What Are Meme Coins and Tokens?

Influencers have at all times featured prominently in cryptocurrency tradition, however by no means extra so than lately. When Elon Musk threw his weight behind the unique meme cryptocurrency, Dogecoin, it sparked a wave of imitators, promoted by influencers on social media platforms akin to TikTok.

Some name investing in meme cash madness, others consider it as an affordable wager with the potential to comprehend 1000% earnings. Whoever’s proper, curiosity in meme cash or tokens has surged in latest months. Here is the lowdown.

What are meme cash and tokens? 

Usually, a meme coin has no inherent worth, and infrequently no utility. Because the title implies, these cryptocurrencies are sometimes—however not completely—themed round Web memes: jokes and pictures shared on social media.

The unique meme coin, Dogecoin (DOGE), relies on the long-running Doge meme, which originated with an image of a Shibu Inu canine. It runs by itself blockchain, and as such is distinguishable from meme tokens, which run atop an present blockchain.

Two of the most well-liked meme tokens are Doge-imitator Shibu Inu (SHIB), an ERC-20 token constructed atop Ethereum, and SafeMoon (SAFEMOON), which runs on Binance Good Chain. However there are dozens extra, together with PepeCoin (PEPE), which made the information in April when a crypto investor turned $250 into $1.02 million price of PEPE.

How have meme tokens develop into so standard?

Since Dogecoin was launched in 2013, it’s develop into a lot simpler to create a cryptocurrency, and meme tokens might be launched quickly on the again of occasions, or develop into standard resulting from their associations with influencers. 

For instance, in Could 2021, Fb CEO, Mark Zuckerberg posted an image of his pet goats captioned “My Goats: Max and Bitcoin.” Quickly afterward, a meme token referred to as Aqua Goat noticed its worth enhance by round 300% inside hours of the social media put up. 

How do you purchase meme cash and tokens?

Because the main meme coin, Dogecoin is on the market on all kinds of crypto exchanges together with Coinbase, Binance and Kraken.

Meme tokens are typically obtainable on a extra restricted vary of exchanges. Shiba Inu, for instance, might be traded at Binance, Crypto.com and KuCoin, in addition to decentralized exchanges (DEXs) akin to Uniswap.

Usually, when they’re first launched, meme tokens are given away. 

How are meme cash and tokens totally different from different cryptocurrencies? 

All cryptocurrencies depend on a powerful neighborhood and influencer assist. However meme tokens have gained recognition resulting from their disproportionate affiliation with influencers, particularly Elon Musk. The Tesla chief wants solely to tweet a few matter, akin to Child Shark—based mostly on a well-liked kids’s music—to ship the value of associated meme tokens hovering. 

In the meantime, meme token builders use publicity stunts to drive up the value. The staff behind Shibu Inu coin determined to offer half of all SHIB tokens to Ethereum co-founder Vitalik Buterin. However he foiled their plan when he dumped the tokens (giving the proceeds to charity), asking that tasks not give him cash with out his consent and stating that “I do not need to be a locus of energy”.

Meme tokens comprised round 1.69% of the crypto market cap in April 2023, and the sector is price over $20 billion, in keeping with one aggregator. However wild worth swings should not uncommon. 

Usually, meme cryptos have an enormous circulating provide—usually within the quadrillions.

What are the hazards of meme tokens?

Not everybody sees the humorous facet to Dogecoin and its ilk. Thailand’s regulator ordered exchanges to delist meme tokens in June 2021, alongside NFTs and fan tokens. 

There’s additionally the ever-present hazard of “rug pulls”—when builders maintain a bunch of cash, get folks to purchase in, after which dump their cash. That causes the market to plummet, whereas they escape with their booty. Even skilled investor Mark Cuban has been a sufferer.

One solution to mitigate the chance of rug pulls is to solely purchase cash and tokens which might be vetted, audited, or have some form of dependable third-party oversight. 

The long run

Counting on crypto influencers to shill the following coin appears a fickle enterprise. However the final success of particular person meme cash and tokens relies on the energy of their communities, and influencer tradition will not be going away.

Inevitably, barring regulatory crackdowns (akin to Thailand’s), the crop of meme tokens seems to be set to increase, because the instruments to make them develop into ever extra accessible. Meme.com, as an illustration, is a market the place customers can examine meme cryptocurrencies and mint their very own “memetic tokens”, whose price will probably be based mostly on the perceived worth of tendencies or memes they signify.