According to data from Coinmarketcap, the current total market value of cryptocurrencies is 1.17 trillion U.S. dollars, and the total market value of the meme sector has reached more than 18 billion U.S. dollars, accounting for 1.5%. The total market value of the meme coin sector has even exceeded the market value of public chains such as ADA, SOL, TRX, LTC, and MATIC.

Compared with other sectors in the crypto market, the Memecoin sector obviously has a very strong wealth-making effect. For example, Shib has increased by 500,000 times, doge has increased by 400 times, etc. These wealth-making myths have also added a lot of new traffic to the crypto market.

Moreover, Memecoin's wealth-making myth continues, such as Unisat in this year's BRC-20 and this year's popular PEPE.

After the last round of bull-bear cycles, the best meme coins Doge and Shib not only survived, but their market capitalizations are also in the TOP15, and their price performance even exceeds that of many so-called value investment projects. Why do the market capitalizations of these projects with no use value exceed those of many Layer1 and Layer2 public chains with quite good ecological development?

Let’s start with Meme culture.

1. Meme Culture and Meme Coin

What is a meme?

Meme (translated into Chinese as "meme" or "meme") refers to a cultural element that is widely spread on the Internet, usually expressed in the form of pictures, videos, animations, text or other forms, which is what we often call "stalks".

The concept of the word "meme" originated in 1976. At that time, popular science writer Richard Dawkins described and defined memes in his work "The Selfish Gene", trying to explain the way cultural information spreads, which means "a role similar to genes in the transmission of thoughts, beliefs, behaviors and biological evolution."

According to the Oxford English Dictionary, a meme is defined as: "A basic unit of culture transmitted by non-genetic means, especially imitation."

Today, the word meme has become widely used for two main reasons: first, memes are often humorous, sarcastic, exaggerated, or relatable, and they can spread quickly through social media, online forums, instant messaging, and other channels;

Second, the popularity of the Internet and social media has enabled people to easily create, share and disseminate content, making information dissemination more convenient and the cost of dissemination lower and lower.

In general, Meme is a form of cultural expression popular on the Internet, which is widely popular for its humor, irony and relatable characteristics.

What is MemeCoin?

MemeCoin is a cryptocurrency based on an internet meme. It is usually created by developers or enthusiasts, inspired by a popular meme or internet culture, and circulated through channels such as social media and online forums.

Unlike other crypto assets, MemeCoins may be created for the purpose of being funny and entertaining. These Memecoins have no specific uses or practical application scenarios. They just accidentally provide investment opportunities about consensus while stimulating people's sense of humor.

As a result, some MemeCoins have gained a large number of followers and even appreciated, making them a viable investment option for those willing to take risks. For example, the increase in the value of meme coins such as Shib and PEPE is very amazing, and the myth of making wealth with these meme coins has spread widely on the Internet. Today, Meme culture has become a part of Crypto.

Among the many meme coins, in addition to the old-fashioned Doge and Shib, Pepe, which broke out this year, is very worthy of attention. Pepe jumped nearly 7000% within 17 days after its launch on April 16. The increase is very exaggerated, and the super high increase has also attracted more users to enter the market.

2. What is PEPE

PEPE is a Memecoin developed by an anonymous team based on the Meme "Pepe the Frog", inspired by the iconic frog Pepe.

According to the introduction on Pepe's official website, Pepe is here to make meme coins great again. The token has no pre-sale, zero tax, LP has been destroyed and the contract has been abandoned.

3. The origin of pepe

Meme coins can trace their origins back to Dogecoin (DOGE) in late 2013 and peaked during the 2021 bull run.

In 2021, DOGE coin gained mainstream popularity, growing from a market value of $700 million on January 1 to $88 billion at the beginning of May, an increase of more than 100 times in market value in 4 months.

Following Dogecoin’s run, Shiba Inu (SHIB) reached a market cap of $42 billion at the end of October, from less than $1 million at the beginning of the year. These dog-themed assets have no intrinsic value, but their association with viral internet memes has driven their popularity among cryptocurrency and retail users.

At present, the market value of DOGE is about 11.2 billion US dollars. Of course, the surge in DOGE tokens is also closely related to the world's richest man Musk, who has mentioned his love for DOGE many times on Twitter and recently changed the location of his Twitter account to XD (X is Twitter's new logo, D is Doge). The promotion of such an influential world-class technology influencer has a great impact on the development of DOGE.

