Memecoins: what they are, popular examples, and how to buy them

By Kraken Learn team
10 min
6 окт. 2023 г.
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Understanding viral-themed cryptocurrencies 🤝

  • Memecoins are cryptocurrencies or tokens built around popular memes, celebrities, animals and pop culture trends.

  • Many memecoins have extremely large or even unlimited token supplies, which keeps their prices low and makes them widely accessible to most investors.

  • Memecoins tend to be more volatile than other types of cryptocurrencies due to their highly speculative and hype-driven nature.

 

Memecoins represent a subcategory of cryptocurrency inspired by internet memes and driven by vibrant online communities. Unlike traditional cryptocurrencies, memecoins are often developed as "joke" projects, providing users with a playful, accessible gateway to the world of digital assets. 

Many draw inspiration from viral media such as humorous text, images, characters, or video clips that spread rapidly online. Yet, over time, the communities behind these farcical projects have accomplished remarkable feats, demonstrating the power of collective action. 

For example, in 2014, Dogecoin holders famously raised $30,000 in DOGE to fund the Jamaican bobsleigh team’s journey to the 2014 Winter Olympics—a testament to the strength and generosity of these lively communities.

While Dogecoin may have been launched as a parody cryptocurrency, lacking the tokenomics or purpose of Bitcoin, it has since risen to claim a spot among the largest cryptocurrencies by market capitalization, along with other popular memecoins, Shiba Inu (SHIB) and Pepe (PEPE).

How do memecoins work? ⚙️

From a technological standpoint, the vast majority of memecoins are created using fungible token standards on Layer 1 blockchains. These standards act as blueprints for easily launching new cryptocurrencies, with ERC-20 (Ethereum) and SPL (Solana) being the most popular examples.

Technical innovation is rarely the main focus when developing memecoins; instead, the emphasis is on building a strong community and achieving virality as fast as possible.

There is a quirk common to most memecoins: an enormous, or even unlimited, supply. For instance, PEPE boasts a total supply in the hundreds of trillions, while SHIB is made up of one quadrillion units. 

There are two main tokenomic advantages to this:

  1. Higher token supplies generally mean lower token prices, making memecoins more accessible to newcomers than most other types of cryptocurrencies.

  2. Low token prices make memecoins great for online tipping and other microtransaction-based utilities.

For more information on cryptocurrency tokenomics, check out our dedicated Kraken Learn Center article here.

However, despite these advantages, there are also some major downsides to having huge token supplies. Namely, token holder dilution.

In the case of Dogecoin — the industry’s first prominent memecoin — it has an unbounded supply, meaning that there is no maximum cap on how many new tokens can enter into circulation. Each year, a fixed rate of 5 billion new DOGE enters into circulation, eroding token holder value over time.

Since most memecoins are fully decentralized, token holders often double as the marketing team, promoting their chosen projects on platforms like Instagram, X, and TikTok to attract new users. Additionally, these projects typically rely on volunteer developers, who contribute new features to engage and grow the user base.

Why do people buy memecoins? 🧐

People buy memecoins for various reasons: some may align with the underlying meme and its overall ethos, others enjoy the fun community aspect, and many purchase them as speculative investments, hoping to make significant price gains.

Memecoins

The top memecoins in 2024 🏆

1. Dogecoin (DOGE)

Launched in 2013 as a fork of Litecoin, Dogecoin is considered the original memecoin. The brainchild of two software engineers, Billy Markus and Jackson Palmer, the cryptocurrency was launched as a joke, based on the famous doge meme depicting a Shiba Inu dog.

Since then, it has seen a meteoric rise in price (boasting an all-time high market capitalization of over $80bn), owing to a vibrant, active community and the endorsement of celebrities such as Elon Musk. 

Charity is a strong theme within the community, which has conducted a range of fundraising activities (including sponsoring NASCAR drivers).

2. Shiba Inu (SHIB)

The second-largest memecoin by market capitalization is also a dog coin, based on the same breed of dog as DOGE — the titular Shiba Inu.

SHIB was deployed on Ethereum in 2020, by a pseudonymous developer, Ryoshi. Since then, it has attracted a large community, dubbed the “ShibArmy,” who vote on governance proposals via the adjacent BONE token and take to social media to espouse the SHIB mission.

Following its success as an memecoin experiment, the Shiba Inu ecosystem set its sights on a grander vision of metaverse domination. It now has its own decentralized exchange (ShibaSwap), an NFT collection (the SHIBOSHIS) and even a layer-two blockchain network (Shibarium), which aims to push the project beyond the meme.

3. Pepe (PEPE)

Pepe is an Ethereum-based memecoin based on the popular Internet meme of Pepe the Frog, a cartoon character created by Matt Furie (note, however, that Furie is not associated with the Pepe coin).

