What Are Meme Coins?

Since the meteoric rise of Dogecoin in 2021, meme coins have received a lot of attention. In this article, we explore their history and which meme coin has the most potential.

What are meme coins?

A meme coin is a cryptocurrency based on internet memes, influencers, social communities, and, in some cases, current events. The genesis of meme coins can be traced to the creation of the original meme coin, Dogecoin (DOGE).

Dogecoin was founded in 2013 by a duo of software developers, Billy Markus and Jackson Palmer, who intended for the crypto to be a joke, hence using the Shiba Inu dog as the cryptocurrency’s logo.

According to Marchus and Jackson, Dogecoin was envisioned as a “fun and friendly internet currency” that would appeal to core Bitcoin (BTC) supporters, mocking the wild speculation in crypto markets at the time. 

Surprisingly, the joke caught on and attracted a unique online following that invested in the digital currency. DOGE became popular on Reddit for online tipping and supporting causes users believed in, crypto transaction service Dogetipbot allowed users to transfer DOGE via their Reddit comments and was used extensively by Reddit and Twitch users

However, it wasn’t until 2021 that Dogecoin became a household name, following a series of tweets from Tesla CEO and crypto enthusiast Elon Musk, who supported digital currency. That, along with further speculation from investors, resulted in the crypto peaking at $0.73 in May 2021, representing an over 5,000% price increase from the start of that year. However, as of April 2024, it had fallen 80% to around $0.15.

Dogecoin’s popularity had a stimulating effect on other meme coins, which also began to attract investor attention. Consequently, meme coins began pushing themselves to the crypto space’s forefront.

How many meme coins are there?

According to data from CoinMarketCap, there are over 2,000 meme coins with a combined market capitalization of more than $45 billion.

Why are meme coins so popular?

Meme coins have become popular for several reasons. Many young, first-time investors find the prospect of investing in meme coins appealing. To them, the coins are part of a new internet trend that could potentially be very lucrative. 

Meme coin supporters often tout the high returns and growing community of followers, it’s no wonder many newbies are attracted to adding them to their portfolios.

Fear of missing out (FOMO) has also contributed to the popularity of meme coins. When Dogecoin rallied after Elon Musk’s tweets, several other meme coins emerged, looking to get a slice of the market action. Many were close clones of Dogecoin with minor adjustments to their code, but all promised to be the next DOGE.

Where to buy meme coins?

Meme coins can typically be bought on crypto exchanges that list them, some popular ones include Binance, KuCoin, and Bybit. However, investors should keep in mind that meme coins can be highly volatile and speculative, so they should do their research and only invest what they can afford to lose.

Popular meme coins

Having explained meme coins and how they work, let’s take a look at some current popular coins.

Dogecoin

Dogecoin is the most popular coin and would likely be many investors’ bet for the first meme coin to reach $1. It is an open-source crypto based on a fork of the Litecoin code. Dogecoin’s founders felt that a meme coin had a greater chance at mainstream acceptance than Bitcoin, which was still in its nascent stage at the time.

Dogecoin, like Bitcoin, uses a proof-of-work (PoW) consensus mechanism to validate transactions and reward miners with newly minted Dogecoins. Digital currency can be used for payments but lacks any real-world utility. Instead, it derives most of its value from speculation and support from a segment of crypto aficionados.

Moreover, Dogecoin has no hard cap on the number of coins being released into circulation, which makes it infinitely inflationary.

Shiba Inu

Shiba Inu is a meme token designed as an ERC20-based alternative to Dogecoin and governed by an active community commonly known as the SHIB Army. It was founded in 2020 by an anonymous developer named Ryoshi. SHIB peaked at $0.00008845 in October 2021 and was priced at around $0.00002189 at the time of writing.

Shiba Inu conforms to the ERC-20 standard, which enables it to support decentralized applications (dapps) and to be incorporated into decentralized finance (defi) protocols. The Shiba Inu community launched its decentralized exchange (DEX) known as ShibaSwap. DEX allows users to buy and trade SHIB, provide liquidity, stake, and swap tokens to earn incentives through its reward scheme.

