Just last week, meme tokens were taking the market by storm again, much to the surprise of everyone. If the crypto market is the people’s market, 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 is a meme cryptocurrency? 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 And When Did Meme Crypto Coins 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 popular meme coin that used to be big in that era is Monacoin which uses a cat as a mascot but it is not too popular outside of Japan. In this cat vs. dog debate, the latter emerged as a winner, evidenced by a huge number of Dogecoin copycats.
How Can Someone Issue A Meme Coin?
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 Markus).
How can you make a meme coin of your own? 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 meme cryptocurrencies 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 the best meme crypto coins at the top today? Let’s see what some of the top meme coins in terms of market cap and popularity are.
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 used to be known for several grand fundraisers, like the Nascar racing car or Jamaican bobsled team. In their own words, DOGE stands for “Do Only Good Every day”. 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 and the affection of one of the world’s richest men, there is little to nothing to ensure the value of DOGE.
And yet, it occasionally jumps up to unprecedented heights. May 8, 2021, when the DOGE price renewed its ATH: $0.7376, may seem like ages ago. However, a year-to-date chart paints another picture: instead of going to the Moon, DOGE presents its holders with plenty of opportunities to make money on volatility:
Shiba Inu (SHIB)
A more infamous hero of the dog coin craze is an asset called SHIB. It was supposed to be a part of a whole DeFi system of interconnected apps: ShibaSwap, SHIB-based liquidity mining with NFTs and more. It just so happened that it was brought down in 2021 as quickly as it flew, not once but twice.
Users who were looking for more obscure altcoins found the Shiba Inu coin, and then its price skyrocketed from all the demand up to $0.0000388 on May 10, 2021. Around that time, the price charts of Dogecoin and Shiba Inu looked alike. It was later that year that SHIB made a series of even more impressive jumps, up to the current ATH of $0.00008845 on October 28, 2021.
But here is the catch: while on launch the devs locked 50% away into a Uniswap liquidity pool, the other 50% was 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.
The initial controversy around Shiba Inu subsided over time because the team provides a constant stream of updates and develops the ecosystem. All this growth makes SHIB more than just a meme coin, and as a result, the users believe in the Shiba Inu ecosystem so much, as of 2023 it is in the top-15 coins by market capitalization. Not top meme coins, top coins overall. Impressive, isn’t it?
Another token that proves you only need an idea to launch one is ELON. How about a crossover between DOGE and Elon Musk’s aspirations to Mars travel?
There is some thought put into it beyond mashing together 2021-era crypto buzz topics. In the token’s manifesto, 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, 2021) 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, 2021, 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 meme coin seemed to have dissolved. Nevertheless, somehow it managed to repeat the feat in October 2021.
Dogecoin was the face of meme coins in 2014, Shiba Inu — a product of the 2020 DeFi craze. If you want to get an idea what meme coins look like today, you should take a look at Rich Quack (QUACK).
To begin with, it is a BEP-20 token, unlike the previous three. Making tokens on BNB Chain is as simple, if not easier, than on Ethereum. However, it is still sophisticated enough to code a few defining traits in to the smart contract.
QUACK sells itself with the promise to bring the holder easy wealth, which is reflected in the punny name. Where does this wealth come from? A 12% tax on each transaction. 4% goes to “reflections”, meaning it is redistributed back to all token holders. Another 4% — to a liquidity pool, to help make the main source of the tokens more liquid. The remaining 4% are split between a “pump and burn” wallet and a team fund. Reflection-based tokenomics are common in meme coins these days: other tokens that use it are VOLT and PIT.
The price chart of this meme token resembles other popular meme coins: there are a few parabolic spikes with sharp corrections. Due to its relative novelty in comparison to the dog coins above, Rich Quack saw these spikes occur at different times than May and October of 2021. Meme tokens are prone to price manipulation by whales, and Rich Quack attempted to alleviate it: they don’t allow one address to contain more than 1% of the supply and sell more than 0.1% of it at a time.
Last but not least, a meme coin that is nowhere near the large-cap coins but is trending in the news and social media. It is one of the newest meme coins based on a huge Internet meme of 2010s that is not Doge.
The token is trending because of its explosive price action which doesn’t seem to stop going up. If its self-reported market cap of $683M is real, it would land somewhere between Klaytn (KLAY) and Maker (MKR) on 67th place. Does it provide any semblance of a genuine crypto project that tries to build something? Not really, PEPE is a proud and loud meme coin, period.
Aside from the unsustainability of this growth without intensive pumping, there are also quite a few alarms the crypto community is ringing about this token. The smart contract contains a few functions that can give the anonymous owner a chance to shut down all transfers of PEPE. In particular, a blacklist function, in theory, can be used to prevent holders from cashing out. Some users also find the fact that ten accounts control over 20% of the PEPE supply concerning.
Are these fears justified? PEPE has been around for a few weeks, and rug pulls have happened even quicker than that, but its legitimacy remains to be seen.
What To Keep In Mind With Meme Coins?
What are some issues with meme coins? 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 being 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 the 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;
- Smart contract control and functions. It’s never a bad idea to learn if there is someone controlling a token contract and what it can do. Don’t be too quick to jump into a token only to learn that it charges you a 10% per transaction but returns a fraction of that.
What are meme coins good for? It’s not like they do not deserve to exist at all. People who come into the crypto space 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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