Launching with a supply of 420,690,000,000,000 tokens, Pepe sought to break away from the dog meta in memecoins. Despite not having a roadmap or any future plans, it has captured significant mindshare in the memecoin space, frequently ranking within the top 30 cryptocurrencies.

4. Dogwifhat (WIF)

Dogwifhat stood out as one of 2023’s most notable memecoin frenzies. Revolving around the meme of a Shiba Inu dog wearing a hat, its strong social media presence and community strength caused WIF’s prices to skyrocket. Interestingly, it goes against the usual trend of massive supply, with just under a billion units in circulation.

Today, Dogwifhat is the top Solana memecoin by market capitalization. Recently, the community raised almost $700k to advertise the coin on the Vegas Sphere.

5. Bonk (BONK)

It may appear to be just another Dogecoin derivative, but Bonk launched in 2022 with a true community ethos. Aiming to reverse the trend of ‘predatory VC tokens,’ 50% of its supply was airdropped to Solana ecosystem users, with the other 50% set aside for community building initiatives (e.g., grants, development and realizing community proposals).

Since launch, the Bonk ecosystem has been rapidly evolving. At the time of this writing, it boasts over 130 integrations, multi-chain support, and a suite of products including a Telegram buying bot, a decentralized exchange and staking rewards.

6. Floki (FLOKI)

Floki was born in 2021, its name inspired by that of Elon Musk’s dog. What followed was an aggressive marketing campaign that saw the coin advertised in New York, London, Dubai, Istanbul, Israel and Australia. Concurrently, the project sponsored a range of football teams and later built schools in a handful of African nations.

At its core, Floki operates like other memecoins — serving chiefly as a means of exchange. However, like Bonk and Shiba Inu, it targets more serious use cases, too. Its Valhalla metaverse is a play-to-earn, blockchain-based game, complete with upgradeable NFTs, while its TokenFi platform empowers anyone to tokenize real-world assets. 

Also present in the Floki suite are a crypto education hub, staking rewards and prepaid cards that can be funded with FLOKI tokens.

Memecoins

How to buy memecoins 📕

Kraken supports 35+ memecoin pairs – making it a great venue for buying your preferred digital assets without the hassle of navigating various decentralized exchanges (DEXs) across multiple chains.

For lesser-known memecoins, however, it may be necessary to obtain them via a decentralized exchange. For this, we recommend the self-custodial Kraken Wallet, which will enable you to trade on Solana, Ethereum and a handful of other networks, all via a single app.

To purchase memecoins, you’ll need the project’s contract address, which can usually be found on its official website. Be sure to double-check this information, as malicious actors oftentimes impersonate memecoin projects to steal unsuspecting users’ funds.

Common memecoin scams to watch out for 👀

As in all areas of crypto, constant vigilance is strongly recommended. Before buying digital assets, take a moment to brush up on some of the most common scams.

Pump-and-dump schemes

The barrier to creating a new memecoin token is incredibly low. Unfortunately, the same tools that make it easy for non-technical users to launch these tokens are also exploited by malicious actors.

In a typical pump-and-dump scheme, scammers will create their own token and, either acting alone or as part of a coordinated group, aggressively promote it across online forums and social media platforms. They may also artificially inflate its price by investing their own money into it to attract outside investors looking for new, up-and-coming tokens to trade.

Once this organic interest drives the token’s price to a peak, the scammers quickly sell off their holdings, reaping a profit while the token's value plummets — leaving regular investors with significant losses and worthless tokens.

Rug pull scams

Similar to the pump-and-dump, but worthy of their own entry, rug pulls in DeFi take many forms. 

Perhaps the most popular is the liquidity pull. In this scheme, a malicious actor creates a token and adds it to an automated market maker’s liquidity pool. In return, they receive an LP (liquidity provider) token, essentially a digital receipt that allows them to withdraw their share of the pool's funds.

The scammer will then aggressively promote their memecoin, often by making unrealistic promises of high returns, unveiling ambitious roadmaps, or even claiming celebrity endorsements. As excitement builds and more users invest, the token’s price rises. Once a critical mass of investors is reached, the scammer ‘pulls’ the liquidity from the pool, cashing out and leaving the remaining holders with worthless tokens.

Airdrop scams

Ever check your wallet on a block explorer to find you have millions in a token you don’t recognize? These may have been airdropped to you as part of a scam, which preys on the wallet owner’s greed.

When the user attempts to swap the tokens on a DEX like Uniswap, they’ll trigger an error which directs them to instead trade them on the coin’s official site. Should the user visit this site, they could be tricked into giving up their own funds, either by inputting their seed phrase or by confirming a malicious transaction in MetaMask.

Memecoins

Find your memecoin community

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Disclaimer

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