Meme Finance (MemeFi) is a concept that refers to the combination of Memecoin and DeFi, in order to bridge the gap between the memecoin-inspired cryptocurrency and the product’s applicability in the financial market. Learn about MemeFi!
What is Meme Finance (MemeFi)?
Meme Finance (MemeFi) is a combined concept of Memecoin and DeFi, promising to create a financial foundation for the sustainable development of the memecoin ecosystem. MemeFi bridges the gap between the memecoin-inspired cryptocurrency and the product’s applicability in the financial markets.
Return of the memecoin
Memecoins are inspired by online memes, which are increasingly noticed and widely used by users. This created a “memecoin craze”.
Memecoins like the original Dogecoin have the same popularity as Bitcoin or Ethereum. Dogecoin also started a long-running “dog” meme movement, exploding on all fronts of the ecosystem. This is said to be a success of the meme when it comes to market capitalization and marks a step forward for memecoins in the crypto market.
From around Q2/2023, PEPE Coin, a memecoin inspired by the famous green frog on the internet, has exploded into the “madness” of the market. The biggest success of PEPE was the announcement by Binance that it would list PEPE token, although it was later delayed, but PEPE still successfully laid the foundation for the meme trend to develop.
The common point of these “successes” is a powerful community, great forces behind or a really outstanding feature:
Foodcoin – Meme coin “food”, featuring Sushi is still active
Safemoon – a system labeled “Ponzi”
Dogecoin thanks to the influence of Elon Musk
PEPE – the green frog is very popular in the worldwide meme user community
Memecoin “as numerous as the army”
Since Dogecoin, one of the first and most popular memecoins, became a phenomenon, memecoins have become a notable niche in the crypto market. This promotes the development and launch of many new memecoins that take on many forms and have their own unique features.
The number of memecoins has increased dramatically, with hundreds, even thousands of memecoin projects being launched. The form of memecoin has also become more diverse. Some memecoins also have significant value growth, creating great profit opportunities. Memecoins highlight the intersection of fun, art, and finance.
At the time of writing, according to statistical data from CoinGecko:
There are about 250 memecoins
Market capitalization: $16.74 billion
24h trading volume: 919 million USD
Number of memecoins on CoinGecKo
According to data from CoinMarketCap:
There are about 750 memecoins
Market capitalization: 16.77 billion USD
24h trading volume: 1.1 billion USD
Number of memecoins on CoinMarketCap
However, as with any other cryptocurrency, memecoins also carry risks. The rapid growth and high volatility of memecoins can lead to sudden price drops or risks of rug pull, hacks, etc. Some memecoins may experience problems with project management, transparency and sustainability.
Therefore, it is very important to understand the fundamentals and do thorough research before investing in memecoins.
“Change name, change last name” – meme is always just “meme”?
We can find thousands of tweets on Twitter with memecoin related content. And it is not difficult to come across content types with a series of hashtags referring to many token memes.
Looking back, however, we all see a common pattern for previous meme projects:
Memecoin: grow from a funny meme (or not) or tell a story of its own.
“The more sketchy, the better”: memes are simply memes, pictures and expressions. No need to have a formal website, no docs or whitepaper, most meme projects just build social media channels like twitter, discord, telegram.
Build community: the larger the user community, the more popular the meme becomes. Moreover, the culture of the meme community is also very different from other coins and tokens. There is no need to be polite or dignified, the meme has its “silly” and “quality” character.
Marketing: One of the most common ways is to use popular hashtags on twitter and tag a bunch of other token memes. Besides, intentionally reaching users through running spam posting bots, constantly mentioning hashtags of meme projects to reach the top trending.
A twitter account has caught the attention of the community when it only took 27 seconds to create a token meme on the Ethereum network. Then another user broke this record when completing the operation in just 23 seconds.
However, the point here is not how many seconds. We see the ease of token creation, and factors such as security or builders are actually somewhat absent from the perspective of the memecoin ecosystem. As a result, there are many scam projects that attack the negligence of users with fake links, a type of phishing attack.
It’s also how creators of memecoins can “monetize” the content they create. However, it cannot be denied that there are projects that really hold the position of memes in the hearts of users such as Dogecoin, PEPE Coin, Shiba…
Will MemeFi summer become DeFi 2.0?
Until now, memecoins were just memes, so the projects in this puzzle were not too focused to develop and most of them just followed the trend or in the short term. Therefore, in general, the overall memecoin ecosystem also has many limitations:
Liquidity: Liquidity is a prerequisite in any market, not only in memecoin but also in the vast DeFi market.
Volatility: According to information from CoinMarketCap and CoinGecKo, there are many memecoins on the market, but not many tokens are actually traded and have almost no value. Most memecoins carry a high level of risk and price volatility.
Security: DeFi is a risky market, and the memecoin market has more than that. Because memecoin is simple, rug pull, scam, liquidity attack can happen very easily, completely depending on the “ethics” of its developers.
Capital Efficiency: Since its launch, DeFi has provided users with a fertile ground to grow and use their capital most effectively. Memecoin is not like that. Therefore, for memecoin to develop more, the efficiency of capital use is also a limitation that the memecoin market needs to improve.
Not many use cases: despite being developed on top of the Ethereum ecosystem, memecoins are generally worth nothing but buying and selling.
DeFi also had DeFi 2.0 to solve the inadequacies of DeFi with its rapid growth. Although not really giving crypto a new face. However, the efforts to get decentralized finance into mass adoption are undeniable.
Memecoin is an indispensable “spice” of crypto. The strong growth of memecoin has opened up many new opportunities. Thus, MemeFi was born.
Just like how DeFi 2.0 came about, MemeFi is expected to solve the limitations and take the memecoin ecosystem to the next level. Simple, MemeFi’s formula:
MemeFi = Memecoin + DeFi + “a story for growth”
The value that MemeFi can bring
Increasing use cases for memecoins is probably the first thing to think about when you want to develop a sustainable meme ecosystem. These utilities could include the ability to interoperate with smart contracts, integrate DeFi applications, operate a project management system, or even interact with other networks.
If the above utilities can be deployed, MemeFi promises to bring memecoin development to a new level, both a challenge and an opportunity to enhance value and be applied in many different industries and fields. .
Some possible values:
Increased sustainability: if utilities can be integrated, memecoin can increase trust among users. Going beyond entertainment, more than just a “meme”, memecoins attract a larger user base, increase their long-term performance potential, and survive in a volatile and fast-moving market like crypto. . In other words, building trust for users.
Expanding use cases: so far, the fact that memecoins have no practical application beyond buying and selling makes memecoins not attractive to many types of investors in the market. DeFi offers a full range of financial tools with a specific application that makes the financial picture more complete. Memecoin if it is possible to expand the applicability of meme, there will be potential for further development.
DAO: community for DeFi projects means more than just a community of product advocates. Memecoin has only worked from the project side so far, users who buy tokens do not have administrative rights. Establishing a DAO can help memecoin operate more stably and sustainably.
Multichain: the memecoin that thrives on the Ethereum network also causes many barriers for users. The fact that memecoin can develop multichain is also a bright spot that the meme system can do. It’s not just cooperation to grow, but it can also help liquidity work more efficiently.
The emergence of MemeFi is a challenge as well as an opportunity. Capturing to develop or not depends on many components in the market. The success or failure of a trend cannot be said in the short term. So let’s wait and see in the near future, how the meme will develop.