I would be lying if I said I had taken the memecoin phenomenon seriously from the start. Like many, I initially observed it with a certain amount of disdain, as if this trend wasn't noble enough to appear alongside Bitcoin and Ethereum, whose mission serves grand monetary and technological purposes.
It has to be said that there's something absurd about these cryptos. How can Dogecoin, which is based on the image of a dog popular on the Internet, be worth more than $20 billion?
And what about the Dog Wif Hat (literally a "dog with a hat" in digital slang), which is worth more than $3 billion and ranks ahead of major infrastructure projects such as Arbitrum or Maker in terms of capitalisation?
This doesn't make much sense, but I think this stance misses the point, which is that memecoins are a representation of the Internet counterculture and are an integral part of what also makes Web3 tick.
For while this ecosystem is working to establish an alternative financial system, its early users are also "nerds" who respond to well-established codes and culture.
"Web3 is marked by the affirmation of a strong culture that has its origins in the history of the Internet, of which memes and now memecoins are the legacy", explains Rusk0f , an Internet user who has been scouring the "trenches" (sic) of this universe for several years in search of the next high-multiplier nuggets.
But before we go any further, let's do a bit of history to introduce the subject.
The first meme is often thought to be a cartoon called "Kilroy was here" dating from the Second World War. This graffiti, depicting a character with a big nose looking over a wall with the inscription "Kilroy was here", was ubiquitous and could be found in various places where American soldiers went, leaving their humorous mark.
So it's a style of humour that doesn't date back to yesterday!
The concept of the "meme" was defined by the British academic Richard Dawkins in his book "The Selfish Gene" (1976) in which he first used the term. According to Dawkins, a meme describes an idea, behaviour or style that spreads from person to person within a culture. By this definition, ancient cultural elements such as proverbs, folk songs or repetitive artistic motifs could be considered memes.
It was with the Internet that this phenomenon experienced a sudden acceleration with the rapid spread of information. It really took off with humorous images shared online in the early 2000s, such as the famous "Dancing Baby" or "All Your Base Are Belong to Us", and then with the "Doge" around 2010, the famous dog that lends its image to the cryptocurrency Dogecoin, created in 2013.
But why was it necessary to financialise this very special humour by creating cryptocurrencies whose fundamental value is close to zero? What explains such a craze in recent years?
A protest trend within crypto "Although Dogecoin has been around for more than 10 years, the memecoin phenomenon really took off around 2021," recalls Rusk0f. "The way it works is quite similar to NFT, it brings members together in a community and allows them to recognise each other on social networks," he explains.
But unlike many NFT collections, whose prices have exploded (over 400.000 for CryptoPunks or Bored Ape at their peak), memecoins do not convey any elitist image.
"I think a lot of internet users have harboured resentment at seeing part of the community organising itself into privileged circles around certain overpriced collections," Rusk0f points out. "Crypto ideology is the complete opposite of this type of approach", he stresses.
It has to be said that memecoins are much more accessible assets. To be part of these communities, all you have to do is acquire a few tokens (no more than a few dollars at most) and join Telegram channels where everyone makes jokes and shares memes related to the world of the memecoin in question. It's very inclusive, unlike the big NFT collections that play up their experiences aimed at the happy few.
"Memecoins can be interpreted as a protest movement against the crypto oligarchy, here everyone is welcome, regardless of the size of their wallet," adds Rusk0f. "The only criteria required are to match the type of humour conveyed by these communities and to participate in increasing their popularity on social networks", he insists.
This movement also makes sense with the proliferation of crypto projects taking themselves very (too?) seriously, largely financed by venture capital funds for whom the objective sometimes boils down to acquiring tokens at low cost during private sales in order to resell them at full price to the general public. Ultimately, memecoins would reconnect with the original spirit of cryptos.
"The tokenomics of memecoins are ideal, as they are not rotten with fundraising where certain teams arrogate substantial amounts of tokens to themselves with their influencers," points out Rusk0f. "At least with memecoins it's simple: those who want to have tokens when the project is created simply have to send cryptos in a smart contract and their creators have to do the same if they want their share of the cake, absolutely no one is privileged," he assures.
And if in the process it allows you to make a little money by speculating on the success of one of them, that's no worse...
A very risky environment for those looking for future nuggets From then on, the challenge for memecoin scouts is to find the future projects that will have their moment of glory, while carefully avoiding being one of those who will buy too late (or stumble across a scam that will siphon off their wallet).
