Regardless of what generation you represent, there's one unifying factor: no one wants to be left behind, as FOMO is a real thing. Some could say that it is an innate characteristic of human psychology, and since the dawn of time, we have moved from one trend to another. Since the inception of blockchain and crypto in 2009, everyone has been going crazy each time something new is introduced. And while permissionless transactions, decentralized finances and even NFTs (everyone's favorite JPEGs that anyone can copy) at least made some sense, one thing always stood apart: meme coins.
Suppose you look up the word "meme" in the dictionary. In that case, it's a humorous image, video, or piece of text that is copied, usually with slight variations and spread rapidly on the internet, as the users would say 'for the lols'. Nevertheless, some meme coins have not just ballooned in value and gained multibillion-dollar market caps but have become a viable payment method for non-crypto businesses. So the crypto community is somewhat divided on whether the characteristics of these coins suggest that they offer some form of underlying utility or lack any fundamental value or unique use cases.
On one side of the crypto front, investors are saying that the actual value of meme coins lies within the community, while the other camp maintains that meme coins are pure speculation. The former group argues that meme coins are designed just like any other cryptocurrency, and if enough people can envision a token's value, then there is no difference. At the same time, the opposition points out that meme coins are not created to improve usability or efficiency levels within the industry but rather to play on the volatility aspect of crypto.
In today's editorial, I welcome you to join me in the quest to find the value of meme coins by examining two industry titans, Dogecoin (DOGE) and ApeCoin (APE), along with a new aspiring project, Big Eyes (BIG). We will look at each token, consider its value proposition, and see what makes them unique to determine which camp of crypto is right. Ultimately, we will settle once and for all: is it worth investing in meme coins? Let's dig in.
The OG and most prominent meme coin is Dogecoin (DOGE) was created in 2013 by software engineers Billy Markus and Jackson Palmer. Although the founders initially made the token to make fun of Bitcoin due to an unexpected turn of events, DOGE assumed almost a spiritual level of support among the crypto flock. Fast forward ten years and DOGE is comfortably maintaining its position among the top-10 cryptocurrencies by market capitalization, with major expansion plans.
Although the road to success was steep, with a few pitfalls, the community around the project defined the token's successful development from day one. For example, in 2014, the Jamaican bobsleigh team qualified for the Winter Olympics in Sochi, Russia, but did not have money to fund the trip. The Dogecoin community raised the necessary $30,000 for a good cause, helping the team to realize their life-long dream. The story was quickly picked up by major news outlets, paving the way for investors to start recognizing the project's value, which ironically was the people who believed in DOGE.
However, community approval peaked when the eccentric billionaire SpaceX CEO Elon Musk publicly claimed he supported the coin. Ever since his appearance on Saturday Night Live, Musk continuously promoted the Dogecoin project, which as a result, skyrocketed in value, hitting a whopping market cap of $88 billion in May 2021. But the bull ride did not last long, and when the crypto winter came at the beginning of 2022, meme coins started to lose value drastically. A change was needed to drive more intrinsic significance to the cryptocurrency, as only the community's support was not enough to sustain the king of meme coins status quo, or wasn't it?
This was when Elon Musk came to the rescue, yet again, by revealing two significant developments: Dogecoin to be accepted as payments for Tesla and that the electric car company possesses vast amounts of the cryptocurrency in its reserves. When this information became public, the price of DOGE gradually began to recover and is currently enjoying almost a month of steady growth, hitting the $0,0813 mark at the time of writing.
Sure, a couple of updates were released in July 2022, improving the coin's scalability and security. Still, it looks like without the community's support, a prosperous future at this point is unfeasible simply because the coin personifies the community and vice versa. In this light, DOGE is genuinely a unique use case as only based on the backing of the people around the project, including celebrities like Elon Musk, does the meme coin stay afloat.
ApeCoin is a fascinating example of how a project's value can be boosted by combining the existing brand and community support to create a product that appeals beyond the initial audience but fails to reach the expected potential. However, its story somewhat differs from other meme coins; let me elaborate. In a nutshell, the ApeCoin is the Ethereum-based ERC-20 token made for the growing Bored Ape Yacht Club (BAYC) ecosystem, which includes a native Metaverse, games and the NFT community.
The main objective of creating ApeCoin was the promotion of decentralization, where developers aimed for the APE token to become the driving force of the ApeCoin DAO. The decentralized autonomous organization would enable its members to decide on the ecosystem's fund allocation, governance rules, future projects, partnerships, and other plans.
