Love them or hate them. The one thing you can’t deny is the importance of meme coins within crypto. Deriving their names and value, as their title suggests, from internet meme culture, they often lack any underlying utility associated with the other larger blockchains like Bitcoin and Ethereum. Instead, they derive their value from market sentiment, social media populism, and community engagement.
So, what are Meme Coins? How did we get here? And where are they going?
History of Meme Coins
Unless you have been living under a rock, you will have no doubt heard about the OG meme coin and pack leader Dogecoin. Launched in 2013 by Jackson Palmer and Billy Markus as a satirical take on the crypto space at the time, it was designed to highlight the nonsensical tokenomics of many of the coins that have mostly fallen into obscurity.
Despite its lack of utility and infinite supply, Dogecoin tapped into something within the crypto community that runs deeper than the face of a cute Shiba Inu. That inherent degen culture and rejection of the traditional norms, including what should be ascribed value, is ultimately what underpins the success of meme coins. The same sentiment that was felt in the Gamestop saga in traditional markets is the same mentality that runs deep through meme coin culture. Users decide what has value, not institutions and traditional finance.
Resurgence under Musk
Nobody understood the potential of meme coin culture quite like the Supreme Meme Lord himself, Elon Musk. In 2019, he tweeted that “Dogecoin might be my fav cryptocurrency,” sending Twitter and the price of $DOGE into a frenzy.
Musk would once again send the price of $DOGE skyrocketing and hitting its ATH in 2021 in the lead-up to his appearance on SNL, and again in 2023 after he acquired ownership of Twitter by replacing the iconic Twitter blue bird logo with the unmistakable image of a Shiba Inu.
Rise of Shiba Inu
Despite Dogecoin being the most iconic and recognizable meme coin on the market, 2021 saw the launch of its closest competitor to date. In an homage to the original meme coin, Shiba Inu launched in the midst of the last bull run, making instant waves by donating half of the token supply to Ethereum founder Vitalik Buterin. He later donated these tokens to help with COVID relief in India. Shiba Inu would demonstrate once again the power of a fanatical community and social movement as the price took off, hitting its ATH in November 2021.
Related: The Dogecoin Symbol Left Us: How Did the Coin React?
However, what really set Shiba Inu apart from the other meme coins at the time was the community development of an entire Shiba ecosystem. Everything from a Shiba DEX (Shibswap), lending platform (Shibarium), GameFi (Shibaeternals), fashion and manufacturing (Shibacals), Metaverse (Shib the Metaverse), and numerous NFT collections. Shiba was determined to prove that despite the coins obtaining their value primarily from market sentiment, they could still provide utility.
2024
After a harsh bear market through the latter half of 2022 and all of 2023, the crypto industry began seeing life again in 2024. Originally driven by the approval of the Bitcoin ETFs in the U.S., funding began to flow back into the rest of the market. Surprising many analysts, meme coin projects would benefit the most from this latest resurgence in interest in crypto. However, not all meme coins in 2024 are created equal or share the same values.
2022 saw the launch of Solana’s first meme coin $BONK, it would be one of the driving forces behind the 2024 frenzy after a successful run-up of over 7,300% in 2023 despite the bear market conditions. $BONK was an attempt to remove the heavy influence of VC funding from projects and be entirely community-run, which is partly why it resonated so strongly with the meme coin culture.
$PEPE is another interesting case study for the success of meme coins. It rejected the trend of other meme coins that pursued adopting utility to their projects and instead fully embraced the idea of being a “useless” coin driven by nothing but demand. This drew a massive audience to the project, as many users embraced it for what it was.
While a project like MONAD looked to completely upend the status quo of L1 blockchains by introducing parallel execution and superscaler pipelining features to revolutionize transaction settlement times and costs. MONAD is still highly community-driven and meme-centric despite its technical innovation and prowess.
Celebrity meme coins
One of the more troubling trends in meme coin culture in 2024 has been the development of celebrity experimentation of meme coins. The success of Iggy Azalea’s $MOTHER meme coin has drawn the ire of Ethereum founder Vitalik Buterin.
He commented on Twitter that he was unhappy with the success of the token and how it may lead to further development of celebrity tokens with no motive other than “Financialization as a means toward an end.”
Related: Iggy Azalea Announces $MOTHER Tokens Could Soon Pay for Phones and Telephone Services
Vitalik later went on to opine that he believed meme coins ultimately need to lead to some form of public good. In the case of some of the tokens discussed before, creating a sense of community by promoting community art is a worthy cause compared to the celebrity experiments that exist merely to enrich the celebrity and early adopters.
What’s Next?
Meme coins have come a long way since Dogecoin burst onto the scene in 2013. What Elon Musk was able to identify early on about meme coins is what other celebrities are starting to realize as they attempt to capture this audience for their own gains.
More on Coins:
- Solana Dev Gambled Away $500,000 in Stolen Cypher Funds
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- Toncoin Weekly Analysis: $TON Social Interest Spikes Despite a Week of Losses
However, despite the success of Iggy Azalea’s MOTHER project to date, the crypto community remains immensely protective of its favorite crypto category. Attempts by institutions or celebrities to capture the space are likely to backfire if they do not embrace the community that got them there. On the other hand, projects like MONAD that embrace the culture of meme coins and community are likely to thrive, regardless of the project’s overall success.
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