What Are Meme Coins?

25 October 2022, 15:54 GMT+0000
Updated by Maria Petrova
7 December 2022, 10:46 GMT+0000

Developers of major cryptocurrencies such as bitcoin and ethereum, which both run on decentralized computer networks, hope to transform the global financial system for the better. They hope that their software can help empower individuals and strengthen economic freedom. But the trajectory of crypto’s global adoption suggests the dream of a more decentralized, fair society could become a reality within a generation.

Not all cryptocurrency developers are driven by such altruistic ambitions. Some cryptocurrency developers just want to have a bit of fun. Enter meme coins. Before going through a list of some of the most popular meme coins, let’s first examine what they are.

What are meme coins?

Dogecoin DOGE is a meme coin

Meme coins are cryptocurrencies that were essentially created as a joke. That was certainly the inspiration for the creation of Dogecoin. Given the substantial returns that Dogecoin has delivered to early investors, a series of copycat dog coins have sprung up. The motive for the creation of these copycat meme coins likely has more to do with the desire for high returns, rather than as a joke.

Some meme coins run on their own blockchains, powered by their own decentralized network of computers. Others run as tokens on top of other cryptocurrency networks — for example, as ERC-20 tokens on the Ethereum network.

The original meme coin: Dogecoin

The first meme coin ever created was Dogecoin. Software developers Billy Markus and Jackson Palmer launched Dogecoin’s mainnet in 2013 as a fork of Litecoin. Markus initially came up with the idea, getting his inspiration from a popular internet Shiba Inu meme. Palmer later helped Markus turn his idea into a workable cryptocurrency.

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At the end of 2013, Dogecoin was trading on cryptocurrency exchanges in the $0.0003–7 region. In early 2014, it surpassed $0.001 for the first time. It took more than four years for Dogecoin to surpass $0.01 for the first time in mid-2018. Then, in May 2021, it briefly reached around $0.74 per coin. That represented a more than 1000x return versus its early 2014 levels.

As of October 2022, Dogecoin’s market capitalization — the market value of all outstanding tokens — is close to $8 billion. That means Dogecoin is more valuable than U.S. tech company Dropbox.

SHIB price
SHIB/USDT Chart by TradingView

There is no definitive answer to this question. Different investors take an interest in meme tokens for different reasons. Many investors find meme coins attractive due to the potential for rapid gains. Major meme coins like Dogecoin and Shiba Inu have a well-documented history of posting rapid, exponential price gains.

Others enjoy the fact that meme coins represent crypto’s light-hearted side. Many might be a fan of the specific meme, dog, or another animal that the meme coin was inspired by. For these investors, the meme coin might serve as more of a collector’s item.

What are the risks of investing in meme coins?

Volatility

Meme coins are generally viewed as lacking in utility when compared to the major cryptocurrencies such as bitcoin and ethereum. Their utility mainly comes from the fact that they function as a collectors’ item. According to critics, this means they have no, or at least very little, fundamental value.

As a result, meme coin prices tend to rise and fall in tandem with the swings in emotion of their associated communities, and alongside the whims of the broader retail investment community. That means their prices can be extremely volatile and unpredictable. Adding to this volatility is the fact that meme coin distribution tends to be highly unequal. A few investors tend to hold a substantial market share, giving them an outsized ability to affect the market.

Prices can surge amid a sudden surge in Fear Of Missing Out (FOMO). Something as simple as a celebrity endorsement can trigger FOMO. Back in early 2021, billionaire Elon Musk frequently touted his support for Dogecoin. This helped pump the cryptocurrency as much as 20,000% in the year.

Just as quickly as FOMO can boost prices, panic selling can trigger a crash. As of October 2022, DOGE is changing hands around $0.06, over 90% lower than the record highs it hit at $0.75 last year. SHIB is changing hands around $0.000001, nearly 90% lower than the record highs from 2021.

For investors who bought at or near the top as FOMO peaked, they have lost nearly all of their money. Meanwhile, meme coins can impact each other’s prices. For example, one coin may crash in price as investors flock to the new fashionable meme coin.

