#193: $PEPE: The Birth of a Memecoin
PLUS: 🔬 A Report on Brands in web3
Before we begin, I want to share that:
I hold some $PEPE. It is not a significant amount, but it has helped me to better understand the ecosystem and developments around this memecoin.
I am not promoting or suggesting that you purchase $PEPE. Rather, I encourage you to be aware of the power that memes carry and how the resulting virality can rapidly create narratives and paradigm shifts rapidly. Pattern recognition is key in a world that moves at lightspeed.
I haven’t purchased or traded memecoins or shitcoins before until this week. If you think NFTs are crazy, this is 10x more intense.
This can go to 0.
With that said, let’s get into it!
What is a shitcoin? What is a memecoin?
Courtesy of ChatGPT:
Shitcoin is a derogatory term used to describe cryptocurrencies with little to no value or utility, often associated with pump-and-dump schemes or created for nefarious purposes. Shitcoins may have weak development teams, lack a clear use case, or have little to no community support. Additionally, they might be designed to enrich the creators at the expense of investors, without any intention of creating a sustainable, long-term project.
Memecoins are a variation of a shitcoin based on memes. These coins arguably have a slightly stronger foundation because they’re based on a meme with a broader understanding.
I’ll be using the term memecoins for the rest of this piece because I don’t want to keep typing the word 💩.
What are some examples of meme coins? Here’s a sample of them ordered by market cap:
One name should look familiar: Dogecoin (DOGE), based on the classic meme:
Some quick facts:
Launched in December 2013 as a joke and quickly gained popularity within the crypto community
The peak market cap of DOGE was $88.8 billion in May 2021
At one point, DOGE was accepted as a form of payment by vendors like Sling TV, airBaltic, the Dallas Mavericks, Twitch (tipping creators), and the American Cancer Society (donations).
The current market cap is ~$11.6 billion, making the coin more valuable than companies like LG Corp, Domino’s Pizza, Draftkings, or Turkish Airlines, respectively.
When you put DOGE side by side with other cryptocurrencies, it’s has the 8th highest market cap:
Earlier this month, Twitter changed the desktop logo to the meme, causing a ~30% spike to the DOGE price. The logo reverted back after a few days, but speculation regarding DOGE integration into Twitter has begun.
What is $PEPE?
Let’s start with Pepe the meme:
Pepe the Frog is a character created by the cartoonist Matt Furie and first appeared in 2005
Over the past decades, the character and its memes have proliferated across the internet
Pepe has been adopted as one of the most popular memes in crypto and web3
Because of this, PEPE took crypto and NFT Twitter by storm this week. Just like DOGE, the memecoin started off as a joke and quickly gained momentum.
What does this momentum look like?
Yes, that’s 6 zeros before you see other numbers, which would ring alarms about how this is is worthless. And it is, or maybe it was…
But what IS value? Clearly, some folks think it’s worth something because the market cap at the time of this writing is ~$116 million, which would make it the 7th most valuable memecoin on the market.
If measured by 24 hour volume (amount of the coin that was traded in USD), PEPE is the third most active memecoin.
How did $PEPE get to where it is today?
Let’s go back to the definition of a shitcoin. Breaking it down, these coins:
have weak development teams
lack a clear use case
have little to no community support
they might be designed to enrich the creators at the expense of investors
don’t have the intention of creating a sustainable, long-term project
All of the points apply to PEPE, especially at the start. However, as the week progressed, the second and third points are being challenged.
As I started seeing PEPE being mentioned all over my Twitter timeline and in many of the Discord servers I was in, I couldn’t help but poke in some more.
One tweet a couple days ago raised my eyebrows:
Batzdu is a well respected digital artist that focuses on Pepe art. His GeoMetric Pepe collection has a floor of 3.88 ETH (~$7,500).
If we were to convert 69 billion PEPE to US Dollars at current prices, it means Batz is willing to sell one of his art pieces for 10 ETH (~$19,500). That’s a significant premium to ETH prices, but addresses one of the points called out earlier:
lack a clear use case
A single tweet from one artist doesn’t address it, but it’s a data point. If PEPE could be regarded as a form of value exchange for digital art (even if there’s a significant premium), what could it look if more web3 artists and creators viewed it similarly?
This was the point where I realized it would be worth a flier to get some PEPE, lean in, and grab the popcorn.
Building the foundation of PEPE adoption
Yesterday afternoon, Manifold (the minting platform that I’ve referenced multiple times) added PEPE as a form of payment for creators.
With this development, any creator can sell their work on Manifold in PEPE. Some artists quickly jumped at the opportunity to sell their work for the memecoin:
So now we have some more data points indicating that some creators are willing to sell their artwork for PEPE. This still doesn’t justify PEPE as the next DOGE, but shows that the web3 creator ecosystem is willing to experiment.
What’s next for PEPE
No one knows. PEPE has been listed on several exchanges and there are rumors of PEPE being listed on larger centralized exchanges like Coinbase and Binance, which would likely unleash another wave of interest if it happens. On the other hand, PEPE could slowly (or quickly) fade away as the next fad, meta, or catalyst draws attention away from its 15 minutes of fame.
Regardless of where PEPE goes from here, what can we take away?
The power of memes is as strong as ever and there’s room for more
Memes are not just a part of crypto culture. They’re part of culture, and always have been. Understanding and harnessing this is a superpower that few understand. Timing and luck make up a large part of memes, but when done right, they are unstoppable.
It’s about money, but there’s more than meets the eye
Much of the energy and excitement is around the possibility that PEPE could be the next DOGE. What gets me more excited is how quickly the web3 creator ecosystem has made moves to provide actual use cases for PEPE.
Sustainable adoption comes from utility and use cases (eg: Gucci accepting crypto), and PEPE has shown early signs of that in less than a week! We’re seeing a case study around interoperability unfolding before us.
Creators are the X-Factor
This is obvious, but I believe most brands still underestimate the power that creators hold individually and collectively. The strength of PEPE’s rapid ascendance beyond the initial pump should be credited to creators:
Pepe the Frog was a character created by Matt Furie
Artists and fans transformed Pepe by creating variations and memes of the character
Developers created PEPE
Content creators promoted PEPE across social channels and in different formats (social audio, text, articles, etc.)
Manifold recognized the value of PEPE for creators and added it as a form of accepted cryptocurrency on their platform
Creators are starting to sell their work in PEPE
We’ll see where PEPE goes from here. The story may be beginning of something bigger 🐸
PS: If you want some quick stats on PEPE, @wuligy has a nice Dune dashboard. There are 31k+ PEPE holders 👀
NFT Tech’s Brands in Web3 & the Metaverse Report
NFT Tech, a web3 agency, released a report on brands in web3 and the metaverse.
Some quick stats from the report:
320 brands launched 526 web3 projects in 2022 and Q1 2023
The number of brand projects in web3 has been relatively consistent over the past 5 quarters despite the crypto bear market
A LOT of trademarks were filed
NFT: 8,625
Crypto: 5,942
Metaverse: 6,685
The fashion industry is leading the way in metaverse projects
Shoutout to
for sharing this report!I’ll be in Austin next week for Consensus, so I’ll have some guest posts up next week.
If you’re at Consensus give me a holler and we can meet up!
For the culture!