Exploring memecoin domination

How massive is the memecoin space?

Memecoins have captured the attention of the crypto industry. They have evolved from simple jokes into prominent financial instruments. Originating from social media trends and memes, they effectively resonate with a wide audience that goes beyond the traditional investor archetype.

Unlike traditional cryptocurrencies, which aim to solve complex problems or offer new infrastructure solutions, memecoins are often created for fun and leverage the viral nature of internet culture to gain popularity and value.

This gives space to the question: Do Jokes Drive the Crypto Community? 

Let’s dive into their story, and try to uncover how important they are for the crypto industry as a whole.

History Lesson: What are memecoins?

Memecoins are a crypto subcategory that are built using the same underlying technology as more serious cryptocurrencies, but differentiate themselves by not having a real purpose or financial metrics to derive their value from; instead they derive their value and popularity from social media hype and community belonging.

However, memecoins are more than just a crypto subcategory. They represent a cultural phenomenon that has driven a movement on the internet.

Originating from social media trends and memes, these tokens effectively connect with a broad audience that reaches far beyond the traditional crypto investor.

Moreover, whilst memecoins are often initially created as a joke and for fun, some evolve into purpose-oriented projects. Despite this, their viral nature and power in the industry is to be appreciated. 

This nature often makes them an attractive investment that appeals to younger and crypto-native investors who are active on social media like Twitter and Discord. Their internet-based existence, accompanied by the heavily-online presence of investors make memecoins a very quick-spreading and rapidly-growing asset class that reach recognition and monetary support in a very short time.

Early Days of Altcoins

Long before the term “memecoins” became popular, there were alternative cryptos to Bitcoin that were characterized by also being among the first cryptocurrencies created, while also offering different features to Bitcoin. Known as “altcoins”, they became a gateway for innovation in the space and diversification opportunities for investors.

In these early days of the crypto industry, many altcoins emerged to address perceived limitations of Bitcoin or offer new unique utilities. Litecoin (LTC) was created in 2011 and is one of the earliest and known examples of this subcategory. Litecoin was created to be a crypto for small transactions and to be seen as “silver to Bitcoin’s gold”. Another example of an early altcoin was Namecoin which was launched in 2011 with the aim to create a decentralized domain name system (DNS) to increase internet freedom and security, thus solving a real problem.

On the other hand, Dogecoin emerged as a less serious project that started as a satirical cryptocurrency making fun at the support that Bitcoin had garnered.

Not all made it

There are many altcoins from the early days that didn’t make it though. For example, Feathercoin (FTC), launched in 2013, aimed to improve on Bitcoin’s technology with faster block times and a more democratic mining process. Despite initial interest, Feathercoin struggled to maintain relevance and currently has a market cap of less than $3M, having lost 98.2% of its value.

Similarly, Peercoin (PPC), launched in 2012, was one of the first cryptocurrencies to implement a proof-of-stake (PoS) consensus mechanism alongside proof-of-work (PoW). Peercoin was designed to be energy-efficient and secure, but it eventually lost momentum as more advanced projects came out.

There’s a vast number of altcoins that, like many crypto projects, didn’t make it in the long-term. However, what’s important is that these early altcoins played a crucial role in the crypto industry’s history, as they were the first approach to innovation and they serve as the precedent for the alternative crypto class this article is about: memecoins.

The Rise of Ethereum: the Birth of Memecoins

There is one blockchain project that played a pivotal role in the birth of memecoins as we know them today and without it, the category would probably not be the same as it is today.

Said project is Ethereum.

Smart Contracts

The reason why Ethereum marked a significant turning point for the crypto industry, is due to enabling the creation of dApps and tokens through smart contracts which revolutionized the usability of blockchains. Smart contracts represented the first foundation for the creation of tokens, which in turn, paved the way for the rise of memecoins.

As self-executing digital contracts, Ethereum’s smart contracts were designed to function without an intermediary and to execute automatically when predefined conditions are met. This unlocked many use cases including the creation of dApps and tokens, with the latter specifically leveraging smart contracts to contain rules for token issuance, transfers, and other functionalities.

With the creation of tokens, ICOs (Initial Coin Offerings) also became popular. ICOs allowed projects to raise funds by issuing their own tokens and selling them directly to investors, granting them a stake in the project in exchange for capital.

Creation of memecoins

Not long after, the same infrastructure and ease of token creation made it easy for any developer to create new tokens. With token standards like ERC-20, virtually anyone could create and launch a token for purposes that expanded beyond raising funds for a project.

For reference, it will take you 30 minutes to launch an ERC-20 token if you’ve never done it before: https://www.youtube.com/watch?v=bgz4jahgaW0 

In a certain way, the adoption of ICOs showcased the potential of tokens as means to raise money, laying the foundation for the creation of many tokens, including memecoins.  

Memecoins were initially inspired by trends or memes, often created for the purpose of showing satire, for fun, or even to provide buyers false hopes of becoming rich. Typically with no real use case or underlying value to back the token, memecoins were frequently marketed as quick profit opportunities as their creators leveraged social media to create hype that attracted investors, creating lots of speculation. While many early adopters did see substantial returns, many other investors were left in the dark and with worthless tokens that lost their value in the long-term.

