The meme coin market has been growing exponentially since the spring of 2024. By the end of this summer, the total capitalization of the segment more than doubled compared to 2023, reaching a figure of $36 billion. At the time of writing, it is already close to $55 billion.
What does this mean? A temporary spike or a return of meme coins to their 2021 high of $90 billion in capitalization? Have coins that have almost no value and are based on a hype begun to be seen as a serious investment?
Let’s take a look at what could be the reasons for such rapid growth and whether it will continue. In particular, let’s look at the role of Layer-2 networks: some analysts are inclined to believe that it was the increased use of Layer-2 solutions that allowed meme coins to achieve amazing results.
Meme coins, the essence of the concept
Meme coins are cryptocurrencies inspired by online culture and expressed in the form of memes, game characters and symbols that are familiar and understandable to Internet users.
Most meme coins do not have the complex and sophisticated infrastructure of traditional cryptocurrencies. The appeal of meme coins is that they have a high potential for rapid distribution due to their virality.
The attractiveness of meme tokens to a wide audience opens up opportunities for quick profits from the almost instantaneous rise in the price of this type of crypto asset. The explosive rise of this or that meme coin is provided by the degree of proximity of the audience to the idea embedded in it and the scale of its promotion at a given moment.
Meme coins are usually characterized by such features as:
- Lack of practical and technological value;
- Low price (often < $0.01);
- Low liquidity;
- Lack of transparent information about the team.
Meme coin creation does not require deep specific knowledge, and technically a new token can be launched on Ethereum or Solana within hours. The low entry threshold makes it accessible to a wide audience. Therefore, the main challenges developers face when launching a new meme coin are an explosive idea, viable tokenomics and smart promotion.
This is how the first meme coin, Dogecoin, reached its current position and laid the foundation for the development of this controversial and, according to many analysts, paradoxical sector of the crypto market.
Having appeared in 2013 as a joke and developed thanks to viral advertising campaigns and the support of powerful media figures, the meme coin with the image of a cute dog offered users an effective tokenomics and traders ample opportunities for speculative trading.
Meme coins are high-risk but high-reward assets to invest in. Their value depends more on the size and sentiment of the community, its engagement and the social media trends that popularize meme coins than on their technical advantages and applicability.
It seems that meme coins, as coins backed by nothing but hype, cannot have a long life cycle and stand alongside fundamental and reliable crypto-assets such as BTC, ETH or stablecoins. In practice, however, it turns out that Dogecoin (DOGE), for example, is among the top ten most capitalized cryptocurrencies in the world, and the recent rapid rise of Pepe (PEPE) has demonstrated that the capitalization of a “hype” coin can exceed the indicators of reputable crypto coins with advanced technologies and an impressive history of existence.
Meme Coin Market Situation in 2024
Today, the meme coin market is one of the fastest growing markets, even considering the overall upswing. The situation in the segment is at another peak from the end of 2023.
At the time of writing, the largest cryptocurrency aggregators already inсlude about 3,000 tokens in the “Memes” category in their valuations, with a total market capitalization of almost $55 billion. Among the Layer 1 blockchains on which meme coins are based, Ethereum leads in absolute numbers (45%), followed by Solana, Arbitrum and BNB in priority shares. The Ethereum network also hosts projects that represent more than 60% of the capitalization of the entire meme coin sector.
The top three coins have each seen more than 50% growth over the year. Data for the top meme coins according to CoinMarketCap:
- Dogecoin (DOGE). First in capitalization among meme coins, third among all cryptocurrencies. Price — $0.12, capitalization — $17.87 billion.
- Shiba Inu (SHIB). Second among meme coins, 13th among all crypto. Price — $0.000018, market capitalization — $10.572 billion.
- Pepe (PEPE). Third place among top meme coins, 25th among all. Price — $0.000011, market capitalization — $ 4.241 billion.
At the same time, despite the positive dynamics, many analysts continue to record a catastrophic impact on the market of this type of assets.
Mike Cramer, the technical expert of Messari, called meme coins “the most extractive, value-destroying crypto phenomenon”, which the world has not seen since the ICO boom of 2017. The engineer noted that while speculative assets have historically been an integral part of the cryptosystem, the hype around a trend that turns out to be a bubble usually “leaves some residual value.” But not meme coins. Here, in his opinion, the value of the asset is first artificially pumped up, and then the developers “dump” their tokens, leaving users with nothing.
In turn, the COO of Unfungible, under the nickname Kermit, posted on Network X curious statistics about Pump.fun (a platform to simplify the creation and trading of meme coins on Blast and Solana, created in January 2024 and exploded the market). According to his data, 60% of users who invested in the platform’s meme coins lost money, 25% made less than $100, and only 0.5% came out with more than $10,000 in profit.
