Meme Coins: Origins and Impact

What is a Meme Coin?

The term “meme” (from Greek “mimema,” meaning “imitation”) was first introduced by biologist Richard Dawkins to describe a unit of cultural information spread through imitation. The history of meme coins is closely tied to internet culture and the rise of cryptocurrencies.

Meme coins are a unique subset of cryptocurrencies that gain value and popularity from internet memes or jokes, making them heavily community-driven. Unlike traditional cryptocurrencies that provide specific utilities, meme coins generally have no inherent utility beyond being traded.

They usually have a large, sometimes unlimited supply, and start with a very low value per token to make them accessible to a wide audience. Despite their speculative nature and high volatility, they continue to captivate investors and the public, representing the playful and experimental spirit of Web3.

DogeCoin

$Dogecoin is recognized as the first and most popular meme coin in the market. Created by Billy Markus and Jackson Palmer in 2013, it was inspired by an image of a Shiba Inu dog named Kabosu. Initially intended as a joke, $Dogecoin quickly gained immense popularity on the internet.

Following its launch, $Dogecoin was embraced by online communities and used for various purposes, such as tipping users on Reddit and supporting charitable causes. Notable examples include funding the Jamaican bobsled team’s trip to the Sochi Winter Olympics and building clean-water wells in Kenya. This widespread use demonstrated the power of community-driven projects.

On May 24, 2024, it was announced on Dogecoin’s Twitter that Kabosu, the iconic dog behind the meme, had passed away. Despite this sad news, $Dogecoin remains influential, with a market cap exceeding $20 billion, making it the 7th largest cryptocurrency. The success of $Dogecoin has inspired a series of dog-themed tokens, with Shiba Inu ($SHIB) being the most notable among them, further highlighting the cultural impact of meme coins.

Shiba Inu ($SHIB)

Shiba Inu ($SHIB) was created by an anonymous individual known as Ryoshi in August 2020. With an initial supply of 1 quadrillion tokens, 50% of SHIB was sent to Ethereum co-founder Vitalik Buterin’s wallet, who later donated 50 trillion tokens and burned the rest. This strategic move helped SHIB quickly gain popularity.

Unlike many meme coins, Shiba Inu has evolved beyond its origins, developing a comprehensive ecosystem. This includes various projects such as Shiboshi and Sheboshi NFT collections, Doge Killer ($LEASH), ShibaSwap decentralized exchange, and $BONE, a governance token for the Shiba Inu ecosystem. Shibarium, a layer-2 blockchain, is also in development to improve scalability and reduce transaction costs.

The Shiba Inu team has ambitious plans for the future, including the development of games and a Shiba Inu Metaverse. These initiatives aim to expand the utility and engagement of the SHIB token.

People

Among the various meme coins that have emerged, one stands out due to its unique origin and purpose — $PEOPLE. It was created by ConstitutionDAO, a group of Web3 enthusiasts who raised $47 million in ETH to bid on a rare copy of the US Constitution in a Sotheby’s auction. Although they were outbid by Ken Griffin, this effort showcased the power of decentralized, community-driven initiatives via blockchain.

Initially, the $PEOPLE token granted holders the right to vote on where the Constitution would be displayed. After losing the bid, ConstitutionDAO dissolved, but the $PEOPLE token evolved into a symbol of collective action and DeFi). Despite no inherent utility, $PEOPLE can still be redeemed for ETH, maintaining its minimal value and investor interest.

Pepe

$Pepe, launched on April 16, 2023, is another notable meme coin inspired by the internet meme character Pepe the Frog. Despite stating on its website that “$PEPE is a meme coin with no intrinsic value or expectation of financial return,” it has gained substantial traction. The coin’s growth has been unstoppable, and it is now among the top 20 cryptocurrencies.

There are many other meme coins with significant influence, such as $WIF, $FLOKI, and $BABYDOGE. In 2024, the massive surge in meme coin prices has reignited FOMO among investors. Election-related meme coins, in particular, have seen leading performances, capturing the market’s attention amid the political fervor of the upcoming US election

US Election 2024

With the upcoming US election in 2024, both political parties are eager to gain the support of the growing crypto industry. Trump has repeatedly expressed a crypto-friendly stance, stating, “If you’re in favor of crypto, you’re gonna vote for Trump.” His remarks have resonated with many in the crypto who view his position as a safeguard against regulatory crackdowns.

In response, the Biden administration has also taken steps to signal its openness to the crypto market. The White House has indicated that President Biden would sign a crypto market bill if it passes Congress, showing a willingness to engage with the industry and provide a regulatory framework that could foster innovation and growth. This bipartisan attention to cryptocurrency has intensified the political landscape, making it a significant topic in the election discourse.

The heightened political fervor has led to significant volatility in election-themed meme coins like $MAGA, $BIDEN, and $TRUMP. These coins, representing the political sentiments of their respective supporters, have seen dramatic price swings as investors speculate on the potential outcomes and implications of the election.

Best Representation of Web3?

Meme coins are often seen as the best representation of Web3 because they encapsulate its core values of decentralization, community-driven development, and empowering users in their digital experience.

However, with the development of DeFi and improved infrastructure, launching a token has become remarkably easy: set the parameters and provide liquidity. While fair launches aim to ensure equal opportunity by distributing tokens transparently and equitably, they also make it easier for bad actors to exploit the system.

In a space where marketing takes priority over technological innovation, both developers and investors often lack long-term commitment. As the FOMO fades, the underlying risks and potential for significant losses are revealed. This highlights the dual-edged nature of meme coins as both a representation of Web3’s potential and its inherent risks.