Meme coins have had a significant impact on the cryptocurrency market, becoming a unique cultural phenomenon. Joke coins (aka Memes) are cryptocurrencies based on internet memes or have a humorous nature.
The first meme coin was Dogecoin (DOGE), a cryptocurrency that originated from a famous internet meme. A significant role in its emergence was played by a community of very interested potential investors who took the caustic irony at face value. The founding fathers of DOGI initially did not even plan to issue a crypto-asset, but issuing a coin turned out to be easier than clearly explaining why it does not exist and will not exist. Since then, many other meme coins have emerged, creating a multi-billion dollar market with an active community.
Contrary to popular belief, meme coins are very real and function just like any other cryptocurrency. Most meme cryptos are built on layer 1 networks such as Ethereum or Solana. Some meme coins, such as Dogecoin, even have their own blockchain network. Popular meme coins associated with the popular Shiba Inu dog include Dogecoin (DOGE), Shiba Inu (SHIB), Floki Inu (FLOKI) and others. Of course, cute dog faces have already become quite familiar, so other characters, like Pepe the Frog, appear on the market from time to time, but so far not a single meme coin has been able to repeat the success of DOGE.
Why are meme cryptocurrencies created?
These joke tokens are launched for various reasons: for some it is a cheap or funny project, and for others it is an attempt to introduce something new, gamify familiar processes, or make quick money.
The main thing is that the issue price is low at the start. At the beginning, the cost of a meme coin is so low that for $1 you can buy several tens of thousands of coins, and for $5-10 – hundreds of thousands, which you just need to keep in your account and trade in the same way as other “serious” assets. The only difference is that they are traded in a limited number of pairs of the Crypto/Crypto type, always paired with USDT, less often with BTS or other crypto, and very rarely in pairs with fiat currencies. On most exchanges, exchange SHIB to SOL is only possible indirectly, using stablecoins
The more active the currency is of interest to the crypto community, the stronger the growth will be. Then the “coin” is noticed by a wider circle of market participants, and active trading begins. And if some whale or major media person pays attention to the token, really strong price fluctuations begin. However, experts warn that meme coins can not only rise rapidly and sharply in price, but also suffer painful declines, which can also hit the owner’s wallet.
Why you should be careful with meme coins
These tokens are not always safe, even if there is a team behind the project, fans and capitalization. The fun and light-hearted look of meme coins is perfect for pump and dump and other scams. The fact is that appearance can be just a bait to attract attention and masses, as well as to help in the sudden rise in prices.
There is also a risk that at one point a funny meme coin with its own funny story could become a powerful tool for money laundering at the international level. Therefore, you should always treat such projects with caution and analyze the information provided.
In addition, they are extremely volatile and unpredictable, and therefore represent a high-risk investment. Why then are people so enthusiastically attracted to them? The answer is simple: some of these assets brought huge profits to those who were able to invest in them on time. But how to distinguish promising meme coin from scam?
What to look for when choosing a meme coin
- Accountability and clarity of purpose. Good meme coins provide regular reporting on your achievements and goals. This may include blog posts, social media updates, and other forms of communication. The project team must clearly demonstrate its goals and plans for the future.
- Project team assessment. Meet the members of the team working on the meme coin. Experienced and dedicated developers, analysts, and leaders can improve the chances of a project’s success. Check their past experience and participation in other successful crypto projects.
- Security audit overview. The meme coin must undergo a security audit by independent auditors. The results of the audit should be published for public viewing. This increases the level of trust in the project and confirms that it takes measures to ensure the safety of its users.
- Market understanding. Explore the asset’s competitive environment. Understanding other meme coins and their place in the market will help you evaluate the uniqueness and competitiveness of the chosen project.
Please be aware that investing in meme coins carries a high level of risk and you should review each project carefully before deciding to invest.
