What is Memecoin
A "Memecoin" is a cryptocurrency with meme characteristics and represents a fresh incarnation of memes in the age of Web 3.0.
In today's internet context, "Meme" is often used to refer to "Gag", which stands for "an image (mainly in the form of pictures, but jokes or any other forms work too) that everyone finds interesting or funny."
Since it's derived from memes and lacks an actual business to anchor their value, memecoin prices often experience dramatic and unpredictable fluctuations. Additionally, memecoins typically have a vast supply, with some even having no caps. Using Dogecoin as an example, as a currency with no supply limit, its circulation has already surpassed 140 billion. And since most memecoins don't have a burning mechanism, this immense supply naturally results in extremely low coin values, where often just a single dollar can get you millions of coins.
Overview of the Memecoin Race
Currently, we can broadly categorize the existing memecoins on the market into four factions.
Web 2.0 Popular Memes Turned Blockchain
This category of memecoins can be simply understood as "meme sticker coins" because their token logos are generally based on some universally recognizable internet jokes or memes. These memecoins, especially in their early stages, typically lack intricate mechanisms or designs. Their websites and whitepapers often have a playful, tongue-in-cheek tone, emphasizing the fun and entertainment value derived from the meme they represent. Dogecoin, the number one player in the fan-coin space, falls into this category.
Dogecoin (DOGE) was founded by two engineers in December 2013. It was inspired by a trending meme image at the time. Their initial intention behind creating Dogecoin was to poke fun at the rampant speculation within the cryptocurrency market, hoping to introduce a cryptocurrency that's easier to obtain, more practical, and more fun than Bitcoin.
Upon its launch, Dogecoin's unique flair quickly garnered considerable attention in various cryptocurrency communities, especially on Reddit. Back then, Dogecoin was mainly used for tipping due to its extremely low value. Users would casually give out hundreds of thousands or even millions of Dogecoins, making everyone feel like a millionaire and offering a delightful user experience. Furthermore, Dogecoin genuinely lived up to the label of a "more fun cryptocurrency." The inherent entertainment value of memes, combined with a fair mechanism (no pre-mining), steadily bolstered the Dogecoin community.
Currently, Dogecoin has climbed its way into the Top 10 cryptocurrencies and reigns as the world's most prominent Memecoin.
Built on Strong Community Beliefs
The Cult DAO project provides insight into the power of "community faith".
The project's core narrative revolves around building a fully decentralized financing platform, seeking to overturn traditional VCs and create a truly independent and fair investment DAO to fund those "contributing to or building a decentralized future".
To further manifest this belief, CULT uses the imagery of Guy Fawkes, depicting their venture as a crypto version of the Gunpowder Plot.
Guy Fawkes, in 1605, was part of a plot intending to blow up the parliament in a bid for justice. Through various reinterpretations over time, Guy Fawkes has evolved into an emblem of idealistic heroism, often hailed as "the last man to enter parliament with honest intentions". This sentiment is popularized further in movies like "V for Vendetta", where the protagonist, V, wears a Guy Fawkes mask.
This imagery undeniably struck a chord. Enthusiasts, driven by a shared belief in "full decentralization", led to a fervently active (or FOMO-driven) community, which, in turn, attracts more participation—somewhat resembling evangelical zeal.
There are many other fancier coin projects that unite communities through cultural identity, such as ConstitutionDAO (PEOPLE), which wants to buy the U.S. Constitution as a group, and Olympus (OHM), which started by uniting communities through the "33 Flywheel Effect". For these types of projects, community belief is their core narrative, and constantly attracting more "believers" is the key to maintaining the project's vitality.
Memes Tapping into Current Trends
These trend-driven tokens are a significant category within the memecoin space. For instance:
- After the Terra debacle, various memecoins emerged focusing on its CEO. The token JAIL KWON even saw a surge when Do Kwon was arrested.
- During the World Cup last year, a myriad of soccer-themed memecoins popped up in the crypto market.
- Recently, when a Korean lab claimed the invention of a room-temperature superconductor LK-99, despite the scientific community not reaching a conclusion, the associated memecoin LK99 saw several price fluctuations.
Crypto Market Native Memecoin
Unlike the previously mentioned types of memecoins, these crypto market-native memecoins do not rely on Web 2.0 or traditional social media buzz, nor do they capitalize on the popularity of current trends, but rather choose to "make their own" - and these types of memecoins are, simply put, a bit "abstract". Instead, they choose to create their own "stems" - and these stems, to put it simply, are all a bit "abstract". Take an example to further understand: HarryPotterObamaSonic10Inu (BITCOIN), a big fire in the previous period of time in the original fan coin project.
First off, just by the name alone, it's like someone tossed a bunch of random pop culture figures into a blender: Harry Potter, Obama, Sonic the Hedgehog, and a Shiba Inu. And get this, the name of its token? BITCOIN. Wild, right? Now, if you decide to get curious and hop onto their website, you're greeted with a pop-up that hits you with the big question: “Do you accept the truth?”. If you're feeling brave and click “yes”, you're allowed in. But if you chicken out and click “no”, they sassy-redirect you straight to the official Bitcoin website. All the while, there's this ticker running at the top of their page shouting “The People's Bitcoin”. Clearly, HarryPotterObamaSonic10Inu thinks their token is the real BITCOIN.
These meme coin projects that seem to pop up out of nowhere really need to bring the creativity and design A-game if they want to steal the crypto spotlight. Basically, the wackier yet more committed you are, the more likely you'll get a nod from the market. Take HarryPotterObamaSonic10Inu, for instance. Underneath its wild and wacky exterior, in its early days, the community operation and related doc prep were on point. They had liquidity ready to roll right from the jump. These signs point to them not just making a joke, but making a well-designed joke. In a sense, these memecoins that are super dedicated to their own shenanigans are the most authentic players in the crypto arena.
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