Meme Coins: The Intersection of Internet Culture and Encryption Assets

This article will explore:

1. The Origin of Meme Coins
2. The Evolution of Meme Coins
3. The Impact of NFTs on the Meme Coins Ecosystem
4. Latest Developments and Emerging Trends
5. Potential Risks and Investment Opportunities

Meme Coins, as the intersection of encryption digital assets and internet culture, have continuously attracted numerous participants in each cryptocurrency cycle due to their affordability, viral dissemination, and high yield potential.

Recently, the market heat for Meme Coins has surged, with some asset traders focusing on strong-performing Meme Coins, such as SHIB, FLOKI, PEPE, and APORK.

Since the beginning of this year, institutional investors have also increased their attention to Meme Coins. According to statistics, as of April, the value of Meme Coins held by institutional investors rose from 63 million dollars in January to 300 million dollars, with the more liquid DOGE and SHIB being the most favored.

The Essence of Meme

Meme( meme) is a unit of传播 that carries cultural concepts and symbols, similar to how genes are transmitted and evolve among people. Memes with strong resonance can last for a long time, while those with weak influence quickly disappear.

The rise of the Internet has given birth to the unique phenomenon of "internet memes," significantly accelerating the spread of memes and various cultural ideas, with common carriers including images, videos, GIFs, and humorous anecdotes. Some studies even compare the diffusion process of internet memes to the spread of diseases: following a viral spread path similar to the SIR model, "infecting" a wide range of internet users.

Meme Coins are encryption assets that derive their value from related Memes, giving the originally socially circulated Meme concept financial attributes.

With the emergence of Meme Coins, the cultural connotations and symbolic significance of Memes, along with their dissemination process, have gained 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 type of market form: here, cultural resonance can not only be accurately measured but is also endowed with actual economic value.

A Brief History of Meme Coins

Here is a brief overview of the cryptocurrency asset cycles and the Meme Coins that emerged during those periods:

Early proof-of-work Meme Coins aimed to attract miners to shift their computing power to new assets for mining and selling. These assets often originated from relevant sections of forums, and not all assets could be listed on trading platforms.

However, a few assets that successfully entered the market were active on some defunct centralized trading platforms. Each Meme Coin builds its own recognizable narrative theme based on characteristics such as its unique name, brand image, hash algorithm, block time, and supply.

The first batch of assets that appeared following Bitcoin, due to their relatively limited practical value beyond the innovative concept, can be considered Meme Coins in a sense. Typical examples include: Namecoin, Peercoin, Novacoin, and Litecoin.

Except for Litecoin, these encryption assets have currently fallen silent, with trading volume and market value nearly at zero, no trading platforms supporting them, and they are vulnerable to 51% attacks. The reasons for this outcome include: a lack of cultural influence as Meme Coins, and significant barriers for users to acquire and use such Meme Coins.

The reason why Litecoin can stand out among many peers and survive to this day mainly lies in its narrative of being the "digital gold," entering the market early to seize opportunities, and continuously receiving strong support from mainstream exchanges.

Doge Coin: The First Meme Coin

Doge Coin is based on the Meme trend that emerged in the summer of 2013 and became popular on multiple social platforms. Two developers seized this cultural wave and launched Doge Coin in December 2013, making it the world's first encryption asset based on internet Meme culture.

The rise of Doge Coin has given birth to a new category of assets, characterized by humor, leveraging celebrities, animal imagery, or precisely targeting a specific community. These are all encryption assets based on proof-of-work mechanisms, emerging from related forum sections. At that time, the elements of the Meme trend contained within them seemed increasingly important compared to technical specifications.

Ethereum Era

The rise of Ethereum is akin to an innovation revolution driven by a catalyst, which not only pioneered numerous emerging application areas, deeply optimized user experience, but also successfully leveraged a large and diverse user base. Its innovation is reflected in:

1. Simplify asset development process
2. Expand user base
3. Enhance the profitability of the project party
4. Achieved interoperability, a single ecosystem, and one wallet

During this period of prosperity, a number of more "pragmatic" projects emerged, such as The DAO, Filecoin, Tezos, EOS, Cardano, Tron, and Bancor. They are more committed to achieving certain practical functions or specific goals beyond pursuing the value of the Meme trend.

At the same time, a small number of Meme Coins that have not received widespread attention but have a certain level of popularity have emerged in the market, such as Useless Ethereum Token, Dentacoin, and HAYCOIN.