Because it's obvious: while some memecoins can see the price multiply by 100 or more in a matter of weeks, this kind of potential performance involves a maximum dose of risk that not everyone is prepared to bear.
Projects like Pepe (PEPE), Book of Meme (BOM) or Dog Wif Hat (WIF) have been wildly successful, with capitalisations reaching several billion dollars and maintaining a certain popularity over time, but the vast majority have a very short lifespan and crash shortly after launch.
"Currently, there are more than 20,000 new tokens being launched every day on the Solana ecosystem via PumpFun (a platform that allows tokens to be created and launched with one click, ed. note)," explains Rusk0f. "Most of the time these initiatives don't take off sustainably, but on one day some can reach a few hundred thousand dollars and this can represent an opportunity for risk-takers", he insists.
But when the machine gets carried away and one of them digs its furrow on social networks, it's a jackpot. Pepe (PEPE) is one of the most significant examples, exploiting the image of "Pepe The Frog", which is very popular in crypto communities. Over the last 12 months, its share price has risen by 1245% (capitalisation in excess of $5 billion).
"Pepe is a real success story that goes beyond a joke; he's now the equivalent of a cartoon character," notes Rusk0f. "The recipe for making a good memecoin is not obvious, as it depends on how a community will take it on itself, but the sine qua non condition is certainly to make people laugh around unifying elements", he stresses.
It is also interesting to note that "PolitiFi", a style that designates memecoins hijacking the image of political figures, is a fast-growing niche.
Memecoins, a new expression of political satire "These memecoins have everything they need to work at community level: they are surfing on strong current events, particularly with the US presidential election in November, using the image of Donald Trump and Joe Biden, who have a lot of potential to be mocked", anticipates Rusk0f.
The "Doland Tremp" and the "Jeo Boden" (whose graphic universe is reminiscent of children's drawings) have capitalisations in excess of 100 million dollars. Even France has its own derivative with "Moonuel Macaron", which is inspired by French President Emmanuel Macron. "From the King's jesters to the Guignols de l'Info, politicians are a prime target for laughter", agrees its anonymous initiator.
Should this be seen as any kind of support for the candidates? With a few exceptions (such as MAGA, for "Make America Great Again", which offers donations to causes supported by Donald Trump) this is not the intention, even if the popularity of a political memecoin can help to make a candidate more likeable. "As far as I'm concerned, a memecoin ceases to be a memecoin if it starts to take itself seriously," reminds Rusk0f.
Famous celebrities want their piece of the pie Naturally, the scale of the phenomenon attracts many celebrities who are now tempted to use their image to recoup millions of dollars cheaply. Examples include former Olympic champion Caitlyn Jenner and singer Iggy Azalea. The price of the latter's memecoin (the "MOTHER") gained 2000% in one week for a capitalisation of $160 million (and never mind that 20% of the tokens went to insiders, says a report by French start-up Bubblemaps ).
These initiatives are a reminder of how risky these investments are, so much so that some figures in the ecosystem seem to want to blow the whistle, as is the case with Vitalik Buterin, co-creator of Ethereum.
"I'm quite unhappy with the so-called celebrity memecoins so far," he posted in a Twitter post on 5 June . "I can accept financialisation if it's a means to an end and if that end is worthy (health, open source development, art, etc.), but it disgusts me if it's the end," he explained.
He then listed the characteristics a celebrity memecoin must have to be "respected" in his eyes: "Have a public interest objective other than enriching the celebrity and early adopters (....), have fun mechanisms that go beyond trading (...), build something that will last more than 10 years rather than bubble up for a few months before being forgotten."
At the end of March, he also published a post on his personal blog to criticise the phenomenon in general: "If people like to have fun and financialised games seem to allow some to do so, then couldn't there be a more positive version of this concept as a whole?"
This stance has the merit of putting the church back at the centre of the village, but Vitalik Buterin is certainly forgetting an important dimension in his analysis: our ecosystem's taste for potty humour and self-mockery.
While memecoins should not be seen as real investments, they are the expression of an often hilarious counterculture that sometimes goes a little too far, but isn't that what characterises the internet and its communities?
"We sometimes forget, but Bitcoin started out as a kind of memecoin," smiles Rusk0f. "Many events in its history have been the subject of memes, and this type of humour is inseparable from its community. Even though his project is serious, I think that part of what binds his supporters together is rooted in this very special humour," he concludes.
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