Just last week, meme tokens were taking the market by storm, much to the surprise of everyone. Crypto market is truly the people’s market, and people want some fun and memes!
In this guide, we explain: what are meme coins? Which ones are the most popular? Oh, and why you should probably stop and think before rushing head-first all-in into them.
What are meme coins?
What are meme coins? A “meme coin” is usually a coin or token, the brand of which is based on an Internet meme. Some other characteristics of them may include being community-driven, not having significant developer activity and reliance on viral marketing. Meme coins are not inherently harmful but they do come with some things to watch out for, which we will talk about.
How did the trend start?
What are meme coins’ beginnings? Few can argue with the fact that Dogecoin was the first true meme coin. It started as a joke, it gained popularity thanks to the meme it was based on.
Doge was everywhere over the Internet in 2014, so it was only natural that the Internet money that used it as a symbol would take off. Another big meme coin of that era is Monacoin which uses a cat as a mascot but it is not too popular outside of Japan.
How can someone issue a meme token?
Issuing new meme coins today is easy — you only need as little as an idea. Back in 2014, Dogecoin creator Jackson Palmer had to find someone to code the protocol for him (that was Billy Marcus).
So what are meme coins made with? Some wallets and services allow you to create an ERC-20 or BEP-20 token in the app. Other services even offer it for free. What is more difficult is making them stick around.
To do so you need something more than the name and specifications. Some users stay with meme coins because they offer a potentially usable protocol. Others, like Dogecoin, nurtured a close-knit and welcoming community.
Top meme coins
What are meme coins at the top today? Let’s see this list of meme coins sorted by the ones with most capitalization first.
The father of all meme coins, Dogecoin is a fork of Luckycoin, which is a fork of Litecoin, which is a fork of Bitcoin. It’s forks all the way down! But jokes aside, it’s a cryptocurrency with an uncapped supply, which is merge mined with Litecoin. Merge mining means that miners secure both networks and receive rewards from both.
The Dogecoin community is known for several grand fundraisers, like the Nascar racing car or Jamaican bobsled team. In their own words, DOGE stands for “do only good everyday”. More about the origins of DOGE and its community you can find in our Guide to Dogecoin.
If this chart got you asking, “is Dogecoin for real?”, don’t worry, us too. 2021 has been crazy for Dogecoin, to say the least. The “penny parity” long-running inside joke had to be retired for obvious reasons. The next stop for DOGE fans is $1 — and then to the Moon!
Or not. The extreme volatility of the coin was surely a test for old and new holders alike. Thanks to the approachability of the coin and the fact that Elon Musk kept hyping it up, it’s been a ride. However, aside from the community, there is little to nothing ensuring the value of DOGE yet.
And yet, it keeps climbing the chart. Not long ago, on May 8, DOGE price renewed its ATH: $0.7376.
Shiba Inu (SHIB)
However, a more infamous now hero of the dog coin craze is an asset called SHIB. It was supposed to be only a part of a DeFi system of interconnected apps: ShibaSwap, SHIB-based liquidity mining with NFTs and more. It just so happened that it was brought down as quickly as it flew.
It is no coincidence that the chart of SHIB looks very similar to DOGE. Users who were looking for more obscure altcoins made the connection and found Shiba Inu, which was even easier to get into than Dogecoin. Then its price skyrocketed from all the demand up to $0.0000388 on May 10.
But here is the catch: while the devs locked 50% away into a Uniswap liquidity pool, the other 50% were sent to Vitalik Buterin’s address (unasked for). The assumption was, as it’s written in the WoofPaper, “as long as Vitalik does not dump on us”, these assets were as good as burnt. But Buterin donated 50 trillion SHIB (about $1.2B at the time) to an India COVID-19 relief fund. The other 410B SHIB were essentially burnt, while he made it clear he never wanted to have that kind of power.
What are meme coins that were not spawned by Dogecoin? A more or less serious project among the dog tokens is SAFEMOON. It is considered a meme coin for different reasons: firstly, the name, which obviously comes from “to the Moon” meme. Secondly, the project is heavily community-driven, and relies on viral and guerilla marketing for exposure and adoption.
SafeMoon also offers a Binance Smart Chain DeFi protocol for auto-liquidity generation and potentially an NFT marketplace. Token burns ensure the supply does not get bloated and devalues.
The meme token rose to prominence thanks to a meteoric rise by 6000% in a month. Mostly this had to do with the popularity of Binance Smart Chain tokens. The current highest price of SAFEMOON is $0.00001399, and today (at the time of writing) its price is $0.000005639, -57.80% of that.
HOGE is a more recent invention, a hybrid of the emerged meme token trend and the DeFi boom. Not only is it a deflationary coin but also it can be used for staking and NFTs. Their whole pitch is “Doge but DeFi” but there is obviously more to this meme token.
Like DOGE, though, it has seen some crazy volatility in 2021 so far. Its historical maximum came up to $0.0008981 on March 15. Only a couple of weeks later, on March 29, it bottomed at $0.0001296. Now the HOGE price is $0.0004446, 243% up from the local bottom but 50% down from the ATH.
Another token that proves you only need an idea to launch one is ELON. How about a cross between DOGE and Elon Musk’s aspirations to Mars travel? Just like that, the token is there!
There is some thought put into it, though. In the token’s manifesto of sorts, the creators pledged to help the victims of rug pulls and scams.
Uniswap made launching meme tokens pretty easy: Dogelon creators did not have to seek a market for long. The coin rose from zero to $0.000002286 (May 12) in about a couple of weeks.
ELON was the victim of the same ordeal with Vitalik Buterin as they used the very same “tokenomics” as Shiba Inu. This is why it tanked so abruptly on May 12, when Buterin started moving the 50% of the supply allocated to him. Moreover, with Elon Musk criticizing Bitcoin’s energy consumption and stopping Tesla purchases, the whole appeal of the token dissolved.
What to keep in mind with meme coins?
What are meme coins’ issues? We glanced over some of them already but it wouldn’t hurt to sum them up:
- Meme value over actual value. Most of these tokens latch onto catchy ideas rather than try to create a meaningful and future-proof project. Most of these projects barely have any developers contributing to the protocol;
- At least two of the projects we mentioned had 50% of the total supply be sent to Vitalik Buterin. No one expected he would move and sell them, which he could and he did. The proceeds did go to charities, and later Vitalik burned 90% of his SHIB tokens. This was still a lesson that token buyers should do research and have an understanding of who has power over an asset;
- Lack of legitimate use cases. Some of the coins claim to be DeFi oriented but their protocols are nowhere near competitive. Other coins are barely used as a currency, like Dogecoin;
- Extreme volatility. Most of meme coins are low-capitalization assets for the reasons stated above. Even a modestly large order can move the markets and cause either a meteoric rise or a dump of the same magnitude. Exercise caution when dealing with such assets in general.
But what are meme coins good for? It’s not like they do not deserve to exist at all. People who come into crypto want to have a community that supports itself and maybe to have some fun. Who are we to judge? Just have fun responsibly and know what you’re getting yourself into.
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