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What Are MEME Coins?

2023.07.31 MEXC
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1. What are MEME Coins?


MEME is a cultural phenomenon that can be understood as popular internet memes or jokes. It involves content that resonates with a large number of users and hence, spreads rapidly across the internet. It is a cultural trend.

Similarly, memecoins are tokens that embody this cultural phenomenon. These tokens may not necessarily have real practical value, but they represent a specific phenomenon during a particular period of time.

2. Why Are MEME Coins Popular?


2.1 Cultural Identity: Many memecoins are based on shared cultural identity, which brings members together and encourages spontaneous dissemination, resulting in increased recognition and participation from others.

2.2 Wealth Effect: MEME coins typically start with low initial prices, and when they trigger market FOMO (Fear of Missing Out), their prices often skyrocket hundreds or thousands of times, creating a wealth effect that attracts more people to participate.

2.3 Strong Speculative & Viral Nature: Most memecoins lack technical or project support and have limited practical applications. Instead, they rely heavily on speculation and hype to gain popularity and drive price growth.

3. What Are Some Common MEME Coins?


Whether it is a bull market or a bear market, memecoins are always fashionably late but never absent. That is because they constantly represent certain cultural attributes, attracting loyal communities of supporters. Of course, the significant wealth effect resulting from sudden surges in value is also a crucial factor for the continuous presence of memecoins.

3.1 Dogecoin (DOGE)


Dogecoin was created with the intention of satirizing the rampant issuance of various crypto at the time. Coinciding with the global popularity of doge memes, the founders of Dogecoin made slight modifications to the code of Bitcoin and released DOGE.

Originally intended for humor and parody, Dogecoin unexpectedly gained popularity due to its low price and fast transaction speed, which led people to use it for online tipping and gifting. Later on, due to multiple endorsements from Elon Musk, DOGE skyrocketed in value, reaching nearly $0.8 per token.

3.2 Shiba Inu (SHIB)


SHIB, introduced in 2021, is considered one of the tokens that contributed to the animal-themed token craze alongside DOGE that year.

SHIB gained popularity partly due to endorsements from Elon Musk on Twitter, and partly because of its innovative token mechanics. During its initial allocation, SHIB sent 50% of the tokens directly to Vitalik Buterin's account, effectively burning half of the supply. Many other animal-themed tokens followed SHIB's lead in this regard.

SHIB's logo features a Shiba Inu dog, and its success, along with DOGE's, as memecoins based on the image of dogs, inspired numerous imitators to adopt the dog theme for their own tokens, with one of them even naming their token after Elon Musk's dog, Floki.

Apart from its innovative mechanics, SHIB's ability to stand out among numerous animal-themed tokens can also be attributed to the team's continued efforts in project development and operations. The SHIB team has developed SHIBASwap, ventured into NFT issuance, collaborated with other teams to integrate the Shiba Inu image into GameFi projects, and even hinted at working on their own blockchain. These actions have convinced the community that the team is actively building and developing the project.

3.3 PEPE


PEPE's token image is based on the character, Pepe the Frog, created by Matt Furie in his cartoon titled "Boys Club" in 2005. Pepe's image has long been embraced by the crypto community and used to create memes. When the PEPE token was introduced, it quickly caught the market's attention.

PEPE has become the fastest-growing ERC-20 token in the history of crypto, accumulating over 100,000 holders and reaching a market capitalization of $1 billion within 23 days. Its popularity sparked a renaissance of memecoins, causing congestion on both the Ethereum and Bitcoin networks.

Note: The rise of PEPE coincided with the BRC-20 token frenzy, with many projects creating memecoins on the Bitcoin network, leading to widespread pursuit and speculation, and causing congestion on the Bitcoin network.

3.4 AIDOGE


If we were to say that PEPE has a strong cultural background and was born into privilege, then AIDOGE takes the grassroots approach. Leveraging the wealth effect of ARB token airdrops, holders of ARB tokens can directly claim AIDOGE tokens, with earlier claimants receiving more tokens. This FOMO mechanism attracted a large number of users in the initial stages. Subsequently, other memecoins issued on Arbitrum also imitated this initial launch method.
In addition, AIDOGE also introduced innovative distribution mechanisms. When trading AIDOGE, there is a default fee of 15%, of which 1% is permanently burned, 3% is distributed to $AIDOGE stakers, and 3% is randomly distributed every half hour to users with transactions above $100, using smart contracts for distribution in randomized amounts. Furthermore, 2% of the fee flows back into the Camelot liquidity pool, 3% is used to purchase $ARB, and 3% is allocated for project development. The deflationary and lottery mechanisms are significant factors that attract later users to join.

4. Elon Musk and MEME Coins


While Elon Musk has endorsed several memecoins, many more tokens have been named based on certain terms mentioned in his normal conversations.

It is well known that Dogecoin is one of the most endorsed memecoins by Elon Musk. Musk has even faced accusations of using his influence to manipulate the token's price due to his multiple tweets expressing support for DOGE on Twitter.

On January 28, 2021, Elon Musk tweeted a fictional "Dogue" magazine cover. As a result, DOGE experienced a price increase of 404% that day, surging from $0.014 to $0.08.

On February 4, 2021, Elon Musk tweeted that "Dogecoin is the people's crypto," leading to a 90% increase in DOGE's price from $0.031 to $0.058 that day.

On February 24, 2021, Elon Musk tweeted a picture of Dogecoin landing on the moon,resulting in the token's price surging from $0.043 to $0.06.

On April 15, 2021, Elon Musk once again tweeted a picture related to the Dogecoin logo, causing DOGE's price to surge by 238% to $0.45 the same day. Subsequently, Dogecoin continued its upward trajectory, reaching its all-time high of $0.73.

On May 10, 2021, during an appearance on the comedy show "Saturday Night Live," Elon Musk referred to Dogecoin as a hustle, causing a significant drop in DOGE's price of over 34% to $0.45.

On January 14, 2022, Elon Musk announced that Tesla would accept DOGE as a form of payment for its products.

On April 10, 2022, Elon Musk suggested that the Twitter Blue subscription fees could potentially be paid in DOGE.

On June 21, 2022, Elon Musk announced that SpaceX would accept DOGE as a form of payment.

On October 28, 2022, Elon Musk acquired Twitter, and DOGE's price surged from $0.06 to a peak of $0.158.

On April 3, 2023, the blue bird logo on Twitter’s webpage was suddenly replaced by DOGE's Shiba Inu logo. Additionally, Elon Musk tweeted an image containing the DOGE's Shiba Inu logo with Twitter's blue bird logo.

On July 20, 2023, Tesla's website appeared to have once again added code supporting DOGE payments.

5. Risks Associated With MEME Coins


The most appealing aspect of memecoins to users lies in the uncertainty of the potential returns due to their high price volatility. MEME Coins often experience rapid price surges driven by market FOMO sentiment. However, once the hype subsides, the prices of these tokens can plummet just as quickly.


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