MEME Coin: From 'Meme' to a Market Value of Over 100 Million, What is the Driving Force Behind It?

Author: Daniel Li, CoinVoice

With the deepening development of the digital age, the continuous emergence of new technologies and application scenarios is changing people's lifestyles and ways of thinking, while also nurturing new cultural forms and modes of communication. Among them, the pop culture characterized by derivation, resonance, and viral replication—"meme" culture—has gradually risen in this context. Initially, memes were just April Fools' jokes or pranks on the internet, but with the integration of memes into the crypto world, MEME coins, as a new type of crypto asset, are rapidly emerging. From "meme" to a market value exceeding 100 million, MEME coins once again demonstrate the infinite possibilities of the crypto market, while also prompting people to explore and reflect on the power behind MEME coins. So, what is driving the rise of MEME coins? This article will delve into the background, history, and underlying forces of MEME coins, revealing the mysteries behind this phenomenon.

From Internet Culture to Crypto Market: The Development History of MEME Coins

The origin of MEME coins can be traced back to 2013, when an anonymous developer created a crypto asset based on Bitcoin blockchain technology, named MEME. The name comes from "Internet Meme," aiming to combine internet culture with crypto assets. The initial goal of MEME was to become an interesting digital currency, using internet memes, emojis, and other elements of online culture to attract more people to participate in the crypto asset market. With the rise of social media, memes received increasing attention, and MEME coins gradually transitioned from internet culture to the crypto market. Today, MEME coins have become an important force in the crypto market, and their development process can be roughly divided into the following stages:

Initial Stage (2009 to 2013): During this period, some of the earliest MEME coins, such as Catcoin and Coino, did not have specific goals or uses; they mainly relied on social media promotion to attract users, thus failing to gain widespread attention in the entire crypto market. It wasn't until the emergence of DOGE coins that MEME coins truly gained recognition in the crypto market. Initially, DOGE coins were just a joke, but due to their cute dog image and the meme culture's playful nature, they quickly became popular on the social platform Reddit. As DOGE coins gradually gained acceptance, a large number of dog-themed MEME coins also emerged, further showcasing the viral replication characteristics of memes. During this period, the MEME coin community was very active, and through the dissemination via internet social channels, MEME coins began to gradually rise in the crypto industry.

Development Stage (2013 to 2017): With the development of the crypto market, more and more MEME tokens began to emerge. In addition to the dog-themed DOGE coins, other MEME coins appeared in the market with different themes, such as Pepe Cash themed around Pepe the Frog, Nyancoin themed around cats, and PandaCoin themed around pandas, among others. These tokens typically attracted users through social media promotion and, to some extent, became part of internet culture. During this period, MEME coins began to gradually gain market attention. Additionally, the emergence of innovative market mechanisms, such as decentralized exchanges and airdrops, also provided support for the development of the MEME market.

Mature Stage (2017 to 2020): The mature stage is an important phase in the development of MEME coins. During this period, the capitalization of the MEME market significantly increased, and some MEME coins with higher market values began to gradually become star tokens in the market, such as DOGE coins and Pepe Cash. Furthermore, some MEME coins also raised substantial funds through ICOs, such as BAT (Basic Attention Token) and GNT (Golem Network Token). In this stage, MEME coins began to explore community governance models to better manage projects and attract more users, while some tokens also started to establish their own ecosystems and application scenarios to promote the use and appreciation of tokens.

Explosion Stage (2020 to 2023): Thanks to the promotion by MEME community members and the gradual maturation of the MEME market, the market value of MEME coins reached new heights. Among them, DOGE, as a representative of MEME coins, reached an all-time high price of $0.74 in April 2021, with a total market value approaching $50 billion. At the same time, during this period, MEME coins began to explore new fields and application directions, such as NFT-based games and art collections, as well as using blockchain technology to solve social issues, such as decentralized management and identity verification. These new ideas and gameplay brought new development directions and thoughts to the entire crypto asset industry.