Rug pulls

Meme coin investors also risk falling foul of rug-pull scams. A high-profile example earlier this year was the Squid Game meme coin, which at the time piggybacked off of the popularity of a Netflix show which went by the same name.

After surging in price, and after the creators of SQUID cashed out on their tokens, Squid’s development team suddenly pulled the rug on their “project” and disappeared. SQUID tokens lost nearly all of their value immediately. Holders were even blocked from being able to sell.

Top 5 meme coins in 2022

1. Dogecoin (DOGE)

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Dogecoin (DOGE) Price Action

Dogecoin is the original meme coin and is responsible for an army of clones. Its pumps have made many an investor good profits.

A common criticism that Dogecoin faces is that it has no theoretical limit to its total supply, unlike some other major cryptocurrencies, such as bitcoin. The supply of Dogecoin tokens rises by about 2.0% per year. These tokens go to Dogecoin network validators for securing the blockchain.

Dogecoin advocates say that Dogecoin’s supply is increasing at a similar rate to other major cryptocurrencies, such as bitcoin, that haven’t yet hit their supply limit. Moreover, they argue that the absence of a cap on the total number of Dogecoin tokens that can be issued creates certainty for network validators about the project’s future. When other cryptocurrencies hit their issuance limits, they will need to find other ways to compensate network validators, Dogecoin validators point out.

2. Shiba Inu (SHIB)

Available on: 

Shiba Eternity Ready for Worldwide Launch: How to Play Shiba Inu’s Card Game - beincrypto.com

Shiba Inu rose to fame in 2021 and, at one point, briefly even managed to surpass the market cap of Dogecoin. The self-styled “Dogecoin killer” is an ERC-20 token that trades on top of the Ethereum network. 

Shiba Inu developers have a number of projects in the works as they seek to boost the utility and usability of the SHIB token. These include the layer-2 Shibarium protocol, the Shiba Inu metaverse, an ecosystem of Shiba Inu games, and a new decentralized exchange. Shiba Inu advocates argue that this intense pace of developments, which surpasses that of Dogecoin, makes SHIB the better investment.

Another strength working in SHIB’s favor is the size and dedication of its fan base/community. Shiba Inu’s official Twitter account has 3.5 million followers, more than Dogecoin.

3. Floki Inu (FLOKI)

Available on: 

Floki Inu vs Dogecoin (DOGE) (FLOKI Shiba Inu (SHIB

Floki Inu is another popular dog-inspired meme crypto. It runs on both the Ethereum and Binance Smart Chain networks. The token, which is named after Elon Musk’s pet Shiba Inu, is essentially a Viking-themed version of Shiba Inu. Floki is the name of a famous Viking explorer, as well as the name of a character in the popular Vikings TV series.

Floki Inu developers are working on a number of major projects designed to boost the cryptocurrency’s utility. These include a gaming metaverse which will be called Valhalla, a suite of DeFi applications that will be launched within the FlokiFi ecosystem, an NFT/merchandise marketplace called FlokiPlaces and an educational platform called University of Floki.

4. Dogelon Mars (ELON)

Available on:

Dogelon Mars

Dogelon Mars is an Ethereum and Polygon network-based meme coin. It attempts to simultaneously follow in the footsteps of the likes of Dogecoin, Shiba Inu, and Floki Inu. Dogelon Mars also plays on a number of popular themes in the meme coin space, such as Elon Musk and his stated goals of creating a self-sustaining civilization on Mars.

Indeed, Dogelon Mars’ ticker on cryptocurrency exchanges is ELON. Some think that the inclusion of Mars in the crypto tokens name is also a reference to how it expects its price to experience a massive upside in the future. Massive crypto price upside is frequently called “mooning” within the crypto space.

5. Baby Doge Coin (BABY DOGE)

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Baby Doge

Baby Doge styles itself as the offspring of the Dogecoin, the first major meme coin ever created. BABYDOGE is a BEP-20 token on the Binance Smart Chain, but is also Ethereum network compatible.