Collectibles Meme and Early NFTs

Outside the field of encryption assets, a part of the Pepe Frog meme is referred to as "Rare Pepe". They are not publicly released, and if they are released, they will carry a specific watermark.

From 2016 to 2018, a group of developers and Pepe meme enthusiasts created Rare Pepe Wallet, among other things, and carefully selected a batch of Meme Coins based on Rare Pepe memes to trade on a certain protocol. As a recognized second-generation NFT collectible, Rare Pepe still holds high value today, with some individual items selling for over $500,000.

After several well-known NFT projects, NFTs have begun to emerge in the Ethereum ecosystem. EtherRocks made its debut in 2017 in a mocking manner, consisting of 100 images of colorful clip-art rocks.

At that time, the series only minted 30 pieces of stones, which received a lukewarm response, but was later rediscovered, triggering a buying frenzy. By August 2021, its floor price had skyrocketed to 305 ETH.

Another collectible Meme Coin example is Unisocks, launched by a developer in May 2019. A limited production of 500 pairs of physical socks was made, with each SOCKS redeemable for one pair of socks. Based on the current market value of SOCKS, this could be the most expensive physical socks in the world.

Summer of DeFi

In June 2020, a project pioneered a brand new way of asset development and distribution: liquidity mining or yield farming. Users lock their assets to provide liquidity, thereby earning asset rewards.

This innovation marked the beginning of the DeFi summer and gave rise to various yield farms, which promised investors to lock their assets in contracts named "yam" or "pickled cucumber" and earn returns.

Meme Stocks and the Doge Coin Craze

In 2021, under the combined influence of multiple factors, market risk appetite significantly increased.

At the beginning of 2021, retail investors on social media platforms sparked heated discussions around "Gamestock," driving the stock price to soar dramatically in a short period. The convenient experience offered by a certain mobile app allowed many ordinary investors to join in on the frenzy.

The "GME" craze further ignited people's speculative enthusiasm for other assets, especially those that can also be traded on the application. Doge Coin has been available on the application since 2018, and at the end of January 2021, its price was only 0.008 cents, making it very attractive to retail investors.

In early February 2021, a well-known entrepreneur frequently posted content related to Doge Coin on social media platforms, further boosting the popularity of Doge Coin. By May 2021, the market value of Doge Coin had reached as high as 90 billion dollars.

The popularity of Doge Coin has led to the emergence of more Meme Coins, such as Shiba Inu, Floki, and Safemoon, all of which have reached extremely high valuations within a few months.

NFT Boom: Image-based Meme Coins

With the popularization of relevant standards and the rise of the NFT market, NFTs have created a brand new category of encryption assets: unique, visual assets that embody a certain "culture" or "Meme".

The most well-known NFTs include: CryptoPunks, Bored Apes, Squiggles, and Pudgy Penguins. These NFTs are used as profile pictures on social platforms, and those who wear them use them as personal identity markers, thereby accelerating the viral spread of NFTs.

These avatars symbolize prestigious status and membership in cultural clubs. Many NFT series have made their holders' wealth soar, but if holders sell their NFTs, they will be seen as "leaving the community."

To give back to loyal holders, some NFT projects have issued Meme Coins to the community as a supplement to liquidity, an extension of practical functions, and as a cultural "currency".

Recent Developments(2023 to date)

As the encryption market emerges from its low point, various new Meme, culture, ideas, and ecosystems are breaking ground. Meme Coins, as one of the few subfields that have maintained activity, have recently shown a significant warming trend.

Recent narratives worth paying attention to include: the rise of the Solana ecosystem, the application of the Bitcoin ordinal protocol, the emergence of AI-related projects, and the biotech-themed Meme Coins.

Common Patterns of Meme Coins

In each cycle, Meme Coins emerge in different forms: they present a diversified performance based on the underlying technology, often being the first practitioners of new technologies or new forms.

Although the mediums relied upon by Meme Coins vary, their paths to value accumulation share commonalities: they all depend on the power of attention, narrative, and hype to sustain their existence and spread.

Although new media can always generate enthusiastic attention in the early stages, to achieve long-term retention of value, it must rely on continuous attention. Merely having the identity of NFT or Ordinal is not enough to support value; there must be a deeper driving force for attention. Attention has obvious periodicity; once a certain