Meme Coins: The Evolution from Internet Culture to Encryption Assets

Meme Coins, as the intersection of encryption digital assets and online culture, have continuously attracted numerous participants during various encryption cycles due to their affordability, viral spread, and high return potential. Since May 2024, the market heat for Meme Coins has soared, with many asset traders beginning to concentrate on allocating recently strong-performing Meme Coins such as SHIB, FLOKI, PEPE, and APORK.

Starting from January 2024, institutional investors have also increased their attention to Meme Coins. Data shows that as of April 2024, the value of Meme Coins held by institutional investors on a certain trading platform has grown from 63 million dollars in January 2024 to 300 million dollars, with the more liquid DOGE and SHIB being the most favored by institutions.

The Essence of Meme

Meme, as a unit of传播承载文化观念与符号, transmits and evolves between people like genes. Memes with strong resonance can last for a long time, while those with weak influence quickly fade from people's sight.

The rise of the internet has given birth to the unique phenomenon of "internet memes," greatly accelerating the spread of memes and various cultural concepts. Common carriers include images, videos, GIFs, and humorous anecdotes. Some studies liken the diffusion process of internet memes to the spread of diseases, following a viral propagation path similar to the SIR model, "infecting" a large number of internet users.

Meme Coins are a type of encryption asset that derives its value from related Memes, giving financial attributes to the Meme concept that originally circulated only at a social level. The emergence of Meme Coins has enabled Memes, which contain cultural connotations and symbolic meanings, and their dissemination process to possess trading and investment value for the first time. The core value of Meme Coins lies in the current popularity of Memes and their ability to attract public attention, thus giving rise to a new market form: here, cultural resonance can not only be precisely measured but also assigned actual economic value.

The Development History of Meme Coins

early proof-of-work Meme Coins

The initial Meme Coins were designed to attract miners to shift their computing power to new assets for mining and selling. These assets often originated from the Altcoin section of certain forums, and not all assets could be listed on trading platforms. A few assets that entered the market were once active on some now-defunct centralized exchanges. Each Meme Coin has built its own recognizable narrative theme based on unique characteristics such as name, brand image, hash algorithm, block generation time, and supply.

Doge Coin: The First Meme Coin

Doge Coin, which is based on the Meme trend, emerged in the summer of 2013 and became popular across various social media platforms. Two developers took advantage of this cultural wave and launched Doge Coin on December 8, 2013, making it the world's first encryption asset based on internet Meme trends.

The rise of Doge Coin has spawned a new class of asset species, characterized by irreverence, humor, leveraging celebrities, animal imagery, or precisely targeting a specific community. All of these are encryption assets based on the proof-of-work mechanism, born in the Altcoin section of a certain forum. At that time, compared to technical specifications, the embedded Meme trend elements became increasingly important.

Ethereum Era

The emergence of Ethereum has greatly promoted innovation in the encryption asset field, simplified the asset development process, expanded the user base, increased the profit space for project parties, and achieved interoperability between assets through the ERC20 standard.

During this prosperous period, a group of more "pragmatic" projects has emerged, focusing not only on pursuing the value of Meme trends but also on achieving certain practical functions or specific goals. At the same time, there are also some Meme Coins that have not received widespread attention but have a certain level of popularity in the market.

The integration of NFT and Meme Coins

From 2016 to 2018, some developers and Meme enthusiasts created Meme Coins based on rare memes for trading on a certain protocol. These collectibles are still highly valued today, with some individual items selling for over $500,000.

Subsequently, NFTs began to emerge in the Ethereum ecosystem. Some early NFT projects made their debut in a playful manner, and although the initial response was lukewarm, they were later rediscovered, triggering a buying frenzy.

The Summer of DeFi and Meme Coins

In June 2020, a certain project pioneered a new model of liquidity mining, marking the beginning of the DeFi summer. This innovation gave rise to various yield farms, which promised investors high returns by locking up assets.

Meme stocks and Doge Coin trend

In 2021, under the influence of multiple factors, market risk appetite significantly increased. Retail investors on social media engaged in heated discussions around a certain gaming retailer's stock, driving its price to soar dramatically in a short period. This wave further fueled people's speculative enthusiasm for other assets, especially those that can be traded on mobile trading platforms.

With the promotion of a well-known entrepreneur, the popularity of Doge Coin further heated up, with a market value reaching as high as 90 billion dollars at one point. This phenomenon has led to the emergence of more Meme Coins, such as Shiba Inu, Floki, and Safemoon, all of which reached extremely high valuations within a few months.

NFT Prosperity: Image Version Meme Coins

With the proliferation of NFT standards and the rise of trading platforms, NFTs have created an entirely new category of encryption assets. Some well-known NFT projects are used as personal avatars on social media, symbolizing prestigious status and membership in cultural clubs. To reward loyal holders, some NFT projects have issued Meme Coins to the community as a supplement to liquidity, an extension of practical functionality, and a form of cultural "currency".

Recent Developments and Trends

As the encryption market emerges from its low point, various new types of Meme, culture, ideology, and ecosystems are emerging. Meme Coins, as one of the few subfields that have consistently remained active, have recently shown a significant warming trend.

Several notable narratives include: inscription-based Meme Coins, cross-chain Meme Coins, community-driven Meme Coins, and AI-based Meme Coins.

The General Trends of Meme Coins

1. Meme Coins are often the first practitioners of new technologies or new forms.
2. The path of value accumulation relies on the power of attention, narrative, and hype.
3. Successful Meme Coins often originate from existing internet Meme trends.
4. The encryption native Meme trend is gradually emerging.
5. The phenomenon of low prices has psychological appeal for investors.
6. A strong community and marketing strategy are the keys to success.
7. The project operation model is gradually shifting from spontaneous initiation to professional team operation.
8. Distinct visual elements, derivative images, and slogans help accelerate the spread of the Meme trend.

Risks and Challenges

Despite the opportunities that Meme Coins present, their risks cannot be ignored:

1. Easily attracts users with a strong speculative mindset.
2. Frequent instances of pump and dump and manipulation occur in the market.
3. The regulatory framework is still unclear.
4. May fade away due to a lack of sustained attention.

Investors should carefully assess project characteristics, fully understand potential risks, and invest rationally when participating in activities related to Meme Coins.