A report out yesterday offers a sobering reminder of the perils of investing and trading in the currency of internet humor. So-called memecoins—like Dogecoin, Pepe, and Shiba Inu—have become the fastest-growing niche of the cryptocurrency industry’s revival this year. The number of meme-related projects is up over 440% over the past two years, making the sector the fourth most valuable in crypto, ranking higher than decentralized finance and blockchain-related services, according to BDC Consulting.
A new Chainplay report, however, offers a sobering take on how little is behind many memecoin projects. Titled the State of Memecoin 2024, the report notes the average life span of one of these coins is just one year—a third the life span of an average crypto project. Aligning with this high turnover rate, nearly 60% of memecoin investors view these assets as short-term investments, and 97% of memecoins have already ceased to exist.
Each month, over 2,000 memecoins disappear, on average. The so-called "death rate"—classified by various metrics such as a deleted website, inactive Twitter, or under-$1,000 market cap—varies across blockchains. Base leads with a death rate of 67%, followed by Solana at 54%, and Ethereum at 37%. So, in other words, on Base, two-thirds of memecoins ever created have already gone out of business. In terms of the prevalence of scams, the report found that over half of all memecoins are deemed malicious, and one-third of investors have reported losses due to scam tokens.
Memecoins divide crypto
Love them or loathe them, one in six new (those in the market for less than six months) investors describes memecoins as a "must-have" part of their portfolio, according to the report. But why?
Proponents regard memecoins as the purest iterations of crypto’s ultimate promise—to democratize finance. Anyone can launch a memecoin in the name of anything. Among the top 300-ranking currencies: "Smoking Catfish," "Kamala Horris," and "I love puppies." Merging finance, internet trends, and gambling, investors flock to the speculative assets during viral moments. Even celebrities such as Caitlyn Jenner, Iggy Azalea, and Andrew Tate have sought to cash in on the frenzy.
“I'm someone that naturally has so many memes over the course of my career, and things go viral on purpose or accidentally, that I felt like it was a space I probably could really engage,” Azalea previously told Fortune, following the launch of her coin Mother.
But critics argue they keep both crypto’s pump-and-dump stigma alive. In June, Ethereum’s founder Vitalik Buterin posted a take-down of celebrity memecoin culture on X. Memecoins should “have some kind of public-good goal” instead of “financialization as a means toward an end.” Tokens should last a decade or more, “rather than bubbling around for a few months and then being forgotten,” he added.
Omid Malekan, an adjunct professor at Columbia Business School, sees the tokens as a symptom of the “economic nihilism” symbolic of the times. “Along with meme stocks, and the growth in traditional forms of gambling, memecoins are yet another indication that people feel like they need to do risky things with their money to get ahead,” he told Fortune.
