Whether you love them or hate them, memes have become a cornerstone of the crypto economy. Memes are not known for their technological innovations or for breaking the boundaries of blockchain scalability, and some skeptics claim they have no value at all.
Some builders within the blockchain ecosystem even believe that memes overshadow their serious work, damaging the overall brand and image of crypto. However, due to their viral nature, memes have surged and accumulated significant value in the broader crypto market.
At its core, a meme is an idea, symbol, or behavior that spreads within or between subcultures. History shows that memes have existed in various forms and media throughout human civilization for centuries. They are likely to persist and present themselves on the most widely used communication channels.
During the pandemic, memes saw a notable rise, with investors gathering on sites like r/wallstreetbets to express their dissatisfaction with the status quo by investing in heavily shorted stocks by Wall Street giants, most notably GameStop. Permissionless blockchains have further amplified this phenomenon.
Dogecoin might have been the original meme, but in recent years, the popularity of memes has exploded. We estimate that the current total market value of memes on permissionless blockchains exceeds $60 billion.
The growth of memes is built on the monetary connections shared by holders of non-fungible token projects, indicating that community, culture, groups, and trends may increasingly rely on monetary tools for cohesion and speculation.
Memes and Expressions Through the Ages
Although the content and messages conveyed by memes have evolved with societal, cultural, and technological changes, the digital images we share and laugh at today are essentially not new. They are a continuation of something that has evolved over thousands of years since the earliest humans.
Storytelling is an integral part of humanity, and viral memes in the form of images, prose, and concepts have played a significant role in shaping and changing human societies, whether through organic marketing or deliberate propaganda. From cave paintings to Roman graffiti, from anonymously spread pamphlets to newspaper cartoons, widely shared images and concepts have conveyed knowledge, helped overthrow governments, and driven social changes through the ages.
While the general concept of memes has always existed, two important components have fundamentally changed throughout history: the media through which they are expressed and the means of their dissemination. Ancient societies used oral traditions to condense complex histories into memorable, repeatable stories, crucial for passing knowledge to future generations.
Viral images were widely used in ancient Greek and Roman societies to convey political messages, and as creation and dissemination methods became more advanced and convenient, the influence of viral images grew. Blockchain is the next stage in the evolution of memes because its technology is widely standardized, with ledgers that are permanent and censorship-resistant, and accessible globally.
The Evolution of Meme Canvases
From the dawn of humanity, the inherent desire to express and share experiences, emotions, and ideas has driven communication and cultural development. Early humans used charcoal and chisels to carve their thoughts and observations on cave walls and stones, creating the first known “memes.” These primitive memes demonstrate the fundamental human need for connection and the shared elements of culture and expression.
As civilizations flourished and technology advanced, the mediums for depicting memes constantly evolved. Paint, ink, slates, and paper became new canvases, with beautiful murals appearing on ancient public buildings, offensive graffiti on the Roman Colosseum, and satirical cartoons in newspapers.
The birth of modern internet memes in 1993 marked the latest paradigm shift in how we express and share ideas. Through emails and message boards, the digital realm became the new frontier for meme evolution, allowing individuals to engage with and share memes on a larger, more expressive scale.
Today, the emergence of memes places us on the brink of another transformative moment in the history of expressive canvases and distribution, changing interpersonal communication as well. The widespread use of blockchain as a canvas for memes and peer-to-peer (P2P) networks as the dissemination track signifies a new era of human communication and cultural evolution.
Just as the printing press revolutionized the spread of ideas (and ultimately memes) in the 15th century, and television and the internet transformed idea dissemination in the 20th century, blockchain will redefine how we create, share, and consume memes and information in the 21st century.
The Evolution of Memes Distribution
In the early stages of human civilization, memes were likely exchanged hand-to-hand between individuals, a process that, while not highly efficient for mass dissemination, was the most advanced form of communication at the time.
