Meme coins - WTF?

welcome to the eighteenth issue of > alpha unhashed, aarnâ's weekly newsletter on a decentralised & intelligent financial future. In this edition, we take a closer look at meme coins, examining their distinct features, evolution, current trends, community sentiments, and much more. And in our DeFi roundup, we cover: 

• 🚨 Normie Meme Coin Hack

• 🚀 Trump Speech Boosts Meme Coins

• 💰 Solana's SEAL Presale Hits $2.5M 

Imagine scrolling through your feed and seeing a hilarious meme. Now, picture that meme not just as a joke, but as a valuable digital asset. Sounds crazy, right? Welcome to the world of meme coins! This is where your favourite internet laughs meet the cutting-edge world of cryptocurrency.

Meme coins may start off as fun, light-hearted jokes, but they can quickly turn into serious business. They gain value, draw in huge, passionate communities, and sometimes even make headlines. While the jury is split on their long-term viability, they undeniably highlight the dynamic and unpredictable nature of internet culture and its growing influence on financial systems.

Meme coins are fundamentally:

> a playful spin on cryptocurrencies: Meme coins are digital currencies that often draw inspiration from popular culture and internet jokes. They are designed to be shared widely, much like the memes they are based on.

> community-driven: A key feature of meme coins is their strong online communities that drive their popularity and growth. These communities are often enthusiastic and promote the coin’s value through social media and other online platforms.

Some of the most well-known meme coins include Dogecoin (DOGE) which was initially created as a joke, and has now gained a large following and significant market value. Another popular meme coin, Shiba Inu has a massive supply of 1 quadrillion tokens. There are also numerous lesser-known meme coins such as Bonk, Pepe, Floki, Memecoin, Baby Doge, and Dogelon Mars, many of which still maintain substantial market capitalisations.

Dogecoin (DOGE) is the first and most iconic meme coin, created in 2013 by software engineers Billy Markus and Jackson Palmer. Featuring a Shiba Inu dog from the popular "Doge" meme, Dogecoin was designed to be a fun and easy-to-use digital currency, unlike other cryptocurrencies with serious financial and technological goals. Its light-hearted nature quickly captured the internet's imagination, making way for the meme coin phenomenon. Dogecoin’s unexpected success popularised meme coins. Inspired by DOGE, a wave of new meme coins emerged, each bringing its own unique twist to the concept. Notable among these are:

> Shiba Inu (SHIB): Dubbed the "Dogecoin killer," SHIB also features a Shiba Inu dog and aims to build a robust ecosystem with DEXs and an artist incubator

> SafeMoon: Launched in 2021, SafeMoon rewards long-term holders and penalises short-term traders with its unique transaction fee structure. When transactions take place, a fee is applied, part of which is redistributed to existing holders to incentivize long-term investment. Another portion of the fee is burned, reducing the total supply of SafeMoon. This strategy discourages speculative trading and fosters a sustainable investment culture.

> Akita Inu (AKITA): Another dog-themed coin, AKITA, seeks to replicate Dogecoin’s community-driven success with new features and community projects. These efforts include the development of dApps tailored to AKITA's ecosystem, collaborations with charitable organisations to support animal welfare causes, and the establishment of educational programs to promote blockchain literacy. 

The meme coin trend, initially sparked by Dogecoin, has seen rapid expansion, with new tokens appearing almost daily. While these coins originally launched on well-known blockchains like Ethereum and Binance Smart Chain, Solana has recently emerged as a key platform for meme coins.

Solana has rapidly emerged as a prominent platform for meme coins, driven by several compelling factors:

> scalability and speed: With fast transaction speeds and low fees, Solana offers an efficient environment for meme coin trading.

> developer-friendly: Solana's tools and resources enable quick project launches and innovation in the meme coin space.

> active community: Its vibrant community supports meme coin adoption and fosters network effects.

> DeFi integration: Meme coins on Solana can tap into a wide range of DeFi protocols, enhancing their utility.

> market opportunities: Solana's popularity as a meme coin hub attracts capital, liquidity, and talent, driving further growth.

Despite the success, the meme coin sector has faced challenges, including instances of rug pulling and controversy. Let's look at the Elecoin case study to see why it's important to be cautious when dealing with meme coins.

The Elecoin meme coin scam unfolded on Polygon, orchestrated by a group of influencers who hyped a fictitious narrative about Sandeep Nailwal's pet elephant. Backed by Polygon figures, the project aggressively marketed itself, attracting investors with promises of lucrative returns. However, red flags emerged early on, including delayed payments and insider dumping. Despite orchestrated interactions with Nailwal, the project collapsed within months, leaving investors financially devastated. 

This incident highlights the importance of thoroughly researching and scrutinising investment opportunities before committing funds. Investors must remain vigilant, verifying project legitimacy, team credentials, and community feedback to mitigate the risk of falling victim to similar scams in the future.

