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Pepecoin and the Rise of the Meme-Backed Currency

Memes, Dreams, and Get-Rich-Quick Schemes



It’s hard to have missed epic saga of Pepecoin over the past two months, and along with it, a resurgence of memecoin hype. Indeed, on May 5, Pepecoin broke through the stunning $1B market cap to become a Top 50 cryptocurrency [1]. In many respects, Pepecoin’s rise calls to mind the famously stunning rise of Dogecoin and Shiba Inu, two of the most famous memecoins in history. In fact, Pepecoin itself even pays homage to the long tradition of memecoins it descends from, writing that it will “make memecoins great again” [2]. So what makes a memecoin “great”? And why do they exist (and even thrive) in the crypto ecosystem, in spite of their evident lack of utility?

Know Your Memecoins

Memecoins have always been a crypto novelty and oddity. Their most characteristic trait is in fact their own self-professed lack of any utility, something they wear around with a semi-sarcastic sense of pride. Even though almost anyone can create a memecoin today just with a few clicks of a button, not all memecoins are created equal. After all, a lot more people hold Dogecoin than say, “HarryPotterObamaSonicInu” (this is an actual real coin on CoinMarketCap) [3].

Indeed, the most successful memecoins never come from humble backgrounds: they are warriors. These are memes that have fought in ferocious battles on the turbulent seas of Internet meme culture, where any cultural sensation or anything that grabs people’s attention, ranging from Elon Musk references (Tweelon), sex jokes (CumRocket), literal poop (PooCoin), GPT-references (PepeGPT) can all be turned into memecoins [4].

In these epic battles, only those memes that have proven their demonstrated approachability, relatability, persistence can survive. For those that do, they are rewarded with boundless glory, with glamour from the crowds, homage from the powerful, and a memecoin that will wear through even the toughest of crypto storms. And amidst all of this, perhaps Pepe does actually stand a chance of surviving, prevailing, and thriving.

Pepe the Meme Royalty


The Original Pepe meme of “Feels Good Man.” Source: https://en.wikipedia.org/wiki/Pepe_the_Frog

Pepecoin was born with a silver spoon in its mouth, as the meme of Pepe belongs (along with Doge) to a class of Internet meme royalty. Born in 2008 out of the hand of cartoonist Matt Furie, the green frog with a bulging green eyes was depicted literally urinating (pee-pee-ing) while commenting “feels good man” [5]. And since then, Pepe has taken off in all shapes and forms, including a sad version, a smirk version, and so many more [6].

Since its inception, the Pepe meme and the corresponding image of an ugly frog has had a distinctly counterculture and subversive connotation, in particular when contrasted with the much more sanguine Doge meme. While most usage of Pepe is very benign, this ugly frog also has a distinctly “ugly side.” On 4chan and other more fringe social media platforms, the frog meme is often twisted and modified to take darker turns and sometimes embody extremist political symbols. And gradually, variants of the Pepe family of memes became staples on alt-right groups and other darker, more subversive corners of the Internet [7]. Thus, the Pepe meme exists in a massive duality: on the one hand, it exists in the mainstream as a benign counterculture image of an ugly frog with a happy or sad or smirky expression on its face. On the other, this counterculture symbol has been coopted for extremist political movements that actively cause societal instability.

This duality is what has made Pepecoin so controversial, and why it landed Coinbase in hot water after Coinbase accused the Pepe meme of being “co-opted as an alt-right hate symbol,” before later being forced to apologize and acknowledge that most mainstream uses of Pepe are non-bigoted [8]. But in the context of memecoins, they thrive on controversy and continued media attention. After all, it is precisely Pepe’s status as a longstanding meme royalty and one of the undisputed hallmarks of Internet meme culture that underwrites the value proposition for Pepecoin, and explains its eye-watering ascent to a $1 billion market cap, with a $1.87 billion trading volume at its peak.


Pepecoin Price, CoinMarketCap. Data as of May 24: https://coinmarketcap.com/currencies/pepe/

In this respect of leveraging its power as an undisputed Internet meme royalty to underwrite its value as a cryptocurrency, Pepecoin greatly resembles Dogecoin. And one could argue that there is a kernel of truth in the Pepecoin slogan of “make memecoins great again” and its self-proclamation of being fueled solely by “pure memetic power.” After all, as Pepe is such an important meme royalty, it is certainly conceivable that Pepecoin could stick around for quite some time, just like Dogecoin [9].