As humans developed more complex communication tools and technologies, such as writing, printing, and painting, the spread of memes became more widespread. Graffiti on buildings and paintings in public places allowed a broader audience to access these cultural elements, even though the memes themselves were still limited in their spreadability.
The advent of newspapers marked a significant milestone in human communication and the spread of memes in the form of comics and cartoons. While the creation of memes in this medium was more restricted, their dissemination became much easier due to the use of cars, bicycles, and storefronts as distribution channels. These modes of transportation were among the most important advancements of their time, enabling rapid dissemination of information, ideas, and culture to a wide audience.
The rise of television and the internet ushered in a new era of meme distribution, democratizing access to memes and allowing people to view them from anywhere in the world. The privilege of controlling meme access was largely eliminated as anyone with an internet connection or TV broadcast could participate in and share these cultural elements. As these technologies and their applications advanced, the creation of memes became increasingly simple, with tools and platforms emerging to facilitate meme production and distribution.
Throughout history, memes have always found their way into the most advanced, influential, and widely adopted communication channels of their time. All these have had a significant impact on humanity.
The adoption of blockchain as a medium for meme expression highlights the growing importance of this technology as a central platform for sharing ideas and experiences in the purely digital age.
Memes on the Blockchain
Memecoins are tokenized representations of internet memes or other humorous events or concepts. They are native assets of the blockchain, transferable, usable in blockchain-based applications, and tradable on secondary markets like DEXs.
Memecoins are usually represented by their code or a string of letters that identifies them, with associated characters or other visual elements similar to the memes most people recognize today. For instance, Dogecoin is a Layer 1 blockchain created in 2013 to satirize Bitcoin, relying on a recently popular online image of a Shiba Inu dog.
Dogecoin is a fork of Bitcoin, launched before the rise of tokenization, so $DOGE required its own Layer 1 blockchain to exist. Today, existing Layer 1 blockchains (such as Ethereum, Solana, and even Bitcoin) can host and issue non-native tokens, and their ecosystems are equipped with out-of-the-box token contracts, decentralized exchanges, and other tools to facilitate token issuance.
Behind each memecoin is a contract tied to a Layer 1 blockchain or Layer 2 network, specifying the memecoin’s name, supply, and other details outlining its digital identity. Only by launching one of these token contracts can a memecoin be deployed. In the early days of blockchains, issuing tokens was mostly costly and difficult, requiring technical capability to write or adjust contracts, issue tokens on the blockchain, and create liquidity pools on DEXs for people to trade.
Today, many difficulties have been abstracted away by services that automatically issue tokens and create liquidity pools upon users entering their memecoin details. Recently, Pump.Fun has become a popular venue for issuing memecoins, but many ready-made token contracts can be easily deployed on various blockchains. The relative ease of issuing memecoins has created a flywheel effect, leading to an unprecedented scale of memecoin creation and speculation.
Gambling as a Distribution Method
Almost by definition, with very few exceptions, memecoins have no real utility. While Dogecoin is used as a gas token for purchasing block space on the Dogecoin blockchain, most memecoins today are nearly worthless native gas tokens.
Instead, memecoins are typically blockchain tokens with no corresponding gas or application use, often promoted by creatives, held by communities, or speculated on by traders as a way to bet on the relative rise or fall of the underlying meme’s viral spread.
Due to the lack of underlying utility, memecoins are highly volatile, and their volatility becomes a vehicle for attracting users, bringing broader use and awareness to the blockchains hosting them. The desire for wild gains and getting rich overnight motivates many to take an interest in memecoins.
The potential to increase financial wealth has been the catalyst for the initial (and continued) adoption of memecoins on blockchains as a canvas for cultural and emotional expression.
Some argue that this is a flaw, indicating that memecoins are temporary or will fade as people make and lose money. However, as we pointed out, memes have always existed, and the desire to make quick money has always been present.
While internet-era memes have become ubiquitous, it is only recently that they have become assets that can be monetized and traded. Blockchain tokenization combines the viral spread of potent messages with humanity’s desire for wealth. This combination is new and likely to remain popular.
