Xpedition Week 9: All About Meme Coins
What’s the hype?
It is safe to say that most Internet users, whether a believer of crypto or not, know about meme coins. Most prominently, Dogecoin is one that caught the attention of many. Later, as many more meme coins surface, it is inevitable that the playing field gets clouded, and more confusion arise. So, what exactly is the hype about meme coins?
First of all, meme coins are usually cryptos that gain huge attention and large interest in a short amount of time thanks to influencers and retail investors, notably CEO of Tesla Motors, Elon Musk and others like Mark Cuban. On a deeper level, it is believed that meme coins are a form of counterculture where it defies the traditional. It is an asset that is based on a joke and thrives on cultural significance as a measure of its value. In this vein, meme coins which reject protocols and formalities are wholly different from the traditional cryptos we know. Major cryptos like Bitcoin and Ethereum were created to solve real world problems such as decentralization, reducing the need for trust between parties (refer to Xpedition week 1 for a recap!) whereas meme coins are not created for any real-world purpose except to make a quick buck. Hence, the appeal towards these meme coins comes from crowd following and is part of a movement.
More recently, traditional cryptos like BTC and ETH are even labelled as “boomer coins” by younger investors, further proving that meme coins serve as a statement against the ‘traditional’, ‘old’, or ‘obsolete’, much like a rebellious teenager against his parents. Having said that, we should definitely not dismiss meme coins and the waves that they have been making because we are clearly living in an era of meme coin/stock investing.
Dogecoin (DOGE) is a peer-to-peer open-source cryptocurrency, and it is categorized under an altcoin and an almost sarcastic meme coin. It was created seemingly as a joke using the popular Japanese meme (featuring Shiba Inu) by software engineers Billy Marcus and Jackson Palmer in the late 2013. Dogecoin has exploded in popularity and at time of writing, it ranks 6 in terms of market capitalization of 31,482,176,149.
With a gain of more than 5000% in 2021, you might be wondering, how did this meme coin become so popular? In early 2021, Dogecoin was pumped on Reddit’s “WallStreetBets” (WSB) — a subreddit where participants discuss on stocks and options trading who was also the prime instigator behind the GameStop affair in January 2021. Enthusiasts promised to propel Doge’s value “to the moon” and created a major hype inside WSB (however, discussion of crypto is now banned on subreddit). Aside from the pump on WSB, Elon Musk, CEO of Tesla also helped send Doge “to the moon” by naming Dogecoin as his favourite cryptocurrency to his 57 million followers on twitter. Doge hit an all-time-high on May 8, just hours before Elon Musk’s Saturday Night Live, where he was anticipated to talk about Doge during the show.
Despite this coin being a joke, Dogecoin’s blockchain still has its merit. Their underlying technology is developed from Litecoin and some notable features of Dogecoin includes the use of scrpty algorithm, lower price as well as unlimited supply (21 million Bitcoin in circulation vs 129 billion Doge). Although recently the hype has died down, many have tried to spot and predict which is the next coin that will blow up. Are you holding any meme coins? Let us know in the comments!
Shiba Inu (SHIB)
Created in August 2020 by an anonymous person known as ‘Ryoshi’, Shiba Inu, SHIB, or Shiba token, is an alternative to Dogecoin. More precisely, Shiba Inu brands itself as the “Dogecoin killer”, in which its intent is clear, to openly compete with Dogecoin. In its defense, Ryoshi argued that SHIB is more “community-driven” as compared to Dogecoin. Furthermore, in its ‘woof paper’, or better known as whitepaper, SHIB was promoted to “outpace the value of Dogecoin exponentially, without ever crossing the $0.01 mark”. SHIB and its “Shiba Inu Ecosystem” that includes the ShibSwap exchange and a decentralized Shib Army of developers, coin holders, and fans was said to be an experiment in “spontaneous community building.” Despite all of these, SHIB, at its fundamentals, is simply a transferrable, Ethereum-based token that does not possess any known smart contract utility and is not backed by any rights or assets.
Even as SHIB sought to be a fierce rival of Dogecoin, its rise and success is arguably built upon that of Dogecoin. In other words, had Dogecoin not been popularized, SHIB may not have attracted the following it now commands. Additionally, similar to Dogecoin which was made even more popular by Elon Musk’s tweets, the price of SHIB also skyrocketed after a tweet by Musk “My Shiba Inu will be named Floki”. Once again, this proves that meme coins are essentially similar in its functions despite attempts at differentiation.
Most importantly, whether or not meme coins are a fad or here to stay remains to be seen, and Matcha urges investors to be well-informed before making any financial trading. Are you Xplorers holding onto meme coins or looking into buying them? Remember, do not blindly follow the hype, and don’t forget to do your due diligence before investing.
Check out the links below for our Xpedition postings this week on Instagram and Twitter!
MEXC Global: https://www.mexc.com/