Although the token's original design was made to facilitate governance of DAO, its utility side surprisingly became more attractive for the investors outside the community. As a Web 3.0 coin, ApeCoin started to be used for payment, with Gucci being among the latest addition of merchants to accept it. On top of that, the coin has already been used as the reward for owning BAYC NFTs, where holders can receive an immediate airdrop for simply purchasing the bored-looking ape JPEGs.
Another example of how third-party developers use ApeCoin to play a role in the ecosystem and incorporate the token into their services is the Animoca Brands Benji Bananas game. This mobile Play-to-Earn application incentivizes its players to compete for a special in-game token that can be swapped for ApeCoin. However, if you look at the graph below, despite the number of industry use cases and the strong support from the community, the token's price has declined rapidly since its peak.
Source: Zipmex.com
Many have blamed the decline of the NFT market since the BAYC is the backbone of the broader ApeCoin ecosystem. Despite being valid to some extent, I believe there is a different reason for the token's recent debacle. Namely, the divide within the community prevents ApeCoin from taking off into the stratosphere. At the beginning of this summer, ApeCoin DAO voted on whether to remain on the Ethereum blockchain or migrate to a different blockchain. The final results revealed ApeCoin holders' support to remain on Ethereum by a narrow margin. Such a state of affairs drastically differs from the sense of solidarity and the unequivocal support exhibited by the DOGE community.
Big Eyes is a new meme coin on the crypto block that looks like it learned from the experience of ApeCoin and Dogecoin to provide a uniquely balanced product. Essentially, the project strives to simultaneously have a use case within the industry and unite the community under a single good cause. Let's start with the utility side. Like ApeCoin, Big Eyes wants to build a broader ecosystem around the project, ranging from DeFi services to the NFT marketplace.
The choice of the industry niches is understandable, considering that in the past couple of years, both have dominated the crypto scene, with NFT totalling sales in 2021 amounting to $40 billion and DeFi's total value locked (TVL) exceeding $236 billion in the same year. Despite the current market downtrend, DeFi and NFTs will likely get back on the saddle soon, so flipping your favorite Big Eyes JPEGs and yielding BIG, the project's native token, could be a highly lucrative pastime.
What could make this process even more enjoyable is that within the DeFi Big Eyes ecosystem, there will be no charges or taxes implemented. This means no costs for Big Eyes Swap, where swapping or transferring crypto will be completely hustle-free. A similar principle will apply to the Big Eyes NFT marketplace, which could become the go-place for many JPEGs aficionados. The only tax that will be imposed is when an NFT is resold, meaning that 4% will go to the original owner, 5% to the holders of BIG tokens and 1% to the charity.
Regarding the community side, Big Eyes structures its fan base around the idea of protecting the environment. However, instead of giving empty promises, as many companies did in the past, the project has a very transparent strategy laid out in its White Paper. For example, 5% of the token supply will be held in the project's charity wallet dedicated to protecting ocean marine life. On top of that, the aforementioned 1% from reselling the NFTs will be decided by the holders of BIG tokens to spend on the charity of their preference.
If you've kept reading until this point, then you are probably still wondering whether meme coins are a good investment, as based on the provided examples, the answer is somewhere in between. The answer would differ with each coin, so let's start with DOGE. The king of meme coins is probably the wildest card out of the three tokens discussed because it relies too much on the community and the external factors, so the price could really go either way.
The case of ApeCoin is different because clearly, it has been underperforming considering its multiple use cases and the general appeal to the audience beyond the BAYC community. The recently released metaverse game 'Otherside' could change the project's status quo. However, there is no indication of unity within the ApeCoin DAO, which is still the biggest hindrance to the project's success. As long as this is resolved, the sky's the limit for ApeCoin and its community of bored-looking apes enthusiasts.
Judging by the project's value proposition, accompanied by a unique marketing strategy to incentivize and build the community around the noble goal, Big Eyes looks like a potentially winning hand. No wonder it is looking to raise more than $50 million in presale because all the ingredients for success are there, albeit the implementation is always crucial, so we will see how everything will unravel.
As you could have guessed, investing in meme coins is risky, but it can pay off handsomely, and they say that fortune favors the brave. While the mentioned coins are of particular importance and could witness wild returns, be sure to always do your own research. Happy trading!
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.