Memes Data
In this section of the report, we will examine the on-chain activity and value driven by memecoins over the past few years.
Solana is the primary blockchain for memecoins in 2024. Solana’s low-fee environment lowers the barrier for users to create and trade memecoins, and its fast transaction confirmation speed makes using the blockchain feel akin to loading memes on an internet browser.
Late 2023 marked a turning point for the on-chain presence of memes. From August to November 2023, Solana averaged about 9,000 new tokens per day, now averaging 28,000 new tokens per day, more than three times that number. At its peak, using a 30-day moving average, it was adding over 100,000 tokens per day.
Although not all of these tokens are memecoins, the large meme culture on Solana allows it to act as a proxy for memecoin creation in the crypto space.
In the past 30 days, the on-chain trading volume of top-ranked Solana memecoins by market cap averaged between $91 million and $109 million. The top two Solana memecoins by market cap, Bonk and WIF, accounted for 59% of the average trading volume during this period.
As trading volume increased, so did the user base. The top ten Solana memecoins have over 1.136 million unique holders in total. Note that this number considers addresses holding multiple memecoins as single holders. This trend highlights the reach of memecoins and the speed at which this trend spreads.
However, memecoins did not start with Solana. $DOGE, one of the earliest and most valuable memecoins in crypto, was launched in 2013 and was worth $24 billion as of May 29, 2024. $DOGE was launched on its own blockchain, the Dogecoin network.
Besides Dogecoin, Ethereum was the original platform for memecoins during the crypto bull market cycle from 2020-2022. Ethereum was the birthplace of iconic memes like SHIB, and more recently PEPE and HarryPotterObamaSonic10Inu, playing a significant role in establishing memes on the blockchain.
Even though activity on Ethereum has migrated to other networks, it still hosts the second and third largest memecoins, SHIB and PEPE.
As the number of memecoins grows, so does their scale. As of May 29, 2024, the total value of the top memecoins is $57 billion, a 3.5x increase from the same time last year and a 4.8x increase from the bear market low.
An interesting feature of this chart is that four of the seven memecoins in the chart were created within the last 511 days as of May 29, 2024; two of the seven memecoins were launched within 160 days. This highlights the rapidly changing nature of memecoins and the lack of longevity due to the fast-paced evolution of today’s human and internet culture.
Over time, as people become more accustomed to using blockchains as platforms for cultural exchange, the types of memes appearing on-chain have become more specific, from primarily dog and animal coins to memecoins expressing political beliefs and opinions.
This shift indicates that blockchains are becoming a more significant means of communication, with memes as the main vehicle. The following chart tracks the total market cap of top “PolitiFi” tokens or memecoins depicting political figures and symbols.
These types of memes did not appear on the blockchain until 2024, the year of the 60th quadrennial U.S. presidential election. Memecoins representing political figures were virtually nonexistent in the past, although they have been around for several election cycles. However, some politicians, like former U.S. President Donald Trump, have previously attempted NFTs.
Subtle Utility of Memecoins
While memecoins typically do not provide any specific utility as assets—they are not used to purchase block space like Layer 1 native assets, and they rarely have any governance or application utility—some have led to significant secondary activities.
For example, the dog-themed memecoin $BONK was launched on Solana shortly after the FTX collapse at the end of 2022. Solana blockchain usage dropped significantly due to its close association with Sam Bankman-Fried and FTX.
$SOL, the native token of the Solana blockchain, saw its value drop by 86% from its all-time high in November 2021 and then by another 78% between the FTX collapse and early 2023. $BONK was initially intended to reignite interest in Solana and catalyze on-chain activity by airdropping free memecoins to Solana developers, application users, and NFT holders.
And it worked; aside from a significant price increase, since its launch, $BONK has been integrated into the Solana ecosystem over 129 times, across DeFi, gaming, NFTs, and other types of on-chain applications; it has become a major sponsor of Solana and non-Solana-related social/cultural events; and has developed its own bonk-specific applications, such as Bonk AMM, attribution contracts, and even a gamified fitness app Moonwalk.