Baby Dog Coin has managed to attract a significant social media following that is likely to solidify its place as one of the major meme coins for the years to come. The crypto token has 1.6 million followers on Twitter, ranking it as the 10th most followed cryptocurrency in the world. According to Baby Doge’s website, the cryptocurrency has over 300,000 followers on Telegram.

Baby Doge has deflationary tokenomics. 5% of each transaction is redistributed to the rest of the network, but 45% of the total Baby Doge supply is held in a dead wallet, meaning 45% of this redistribution leaves circulation forever. Baby Doge also has a designated charity wallet which also receives redistributions. The Baby Doge community has raised over $750,000 to help save dogs.

How to buy meme coins?

Meme coins are easy to buy on most major cryptocurrency exchanges. The process only takes a few steps on simple-to-use platforms such as OKX. Here is an example of how to quickly buy Dogecoin via OKX.

  • Once you have set up and verified your OKX account, log into the platform. Make sure to click on the “Exchange” tab in the top left. Now hover over the “Buy crypto” tab at the top of the page. You then want to press “Buy with card”.
  • Press You will now be directed to a page where you can enter the amount of cryptocurrency you want to buy and what fiat currency you want to buy it with.
  • After selecting the fiat currency you wish to pay in, enter the amount of crypto you want to buy.
  • You will now be directed to a page that allows you to choose your preferred payment method.
  • Scroll down to see a preview of the exchange rate you will receive. Hit “Pay” to buy. If you have not yet entered your card details or completed certain KYC requirements, this is where you will be prompted to do so.

Should you invest in meme coins?

For professional/serious investors and traders, trading meme coins offers the potential for rapid gains. That is also the case for casual/retail investors. But meme coin prices move rapidly. This complicates things for investors who don’t always watch markets. For this reason, casual investors likely face a higher risk of incurring substantial losses on their meme coin investments.

When it comes down to it, whether to invest in meme coins is up to the individual. If an investor is happy to own an asset that can fluctuate by orders of magnitude in a matter of days, all power to them. One piece of sound advice that most retail/casual investors are advised to follow, however, is not to invest more money in meme coins than they can afford to lose. Plowing one’s life savings into the latest trending meme coin could make a person rich, but could just as easily end in disaster and leave a person broke.

Will meme coins continue to flourish?

Meme coins have risen to prominence in the past few years, all riding on the back of Dogecoin. Now, the focus is on increasing the utility of the tokens, with many projects switching to games and technical developments to boost usage.

The market will likely see many more meme coins going forward. However, as it stands, the ones mentioned in this list are dominating the niche and are expanding with more features. These may even change the nature of meme coins, which could result in an interesting future.

Frequently asked questions

How do I buy meme coins?

Meme coins can be bought across a range of cryptocurrency trading platforms. Two of the world’s most popular and easy-to-use cryptocurrency exchanges are Coinbase and Binance. Meme coins can be purchased easily on both.

What are meme coins?

Meme coins are joke cryptocurrencies. Their aim more to provide entertainment rather than to real utility in the crypto space. The most popular meme coins at the moment are both dog-inspired, with the original meme coin Dogecoin based, on a popular Shiba Inu meme from 2013.

How to find new meme coins?

CoinMarketCap has a new cryptocurrencies section on its website. You can scroll here to see some of the latest meme coins to have been released. Remember that there is a high risk that many of these new cryptocurrencies may be rug pulls, like the infamous Squid Game token.

Where to buy meme coins?

Established meme coins are easily bought across most of the major cryptocurrency exchanges, such as Binance and Coinbase. Newer meme coins can be more difficult to find. They may only be available on certain decentralized exchanges, for example.

Which meme coin is the best?

That depends entirely on an individual’s opinion and own assessment of the meme coin market. Dogecoin is the most well-established meme coin, which might make it the best for some. Baby Doge has an inbuilt mechanism to donate funds to dog charities, which might make it preferable for some investors.

Is a meme coin a good investment?

Meme coins are inherently volatile. Investors may experience large returns, but they could easily lose nearly all of their money. Investors should only invest money that they can afford to lose.

How much is a meme coin worth?

The price of an individual meme coin tends to be very low. For a few dollars, investors can own millions of tokens some meme coins, or perhaps even more.

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