The evolution of memecoins and the search for substance in the crypto industry

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As the crypto industry continues to evolve, there has been growing interest in memecoin digital assets which often have little or no underlying value, but instead rely on internet culture and hype. media of social media to gain popularity. From the meteoric rise of Dogecoin (DOGE) to the recent launch of the Pepe memecoin (PEPE), these coins have captured the attention of the masses and even enjoyed some market success. However, as the market matures, the pressure is on for crypto projects to offer more than just a catchy name or a meme-worthy mascot.

From the beginning

Memecoins date back about a decade to the success of Dogecoin. Created as a joke by two software engineers in 2013, Dogecoin gained a large following among meme-loving traders, and its mascot, Shiba Inu, became an internet sensation overnight.

Despite its lack of real utility or purpose, Dogecoin soared, briefly overtaking Bitcoin (BTC) in 2014 and even reaching its highest market cap of $88.8 billion in May 2021 at a price of 0.6818. $ per DOGE. Its success and endorsement by the likes of Elon Musk paved the way for other coins such as Shiba Inu (SHIB), Baby Doge and more recently Pepe Coin. In April 2023, Musk even briefly replaced Twitter’s iconic Bluebird logo with the official Dogecoins mascot from the Shiba Inu meme. Around this time, DOGE rallied up to 40% on the news.

Launched in early 2023, PEPE quickly caught the attention of the internet community and has since grown to a market capitalization of over $1 billion, with recent listings on platforms such as Binance, Huobi, Bitget, Gate. io, XGo and OKX, to name a few.

Although it has been a resounding success since its launch, the anonymous development team behind the token has been transparent about its intentions, making it clear that it is completely useless and even stating so on its warning page:

PEPE is a memecoin with no intrinsic value or expectation of financial return. There is no formal team or roadmap. The room is completely useless and for entertainment purposes only.

So, as the space emerges from the current crypto winter and continues to grow and expand, it is crucial to consider the long-term sustainability of memecoins. Essentially, the crypto industry should look to prioritize substance and utility instead of just focusing on short-term gains.

More importantly, the question that should be asked is not: do people question the long-term sustainability of memecoins? but rather, what steps can be taken to ensure the long-term viability and usefulness of cryptocurrencies as a whole?

Go beyond the memescape

Indeed, as the crypto industry continues to evolve, there is a growing understanding that cryptocurrencies need to have real-world applications and solve real-world problems to gain wider adoption and traction. long-term viability. While memecoins can bring attention and excitement to the industry, they ultimately do little to advance the technology or promote its adoption.

In fact, some claim that memecoins can even damage the reputation of the industry. To quote Lim Yu Qian of CoinGecko: Memecoins are a very risky type of crypto because they are based on internet cultural references with price movement depending on whether Memecoins can stay relevant by generating hype.

According to CoinGecko Research, an investor would have had to invest $66,298.25 on average to become a memecoin millionaire, based on the analysis of 10 memecoin price returns. To reach $1 million in memecoin holdings, the minimum initial investment required ranges from $11.87 for Shiba Inu in 2020 to $190,585.57 for ArbDoge AI (AIDOGE) in 2023.

Source: CoinGecko

While these numbers may seem tempting to some, it is important to consider the significant risks and volatility associated with memecoins and the potential damage they could cause to the reputation of the broader crypto industry.

Ultimately, the long-term success and viability of memecoins is still uncertain. While they have captured the attention of a new and growing audience, they may not provide the substance and utility needed to drive long-term adoption of cryptocurrencies. However, it should be noted that the crypto industry is still in its infancy and therefore constantly evolving.

From speculation to tangible benefits

Therefore, while memecoins may not be the answer to long-term adoption, they have served to bring attention and excitement to the industry. To truly drive adoption and bring substance to the space, the industry must move away from mere commerce and speculation, and instead develop practical applications that solve real-world problems and deliver tangible benefits. to users. This could include applications in areas such as remittances, online payments and wealth management.

As the cryptocurrency industry continues to mature and grow, the possibility of an app or platform to use memecoins for real-world transactions isn’t far-fetched. Such an innovation would not only bring more substance to the crypto industry, but also give memecoins and other cryptocurrencies real utility beyond their current speculative nature.

The crypto industry has the potential to bring significant positive change to the world of finance and beyond. By working to build a more stable and reliable ecosystem alongside projects like Arbitrum, Optimism, and XGo, the industry can usher in a new era of crypto utility that will benefit individuals and society as a whole. together.

Kirthana Devaser is an economist turned financial writer and speaker in the Web3 space. She is a firm believer in using technology for good and believes Web3 will drive meaningful change and build a better future for all. Currently, Kirthana is Head of Content and Copy at XGo, where she oversees and champions all things content and brand identity across the company.

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