1. Project Overview

1.1 Business Summary

PEPE is a MemeCoin launched on Ethereum on April 17, 2023, driven purely by memes and positioned as "the people's token." The creation of PEPE aims to leverage the popularity of MemeCoins like Shiba Inu and Dogecoin, paying tribute to the Pepe the Frog meme created by Matt Furie, and establishing itself as a top MemeCoin in the industry.

In its market operations, PEPE has attracted significant attention from the cryptocurrency community by implementing tax exemption policies, a redistribution system that rewards long-term stakeholders, and a deflationary mechanism that maintains the scarcity of PEPE tokens.

1.2 Team Background

Zachary Testa, the founder of PEPE, was born in Phoenix, Arizona, USA, in 1997. He graduated from Arizona State University in 2018 with a degree in marketing and is also an American landscape photographer. He has a history of illegal activities in several wilderness areas, sacred indigenous territories, and other drone-prohibited areas.

Matt Furie is the original creator of Pepe the Frog. As an American cartoonist and illustrator, he is known for creating Pepe, a character from his 2005 series "Boy's Club." Initially designed as a green humanoid frog, it later evolved into various memes and spread widely on the internet in the late 2000s and early 2010s.

Notably, in August 2023, PEPE's price plummeted by 20%, and founder Testa faced scrutiny due to reports that he and team members had stolen over $15 million worth of PEPE from the project's multi-signature wallet. Other team members were identified on Telegram as @billyoptions, @zerozevia, and @ekim222 (all of which have since been deleted).

1.3 Product/Technology

The birth of PEPE positions itself as "the easiest to remember MemeCoin currently in existence," but according to its official website, PEPE has no intrinsic value or product technology content --- "PEPE is a MemeCoin with no intrinsic value or expectation of financial return. There is no formal team or roadmap, and it can be said to be completely useless, for entertainment purposes only."

However, this is not unusual in the crypto space, as many past MemeCoins have made no claims and directly warned users that they hold no value.

1.4 Development Roadmap

The first phase involves listing PEPE on CoinMarketCap and CoinGecko, promoting community growth, and conducting marketing activities to increase visibility and influence;

The second phase focuses on listing PEPE on major centralized exchanges to expand trading volume and liquidity, increase market capitalization and ranking, and attract more investors and partners;

Currently, it is in phase three, listing PEPE on various top exchanges and launching the team's so-called "meme era" plan to create an ecosystem for meme coins, including NFTs, games, and charity.

2. Market Data

2.1 Official Website Data

From the official website data from February 2024 to April 2024, the total visits were 990.13K, with an average monthly visit of 330.04K and a bounce rate of 72.42% (medium, as the website structure is simple). User visit data from various regions is relatively uniform, and direct visits and shared visits account for over 75%, indicating that the proportion of dirty data among visiting users is low and mostly results from community interaction.

2.2 Social Media Data

3. Competitive Analysis

3.1 Market Size

MemeCoins typically have no practical use and rely mainly on sentiment and community engagement. Between 2020 and 2021, meme coins like $DOGE and $SHIB established their positions, showcasing the unique allure of the meme coin market. Currently, the total market capitalization of all meme coins is approximately $60 billion, with Dogecoin, Shiba Inu, Dogwifhat, and PEPE occupying prominent positions among the top 50 cryptocurrencies by market capitalization, although this figure is still below the nearly $100 billion peak driven by Dogecoin in early 2021.

Initially, MemeCoins were mainly concentrated in the ETH ecosystem, but with the rise of high-performance networks, the Solana network has become an important network for MemeCoin trading, with enthusiastic community participation making it the center of a vibrant meme coin market. After the Denchun upgrade, thanks to a significant reduction in trading fees on DEX, Base Chain has also become a major platform for trading MemeCoins.

3.2 Competitive Landscape

According to Coingecko data, in the first quarter of 2024, MemeCoins became the most profitable crypto sector, with an average return rate of 1312.6%, with the top five being DOGE, SHIB, PEPE, WIF, and FLOKI.

In the ETH ecosystem, PEPE stands out as the top MemeCoin project, with trading volumes far ahead of other popular MemeCoins, such as TOP 2--4 TRUMP, PORK, and FLOKI, which all lag significantly behind PEPE. However, compared to SHIB, TOP 3 PEPE still has about three times the growth potential, but its development speed is much faster, and its expected growth and market capitalization performance are more promising. For example, SHIB reached 100,000 holder addresses in 90 days in 2021, while PEPE achieved over 100,000 holders in less than 30 days.

Observing the development patterns of leading MemeCoins, once the consensus demand for meme narratives reaches saturation, there will be a shift towards exploring substantial functional expansions to increase users and support market capitalization, as DOGE began to announce the launch of ecosystems like ShibaSwap and NFTs. In other words, the first phase is to run the financial flywheel, followed by the second phase of narrative implementation. PEPE will also continuously explore new application scenarios in the later stages of its roadmap to support its market capitalization growth.

3.3 Competitive Advantages

Compared to other MemeCoins, PEPE has inherent artistic and communicative qualities. PEPE originates from "Pepe the Frog," an original work by artist Matt Furie, whose character has been popular on the internet since 2005, possessing a deep cultural foundation and recognizability.