The popularity of pepe coins stems from the creation of the Pepe the Frog character by Matt Furie in the 2005 cartoon “Boys Club.”

After the original Pepe drawing and later variations achieved viral popularity on internet platforms such as 4chan and Tumblr in the 2010s, Pepe was embraced by the cryptocurrency community and quickly became part of crypto cultural lore.

The anonymous team that released PEPE took advantage of Pepe the Frog’s existing popularity on Twitter and created a meme campaign to drive early adoption, a strategy that arguably was unexpectedly successful.

The PEPE token was launched on April 14 this year. By May 5, the number of token holders’ addresses reached 100,000, which took only 22 days. This rapid growth is unprecedented in the history of cryptocurrency.

In addition, the market value of PEPE reached more than 1 billion US dollars in just 23 days after the token was launched. In less than a month, the increase reached 120,000 times. The price increased from 10 zeros before the decimal point when it was launched to 5 zeros, which attracted great attention from the market.

4. PEPE Token

According to the official website, the total number of PEPE tokens is 420,690,000,000,000 (420 trillion), of which 93.1% of PEPE tokens are sent to the liquidity pool, and the remaining 6.9% of the tokens are stored in a multi-signature wallet, which will only be used for future centralized exchange listings, bridges and liquidity pools.

At present, PEPE does not have any token economic utility. Of course, this is also a feature of many MEME tokens. In the future, the PEPE token may also be given some usage scenarios. After all, new narratives are needed to support it in the future.

V. Development Stage

According to the roadmap published on PEPE’s official website (https://www.pepe.vip/), its future plans are mainly divided into three steps.

The first step is to be listed on CoinGecko and CoinMarketCap as a meme coin, have 1,000 holding addresses, and be mentioned by more people on Twitter.

The second step is to Vibe and HODL, maintain community partnerships with the Pepe Times newsletter, provide holders with a dedicated discord channel, and list on a centralized exchange with 10,000 holding addresses.

The third step is to develop the token economy and create Pepe-themed products. Customers can use PEPE tokens to purchase them, and part of the income will be destroyed. PEPE Academy and Pepe Tools will be launched online, and they will also be listed on first-tier centralized exchanges, with 100,000 holding addresses. At the same time, it has proposed the gimmick of surpassing Bitcoin.

The first and second steps have already been achieved. The development speed of PEPE has far exceeded the team's expectations. After the token was issued on April 14, the growth rate was slower on the first and second days. On the third day, the number of PEPE holding addresses reached more than 2,700. On the fifth day, the number of holding addresses reached more than 16,000. By May 5, the number of PEPE holding addresses exceeded 100,000. It took only more than 20 days from 0 to 100,000.

We can feel the growth rate of PEPE by comparing it with Shib.

When SHIB entered a period of super-fast growth in 2021, it took 90 days for the token to reach 100,000 holder addresses. In comparison, PEPE's development speed is much faster.

By observing the development patterns of other meme coins, we can find that meme coins generally use cultural narratives and speculation to ignite the market and build consensus in the early stage. When the consensus demand of meme narratives reaches saturation, it is necessary to pursue substantive functional exploration to expand users and support market value.

In other words, the first stage is the running of the financial flywheel, and the second stage is the implementation of the narrative.

For example, after doge achieved great success, it began to explore payment and reward scenarios to realize its functional value. Similarly, after Shib achieved success, it also began to announce the launch of its ecosystem, such as shibaswap and nft.

Based on the same logic, PEPE coin will continue to explore new application scenarios in the future to support its market value.

6. Driving Force

What force is driving the surge in PEPE coins?

Of course, there are many influencing factors. The surge in PEPE is the result of the combined effect of many factors. It is difficult for us to summarize an accurate model for detailed explanation. For ease of understanding, we will try to interpret it from only three perspectives below.

1、FOMO

After witnessing the huge wealth effect brought about by the crazy surge in Dogecoin and SHIB, people have been looking for the next MEME coin.

The emergence of PEPE and its rapid growth have stimulated people’s FOMO emotions, fearing that they will miss out on such good opportunities as 100x and 1,000x MEME coins. Therefore, the faster the initial growth, the more people will buy in, which is a self-reinforcing process. It took less than a month for PEPE to be issued and the number of addresses holding tokens exceeded 100,000.

