Memecoins
Shiba Inu, DOGE, and PEPE Memecoins Are Important in the Ecosystem Despite Lack of Practical Use Cases ⋆ ZyCrypto
Much to the chagrin of crypto ecosystem realists, meme coins have become the stars, making their way into the top ten largest digital assets and gaining infamy.
Dogecoin (DOGE) spawned the meme coin craze. Yet the embers were boosted by Elon Musk on X (formerly Twitter), as the billionaire openly declared his support for cryptocurrency. Riding the buzz, several meme coins, including Shiba Inu (SHIB) and PEPE, appeared in space, instantly gaining support from the community.
Driven by a herd mentality and viral marketing techniques, these meme coins have seen their valuations skyrocket, eclipsing the gains made by Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). While skeptics have predicted a decline in interest in meme coins since 2021, they have shown little to no signs of slowing down halfway through 2024.
Year-to-date, meme coins have delivered investors the best returns in the digital asset space compared to other categories. On average, meme coin investors have seen their portfolios grow by 300% in 2024, while artificial intelligence (AI) tokens and DeFi generated approximately 150% and 50% respectively.
A series of positive points
Despite their glaring lack of use cases, some experts continue to advocate for meme coins, arguing that their presence in the cryptocurrency world is a clear advantage. One analyst believes that the digital currency market, marred by a rigid approach, can learn from memecoins’ agile nature to evolve and keep pace with rapid digitalization.
Other analysts see meme currencies as an ideal way for beginners to enter the world of cryptocurrencies. They serve as a learning curve before moving on to projects with real-world use cases. Some hedge funds have since turned to meme currencies as a hedge against inflation, citing their upward momentum and global accessibility.
There is another argument that memecoins are potential testing grounds for new concepts in the cryptocurrency world, including tokenomics and community-driven projects. Their low barrier to entry and daily trading volumes contribute to the liquidity of the ecosystem, while others have found success in fundraising and environmental protection efforts.
There is no doubt that memecoins have actively contributed to cross-chain compatibility in the ecosystem, leaving lasting cultural impacts throughout their nascent existence.