The long-standing popularity of the "Pepe the Frog" meme is a core factor in the development of PEPE. PEPE cleverly combines the advantages of blockchain technology with the communicative nature of the Pepe the Frog meme, leveraging the collective power of internet culture to create a MemeCoin with strong community consensus.

3.4 Risks and Issues

As a top 3 MemeCoin, PEPE faces risks of extreme volatility and poor market capitalization stability, similar to other MemeCoins. Once sentiment shifts, market capitalization and token prices may experience significant declines. Although PEPE may have already provided high returns for many investors, investing in MemeCoins still requires caution and patience.

Additionally, the previous incident where PEPE team members stole over $15 million worth of PEPE from the project's multi-signature wallet has had a significant impact on the community. Now, with PEPE's market capitalization soaring, this incident seems to have become a thing of the past, but whether there are still residual risks that could cause community unrest and token market fluctuations remains unknown, and close monitoring is advised.

4. Token Valuation

4.1 Token Model

PEPE has a total supply of nearly 420.7 billion (420,690,000,000,000), a number that pays homage to the popular meme numbers 4:20 and 69 (which have specific meanings in certain cultures). The official website claims that PEPE tokens have no presale, zero taxes, liquidity pools have been burned, and the contract has been renounced.

4.2 Valuation Analysis

The valuation model for MemeCoins differs significantly from traditional financial asset valuation models, primarily because the value of MemeCoins depends on factors such as narrative size, emotional awakening frequency, and celebrity effects, making it difficult to quantify precisely with mathematical models. While some MemeCoins have found innovative ways to integrate NFTs, decentralized finance (DeFi), or community-driven initiatives, many projects primarily focus on humor and satire as their emotional value, leading to limitations in the valuation models for MemeCoins.

First, in the MemeCoin sector, the top 1 DOGE currently has a market capitalization of $20.8 billion (peaking at $100 billion), SHIB has a market capitalization of $14 billion (peaking at $50 billion), and PEPE currently has a market capitalization of $3.9 billion. All are in a fully circulating state, and PEPE's inherent communicative attributes give it a greater comparative advantage in competition, with significant potential for appreciation and value creation.

Secondly, for memes, narrative equals product, culture equals product, and community equals product. Although it is difficult to quantify the value of MemeCoins precisely, some valuation formulas can be referenced for fuzzy judgments. The narrative in the formula is the Meme product itself, while the numbers represent a deviation factor that is difficult to calculate accurately, encompassing multiple factors. If expanded, the valuation = narrative size (the extent of market influence) + emotional awakening frequency + celebrity effect (KOL recognition and sales ability) + SOV (Share of Voice: media share ratio), among other factors.

Based on AI-generated token scores derived from market trends, historical performance, on-chain transactions, and analyses of Twitter and news content, PEPE currently ranks second with a score of 63, reflecting a greater potential opportunity for investing in this token in the next 24 hours.

PEPE tokens have grown by 6.1% over the past 7 days, and in the last 24 hours, there has been positive sentiment from some KOLs on Twitter. PEPE was mentioned 8 times by 6 KOLs, with total views exceeding 208,947. Accounts mentioning PEPE include ColdBloodShill, cryptogems555, and ai_9684xtpa.

PEPE's valuation = narrative size (90 points/100 in the MemeCoin field) + emotional awakening frequency (80 points) + celebrity effect (70 points) + SOV (50 points) = 290 points (total score 400 points).

Finally, as of May 15, 2024, Coinglass data shows that PEPE's open contracts surged by 24.43% to $139 million, while derivatives trading volume skyrocketed by 19.72% to $2.063 billion. This may further drive short-term volatility for PEPE, coupled with the recent influx of frequent trading by whales and the continuation of the Meme market cycle, leading to an optimistic outlook for PEPE's long-term prospects.

5. Conclusion

As a MemeCoin project, PEPE lacks substantial product technology support. Additionally, the previous malicious cash-out history of the PEPE team and the potential legal scrutiny faced by the founder add more uncertainty to PEPE's development, which are key risk factors to consider when investing in PEPE.

However, PEPE's inherent communicative attributes give it a unique comparative advantage, and its success in community and cultural narratives has secured a place in the MemeCoin market. The continuous speculation by a large number of whales also provides a certain growth foundation for PEPE's long-term development.

In terms of current market capitalization, PEPE is relatively undervalued compared to DOGE and SHIB, presenting an opportunity for higher growth in the next market cycle. However, due to the overall weak market conditions, investors are advised to adopt a cautious wait-and-see investment strategy, closely monitor further developments from the project team, and track changes in community activity and market sentiment to adjust investment decisions in a timely manner.

References

【1】https://www.PEPE.vip/

【2】https://ai.0xscope.com/

【3】https://dune.com/wuligy/PEPE-metrics

【4】https://dune.com/cryptokoryo/Memelords

【5】https://www.coinglass.com/currencies/PEPE

【6】https://foresightnews.pro/article/detail/30961

【7】https://www.rootdata.com/Projects/detail/PEPE?k=NDE0Ng%3D%3D

Note: All opinions above are for reference only and do not constitute investment advice. If there are any objections, please feel free to contact us for corrections.