Moreover, like other MEME coins, PEPE has a very high total token amount, and the price in the secondary market has many zero digits after the decimal point. From a personal perspective, if we use $100 to buy mainstream coins, whether it is BTC or ETH, it is far from enough to buy 1 coin. This does not constitute any impact on personal feelings, and it will discourage small funds.

Imagine, would we buy Bitcoin with $100? Whether from the perspective of expected increase or personal perception, there is not much motivation to buy. After all, the price of Bitcoin is already so high. Even if it increases 10 times, $100 will only become $1,000.

But MEME coin is different. Its price can increase by thousands of times at any time. If 100 US dollars increases by 1,000 times, it will be 100,000 US dollars. Moreover, the number of tokens that can be purchased with 100 US dollars is huge.

According to the current price, it only costs more than 100 US dollars to buy 100 million PEPE tokens. 1000 US dollars can buy 1 billion. The number of purchases by users is in the hundreds of millions. This has a strong impact on users or investors and caters to the psychological needs of investors. Whether it is the expectation of future growth or the perception of purchase quantity, buying meme tokens such as PEPE is incomparable to buying other mainstream currencies.

Moreover, $100 is an amount that most people can afford to lose. Even if the PEPE token eventually returns to zero, the maximum loss is more than $100. This is very common in the highly volatile crypto market, and it is a loss that everyone can afford by default. But if it soars, its increase may be very amazing. This asymmetry of returns and risks prompts a large number of people to buy. PEPE, like other MEME coins, is suitable for games that are small-scale and big-risk.

2. Promotion from top exchanges

In addition to arousing people's FOMO emotions, exchanges also played a significant role in the development of PEPE.

For example, it took only 6 days for the PEPE token to be listed on the MEXC exchange, which was also the first centralized exchange it was listed on. From the issuance of the token, it took a total of 22 days to be listed on Binance, the world's largest cryptocurrency exchange. This is a treatment that many other mainstream tokens do not have. After all, there is still a certain threshold for listing on Binance.

Of course, exchanges want to earn transaction fees, so they will choose to list the tokens that are most popular. For a token that has reached over 100,000 holding addresses in just over 20 days, exchanges will certainly not miss the opportunity and will rush to list it. In addition to Binance, other exchanges include OKX Exchange, Huobi Exchange, and others.

The launch of these leading exchanges not only lowers the threshold for users to speculate, but also, with the user base of exchanges such as Binance, brings more users and funds to the PEPE token.

3. Spread of stories about getting rich quickly

In addition, the stories of early users getting rich quickly are also attracting more users to join the market. After all, the huge increase in PEPE has indeed made a group of early users rich, and these stories of getting rich quickly will become the driving force for more users to join.

7. Future Potential

In the Memecoin sector, Pepe ranks third in market capitalization, behind Dogecoin and Shib.

Let’s compare the top 3 Meme coins by market capitalization:

Dogecoin market value: US$10.3 billion, ranking 7th in the entire crypto market.

Shib coin market value: US$6 billion, ranking 14th in the entire crypto market.

PEPE coin market value: US$500 million, ranking 75th in the entire crypto market.

At present, the market value of PEPE is only one-twelfth of SHIB and only one-twentieth of Dogecoin.

Let’s compare the number of addresses holding Shib and Pepe tokens.

According to statistics from the dune platform, the number of addresses holding SHIB tokens is currently over 1.4 million, while the number of addresses holding PEPE tokens is over 130,000. The difference between the two is almost 10 times. The number of addresses holding PEPE tokens cannot even be compared with DOGE.

Let’s look at a comparison of social media data.

SHIB's Twitter account has 3.72 million followers, DOGE's Twitter account has 3.84 million followers, and PEPE's Twitter account has 430,000 followers, a difference of more than 9 times.

Besides, it is still a bear market. Once the bull market comes, the increase in MEME coin will be very exaggerated, and of course it will also benefit PEPE.

Therefore, compared with these top Meme coins, PEPE still has a lot of room for development. After all, compared with DOGE and SHIB, PEPE was only issued in April this year, and only a few months have passed. It is already quite good to achieve such results.

Of course, as to how much the future market value of PEPE will reach and whether it can surpass the leading Meme coins such as SHIB and DOGE, everything is unknown. It also depends on the future layout of PEPE. HorairballoonCN will continue to pay attention to the development of PEPE and other MEME coins.