New Wave Period (After 2023): The current MEME coin market is experiencing a new wave of excitement. PEPE coins, as the biggest dark horse this year, achieved a market value of $1 billion and 107,000 holders in just 23 days, breaking the previous records set by DOGE and SHIB coins, becoming the fastest-growing MEME token in crypto asset history. Additionally, this round of MEME coin excitement has also expanded to the Bitcoin market for the first time. The first BRC-20 token, ORDI, built on the Bitcoin blockchain, quickly approached a market value of $1 billion after being listed on mainstream exchanges. BRC-20 is a fungible token standard built on the Bitcoin blockchain, which has already been used to mint 8,500 different tokens, most of which are MEME coins. It is foreseeable that the next explosion of MEME coins is likely to occur in the Bitcoin market.

The Reasons Behind the Rise of MEME Coins from Internet Culture to Star Coins

Whether it is the early DOGE or the recently popular Pepe and Aidoge, these MEME coins that can break out of their niche share common characteristics, which are fundamental reasons for the continuous emergence of explosive MEME coins in the crypto space.

Fair Distribution Model

In the initial stage of MEME projects, most tokens were distributed for free through community activities and creative mining. This distribution model is fair and attractive, attracting more users to join and forming a large and active community while also enhancing the liquidity of the tokens. As more people hold the tokens, the supply in the market increases, promoting trading volume and price increases. For startup MEME projects, this free and fair distribution model can also enhance visibility and promotional effectiveness, thus attracting more investors into the market.

Additionally, MEME coins have adopted concepts similar to "miners," such as "AI miners" in AIDOGO coins and "Frog Miners" in Pepe coins. These miners can earn rewards based on their contributions, encouraging users to actively participate in the project. This reward mechanism can effectively motivate community members' behavior, increasing their investment and support for the project.

Extremely Low Investment Prices and High Return Expectations

Compared to mainstream value coins, MEME coins are very inexpensive, with most priced below $1. The extremely low price allows users to purchase millions of MEME tokens with very little money. For those looking to try crypto asset investment but with limited funds, MEME coins are a very attractive option.

MEME coins exhibit extreme price volatility, often surging or plummeting by several times due to a hot event. Therefore, for most MEME coin users with limited funds, the probability of achieving significant gains through MEME coins is much higher than with traditional mainstream value coins. Even if they fail, they may only lose a few hundred or thousand dollars, while success could lead to financial freedom. This explains why, despite many retail investors being "rekt" after each MEME coin boom, their enthusiasm for investing remains undeterred. For most crypto speculators, MEME coins are like a lottery ticket in the crypto industry, and no one can resist the opportunity to achieve high returns at a minimal cost, even though this opportunity is very slim.

Strong Narrative Power

MEME coins are a typical case of narrative-driven finance, and their success is largely attributed to the power of narrative. The narrative models of MEME coins include: derivative narratives, relevant narratives, and counter-narratives. The innovation and application of these models provide crucial support for the rapid dissemination and popularity of MEME coins.

Derivative narratives refer to the narratives of MEME coins originating from existing cultural or media materials, creating entirely new MEME images and stories through secondary creation and adaptation of these materials. This narrative model primarily relies on a keen grasp of popular culture and internet culture and creative adaptation abilities. For example, the image of Dogecoin comes from a widely circulated funny dog meme on the internet, and the creator applied this image to digital currency, promoting it through social media, leading to its rapid popularity.

Relevant narratives refer to the narratives of MEME coins being associated with a specific event or theme, creating unique MEME images and stories through humorous, witty, or satirical interpretations and expressions of that event or theme. This narrative model mainly depends on the creator's insights and creative expression abilities regarding the event or theme. For instance, ArbDoge AI (AIDOGE) utilized the hottest topics in the current market, combining "AI" and "Doge" to create a fun and creative digital currency image, rapidly attracting a large number of users' attention through social media promotion.

Counter-narratives refer to the narratives of MEME coins creating MEME images and stories with strong social critique by ironic or critical interpretations of a phenomenon or event. This narrative model mainly relies on the creator's profound observation and critical spirit regarding social phenomena and human weaknesses. For example, Pepe Coin (PepeCoin) was created through the secondary creation and adaptation of the commonly seen "Pepe the Frog" image in internet culture, aiming to deeply reflect and critique certain issues in modern society.