At the same time, leading meme coins that have a strategy and are focused on the future are gaining ground in the market. Let’s take a closer look at the biggest and most interesting projects that have development prospects in the coming year.
Leading narratives 2024-2025
In addition to the “bisons”, analysts definitely distinguish from the proposed abundance of meme coins such projects as Pepe (PEPE), which is currently transitioning to a Layer 2 solution, as well as Layer 2 tokens launched on Base.
PEPE
The development of Pepe has perhaps garnered the most attention from crypto enthusiasts this year. Launched in April 2023, the coin featuring a popular meme (Pepe the frog) captured the hearts of the community and experienced rapid growth, quickly joining the ranks of the 50 most actively traded cryptocurrencies.
In the early summer of 2024, the Pepe team, whose members prefer to remain anonymous, announced the transition of frog meme coins to Layer 2. “Pepe now has its own blockchain!” – reads the front page of the project’s website. The updated token will be called PEPU, in line with the name of the new Pepe Unchained network.
Let’s remember how Layer-2 networks work and how they can benefit cryptocurrencies.
Layer-2 for meme coins: Perspectives
Layer 2 (Layer 2, L2) solutions are primarily used to increase the scalability of cryptocurrencies by offloading some of the operational load from the underlying blockchain. No changes to the architecture of the underlying network are required.
The speed of transaction processing with Layer 2 increases many times faster while reducing commissions. The integration of Layer-2 and DeFi enables optimized trading operations. The security of Layer 2 networks is ensured by the parent blockchains on which they are implemented.
Layer-2 solutions have had a significant impact on the cryptocurrency market in recent years, as they provide a low-cost, fast and efficient way to address the scalability of Layer-1 blockchains.
Coming back to Pepe, we can say that the project is making a qualitative leap. Increased transaction speeds and reduced fees in the Layer-2 network of Pepe Unchained will serve as a powerful incentive to attract new users. The creators of PEPU claim a 100x increase in transaction speed compared to Ethereum, which currently hosts the PEPE coin. Combining DeFi tools and “frog” meme coins on Layer-2, they promise opportunities to participate in staking with APYs over 2,000%. There is also a grant program for third-party developers that will lay the groundwork for an entire ecosystem of Layer-2 solutions. In addition, PEPU is positioned as a secure meme coin: it has been verified by two independent auditing companies.
Adherents of the Pepe the Frog philosophy believe that PEPU is the future of meme coins. For their part, traders and analysts are watching the project’s development to form an objective opinion about it as the first full-fledged example of meme coin on layer-2. Be that as it may, investors have already shown their attitude to the project — currently, three months after the announcement of the transition to the updated functionality, it has raised almost $18 million (!) at the pre-sale stage.
Base network meme coins
Launched a little over a year ago on Base’s L2 network, meme coins are also showing explosive growth momentum.
Base is a project of Coinbase, one of the largest publicly traded crypto exchanges in the U.S., deployed on Ethereum. It is designed to create DApps and provide instant access to the exchange’s DeFi products. After the Dencun updаte to Ethereum, Base was literally hit by a wave of new meme tokens, which recorded a hundredfold or more growth. Among them are such well-known coins as BRETT, DEGEN, DOGEVERSE. TOSHI, DOGINME.
Experts consider one of the main risks of meme coins on layer-2 base to be the problem of protocol centralization. Although Coinbase representatives promise to provide full decentralization over time.
Dogecoin and Shiba Inu
The flagship meme coins continue to lead and evolve.
The first meme coin, DOGE, continues to grow in popularity as a means of payment, combining simplicity, low transaction costs and recognition with minimal technical risks. The short-term action plan includes simplifying the integration of DOGE into the infrastructure of payment systems, trading and social platforms, games and retail stores. As for Layer-2 solutions — the project roadmap includes an item on their development, but a full-fledged realization of Dogecoin on Layer-2 has not yet been presented.
In August, the Shiba Inu team announced the launch of the DAO, which will democratize decision-making and the development of new initiatives. Shiba Inu will be governed by Shibarium’s Layer-2 tokens (BONE and LEASH), whose holders will get priority voting rights on certain issues of the ecosystem’s life.
Conclusion
The recent rise of meme coins has proven their viability as a cryptocurrency asset class, and now analysts are waiting for the segment’s quantitative growth to turn into quality.
Whether it’s changes in blockchain governance, the evolving applicability of meme tokens, or the transition to Layer 2, either way, it’s becoming evident that bona fide meme coin developers are making significant efforts to get in line with fundamental cryptocurrencies.
Thank you for your attention. Invest safely and profitably!
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