From Dogecoin to SHIB: The Rise and Resilience of Memecoins in Crypto

Love them or hate them, there's no escaping memecoins. The impressive gains boasted by top dog and catcoin traders regularly make headlines, fuelling FOMO (fear of missing out). It would be easy to dismiss memecoins as a fad if not for their persistent growth and increasing share of the cryptocurrency market.

When a respected figure like Vitalik Buterin feels compelled to comment, publishing a treatise advocating for "higher quality fun projects that contribute positively to the ecosystem and the world around them," it captures the attention of the few remaining industry observers who weren't already monitoring memecoins. These assets' growing popularity is drawing talent and user activity to the space, as highlighted by Bitmex CEO Arthur Hayes in May.

Now, everyone is watching and many are trading them. The question is, are memecoins the natural evolution of crypto or a last resort for desperate gamblers seeking a quick win?

In the Beginning There Was One

Just as there was initially only one cryptocurrency — Bitcoin — there was once only one memecoin: Dogecoin. Launched as a joke by Billy Markus and Jackson Palmer in 2013, it quickly gained a cult following but it wasn't until 2021 that memecoin mania truly took off. That year, Dogecoin reached a market cap of $85 billion, surpassing several of the top 100 US companies.

Predictably, a multitude of other memecoins followed, each attempting to dethrone Dogecoin. While none have yet succeeded, some have come close, notably $SHIB, which currently sits just outside the crypto top 10. Memecoins now represent a $56 billion sector with popular tokens such as $PEPE, $WIF, and $FLOKI routinely recording daily volumes that surpass everything except ETH and BTC.

The Appeal of Memecoins

From a consumer perspective, the appeal of buying memecoins is evident: their high supply and low unit price make them appear affordable to retail investors, while their accessibility simplifies the acquisition process. The record-breaking returns realised by holders of the most successful memecoins also vastly exceed those of traditional assets like BTC. For instance, $WIF has surged 185,498% from its low five months ago.

But beyond mere speculation, there are several reasons why memecoins are now the face and future of crypto.

The Closest Thing to a Fair Launch

There is a case to be made that memecoins are among the fairest cryptocurrencies ever created. They do not require specialist technical skills or equipment to acquire; one only needs to believe in the token's potential. While the odds are heavily stacked against the buyer, identifying a coin with the right attributes — memes, community, content, uniqueness, and that certain je ne sais quoi — is an underrated skill.

Even for those who lack the ability to identify a gem among the many launching simultaneously, there is still money to be made from buying into memecoins that have already succeeded. There is a reason why memecoins such as $PEPE are hitting all-time highs while serious DeFi assets are down, even in a bear market: distribution.

The key feature of memecoins isn't their high supply or low unit price; it's their fair launch that allows everyone to get in on the ground floor. Memecoins contrast sharply with low float, high fully diluted value (FDV) "VC coins" whose charts often show a perpetual decline. With memecoin launches, no one — save for perhaps a few insider wallets — gains an unfair advantage. It's the ultimate PvP (player versus player).

Rather than venture capitalists and influencers selling off to retail investors, it is often retail investors forcing professional investors to buy their assets after realising that memecoins are not a passing fad but a lasting asset class. There's no such thing as a completely fair launch, but memecoins come close.

It's not just retail investors who are interested in high-supply tokens. From the perspective of crypto exchanges, AMMs, and DEXes, memecoins are highly beneficial, boosting trading volumes and increasing protocol fees. Issuing a memecoin has now become the default way to launch a new DEX or layer2, akin to christening a new ship with a bottle of champagne.

Protest Money for the People

Reviewing the new tokens being traded on platforms like Cielo or the latest Solana tokens funded on Pump Fun, it is clear that most memecoins are high on hype and low on originality. In the time it takes to read this sentence, a dozen memecoins will have launched on EVM chains and Solana. By the time you finish this article, half of those coins will have failed. It is a reality that 99% of all memecoins will go to zero.

However, the same can be said for many "serious" cryptos that claim to have genuine utility and backing. Be it in DeFi, GameFi, or RWAs, the charts are filled with tokens that peaked shortly after launching and have been in decline ever since. At least with memecoins, people accept these risks, understanding that their value is driven by memes and community energy.

The fairness of memecoins extends to their creation as well. Thanks to numerous Token-Launch-as-a-Service platforms, anyone can now create and issue their own token with no technical skills required. This enables tokens to be spontaneously issued to commemorate breaking news or latch on to the latest popular meme.

Memecoins represent protest money for the people: a way to push back against those who hold power and wealth. In a space where ideas are judged on their merits, memecoins provide a voice for the voiceless and an opportunity for the disenfranchised. The memecoins that succeed, achieving billion-dollar valuations and tier-one exchange listings, are the crypto equivalent of underdogs who have fought their way to the top through sheer grit.

Often simple and short-lived, memecoins are nonetheless a unique opportunity for outsiders to make it big. Moreover, they add a fun element to the crypto space. In a world where humour is increasingly regulated and open discussion is discouraged, memecoins remain a bastion of free speech. Regardless of the concept's popularity, no one can prevent the launch of a token, thanks to the power of permissionless blockchains.

We may not all appreciate them, but we cannot deny their place in crypto. Memecoins are here to stay.