While the crypto sector is no stranger to controversy, meme coins represent an especially polarizing type of token. Meme coins are essentially tokens whose name, image, and general concept are based on an internet meme or a pop culture reference. Because of these foundations, many, even the most committed crypto lovers, do not see them as legitimate tokens.
The first meme coin was Dogecoin, which was founded in 2013 and is based on the popular Shiba Inu dog meme. In the decade since it was created, meme coins have exploded in popularity. As Michael explains, top meme coins can see millions of dollars in investment each month and are more publicly visible than ever.
Even though they continue to be maligned by critics, they are still on track to succeed for the following reasons:
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They Offer Utility
Speak to any critic of meme coins and one of the most common arguments you’ll hear is that meme coins don’t ‘do’ anything and thus, are not valuable. A token like XRP can be used for cross-border transactions and tokens like ETH can be used in metaverses. But what do meme coins ‘do’ beyond being pop culture references? Turns out, a lot.
This isn’t universal but many meme coins are known to have a utility that drives their demand. Tokens like BONK can be used to tip creators and pay for microtransactions within gaming universes. Dogecoin is being used to fund a literal mission to the moon. MEME can be staked to earn interest.
The growth of the meme coin space has meant that developers of new tokens often have to give their projects utility to compete with others in the market. And those who use meme coins are certainly enjoying these features. As more meme coins are tied to gaming universes, for example, meme coins offer a way to access exciting features.
Some meme coins are also accepted on gambling sites. Crypto gambling is a big deal these days and it is not uncommon to see meme coins used on any anonymous casino or even on a casino dedicated only to that token. As crypto gambling only gets bigger, so will the meme coins attached to it.
As we’ve said, not every meme coin project has utility attached; some are happy to simply be internet jokes tied to community sentiments. But there is no denying that others do.
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Market Hype
Another thing that cannot be ignored when it comes to the success of meme coins is the fact that they have a lot of market hype. Many meme coins have seen themselves heavily sought after, with record-breaking presale figures and listings on major exchanges. When tokens get this much attention, they are bound to capture public interest, regardless of their utility or lack thereof.
This eventually reflects on the token’s market price making them even more sought after. Take Dogecoin, for example, which is ironically the first meme coin. We can debate its utility or lack of it but it cannot be denied that it is among the top 20 cryptos by market cap. The hype that meme coins get from their initial push into the market typically leads to more people investing in it and thus sustaining their market presence.
This hype could be as a result of their profitability, the lore they are based on, the team behind it, industry drama, and so on. In fact, the creators of tokens like Dogwifhat have admitted that it has no practical use and that it relies only on industry hype.
Proving the power of hype, Dogwifhat has gone on to become a major meme coin in only a short time of launching.
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The Power of Memes
If you’ve been on the internet long enough, you will be able to attest to the sheer power of people coming together to share jokes. There are memes that have been turned into cryptos, sold as NFTs, and remain cemented in our collective consciousness. While they might seem like funny jokes or pictures or videos, they are pieces of content that connect millions of people.
This connection can and has driven significant amounts of investment from consumers. When a new internet joke goes viral, there is a new possibility to create a meme coin that people immediately recognise and have a connection to. A random token is less likely to catch your attention compared to one called TRUMPSTOUPE or KENNYFROMSOUTHPARK. Fans of personalities, shows, and so on are also likely to feel more of a connection to and feel compelled to buy meme coins.
While they are easy to discount, meme coins by nature are instantly more interesting to look at and engage with than typical cryptos and this will keep them at least a bit relevant in the industry for time to come.
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Community Participation
A common theme among many meme coins is an emphasis on community ownership and participation. Several tokens have been known to operate as DAOs, thus letting the community decide on its various changes. BONK, for example, is closely tied to the Solana community and was launched as a gift to it during a difficult time.
Because many of them rely on community participation to keep their ecosystems alive in lieu of utility, the community is prioritized even more so compared to non-meme tokens. Take social media use, which has always been a big part of cryptos’ success but is even more so when it comes to meme coins. Your average meme coin team aggressively engages with the community via social media and makes sure the connection is never lost. As long as meme coins can keep creating and maintaining these community connections, their continued success is more likely.
Conclusion
Meme coins are truly an interesting phenomenon; they are digital assets based on memes and jokes that often have no practical use. Despite this, they have continued to succeed and are approaching a future where they have even more influence in the crypto space. But why?
As we’ve highlighted in this article, their current and continuing success is put down to the fact that they are very community-focused, harness the endless power of the internet, are profitable despite their lack of use cases, and often do have use cases after all.