Meme Coin Development

Ten years ago, two programmers decided to create a “fun and friendly Internet currency” as a joke, to prove to the community the exaggerated practical usefulness of cryptocurrencies and simply to ridicule the growing hype around them at that time. And they could not expect that their “dog” coin, based on a popular meme, would become the progenitor of an entire category of cryptocurrencies – memecoins.

Meme coins, deriving inspiration from the humorous and satirical nature of memes, are often created as a playful experiment, designed to captivate and amuse. Their value proposition lies in their ability to disrupt the conventional seriousness of the crypto market, injecting a healthy dose of skepticism and irony. It is worth noting that meme coins are often not backed by tangible assets, relying instead on the power of popularity and virality to dictate their worth.

According to CoinGecko, there are more than 150 different meme coins actively traded on the cryptocurrency market, but their total number is conservatively estimated at more than 400. Despite the fact that most of them have long lost their value and been forgotten by the community, the market capitalization of memecoins is ~$18 billion .

The first memecoin, Dogecoin, was created in 2013 by Billy Marcus and Jackson Palmer. The basis for it was a popular Internet meme with a Shiba Inu dog. Dogecoin was originally created as a crypto parody of Bitcoin. As a result, the “joke” gained enormous popularity and the number of similar cryptocurrencies on the market began to increase rapidly. Elon Musk played a big role in the PR of the coin thanks to his love for memes with the Shiba Inu dog. All he had to do was tweet about the coin and its price would skyrocket. At the end of 2013, DOGE was trading at a price of $0.0003-7; in 5 years, the coin rate exceeded $0.01 for the first time, and in May 2021 it briefly reached $0.74.

As Elon Musk noted, Dogecoin is no different from other cryptocurrencies, but it has a meme. The absurd expression has some truth. Memcoin technology is no different from some other cryptocurrencies that are considered “real”. For example, Dogecoin was created as a derivative of Litecoin. After Doji, the world saw several more meme coins with dogs “at the head”: Shiba Inu (SHIB), Dogelon Mars (ELON), etc.

The basic mechanisms of functioning of memcoins are similar to the mechanisms of well-known altcoins, such as Ethereum and Litecoin. Meme coins, like other cryptocurrencies, operate using blockchain technology, and some even operate on alternative blockchain networks. They also use common hashing algorithms. And although memcoins are associated with popular Internet memes, their technical characteristics are similar to regular cryptocurrencies.

Memcoins differ from many other cryptocurrencies in that they often serve no purpose, simply serving as a means of payment and market speculation. The issue of these coins often has no restrictions, which increases their already high level of volatility.

However, the hype around this type of asset has led to memcoins gradually “evolving” and moving towards a more utility-oriented model. For example, a metaverse will soon be created based on the Shiba Inu memecoin. The creators of Floki Inu have gone even further and are creating a metaverse, a trading market for the FLOKI ecosystem, and even a crypto education platform.

If we talk about why memcoins are subject to high volatility and their quotes are extremely unstable, then FOMO plays a major role – the fear of missing out. Also, the concept of memcoins is often used by scammers in pump&dump schemes.

Should you invest in memcoins?

As mentioned above, meme tokens are a unique crypto asset that is rapidly growing and sharply falling in price. That’s why some investors can make crazy amounts of money on projects like PEPE. Does Decrypt give an example? when a person exchanged 0.125 ether, worth $250, for 5.9 trillion PEPE tokens. In a short time, this investment grew to one million dollars. But foreign experts believe that memcoins for such an amount are difficult to sell quickly, since they are a specific asset.

“No one remembers the names of Dogecoin’s 2013-2014 peers, which are now not traded anywhere and gutted untold amounts of speculative money back in the day,” Jonathan Zeppettini, head of global operations for online publication Decred, once told Forbes Advisor.

His words contain the main essence of investing in meme cryptocurrencies. Most memecoins are created literally immediately after the release of a meme that has attracted sufficient attention from the community, and their main purpose is speculation based on FOMO. This is why memcoins are often classified as Shit coins, most of which are created solely for fraudulent purposes. Therefore, the prospects for investing in such coins are quite doubtful.

However, some meme cryptocurrencies eventually form a large community and a wide ecosystem around themselves, which allows them to be used as a promising investment tool. Also, memcoins depend much more than other cryptocurrencies on the mood of society and culture. This is why the hype around memcoin affects its price.