Pumps, Dumps, and the Power of FOMO

Memecoins such as Dogecoin and Pepecoin, along with their self-processed lack of any utility, are of course ripe targets for pump and dump schemes and regulations. And in many cases, “shilling shitcoins” is a favorite pastime for the rich.


One need to look no further to see how Elon Musk has been instrumental in shaping the fortunes of Dogecoin to see the influence of how key opinion leaders can send prices soaring to the moon [10]. After simply Tweeting “Doge” and writing that “Dogecoin is the people’s crypto”, Dogecoin prices soared 40%, and in the massive bull run of 2021, Dogecoin did a phenomenal 147.6x price increase in just over five months.


Elon Musk calling Dogecoin “the people’s crypto”. Source.

Arguably, this ability to be pump and dumped at will by key opinion leaders is in-baked into the economic logic of memecoins. As mentioned before, memecoins monetize and gain according to how much attention and cultural capital the underlying meme (or cultural phenomenon) is able to accrue and sustain over a long period of time. Key opinion leaders such as Musk have by definition the power to single-handedly create and sustain cultural phenomenon, and thereby allow these cultural derivatives (i.e. memecoins) to gain immensely in value, and in turn, kickstart a cycle of fear-of-missing-out (FOMO) for retail investors, who want to hop aboard the get-rich-quick crypto ride.

This same logic that applies to Pepecoin’s rapid ascent over the past month or so. Although there isn’t a clear single celebrity pushing Pepecoin on Twitter (as in the case of Musk and Dogecoin), from on-chain data it seems as if there have been some outsized winners with the Pepecoin hype. For example, a wallet labelled blackrock3.eth bought $244 worth of Pepecoin on April 21, and sold all of them on May 5 at its peak for $2.63 million [11].

And of course, with a pump inevitably comes a dump. Today (May 25th), exactly 20 days from its peak, Pepecoin is down 70% from its all-time-high [12]. As the attention of the memecoin inevitably dissipates and the frenzy of FOMO subsides, the price (a function of this attention) naturally also decreases. But that’s simply the virtue or characteristic of memecoins. For a memecoin, Pepecoin’s -70% can already be considered tame and “benign.” At least Pepecoin hasn’t mimicked the fate of the “Squid Game token,” a memecoin which rode on the wave of the Netflix TV show “Squid Game’s” massive success in 2021. The “Squid Game token” jumped from 1 cent to $2856 in a week, before plummeting to zero after its creators essentially ran away with the money earned and did a classic “rug pull” [13]

But this volatility coming from memecoins, who self-profess that their only value comes from their memetic power, one really shouldn’t be surprised — after all, they literally say “useless” on the label.


From the Pepecoin Website

Memechains and the Question of Utility

But what does the future of memecoins look like? Will they ever only really be objects of pure speculative bubbles? The answer actually is a bit more complicated than a simple yes or no. Memecoins by design are backed up by the potency of their underlying meme. The problem is that you can never really quantitatively measure the economic value of a meme. These, after all, are simply free JPEGs widely accessible and distributed on the Internet, and as such, obviously generate no monetary value. After all, why pay for a meme I can see, copy, and create for free?

But just because a meme does not have a price tag on it does not mean that it lacks intrinsic value. If Pepe the meme did not have any value, why would people continue to use it to this day, as a symbol for resistance, counterculture, and digital identity? This is the paradox at the center of all art, but particularly digital mementos that can be freely copy-pasted: no one doubts that they are valuable, yet there is no way to measure that value.

Memecoins, to some extent, may in fact be one way out of this problem. If a meme is a some “unquantifiable value,” a memecoin is in essence a “quantifiable un-value.” The two therefore fit together hand-in-glove, and attaches some quantifiable representation to the value of the meme behind the coin. Therefore, even if much of the memecoin mania is fuelled by speculation, I don’t expect the memecoins of mainstream memes such as Pepe and Doge to ever go to zero, so long as the memes themselves still exist.

