Use cases don’t drive memecoins, Here are the 3 things that drive them.

Meme coins are crypto projects built around meme-worthy themes and animals, such as Dogecoin, Shiba Inu, and Pepe Coin. They often have no clear use case or utility, but they can still attract massive attention and investment.

How do they do it?

Here are the 3 main factors that drive meme coins:

1. Meme factor: how catchy, funny, and viral the coin is

- The more people share, like, and comment on a meme coin, the more exposure and demand it gets
- For example, Dogecoin became popular because of its association with the Shiba Inu dog meme and its endorsement by celebrities like Elon Musk¹
- The more creative, humorous, and relatable a meme coin is, the more it appeals to the masses and the culture
- For example, Shiba Inu is a meme coin that claims to be a "Dogecoin killer" and has a loyal community of "Shib Army" supporters²
- The more unique, memorable, and recognizable a meme coin is, the more it stands out from the crowd and the competition
- For example, Bonk is a meme coin that features a pixelated dog face and has a catchy slogan of "Bonk the world"³
- Meme factor is the key to creating a loyal and passionate fan base for a meme coin

2. Hype cycle: how much attention, buzz, and FOMO the coin generates

- The more media coverage, influencer endorsement, and social proof a meme coin has, the more credibility and legitimacy it gains
- For example, Pepe is a meme coin that is based on the popular frog meme and has been featured by major outlets like Forbes and CoinDesk
- The more hype, excitement, and anticipation a meme coin creates, the more people want to join the bandwagon and not miss out
- For example, FLOKI is a meme coin that was inspired by Elon Musk’s tweet about naming his dog Floki and has seen a surge of interest and price
- The more volatility, unpredictability, and risk a meme coin has, the more it attracts speculators and gamblers who are looking for quick profits
- For example, Memecoin is a meme coin that has a high inflation rate and a random burn mechanism that makes it highly speculative and risky
- Hype cycle is the key to creating a massive and explosive growth for a meme coin

3. Network effect: how many people, platforms, and communities adopt the coin

- The more users, holders, and traders a meme coin has, the more value and utility it has
- For example, Dogecoin has a large and active user base that uses it for tipping, donating, and buying goods and services
- The more platforms, exchanges, and wallets a meme coin is supported by, the more access and convenience it has
- For example, Shiba Inu has its own decentralized exchange platform called ShibaSwap and is listed on major exchanges like Binance and Coinbase
- The more communities, groups, and forums a meme coin is discussed by, the more feedback and innovation it has
- For example, Bonk has a vibrant and engaged community on Telegram, Twitter, and Reddit that provides suggestions and feedback for the project
- Network effect is the key to creating a sustainable and long-term future for a meme coin

If you enjoyed this article and want to learn more about meme coins and web3, follow me for more content like this. You don’t need a use case to invest in meme coins, but you do need to understand the psychology and the dynamics behind them.