Cryptocurrencies are often tied to ambitious blockchain projects that try to aspire to remake the world’s financial and computer systems. But there’s an entire class of cryptocurrencies that derive their value primarily from Internet jokes or popular culture: memecoins.
The most recognizable is Dogecoin, inspired by a Shiba Inu meme from the early 2010s. Dogecoin is also one of the oldest memecoins, created in 2013 by software programmers Billy Markus and Jackson Palmer to mock the rising trend of cryptocurrencies. Dogecoin was built using a variation of Bitcoin’s code.
Although both creators publicly denounced their coin, a community formed around the project, which triggered a soaring valuation. Endorsements from billionaire Elon Musk boosted the Dogecoin market to $88 billion in May 2021. The coin still has little practical use beyond speculation.
The popularity of Dogecoin inspired countless knockoffs and inspirations, although most are created in response to current events and quickly die off. For instance, dozens of cryptocurrencies based on Queen Elizabeth II launched in the hours after she died, but trading in them soon fizzled out.
With such a short lifespan, most memecoins are effectively pump-and-dump schemes, created to profit from the hype of a major news story. They often have enormous token supplies and are hyperinflationary to keep them alive as long as possible.
But others have gained traction. These include Doge and Shiba Inu, which were respectively the 8th and 15th most popular cryptocurrencies as of May, 2023. Other memecoins that have shown modest staying power include Floki and Dogelon Mars, which stood at 110th and 180th respectively.
While most memecoins are shameless cash grabs, some profess ambitions beyond internet virality. Floki Inu is building a Viking-based NFT game, and Shiba Inu launched a decentralized exchange. These are tokens—not coins—and power apps that run on blockchains like Ethereum or Binance Smart Chain.
Despite the attention they demand, memecoins account for only around 1.5% of the crypto’s market capitalization.
Go deeper:
CoinGecko—Memecoins
See also:
Staying safe in crypto-avoiding scams
Crypto investing 101
What is Ethereum?
Try it:
MetaMask—a popular crypto wallet
PancakeSwap—a popular decentralized exchange for memecoins on Binance Smart Chain
Poocoin.App—price chart for memecoins on Binance Smart Chain