What are Meme Coins and Tokens?

Memes have always been a part of crypto cultures—so it was probably inevitable that they would be funded using the same technology that gave birth to cryptocurrencies.

Initially, meme coins like Dogecoin were created as a joke, poking fun at cryptocurrencies—but, in true decentralized fashion, they have evolved beyond their creators' original intent.

With the shape of influencers, their volatile prices and fast-moving news cycles, meme coins have become a growing sector of the crypto economy – but while some see it as a way to make eye-catching profits, others call investing in meme coins irresponsible. The best.

Whoever is right, meme coins and tokens are showing no signs of going anywhere. Here's the lowdown.

What are meme coins and tokens?

Simply put, meme coins and tokens are cryptocurrencies based on internet memes.

A meme was first defined by biologist Richard Dawkins in his 1976 book “The Selfish Gene” as “a unit of cultural transmission or imitation.” The term was later chosen to describe Internet memes, ideas, or jokes that spread rapidly across the Internet (although Dawkins later argued that Internet memes—ironically—is an evolution of his own term, not a random change but a deliberate change by human creativity. ).

Meme coins are embedded in this online economy of ideas, where each coin or token typically receives the name and icon of an internet meme. Typically, a mem coin has no value, and often no utility.

The first meme coin, Dogecoin (DOGE), is based on the long-standing dog meme, which originated from a picture of a Shibu Inu dog. It operates on its own blockchain, and as such differs from meme tokens that run on top of the existing block chain.

Some of the most popular meme tokens are Doge-emitter Shibu Inu (SHIB), An ERC-20 A token made from above EthereumPepeCoin (PEPE) and Solana-based Dogwifhat (WIF).

How are meme tokens so popular?

Dogecoin Since it was launched in 2013, it has become very easy to create crypto, and meme tokens can be launched quickly on the back of events or popularized by association with influencers.

The arrival of Pump.fun, Solana's meme token factory in September 2024, supercharged the meme token economy, allowing anyone to spin up a meme token in seconds. Some of the biggest meme coins of 2024 hit Pamp.fun, including tokens from BILLY, FWOG, and celebrities like Iggy Azalea's mom.

More controversially, Pump.fun served as a launchpad for live streaming tokens, where creators would point at a camera and engage in risky activities to collect their tokens.

How to buy meme coins and tokens?

As a leading meme coin, it is available on various crypto exchanges including Dogecoin. CoinbaseBinance and Kraken.

Meme tokens are available on a limited range of exchanges. For example, Shiba Inu can be traded on Binance, Crypto.com and KuCoin as well as decentralized exchanges.DEXs) as a Uniswap.

Usually, when you first start, you are given meme tokens.

How are meme coins and tokens different from other cryptocurrencies?

All cryptocurrencies rely on strong community and influencer support. But mm tokens have gained popularity because of their disproportionate relationship with influencers. Tesla boss Elon Musk, for example, only needs to tweet about a topic based on a popular children's song — like Baby Shark — to send related meme tokens soaring in value.

Meanwhile, meme token developers use advertising campaigns to increase value. The team behind the Shibu Inu coin decided to give half of all SHIB tokens to Ethereum co-founder Vitalik Buterin. But he thwarted their plans when he asked the projects not to give him coins without his consent and threw away the tokens (donating the proceeds to charity) saying, “I don't want to be in a position of power.”

Meme tokens comprise 3.45% of the crypto market capitalization as of November 2024, and the sector is worth more than $109 billion, according to aggregator Cryptoslat. But wild price fluctuations are not unusual.

Typically, meme cryptos have a large circulating supply – often in the quadrillions.

What are the risks of meme tokens?

Not everyone sees the funny side of meme coins. Thai regulator orders exchanges to delist MEM tokens by June 2021 NFTs and fan signs.

Newly launched meme coins have limited on-chain liquidity, and are developer-driven, with devs making their profits by developing the on-chain infrastructure, often cashing in from the project.

At the extreme, this is a form of “carpet pulling” – when developers hold lots of coins, get people to buy them, and then dump their coins. That causes the market to crash as they escape with their loot. Even seasoned investor Mark Cuban has fallen victim.

One way to mitigate the risk of carpet pulling is to buy coins and tokens that have been filtered, audited, or monitored by a reliable third party.

in the future

Relying on crypto influencers to sell the next coin seems like a volatile enterprise. But the ultimate success of individual meme coins and tokens depends on the strength of their community, and influential culture will not disappear.

Barring regulatory loopholes, the crop of meme tokens will likely continue to expand, as the tools that generate them become more accessible.

And meme coins are becoming serious business. A Canadian digital asset manager has taken Dogecoin as a hedge against the 2024 US presidential election (itself the creator of Politifi meme coins), and some analysts have suggested we could see meme coin exchange-traded funds (ETFs). ) in the future.

This article was originally published in 2021 and was last updated in November 2024.