Educational Byte: What is a memecoin and how to create one?

Everybody loves a good meme, and that includes software engineers and cryptocurrency-lovers. The result is what we call now “memecoins:” cryptocurrencies or tokens designed around an Internet meme or humorous element whose core purpose may not be entirely clear. In other words, they’re real coins released by developers mainly for fun. But they have all the technical aspects in check and can be used as a means of payment or any other possible feature in their native ledgers —like DeFi apps.

So far, Dogecoin (DOGE) is the most popular memecoin. It’s also the first one, and it was created in 2013 as a joke by the devs Jackson Palmer and Billy Markus. They didn’t plan for the coin to go anywhere, really. So, they were quite surprised to see the incredible growth of their techie joke.

As of December 2023, Dogecoin has a price of around $0.1 and a market capitalization of over $14.8 billion. That’s in the top ten market caps per coin [CMC], surpassing chains like TRON, Chainlink, Avalanche, and Polygon.

Besides its funny sympathy, the opportunity to mine new coins, and some diffuse promises by its foundation, we can say for sure that Dogecoin doesn’t have a lot to offer. It’s living proof that not only utility can cause fierce loyalty. Therefore, other devs quickly followed to try their luck as well, and other memecoins with real prices, market caps, and loyal communities have appeared.

Shiba Inu, PEPE, and more

Shiba Inu (SHIB) appeared in 2020 to be Dogecoin’s direct competitor. Indeed, one of the tokens of its ecosystem is called “Doge Killer.” Unlike Dogecoin, it doesn’t have its own ledger but is based on Ethereum. Unlike Dogecoin again, it brought new DeFi features for its users to take advantage of. It’s possible to make liquidity mining with SHIB and earn BONE tokens in exchange.

They also have a magazine, a name service, a game, an NFT collection, and plans for a Metaverse. Currently, the price per SHIB is at $0.0000090 (due to its enormous supply) and its market cap is at $5.3 billion. We can say that they took the joke to the next level, and some other ecosystems followed suit. There are a lot of other “Inu” coins around. We can find approximately 100 dog-themed coins in CMC, and they’re not the only memecoins in existence. There are more, like Pepe Coin (PEPE).

Focused on Pepe the Frog memes, PEPE was released on Ethereum in April 2023 and went viral in May of the same year. It literally went from zero to hero, showing a price rally of over 7,000% in a single month. It has a market cap of $570.8 million at the time of writing, and it’s been listed in the most popular exchanges. This is despite the warning on their own website.

“$PEPE is a meme coin with no intrinsic value or expectation of financial return. There is no formal team or roadmap. The coin is completely useless and for entertainment purposes only.”

The conclusion seems obvious. You can have some fun and, maybe, take some real earnings in the process.

How to make your own memecoin?

Most memecoins are done on the top of an already existing chain (like Ethereum) because the team doesn’t want to bother creating a whole new ledger for a joke. If you’re doing something mainly for fun, the budget is often tight. In this sense, probably Ethereum isn’t even the most cost-effective solution.

Last time we checked, Ethereum's average transaction fee was $11 [BitInfoCharts]. That’s not funny. Besides, if you wanted to hire someone to do the job because you know nothing about code, that would cost you between $5,000 and $10,000. Again, not funny. On the other hand, you can find a really inexpensive and user-friendly solution in Obyte: The Asset Registry.

This is a simple website where you can create any kind of Obyte-based customized token, including loyalty points, ICO shares, tokenized products, or memecoins. Imagination is the limit because no programming is required. You just fill in the spaces (supply, name, description, etc.) and order the creation by paying 0.005 GBYTEs (less than $1). Then, your new coin is ready on-chain to be promoted and used. No extra steps or fees.

Of course, you should consider that memecoins are risky assets. A new memecoin probably won’t have any value, but if it’s duly promoted and goes viral (like PEPE) it could reach a decent market cap and price. After that, the price could be highly volatile. But hey, at least we had some laughs, right?

Featured Vector Image by Freepik