Memecoins can also serve as liquidity flowing through new application pipelines. Decentralized exchanges and DeFi applications serving memecoins today may become the infrastructure supporting more traditional tokenized markets in the future.
Just as MakerDAO was an application allowing users to convert ETH into stablecoins but is now a major way for traditional asset issuers to bring U.S. Treasuries on-chain, the explosive growth of memecoins may lead to the development and evolution of new application primitives, driving more sustainable blockchain adoption in the future.
Memecoins and NFTs
Memecoins have also capitalized on the NFT craze by transforming popular internet characters into unique digital assets that users can own and trade.
For instance, a memecoin project might create limited-edition NFTs featuring popular memes associated with its tokens. Crypto users can buy, sell, or trade these NFTs on various NFT marketplaces, including Kraken NFT. This allows meme enthusiasts to own a piece of internet history while supporting their favorite memecoin projects.
Rare Pepes and the subsequent Fake Rares series are examples of some of the earliest NFT projects that evolved from viral internet memes.
Shiba Inu (SHIB), one of the most popular memecoin ecosystems in the crypto space today, also launched its own “Shiboshis” NFTs. This collection features 10,000 cartoon characters inspired by Shiba Inu dogs, and holders can use them to battle in Shiba Eternity, the project’s play-to-earn game.
Like many other popular NFTs, memecoin NFT holders have built their own private communities around their favorite collections. Some communities grant holders access to exclusive live events and related merchandise.
Memecoins and DeFi
DeFi refers to a collection of blockchain-based financial applications designed to reconstruct traditional financial services in a decentralized manner.
Memecoins have leveraged DeFi protocols to create innovative ways for users to utilize their tokens in non-speculative ways. These functionalities include staking, yield farming, and liquidity provision.
Staking: Memecoin holders can stake their tokens on DeFi platforms to earn rewards. These rewards can be additional memecoins or other tokens, incentivizing users to hold and actively participate in the memecoin ecosystem.
The Shiba Inu ecosystem is a prime example of a memecoin project thriving by incorporating DeFi elements into its protocol. SHIB token holders can use the ShibaSwap platform to exchange ERC-20 tokens and perform various tasks to earn SHIB and two additional native tokens, BONE and LEASH.
DoggyDAO is a decentralized autonomous organization (DAO) that provides token holders with voting rights on key protocol decisions, giving them additional utility.
Yield Farming: Yield farming involves lending your memecoins to others via smart contracts in exchange for interest. Memecoin DeFi platforms use these loans to facilitate various activities, including trading or providing liquidity, and users are compensated for their contributions.
Liquidity Provision: Memecoins can also create liquidity pools where users can supply their tokens for others to trade on decentralized exchanges. This process allows users to earn a portion of trading fees while contributing to the liquidity and efficiency of the memecoin market.
Conclusion
In 2024, two main segments drove most of the traffic and interest in the cryptocurrency market: Bitcoin (especially considering the launch of a spot BTC ETP in the U.S.) and memecoins. Other significant segments (such as NFTs, DeFi, and gaming) continue to grow and evolve, but their tokens have mostly underperformed, and the market has not yet embraced them as driving narratives.
Newer technological concepts, like modularity and re-pledging, remain top of mind but have mostly not launched. Bitcoin’s continued strong performance and growing institutional adoption continue to be powerful macro crypto narratives, but the most compelling crypto-native narrative in today’s market is memecoins.
While many view memecoins as nihilistic and inherently useless, their existence is built on generations of viral storytelling, and their activity continues to drive blockchain adoption. Their significant role on-chain is not about how much they should be worth but about blockchains being used as a communication channel to spread them—because they are poised to become broader channels of societal expression.
As blockchains gain prominence as means of communication and cultural exchange, the fusion of memes and technology makes this new medium comparable to newspapers, cars, television, and the internet, all of which have had a profound impact on humanity and have become technologies adopted globally.
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