In this week’s edition of ‘The Cortex Connection’, we explore some of the most popular memecoins in the market, what makes them stand out as potential investments to some and nothing short of gambling to others, along with some obvious and not so obvious risks of gaining exposure to them.
What Are Memecoins?
Memecoins are cryptocurrencies inspired by memes and internet jokes. They are often created as a way to mock more serious aspects of the crypto space, as a social experiment to see how far a meme can go or, as some believe, to just make the founders rich. Some of them have gained huge popularity and market value, thanks to viral marketing, celebrity endorsements, and community support. However, they are also very risky and volatile investments, as they are subject to hype cycles, market manipulation, and regulatory uncertainty.
The History of Memecoins
Memecoins can be traced back to the early days of Bitcoin, when people started creating alternative cryptocurrencies with different features, goals, or jokes. Some of the earliest examples include BBQCoin, Coinye West, and of course the most successful memecoin, Dogecoin.
Dogecoin was launched in 2013 as a parody of Bitcoin, using the image of a Shiba Inu dog as its logo and mascot. Dogecoin quickly gained a loyal fan base, who used it for tipping, charity, speculation, and good ole fashioned fun.
Since then, many other memecoins have emerged, often copying or modifying Dogecoin's name, logo, or code. Some of the most popular ones include Shiba Inu, Floki Inu, Pepe, and Baby Doge Coin. These memecoins usually have very large supplies, low prices, and catchy slogans. They rely on social media platforms like Reddit, Twitter, TikTok, and Telegram to spread their memes and attract new participants.
The Most Popular Memecoins
While the die-hard communities behind these projects will come up with varying criteria for why theirs is the most successful, for this post we’ll simply use the top 6 by marketcap as our guide.
Dogecoin ($DOGE)
Dogecoin has a market cap of nearly $10 billion, earning it the #1 spot in the list, and the #8 spot against all other cryptocurrencies by market value. It has a circulating supply of over 140 billion coins, with no hard cap on the total number of coins that can be created. Dogecoin uses a proof-of-work algorithm similar to Bitcoin's, but with shorter block times and lower transaction fees.
Dogecoin was created in 2013 by software engineers Billy Markus and Jackson Palmer, who wanted to make fun of the hype around Bitcoin and other cryptocurrencies. They chose the image of a Shiba Inu dog, known as the "doge" meme, as the logo and mascot of their coin.
Dogecoin quickly became popular among internet users, who started using it for tipping online content creators, donating to charitable causes, and sponsoring various projects. For example, in 2014, the Dogecoin community raised $30,000 to send the Jamaican bobsled team to the Winter Olympics in Sochi. They also funded a NASCAR driver named Josh Wise to race with a Dogecoin-themed car.
Dogecoin also gained the support of celebrities like Elon Musk, Snoop Dogg, Gene Simmons, Mark Cuban, and others. Musk in particular has been very vocal about his love for Dogecoin and has called it his favorite cryptocurrency. He has also hinted at collaborating with Dogecoin developers to improve its technology and efficiency.
Shiba Inu ($SHIB)
Shiba Inu has a market cap of over $5 billion making it #2 on our list and top 14 of all cryptocurrencies by market value. It has a circulating supply of 589 trillion coins, out of a total supply of one quadrillion coins. Shiba Inu uses a proof-of-stake algorithm based on Ethereum's ERC-20 standard, which means it can run on the Ethereum network and benefit from its smart contract capabilities.
Shiba Inu is another meme coin that is based on the same dog breed as Dogecoin. It was launched in August 2020 by an anonymous developer who goes by the name "Ryoshi". Shiba Inu claims to be a decentralized community experiment that aims to create a "Dogecoin killer".
Shiba Inu is also part of a larger ecosystem that includes other tokens such as LEASH and BONE, as well as a decentralized exchange platform called ShibaSwap. Shiba Inu gained widespread attention in May 2021, when Vitalik Buterin, the co-founder of Ethereum, donated 50 trillion SHIB tokens (worth about $1 billion at the time) to an Indian Covid-19 relief fund.
Pepe ($PEPE)
Pepe has a market cap of just under $500 million, making it #3 on our list and one of the top 100 cryptocurrencies by market value. It has a circulating supply of 391 trillion coins, out of a total supply of one quadrillion coins. Pepe uses a proof-of-work algorithm similar to Bitcoin.
Pepe is a meme coin that is based on an internet meme featuring a cartoon frog with various expressions. The meme originated in 2005 from a comic series called "Boy's Life" by Matt Furie. Pepe became popular on online forums such as 4chan and Reddit, where users would create different versions of the frog to convey different emotions or situations.
Pepe is also part of a larger ecosystem that includes other tokens such as Kekdaq 2.0 and PEPEAI, among others.
