What is a Memecoin? From Dogecoin to Dogwifhat

In the early days of cryptocurrency, the focus was mostly on serious use cases. Bitcoin aimed to create decentralised digital money. Ethereum aimed to provide a global smart contract platform.

Then Dogecoin appeared. Launched in 2013 as a joke about the self-importance of crypto culture, it used a Shiba Inu dog from a popular internet meme as its mascot.

The joke did not disappear. Instead, it helped create a multi‑billion euro market segment that often ignores traditional financial logic. Today, memecoins are a visible part of the crypto market. Their value is strongly linked to humour, community strength, and online attention, rather than fundamentals such as revenue or cash flow.

Defining a memecoin

A memecoin is a cryptocurrency that is mainly based on internet memes, viral trends, or pop culture references.

Unlike many so‑called utility tokens, which may provide access to a platform or service, or cryptoassets promoted as a store of value, memecoins are usually driven by social sentiment and speculation.

They often exist on the same advanced blockchains as more established projects. However, their main purpose tends to be community engagement, trading, and viral visibility, not long‑term technical innovation.

When a community is active and vocal, prices can rise quickly. When interest fades, prices can fall just as fast, sometimes to almost zero. There is rarely any underlying cash flow or formal business model to support the price.

The psychology of unit bias

Many memecoins have a very large circulating supply, sometimes in the trillions. This leads to very low prices per token, for example €0.00001 per unit.

This can trigger what is known as unit bias. People often feel more satisfied owning one million units of a very cheap token than owning a small fraction of a more expensive asset such as Bitcoin, even if the total amount invested is the same, for example €100.

This psychological effect does not change the actual economic value of the investment. Whether a person buys 0.001 BTC or 10,000,000 units of a memecoin, the important figure is the total amount spent and the future price movement, not the number of units.

The major players

The memecoin market has expanded well beyond the original dog mascot. Below are some of the most widely recognised examples. Inclusion here is for illustration only and is not a recommendation to buy, sell, or hold any asset.

Dogecoin (DOGE)
Dogecoin is often described as the first major memecoin. It operates on its own blockchain, which is a fork of Litecoin.

It is widely known, has been publicly mentioned by high‑profile individuals such as Elon Musk, and is sometimes used for payments because of relatively low transaction fees. Despite this, it still has no capped supply and its long‑term economic model remains uncertain.

Shiba Inu (SHIB)
Shiba Inu launched on the Ethereum network as a self‑described competitor to Dogecoin. Over time, its developers have added additional features, including a decentralised exchange called ShibaSwap and a Layer‑2 network known as Shibarium.

These additions seek to create more utility around the token. Even so, SHIB continues to be strongly influenced by meme culture and speculative trading, and its price is highly volatile.

Pepe (PEPE)
Pepe launched in 2023, using the well‑known “Pepe the Frog” internet character as its central meme. Unlike projects that highlight extensive roadmaps or complex features, Pepe presented itself openly as a pure memecoin.

Its price performance has been closely tied to the recognisability of the meme and the enthusiasm of its community. As with many memecoins, there is no guarantee that this interest will persist over time.

Bonk (BONK) and Dogwifhat (WIF)
Bonk and Dogwifhat are examples of prominent memecoins on the Solana blockchain, which has become popular for high‑speed, low‑cost trading.

Bonk distributed a large airdrop to Solana users, aiming to energise the community after a previous market downturn. Dogwifhat, often called WIF, gained attention for its simple theme: a dog wearing a pink knitted hat.

Both tokens reflect the kind of absurdist humour and viral imagery that often drives interest in this sector, rather than clear long‑term use cases.

How memecoins work in practice

To understand memecoins, it can be useful to think of them partly as social networks, not just as technology projects or payment systems.

The launch and viral spread
On modern blockchains, especially high‑throughput networks such as Solana, a new token can be launched very quickly. A developer can create a token that references a breaking news story, a celebrity moment, or a trending video.

They then add liquidity on a decentralised exchange and start promoting it in online spaces such as X (formerly Twitter), Telegram, or Discord. In some cases, anonymous teams are involved, which can increase risk because accountability is limited.

Community takeover
If a memecoin gains attention, community members may start to promote it voluntarily. They create memes, post comments, and encourage others to look at the token. In crypto slang, this is often called “shilling”.

If more people buy, the price can rise. This can attract new traders, which can create a feedback loop. However, the reverse is also true. If sentiment turns negative or buyers lose interest, selling pressure can accelerate and prices can fall very quickly.

The “supercycle” trend
In 2024 and 2025, memecoins on several blockchains, including Solana and Ethereum, sometimes outperformed more technically focused projects for short periods.

New sub‑categories emerged, such as “PolitiFi” tokens that referenced political figures, and AI‑themed memecoins where automated tools or bots promoted tokens online. This did not remove the underlying risks. Many of these tokens saw rapid boom‑and‑bust cycles.

Risks and red flags

Memecoins are among the highest‑risk parts of the crypto market. Many new tokens lose most or all of their value, often within a short time frame. You should be prepared for the possibility of losing your entire investment.

Some key risks include:

• Extreme volatility
  It is common for a memecoin to fall by 50% in a few hours or rise by 100% in a single day. This price movement can go in either direction and can be driven by social media trends, influencer posts, or overall market sentiment.
  Traders who buy during a hype phase may see the price drop sharply once attention moves elsewhere.

• Rug pulls and scams
  Since creating a token is relatively easy, some developers launch memecoins with the intention of taking advantage of buyers. They may add initial liquidity, wait for other people to buy, then remove the liquidity or sell large holdings, leaving others with tokens that cannot be sold at a reasonable price.
  This type of exit scam is often called a “rug pull”.

• Concentration risk
  In many projects, a small number of “whales” or early holders control a significant share of the total supply. If these large holders choose to sell, the price can fall very quickly, causing a chain reaction of further selling.
  Smaller holders may find it difficult to exit without accepting major losses.

• Limited staying power
  Internet memes often have a short life. Once a joke or trend feels old, community activity can fade and liquidity can dry up. Only a very small number of memecoins have remained relevant across multiple market cycles.
  Past popularity is not a reliable guide to future performance.

• Regulatory uncertainty
  The regulatory treatment of different cryptoassets, including memecoins, continues to evolve. Under frameworks such as MiCA in the European Union, issuers and service providers may need to meet specific disclosure and conduct standards.
  Tokens issued without clear documentation or responsible teams may expose buyers to additional legal and operational risks.

Why memecoins matter

Despite their speculative nature, memecoins have had a clear impact on the wider crypto market.

They often act as an entry point for new users who are attracted by humour, community, or the low unit price of tokens. Many people learn how to set up a wallet, use a decentralised exchange, and manage private keys for the first time through memecoin trading.

Memecoins also illustrate how powerful online culture can be when combined with financial markets. Collective mood, jokes, and shared symbols can move large amounts of capital, sometimes with little connection to underlying value.

At the same time, memecoins highlight the importance of personal responsibility. Research, risk management, and a clear understanding of potential losses are essential. Anyone considering memecoins should treat them as highly speculative, and only commit money they can afford to lose entirely.