ShibSwap supports LEASH and BONE tokens. LEASH offers returns to liquidity providers on the DEX, while BONE is a governance token that allows users to vote on upcoming proposals on the Doggy DAO. 

Pepe

Pepe (PEPE), inspired by the popular Pepe the Frog meme, was launched in April 2023 by an anonymous team. Pepe stands out with its colossal maximum supply of 420.69 trillion coins while implementing measures to maintain scarcity by regularly burning tokens.

Operating as an ERC-20 token on the Ethereum blockchain, Pepe coin leverages the proof-of-stake (PoS) consensus mechanism. The native token of the Pepe Network, known as PEPE, serves multiple purposes; it can be used as a souvenir, a gift, or an investment tool.

Pepe coin promises a “no taxes” policy, which translates to minimal trading fees. These fees are only applied during periods of high network usage, allowing users to enjoy cost-effective transactions.

According to the project, the token’s distribution strategy designates a significant majority of 93.1% for the liquidity pool, ensuring stability. The remaining 6.9% is held by the development team to support future exchanges, community partnerships, and promotional endeavors.

Dogelon Mars

Dogelon Mars (ELON) is a meme coin similar to Dogecoin and Shiba Inu. The ERC-20 token derives its name from a combination of Dogecoin and Elon Musk.

Dogelon Mars was built by a team of anonymous developers and operates on the Ethereum and Polygon networks. ELON has a total supply of 1 quadrillion tokens. The developers sent 50% of ELON tokens to Vitalik Buterin, the founder of Ethereum, to burn and remove them from circulation. The remaining balance of tokens was placed into liquidity pools.

The coin’s website features a series of short comics depicting Dogelon’s adventures on Mars, where he “explores the greatest mysteries of the galaxy.”

Baby Doge

Baby Doge (BabyDoge) is a meme token modeled by fans of the highly successful Dogecoin and is meant to be a unique addition to the Dog meme series of tokens. It was launched in June 2021 by anonymous developers, who hoped it would impress Dogecoin followers with its adorableness (and to profit from the meme crypto frenzy).

Baby Doge focuses on creating an engaging meme community that promotes animal welfare and pet adoption. It features a BabyDoge AI image generator that lets users craft AI-generated Baby Doge characters, memes, and images. Additionally, community members can use BabyDoge to mint these creations into NFTs, enhancing their digital asset collection.

BabyDoge is a BEP-20 token operating on BNB Smart Chain. The meme coin was built with a deflationary mechanism, and the maximum token supply of BabyDoge is 420 quadrillion tokens.

How to find new meme coins early?

Like with other types of crypto, staying active in online crypto communities is a good way to discover meme coins early.

• Social media: Following crypto influencers, developers, and enthusiasts on platforms like X, Reddit, and Discord could lead to catching onto new projects they find interesting.
• Crypto forums and communities: Forums like Bitcointalk and CryptoCompare often discuss emerging projects, including meme coins.
• Token launch platforms: Sometimes, meme coins are launched through these platforms, so keeping an eye on them may lead to discovering coins early.
• Crypto news websites: Websites like crypto.news, CoinDesk, and Cointelegraph often cover new and trending crypto projects, including meme coins.
• Token listings on exchanges: Some exchanges list new tokens before they gain widespread attention. Regularly checking the new listings section of exchanges could help investors spot meme coins early.

Are meme coins worth it?

While it is possible to make a profit trading in meme coins, investors should remember that, in many ways, it’s similar to gambling. Meme coins have few practical uses beyond being “joke” currency and being used for speculation. 

Compare meme coins like Dogecoin and Shiba Inu to Bitcoin, and you will see the difference. Bitcoin is a disinflationary digital currency with a limited supply, which has established it as “digital gold”. Conversely, meme coins lack real-world applications, although many investors do find a sense of community in the coins due to their shared belief in their value.

While there is always a chance that the meme coins price could explode, investors should be sure to do their own research into how meme coins work and take into account their expertise in the crypto market, attitude towards risk, and investment goals before deciding whether meme coins may be a good investment for them.

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