life, the consensus is value and entertainment and satirical culture have strong dissemination and penetration power on the internet. A picture of a cute dog gave birth to DOGE, an idea to surpass DOGE created SHIB, a crowdfunding campaign to bid for a copy of the US Constitution at Sotheby's formed PEOPLE, and interesting, trendy, or satirical narratives could all become followed memes. In terms of speculation, the most typical example is a large amount of SHIB sent to Vitalik Buterin to ride the wave and quickly increase exposure. Of course, many new meme coins are born from following trends, modifying parameters or images based on other coins, and engaging in quirky interactions on internet communities.
Fair Distribution Model
In the early stages of Meme projects, most tokens were distributed for free through community activities and creative mining, and this distribution model is fair and attractive. While attracting more users to join and forming a large and active community, it also increases the liquidity of tokens. Because more people hold tokens, the supply on the market also increases, promoting trading volume and price increases. For early-stage Meme projects, this free and fair distribution model can also increase visibility and promotion effects, attracting more investors to enter the market. Additionally, meme coins also adopt concepts similar to "miners," such as "AI miners" in AIDOGO coin and "Frog Miners" in Pepe coin. These miners can be rewarded based on their contributions, encouraging users to actively participate in the project. This reward mechanism can effectively incentivize community members' behavior, increasing their investment and support for the project.
Economical Model of Large Supply and Low Price
Meme coins have a huge or unlimited supply, such as DOGE's current supply of over 140 billion, PEPE's 39.1 quadrillion, and BabyDoge's 140 quadrillion, so the prices are relatively cheap, with most of them being less than $1. Compared to other cryptocurrencies, psychologically, purchasing meme coins is more cost-effective and gives a greater sense of achievement in terms of owning more coins.
Celebrity Effect and Community Maintenance
GME and AMC initially drove the concept of "Meme stocks," with the Reddit community driving the stock price up 100 times in a few months at the end of 2020. Similarly, a Reddit group called for pushing up the price of DOGE like GME, which attracted attention. Subsequently, Elon Musk endorsed DOGE, and the price of DOGE often fluctuates dramatically due to his tweets.
3. Investment Advantages of Meme Coins
In the world of memes, the quality of the project is not the most important consideration factor; the core value of memes lies in whether they can become hot topics. When a project has an attractive narrative, the topic will spread rapidly, and funds will continue to pour in. Moreover, since emotions often drive most situations, with less interference from other factors and almost no learning curve, easy trading by a large number of users makes prices continuously surge, and stories of overnight wealth with prices multiplying several times, tens of times, or hundreds of times are common.
Cost-effectiveness and Sense of Achievement
Due to the huge supply and low price of meme coins, compared to Bitcoin priced at tens of thousands of dollars and Ethereum priced at thousands of dollars, or other mainstream coins priced at tens of dollars, it is easier to psychologically afford and own more coins on the surface, satisfying a sense of achievement and value perception.
Non-economic value of social needs or community identity. The reasons for owning meme coins are diverse, either because they resonate and are recognized with the narrative of the project, or because they can participate in activities such as AMAs and live streaming. The existence is reasonable; meme coins to a certain extent reflect the Lindy effect, that is, the longer they exist in the crypto market, the stronger their continuity on the market over time.
The First Step into the Crypto World
For many new cryptocurrency investors, meme coins are often their initial reason for paying attention to crypto assets other than Bitcoin. With the spread of the internet and media reports, incredible price increases and interesting meme projects become their new focus.
4. Considerations When Investing in Meme Coins
Cryptocurrencies themselves are a relatively high-risk investment, especially for meme coins that are mainly driven by community forces and speculative sentiment.
Enhance Discrimination of Meme Projects to Guard against Rug Pull
Based on token creation standards such as ERC-20, creating new cryptocurrencies has become relatively simple. Even if a project team has an attractive narrative, they may choose to sell coins and run away after the price rises sharply. Therefore, investors need to self-discriminate against new meme coins spread on the internet or projects displayed only on DEX, although it is often difficult to obtain referable information.
Dramatic Price Fluctuations of Meme Coins
Understanding the dramatic price fluctuations is a characteristic of meme coins. Investors need to manage their positions, and it is recommended not to exceed 20%. Messari analysts said that while investors may achieve high returns through meme coins, it is actually difficult to convert these meme coins into other cryptocurrencies, let alone convert them into US dollars.
The Majority of Meme Coins Lack Real Value
Investing in meme coins requires always adhering to the investment logic of "meme genes", which means that the lack of real value is the norm for most meme coins, and the few coins that can expand practical applications are rare. According to a Chainplay survey report of thousands of cryptocurrency investors in 2023, 30% of investors believe that meme coins have no practical use cases and eventually disappear, and 28% of investors believe that they lack intrinsic value and are susceptible to market manipulation and fraud.
5. Popular Meme Tokens
Doge Coin
Since its launch in 2013, Dogecoin has come a long way and is no longer just a light-hearted satire of the emerging cryptocurrency market. It has become the highest valued meme coin, bringing huge profits to early investors. Subsequently, Dogecoin was accepted as an online payment method due to its low cost and fast transaction speed.
The success of Dogecoin comes from its loyal fan base, which continuously inspires people's enthusiasm for this project. With the support of Tesla CEO Elon Musk, the token has shown significant potential to trigger price increases and national headlines. The bottom of Dogecoin may have been reached, making it an excellent entry opportunity for new investors.
Shiba Inu
Shiba Inu was launched in 2020 by a pseudonymous creator as a response to the success of Dogecoin and meme propagation. However, no one could imagine how Shiba Inu would unfold its own life. Its native token SHIB experienced an epic surge, reaching a historic high in October 2021, consolidating its position in the cryptocurrency world.
Shiba Inu has evolved from a speculative meme coin into a complete blockchain project. This is evidenced by its launch of Shibarium, a Layer 2 Ethereum scalability solution for the SHIB ecosystem. The platform will focus on metaverse and blockchain gaming applications, serving as a settlement layer for DeFi applications.
Floki Inu
Floki Inu was launched in 2021 and quickly established itself as a leader in the meme coin field. Like all other participants in the list, Floki Inu differentiates itself from meme coins filled with speculation by focusing on blockchain games and GameFi. Floki Inu is launching Valhalla, its own NFT game, where users can earn FLOKI tokens by playing games.
Pepe
PEPE is a deflationary meme coin launched on Ethereum. The creation of this cryptocurrency was to pay tribute to Pepe the Frog, a popular internet meme in the early 2000s created by Matt Furie.
The project aims to leverage the popularity of meme coins like Shiba Inu and Dogecoin and strives to become one of the top meme-based cryptocurrencies. PEPE maintains the purity and simplicity of meme coins by formulating tax-exempt policies and admitting its lack of utility.
From late April to May 2023, PEPE's explosive growth led to its market cap reaching a high of $1.6 billion, making early holders millionaires and attracting a group of like-minded followers. It sparked what some call the "meme coin season," resulting in other meme coins—some launched within hours—experiencing astonishing surges and shocking crashes.
6. In Summary
The craze of meme coins fully demonstrates people's cognition and demand for cryptocurrency. Although the value of meme coins mainly comes from their unique social culture and network effects, their success also reflects people's widespread recognition of cryptocurrency. Although meme coins still have many shortcomings, the emergence of novel meme coins constantly explores new possibilities and innovative directions for blockchain applications.
For more analysis, please follow Aibit's media account for real-time updates! This article is for reference only, does not represent any position, and is not intended as investment advice. Investment is risky, caution should be exercised.
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