Nevertheless, there has been a frenzy in memecoin communities to add on so-called “utility” to these originally supposedly “useless” coins. This notably includes the Dogecoin community’s Dogechain, a smart-contract executing PoS built using Polygon Edge where gas fees can be paid in Dogecoin [14], as well as the Shiba Inu community’s Shibarium, a L2 scaling solution that recently just announced its public beta [15]. Most of these “added utility functions” are centered around the classic playbook of getting a chain in order to nominally “have utility.” But the crypto industry is already strewn with the corpses of failed chains, and today there are already too many L1 and L2 chains that are able to match and surpass the proposed functionality of something like Dogechain and Shibarium. The central problem of building a chain to inject so-called “utility” into these tokens is this: why should I use Shibarium and Dogechain to execute smart contracts, over say Arbitrum, Optimism, or Polygon?

Any satisfactory answer to these questions must go back to where memecoins started from in the first place — the original meme underwriting the whole memecoin, such as Doge in the case of Dogecoin, or Pepe in the case of Pepecoin. In fact, if any of these memecoin powered memechains do succeed, they likely will be some sort of a meme-focused chain, where the design of the chain leverages and magnifies the iconographic power of the meme, which in turn adds value to the memechain. Viewed through this lens, one could argue that a memechain’s long-run potential is in becoming a special sort of appchain, one that specializes in operating the underlying meme.

In the long-run, the successful operation of a memechain would likely be more similar to the operation of a successful NFT community, such as BAYC, Azuki, Nouns or Doodles, rather than the operation of an actual L1 or L2 chain like Ethereum, Arbitrum or Polygon. The focus needs to be on the underlying asset backing the memecoin in the first place — the meme — rather than the functionality of the chain itself.

This convergence and triangulation between memes, coins, and tech is arguably the most innovative and inspiring aspect of memecoins. If Pepecoin, Dogechain, and Shibarium are able to innovate out a novel governance structure that perpetuates the longevity of the underlying meme, they will undoubtedly leave a significant mark on the cultural legacy of web3. And then, perhaps, we will truly be able to “make memes great again.


Pepecoin making memes great again. Source.


[1] https://markets.businessinsider.com/news/currencies/what-is-pepecoin-pepe-memecoins-dogecoin-shiba-inu-crypto-news-2023-5

[2] See Pepecoin’s Website: https://www.pepe.vip/

[3] https://coinmarketcap.com/alexandria/article/9-funniest-memecoin-names

[4] What are Memecoins: https://www.pcmag.com/how-to/what-is-a-meme-coin-how-do-they-work

[5] https://knowyourmeme.com/memes/pepe-the-frog

[6] Derivative memes of Pepe the Frog: https://knowyourmeme.com/memes/pepe-the-frog/children

[7] https://www.thedailybeast.com/how-pepe-the-frog-became-a-nazi-trump-supporter-and-alt-right-symbol

[8] https://www.forbes.com/sites/antoniopequenoiv/2023/05/11/coinbase-apologizes-for-tying-meme-token-pepecoin-to-racist-symbols/?sh=37957e942419

[9] https://www.forbes.com/advisor/investing/cryptocurrency/what-is-dogecoin/

[10] Elon Musk and Dogecoin: https://coincodex.com/article/21927/elon-musk-dogecoin/

[11] See https://coinmarketcap.com/headlines/news/blackrock-labeled-wallet-nets-2-4m-from-pepe/. Note that while some have speculated this wallet may belong to BlackRock fund, there is no concrete evidence suggesting this to be the case.

[12] Data from CoinMarketCap, as of May 25: https://coinmarketcap.com/currencies/pepe/

[13] About the Squid Game Token Collapse: https://www.bbc.com/news/business-59129466

[14] About Dogechain: https://coinmarketcap.com/alexandria/article/what-is-dogechain-the-smart-contract-platform-for-doge

[15] About Shibarium: https://blog.shibaswap.com/introduction-to-shibarium/

[16] See the importance of community building in NFT circles such as NounsDAO: https://review.stanfordblockchain.xyz/p/nouns-dao-and-the-philosophy-of-governance

Note: An earlier version of this article incorrectly suggested that BlackRock was an institutional holder of Pepecoin based on on-chain data. The Stanford Blockchain Review regrets this error.

Edited by XWORLD: Pioneering Web3 Games & Apps Store.


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