However, we should not forget that this influence is not always positive. For example, Elon Musk’s tweet that he did not invest in Dogecoin, but bought the coin only out of curiosity, instantly collapsed the price of DOGE. On the other hand, when Mark Zuckerberg posted a photo of domestic goats on the social network with the caption “My goats: Max and Bitcoin,” the value of the Aqua Goat memecoin (AQUAGOAT) jumped by 300%.

How to invest money in memcoins correctly

1. Conduct a thorough research of the project, team, check their experience and intentions. Assess whether the project has real value, functionality and a development plan. Check whether communication with the team is open, whether there is activity in the community and the potential for achieving the set goals.

2. Realize that initial memcoins are high risk. Their cost is determined primarily by popularity and consumer perception. Be prepared for significant price fluctuations and possible losses.

3. Carefully evaluate the project’s financial plan, including fundraising and use of the money invested. Ensure that the team has sufficient resources to carry out plans and ensure the duration of the project.

4. Consider diversifying your portfolio by investing in different memcoins and projects. This will help reduce the risk.

5. Research what regulatory restrictions and responsibilities exist in your jurisdiction regarding memcoins. Be sure that you comply with all investment requirements and regulations.

6. Assess the reputation of the project and its community. Explore how the project communicates with the community. This may indicate stability and support for the project.

Experts do not recommend investing large sums of money in memcoins: if you trade, then buy and sell only during the day.

It also makes sense to invest money in well-known and long-term meme projects, for example, Dogecoin and Shiba Inu. At the same time, it is important to be aware of the risks, understand events in the market and exit the project with a profit on time, and not be afraid of losing money in case of failure.

If you are more interested in unknown meme tokens, then investment trends should be looked for in different online communities. But it is unlikely that it will be possible to guess which project will become a powerful news feed around the world. You can only try and distribute the money little by little.

Why memcoins attract speculators

Analysts believe that it is better to deal with memcoins with caution. The fact is that any “coin” like PEPE without real support is quite dangerous for investment, and its low cost and capitalization allow price manipulation on the market. The greater the dynamics of a token, the more speculators it attracts. And although formally there are signs of a soap bubble and manipulation, with such a low cost and high volatility this stops few people.

Disadvantages of Memcoins

Memcoins have several disadvantages. In fairness, it is worth noting them:

Manipulation and fraud. Given the “joke” nature, it is likely that memcoins will attract scammers who will carry out scams such as once the value of the token reaches a certain point. However, it’s not just memcoins that are susceptible to such fraud. This is a problem for the entire crypto industry as a whole due to insufficient regulation. The latest example of PEPE is proof of this – unscrupulous developers withdrew 16 trillion PEPE, sold them on the market and disappeared.

Memcoins can be used to spread misinformation and propaganda. For example, if the drawing or name of the token has a certain message.

Volatility. For traders who trade on margin, this is, of course, an advantage, but for investors it is a disadvantage. The value of meme-cryptocurrencies can fluctuate greatly, which promises a loss of capital for the latter.

Safety. Many memecoins are created as a joke or as a social experiment. Therefore, they are unlikely to provide the same level of security and reliability as Bitcoin.

Conclusion

Meme coin development represents a unique fusion of humor, creativity, and investment potential. As these coins continue to capture the imagination of internet communities, their impact extends beyond mere entertainment, paving the way for novel possibilities within the cryptocurrency landscape. Memcoins have pleasantly diversified the world of cryptocurrencies and blockchain. They combine collectible value, social inclusion, financial experimentation and entertainment. It is important to remember that investing in memtokens may involve high risks and their value may fluctuate widely. Which is good for trading on a margin platform. However, they continue to attract attention, attracting more and more new users to the industry.

To summarize, it is worth noting that memcoins can be a good investment if the investor is willing to pay enough attention to monitoring public sentiment and actively participate in creating a positive attitude towards the token. However, looking at the daily trading volume of memcoins, which exceeds $1.5 billion, we can say with confidence that this category of cryptocurrencies definitely has a future.

Boosty Labs, the largest blockchain development outsourcing company in Europe, has been developing various crypto and blockchain projects for a long time. Our world-class fintech and cloud engineering team has a solid background of practice that combines consulting, strategy, design and engineering at scale. Our professionals can help with all kinds of development services. We architect smart contracts on platforms including Ethereum, Polkadot, IBM Foundation, Hyperledger, Binance Chain, Huobi Chain, Cosmos, TRON, Graph, Aptos, Ripple, Stellar, Solana, Algorand, and more. Our team develops applications and cryptocurrencies, including those which are of memecoin-type, utilizing decentralized databases and programming languages such as Solidity, Golang, Rust, C++, Scala, Substrate, Clarity, Motoko, Cadence, Babylon.JS, and Sway.