Bone ShibaSwap ($BONE)
Bone has a market cap of just under $300 million, putting it just outside of the top 100 cryptocurrencies by market value. It has a circulating supply of 230 million coins, out of a total supply of 250 million coins. Bone uses a proof-of-stake algorithm based on Ethereum's ERC-20 standard.
Bone is part of the Shiba Inu ecosystem and was launched in July 2021 as the governance token of ShibaSwap, which means it gives holders voting rights on how to manage and improve the platform. Bone also serves as a reward token for users who provide liquidity or stake their SHIB or LEASH tokens on ShibaSwap.
Bone aims to create a fair and transparent system that allows users to participate in the decision-making process and benefit from the growth of the Shiba Inu ecosystem.
Floki Inu ($FLOKI)
Floki has a market cap of just under $200 million, making it one of the top 150 cryptocurrencies by market value. It has a circulating supply of 9.4 trillion coins, out of a total supply of 10 trillion coins. Floki uses a proof-of-stake algorithm based on Ethereum's ERC-20 standard.
Floki is a meme coin that is inspired by Elon Musk's dog, who is named after a character from the TV series "Vikings". Floki was launched in September 2021 by an anonymous developer who claims to be a fan of Musk and his dog. Floki claims to be a community-driven project that aims to create a "hyper-deflationary" token that rewards holders and burns tokens with every transaction.
Floki also plans to launch other products and services, such as a decentralized exchange platform called FlokiSwap, a gaming platform called FlokiVerse, and a charity platform called FlokiGives.
Baby Doge Coin ($BABYDOGE)
Baby Doge Coin has a market cap of just under $170 million, putting it in the top 250 cryptocurrencies by market value. It has a circulating supply of 149 quadrillion (15 zeros) coins, out of a total supply of 420 quadrillion coins. Baby Doge Coin uses a proof-of-stake algorithm based on Ethereum's ERC-20 standard.
Baby Doge Coin is a meme coin that is based on a variation of the Dogecoin logo, featuring a cute puppy instead of an adult dog. Baby Doge Coin was launched in June 2021 by an anonymous developer who claims to be a fan of Dogecoin and its community. Baby Doge Coin claims to be an improved version of Dogecoin, with faster transaction speeds, lower fees, and more features.
Baby Doge Coin also has a charity program that supports animal shelters and rescue organizations around the world. Baby Doge Coin has received nods from celebrities such as Elon Musk and Lil Yachty, who have tweeted or mentioned the coin on social media platforms.
Risks of “Memecoining”
While memecoins can be fun and profitable investments for some people, they also come with many risks and challenges that potential buyers should be aware of.
Volatility
Memecoins are very sensitive to market sentiment and social media trends. They can experience huge price swings in a short period of time based on news events, celebrity tweets, viral memes, or coordinated pump-and-dump schemes. This can make them very unpredictable and stressful to trade or hold.
Regulation
Memecoins are often unregulated or poorly regulated by authorities around the world. This means that they can face legal issues or bans in some jurisdictions that can affect their availability or value.
Security
Memecoins are often subject to hacking attacks or scams that can compromise their security or integrity.
Quality
Memecoins are often created with little or no technical innovation or development. They are usually based on existing code or platforms that are not optimized or updated for their specific needs or goals. This can result in poor performance, high fees, low scalability, or compatibility issues with other services or devices.
Sustainability
Memecoins are often created with no clear vision or roadmap for their future growth or development. They are usually driven by short-term hype or speculation rather than long-term value or utility. This can make them lose relevance or interest over time as new memes or trends emerge.
Rug Pulls
A rug pull is a type of cryptocurrency scam in which the developers of a project abandon the project and take all of the investors' money, essentially removing their ability to exit the project. In July 2023, the $BALD token launched on Coinbase's Layer 2 testnet, Base. The token quickly gained popularity and its value soared, reaching a market cap of $68 million within a day. However, the token's price then plummeted by 85% after the deployer behind the token, BaldBaseBald, rug pulled the token.
The deployer had added over $12.5 million worth of liquidity to the pool in the first 24 hours. This liquidity was then used to buy back the token and sell it at a higher price, causing the price to soar. Once the price had reached a high enough level, the deployer pulled all of the liquidity out of the pool, causing the price to plummet and leaving investors with worthless tokens.
Stay Calm and Meme On…or Don’t
Meme coins have certainly carved out their niche in the crypto space. While they started off as internet jokes, many have gained serious traction and have developed their own ecosystems, utilities, and enthusiastic communities. However, as with all investments, exercise caution and do thorough research before diving in.
The obvious disclaimer here is that none of this should be taken as financial advice. It may be a bit of a meme itself, but the author of this article holds just 1 Doge and 1000 Shib with no desire to dollar cost average but aspires to be able to buy a piece of gum (maybe even a whole pack!) with their investment at some point in the distance future.
Thanks for reading!