This content originally appeared on HackerNoon and was authored by Olayimika Oyebanji
How a lighthearted internet joke became something of immense value is a story anyone would be curious about. However, while there is a tendency to view memecoins as the ‘NFT bubble ‘of the current cycle, destined to burst, there are interesting sides that prove otherwise.
\ Memecoins such as DOGE, SHIB, and PEPE, for example, have continued to strongly defy this expectation with their skyrocketing valuations and community growth, primarily driven by viral marketing and community support.
\ This article sheds light on the need for memecoins as a unique subculture in the crypto space to embrace an ecosystem approach for long-term sustainability and growth. It highlights the current challenges facing memecoins and makes a strong case for the adoption of an ecosystem-based solution.
The Rise of Memecoins
Memecoins started as internet jokes with no intrinsic value other than to entertain. It goes back to when Kubosu, a special breed of Japanese dog, became an internet sensation and inspired the creation of the first breakout memecoin, Doge. Thus, began what can now be considered a significant trend in the crypto space.
\ In the current crypto cycle, memecoins have continued to captivate the crypto community with their ability to attract a large user base, despite the fact most of them lack utility or a purpose-built structure.
\ In most cases, they succeed in building huge communities on Telegram and making rapid gains. But the problem they face is that they struggle constantly to maintain their ascension and traction.
Challenges Facing Memecoins Ecosystem
Despite the immense popularity of memecoins among crypto traders, they continue to face significant challenges such as the lack of utility, high volatility, pump-and-dump scams, etc. raising a valid question as to their sustainability.
Lack of Utility
Most memecoins are bereft of any real-world value or use cases. They are mainly for entertainment purposes and have become popular among high-staking crypto investors known as ‘degens’ because of their ability to generate quick financial returns.
High Volatility
Memecoins’ association with cryptocurrencies makes them highly volatile assets. They are often susceptible to rapid price fluctuations and attract speculators who can manipulate the price.
Pump-and-Dump Scams
The rise of memecoins provided a fertile ground for crypto scams, especially pump-and-dump scams. This typically involves a situation where a memecoins price is pumped to attract more buyers before they are dumped on the market to trigger a decline in value. Prominent examples have included celebrity memecoin scams like $BITCH, $DAVIDO, $JENNER, etc.
\ Some of the above challenges facing memecoins have not only raised valid concerns about the long-term sustainability of the memecoin subculture but they have also established the thesis that, without a solid foundation and a blueprint for future development, many memecoins projects are bound to fail.
The Need For An Ecosystem Innovation
Innovation is key to the sustainability of any project. Maintaining relevance in the crypto space has been a constant drive to build new products or add new features.
\ The long-term sustainability of memecoin projects wholly depends on the ability to evolve beyond their current model. They can gravitate toward an ecosystem type of innovation that offers real-life applications and benefits to their users.
\ An ecosystem built on real-world utility is essential for the success of memecoin projects as it helps them to transition from an internet sensation to a value-adding venture.
\ An ecosystem approach focuses on user engagement, partnerships, and business development rather than token speculation. Building a strong community and keeping users engaged is vital for the long-term success of memecoin projects as it infuses a deep sense of belonging and contributes to their overall growth.
Examples of Ecosystem Approach
There are notable examples of memecoin projects that have applied the ecosystem approach. to grow and retain their user base. Some of them include: DOGE, SHIB
\ In 2014, the DOGECOIN's community organized a fundraising for water projects (DOGE4WATER) in Kenya, and it sponsored popular NASCAR driver Josh Wise who was in dire need of financial support. Moving away from charitable activities, ShibaSwap, an initiative of SHIB memecoin is another example of how an ecosystem approach can foster the sustainability of memecoin projects.
Ecosystem Approach Case Study: LAIKA Memecoin
LAIKA, a dog-themed memecoin launched on the Solana blockchain in 2024, leverages the ecosystem approach, with its TGE launched in June 2024. It quickly gained traction, with its cap, soaring to $50 million within the first month.
Utility
In an act true to the ecosystem-oriented approach, LAIKA community sent the LAIKA dog to earth’s lower orbit, capturing the imagination and support of the community. This innovative marketing strategy paid homage to the first dog in space and demonstrated its commitment to pushing boundaries of innovation in the memecoin space.
Its listing on prominent exchanges like MEXC and Bitget, as well as Solana-based DEXs Raydium and Jupiter also point to the importance of strategic partnership, especially as they provide liquidity and trading opportunities for it, while enhancing its credibility and visibility.
\ Additionally, its recently launched metaverse project offers an immersive virtual experience, building a rocket for the upcoming Laika’s space mission. This is an important element of the LAIKA ecosystem that serves as a hub for community interaction, events, activities, and earning reward opportunities that enhance its user engagement.
\ Finally, it has a wallet integration available on both iOS and Android, the LAIKA Wallet is secure and user-friendly and leverages multiparty computation (MPC) technology for security purposes.
Conclusion
The emergence of memecoins has sparked intense curiosity about their value proposition and long-term sustainability. There are those who argue that it is yet another bubble without making a veiled reference to the recent NFT bubble.
\ Meanwhile, the significant traction that they command in the current crypto cycle has made them the subject of ongoing debate and discussions within the crypto space. The most important question is as to whether they have the potential to thrive in the long run.
\ Despite their high volatility and the lack of real-world value, memecoin projects can still be sustainable for the long term. An ecosystem-oriented approach can transform them from viral internet sensations into valuable entities for crypto investors and enthusiasts.
This content originally appeared on HackerNoon and was authored by Olayimika Oyebanji
Olayimika Oyebanji | Sciencx (2024-08-06T00:06:55+00:00) Memecoins: Adopting An Ecosystem Approach For Long-Term Sustainability. Retrieved from https://www.scien.cx/2024/08/06/memecoins-adopting-an-ecosystem-approach-for-long-term-sustainability/
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