The opinions surrounding meme coins are sharply divided, reflecting contrasting perspectives on their longevity, investment potential, and inherent risks.

The Token 2049 panel, "Navigating the New Frontier of Meme Coins in the Exponential Age," discussed the complexities and potential of meme coins. The panellists acknowledged initial scepticism which eventually transitioned to recognising meme coins as more than mere distractions. The discussion highlighted meme coins as an entry point for newcomers, a testing ground for blockchain capabilities, and a tool for cultural tokenization. They also discussed the possibility of meme coins eclipsing NFTs in cultural significance speculating on the evolution of meme coins into serious financial instruments. Ultimately, the panellists viewed meme coins as a form of democratised prediction market, offering real-time insights into cultural and financial trends. Despite concerns about pre-sales and short-term behaviours, proponents maintain that the meme coin market will continue to thrive, drawing attention and investment. 

On the other hand, cautious scepticism surrounds meme coins, with critics warning against treating them as traditional investments like Ethereum or Bitcoin. Rekt Brands co-founder Ovie Faruq, aka OSF compares meme coins to gambling in a volatile and unpredictable market, characterised by high risk and potentially high reward. The T2049 panel also discussed concerns about the fairness of meme coin launches due to snipers acquiring most of the coin supply early, potentially disadvantaging retail investors. Speakers identified the distribution mechanisms, noting varying levels of transparency and community focus among projects, suggesting the need for evolution towards fairer practices over time. Additionally, assessing the fundamentals of meme coins or predicting market trends is particularly challenging, often resulting in irrational decision-making and significant losses. Concerns are raised about the limited longevity of meme coins, questioning the sustainability of their appeal and the difficulty new coins face in breaking through the crowded market to maintain investor interest.

In essence, the debate surrounding meme coins underscores the dichotomy between their perceived potential for entertainment, engagement, and profit, and the associated risks of volatility, speculation, and market saturation. While some embrace meme coins as a playful avenue for exploration and investment, others approach them with caution, recognising the inherent challenges and uncertainties of the meme coin ecosystem.

The future outlook for meme coins indicates a shift towards a more utility-focused model, as exemplified by projects like Shiba Inu and Floki Inu. Shiba Inu plans to establish the Shibaverse, a Metaverse for community members, alongside its existing ecosystem, including ShibaSwap, a DEX. Similarly, Floki Inu aims to differentiate itself by emphasising utility, with plans for an NFT gaming Metaverse called ‘Valhalla’, a merchandise marketplace, and a crypto education platform. This trend signifies a departure from meme coins solely for trading, as new projects leverage the comedic element of their tokens to build vibrant communities.

Additionally, the integration of DeFi features marks a significant evolution in memecoins. Platforms like Base and Solana have seen substantial growth driven by memecoins, with Solana particularly notable for its surge in network activity, growth, and adoption. 

The rapid rise of memecoins launched as recently as March underscores their growing prominence, with projects like BRETT and Dogwifhat experiencing exponential growth. Overall, the integration of DeFi features signals a paradigm shift in memecoins, shaping their future trajectory and interactions with users.

wrapping up

When dealing with meme coins, it's important to maintain a balanced perspective. While the potential for substantial returns may be appealing, it's imperative to recognise the inherent risks involved. 

The rise of meme coins also underscores some issues within the crypto market, such as regulatory ambiguity and investor protection. As regulators navigate this evolving landscape, it's crucial to strike a balance between fostering innovation and ensuring market integrity.

In conclusion, meme coins serve as a reminder of the complexities inherent in the crypto market. By approaching them with prudence and advocating for responsible investing practices, we can navigate this phenomenon with diligence and resilience. 

Normie, a meme coin on Base, saw its market cap plummet from nearly $42 million to $1 million after an exploit. The team, holding 600 ETH, agreed to the hacker's terms, keeping 10% of the exploited funds and pledging to launch a new token to reimburse NORMIE holders.

Former U.S. president Donald Trump's appearance at the Libertarian National Convention sparked a surge in political meme coins. MAGA Hat (MAGA) soared over 150% in 24 hours, while MAGA (TRUMP) rose 12.7%. 

Solana's seal-themed crypto (an overweight seal mascot indulging in junk food and crypto trading) has raised over $2.5 million pre-exchange launch. With no whitepapers or roadmap, Sealana focuses solely on meme appeal, relying on social media for hype generation. And it's paying off.

top DeFi Tweets

@DeRonin_ advises on finding high-potential meme coins on TON while avoiding scams by prioritising project research. 

@DannyCrypt recommends capitalising on the popularity of meme coins by investing in those with a history of success. He highlights coins like $PEPE and $MOG, which have reached all-time highs as prime examples.

@digitalartchick highlights the current struggle for new meme coins to gain momentum amidst the constant stream of launches, citing trust issues with teams and early investors. Emphasising that investing in meme coins is more about their distribution than the memes themselves, akin to NFTs.

reflections

A joke is a very serious thing

- Winston Churchill

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