Despite their unserious beginnings, some memecoins have risen to substantial market caps. As an example, Dogecoin (DOGE) started as a joke, but has grown into one of the most famous cryptocurrencies with a market cap of $17.85B at the time of writing. Similarly, Shiba Inu was launched into the market as a competitor for Dogecoin with only $3,000 in liquidity but grew at an astounding pace, reaching its current market cap of $10.14B.

The Present (and Future?) of Memecoins

As you can already picture, the landscape of memecoins is constantly changing, but one thing is certain: they have an ever-lasting appeal and influence in the overall crypto market. As time passes by, memecoins tend to have a more pronounced presence and are becoming a more interesting category.  

Ethereum Memecoins: Popularity and Decline

Between 2020 and 2021, Ethereum memecoins emerged as pioneers in their category, quickly gaining attention and funding. The graph below shows a massive spike in volume during this period, which coincided with Bitcoin’s price peaks. This period in time was marked by lots of speculative hype as Ethereum memecoins rode the industry-wide boom that crypto was experiencing.

Source: Daily memecoin volume by chain across cycles. @daedalus_angels Dune Dashboard.

In contrast, the same chart reveals how the current 2023 to 2024 cycle has experienced a drastic decline in Ethereum memecoin volume, even as Bitcoin’s prices exceeded those of the past cycle. While there are many factors that influence this phenomenon, a critical one is Ethereum’s scalability challenges that make Ethereum a less ideal network for frequent and small transactions that are typical of memecoin trading.

It’s evident that the memecoin landscape is changing rapidly and what once was Ethereum’s domain, has now migrated to alternative blockchains like Solana and Base, showing that the same cyclical nature of memecoins applies to the foundational network on which they exist too.

Solana: Rising Ecosystem for Memecoins

Solana memecoins have experienced a significant rise in volume during the ongoing cycle, this rise is even more pronounced when comparing it to the null activity during the last cycle. This surge in activity also aligns with Solana’s overall market capitalization.

As can be appreciated below, Solana memecoins didn’t gain traction until the ongoing cycle despite Solana having proper support for their creation for years before. 

Source: Daily memecoin volume by chain across cycles. @daedalus_angels Dune Dashboard.

On another hand, although a much younger network, Base memecoins are experiencing similar volume increase showing how the platform quickly became a hub for these tokens. The memecoin volume on Base shows a strong correlation with Bitcoin’s price movements, suggesting that investors are increasingly looking at Base as a viable alternative for speculative activities traditionally associated with Ethereum.

Additionally, Base’s efficient transaction processing and low fees are critical factors driving this trend. As memecoins rely heavily on frequent, low-cost transactions, platforms like Base provide a more suitable environment compared to Ethereum’s higher gas fees, possibly indicating that some of Ethereum’s decline in volume has migrated onto its scaling solutions.

Source: Daily memecoin volume by chain across cycles. @daedalus_angels Dune Dashboard.

Source: New tokens by blockchain (excl. Solana) https://dune.com/queries/3729319/6272382 

A New Cycle Model?

The analysis of the charts above leads to a very clear thesis: the memecoin cycle has slowly moved from Ethereum onto other chains like Solana and Base. While the paradigm change is due to Ethereum’s scalability issues or high costs, the same thesis points to how each crypto cycle brings a shift in where capital flows.

As Bitcoin prices rise, the market searches for higher returns that lead to investors to explore alternative chains that, in this case, has driven considerable memecoin activity from an ‘OG’ blockchain to alternative ones.

The evident effects of memecoins and their rapid changes in popularity and volume across different ecosystems showcase the importance of seeking where capital is flowing as an investor.  

In the end, according to Coingecko, memecoins were the most profitable in Q1 of 2024, with a performance that eclipsed that of Bitcoin and major cryptos. Based on their findings, the category recorded the highest returns of 1,312.6% on average across its top tokens.

Key note: this is across top players in the category, meaning that the performance from small-cap players is not accounted for.

As an investor, keeping an eye on shifts of the memecoin market and understanding the inflows of capital into them can provide lots of insight to make informed decisions and finding highly profitable projects early. 

Recent data further strengthens this dynamic between the overall capital inflow that the crypto market and memecoin narrative experiences. As it can be seen in the graphics below, the top 3 cryptocurrencies normally see an average daily USD inflow between $9 to $13 billion combined, while the top 3 memecoins exceed that number by double (to $20 billion) in the last 24 hours, serving an example of the memecoin’s inflow magnitude.

Source: USD Inflows to Exchanges. The Block.

Source: Memecoin Inflow Trade Volume. @dyorcrypto Dune Dashboard.


Memecoins have established their place in the cryptocurrency landscape, evolving from satirical and unserious beginnings into major financial instruments with substantial market influence. Their presence on newer chains, popularity, and volumes showcase their importance and ever-present growth potential.

Despite their humoristic nature, memecoins have an undeniable power over the crypto industry. Their cultural impact, evolution, and ongoing trends highlight their significance and potential for future growth and as the crypto ecosystem continues to evolve, memecoins will likely remain a significant part of the industry, and thus, studying them and their market performance can be key to finding financial opportunities.