Community Promotion and Creative Marketing

Community promotion not only increases interaction and participation within the community but also enhances the liquidity and value of the tokens. The creators of MEME coins and community members attract more users to join the community through various online and offline activities, such as airdrops, social media interactions, and mining, thereby expanding the user base and increasing token liquidity. For example, mechanisms like "AI miners" in AIDOGO coins and "Frog Miners" in Pepe coins allow users to earn rewards based on their contributions, motivating community members to actively participate in the project and increasing their investment and support. This mechanism encouraging community member participation can effectively enhance community activity and cohesion, thereby increasing the value of the tokens.

Moreover, MEME coins are also very creative in design and marketing. For instance, combining popular elements with crypto assets has attracted more interest and attention from young people and social media users. These design and marketing strategies have made MEME coins a fun investment choice, attracting more investors to participate. For example, Punk Comics (PUNK) is an NFT-based digital collectible game that combines pixel art, comics, and gaming, designing a series of unique pixel characters and comic roles. These pixel characters and comic roles represent different superheroes and villains, such as Spider-Man, Iron Man, and Hulk. The marketing approach of PUNK, which combines the most popular cultural elements and art, has quickly gained high topicality and investment appeal in the market.

As the Craze Fades, Issues Exposed in the MEME Market

Under the MEME craze led by PEPE, the MEME market has shown a hot scene this year. Many MEME coins saw their prices rise over 1000% in just one day, but this wave of excitement quickly faded. Within just a week, the price of PEPE had already dropped nearly 65%. This brief frenzy and rapid decline reveal many issues currently facing the MEME market. Although MEME coins have gained attention from mainstream institutions and investors, there is still a significant gap compared to mainstream value coins.

Firstly, the bubble risk of MEME coins is the biggest challenge to their development. Taking PEPE as an example, its rapid rise and fall in a short time exposed the bubble risk in the current MEME market. Driven by investors' FOMO emotions, excessive speculation may lead to inflated prices. Additionally, some bad actors manipulate prices in the MEME coin market, further exacerbating the bubble risk. To address this, MEME coins need to take measures to prevent excessive price fluctuations, such as strengthening regulation and increasing exchange transparency to standardize market order.

Secondly, the lack of practical application scenarios is also an important challenge for the development of the MEME market. Currently, MEME coins have relatively few application scenarios in real life, which limits their actual market value and makes it difficult to attract more users. In contrast, mainstream value coins have been widely applied in various fields, such as cross-border payments, international trade, and financial investment, having a stable market foundation and high market recognition. The lack of practical application scenarios for MEME coins makes it difficult to quantify their value, making them highly susceptible to market sentiment fluctuations, leading to extreme price volatility.

Additionally, compared to mainstream value coins, MEME coins have not yet gained sufficient recognition and trust. The issuance mechanisms, governance structures, and exchange transparency of MEME coins still need improvement. To gain broader recognition, MEME coins need to establish connections with mainstream digital currencies (such as Bitcoin, Ethereum, etc.) and achieve interoperability through cross-chain technology. At the same time, MEME coins also need to build their unique brand and internet cultural connotation to differentiate themselves from other digital currencies.

In summary, although the MEME market was once thriving in the short term, the issues exposed as the craze fades have become increasingly apparent. Bubble risks, lack of application scenarios, and insufficient recognition pose challenges to the development of the MEME market. To achieve sustained and stable growth, MEME coins need to continuously improve themselves, strengthen connections with mainstream value coins, and play a larger role in practical application scenarios.

Conclusion

In the MEME coin craze, people's understanding and demand for crypto assets have been fully demonstrated. Although the value of MEME coins stems from their unique social culture and network effects, their success also reflects the widespread recognition of crypto assets. While there are many imperfections in current MEME coins, the continuous emergence of novel MEME coins provides new possibilities and innovative directions for blockchain applications. As the saying goes, "No pain, no gain," the future of MEME coins will require ongoing innovation, upheaval, and volatility to establish a firm footing. We look forward to seeing MEME coins become an open digital economy that integrates technology, culture, and economics in the near future.