Memecoins: It’s not just pumps and dumps…

Conventional perspective of memecoins are they are just ‘pumps and dumps’ and does not have any use cases. However, I believe that not all memecoins are useless because across the years, some of them have impressive development. Recently, memecoins even lead the crypto rally and have proved many people wrong. There are a few factors that supported the rise of these memecoins:

• Fun, hype, and simple to understand: Compare to many other cryptocurrencies such as Ethereum, Solana, or even Bitcoin itself, memecoins are quite easy for a normal non-technical person to understand. Take Dogecoin for example. The creators copied Bitcoin’s code and put a Shiba Inu dog, which is one of the most likable and recognizable memes around the world on it. It started to gain much attention in public and even caught the attention of Elon Musk, who tweeted and promoted a lot about the crypto on Twitter. People started to feel FOMO and hyped in, pushing the price to close to $0.70 in 2021 before crashing down. When people thought $DOGE is done, the price has pumped more than 100% within a month recently.
• Low barrier for small investors to enter: Compare to Bitcoin and Ethereum which you need to have more than $66,000 and $3,400 to own one coin, memecoins are usually priced in cents or even less than a penny. This is quite attractive for investors who have low capital because it seems affordable for them to own thousands or even millions of tokens. For instance, it seems more appealing for a regular retail buyer to own approximately 13 million $PEPE tokens instead of owning about 0.0015 $BTC with US$100 because it creates a perception that when the $PEPE tokens rise to $1, they will become millionaires.
• Strong community: Many memecoin communities are hard-core fans of the project and will constantly promote and post news about the memecoins on social media such as Twitter and messaging apps such as Telegram and Discord. People who are influenced by their enthusiasm will be drawn in and invest into the project. Floki Inu, another dog-themed memecoin named after Elon’s dog, has a very active and passionate community across social media and messaging apps. No matter what kinds of inquiries a user has towards the project, their community will help out and guide the person. Its token price even climbed up to close to its previous highs not long ago.
• Real utilities: Although most memecoins are created just for fun to create hype for more people to invest in it, there are a few of them actually have developed an ecosystem to cater all sorts of purpose. Shiba Inu token is one of those memecoins that have gone through significant development and progress. $SHIB is its main utility token on the blockchain, which is used mainly for paying fees, rewards, and trading. The team further developed 2 other tokens on the protocol, which are $LEASH and $BONE. $LEASH has a lower total supply compare to $SHIB and is used to reward ecosystem supporters, while network validators and delegators are rewarded with $BONE. The team even introduced a layer-2 blockchain Shibarium to run on top of Ethereum to reduce its network congestion.

In conclusion, memecoins have evolved to be one of the strong pillars that drive the movement of the overall crypto market and encourage new investors to hop into the crypto space.

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