In the fast-moving world of Inus, Flokis and Tigerkings, it makes sense to return to the OG memcoin that started it all.
With hundreds upon hundreds of memecoins hoping to replicate the success of the original community token of the masses, what are the core factors that allowed Dogecoin to last where others have failed?
3 Reasons Why Dogecoin Succeeded
-
Celebrity Endorsement
One of the main reasons Dogecoin succeeded as opposed to other memecoins is that Elon Musk has given it publicity. He sent over 50 tweets about Dogecoin between Jan. 2021 and Jan. 2022.. Every time, the price underwent a huge fluctuation. For example:
- Feb. 2021. Dogecoin jumps 80%.
- May. 2021. Musk says Dogecoin is a scam in an interview on Saturday Night Live. Dogecoin plunges 34%.
- Jan. 2022. Dogecoin rallies more than 20%.
Footprint Analytics – Price of Dogecoin
On Aug. 18, 2021, the Dogecoin Foundation was Re-established after the departure of co-founders in 2014, with Musk and Vitalik Buterin elected as advisors to the Board of Directors.
-
Consensus Value
Consensus value refers to people investing in their beliefs, e.g. BTC. In contrast, utility value refers to the underlying potential of use cases of a technology.
BTC has value because of consensus. It is considered as an option for investment or asset preservation. It is also recognized as a legal tender in El Salvador.
Dogecoin is not yet a legal tender, but it is accepted as a payment method. According to Cryptwerk, as of Feb.25, 222, there are 1,069 merchants and organizations already accepting DogeCoin for payments.
Although one of Dogecoin’s founders, Jackson Palmer, gave up on Dogecoin in 2014, it didn’t stop the token from growing.
Two random milestones:
- The Dogecoin community sponsored the Jamaican bobsled team for the Sochi Winter Olympics.
- In 2014, the community raised money to help Doctors Without Borders treat victims of Ebola by “One Day No Contact” MSF Dog Coin Game Fundraising Event
- Meme Value
A memecoin is generally defined as a coin with no intrinsic utility, but whose value is based on a passionate community of followers. They have low values, with most available for a few cents, and huge or unlimited supplies.
There are now thousands of memecoins, but Dogecoin is notable as the one that started it all.
The coin was founded on Dec.6, 2013 by Jackson Palmer and Billy Markus. Both of them are software engineers. Created to satirize BTC, but became the second most popular cryptocurrency after BTC in terms of users.
Since then, other memecoins have also seen huge growth. Namely: Shiba Inu, Dogelon Mars, and Floki Inu.
Reflections on Meme Token
DogeCoin has been a success, but the huge volatility influenced by celebrities means high risk. Of course, Meme tokens are easy to launch, not expensive to maintain, and have a large degree of community ownership. But that doesn’t mean you can go all in on Meme tokens.
In contrast, Meme tokens are not easily recognized and supported by celebrities with similar feelings . Meme tokens have very few usage scenarios, which is very different from the chain or DeFi protocol token.
In addition, some Meme tokens do not support smart contracts, and there are no ecosystem applications for pure Meme tokens.
So, the success of DogeCoin is just an example of probability. You can try Meme tokens as a hobby, but not for investment. At least, it’s not a good choice to all in.
This piece is contributed by the Footprint Analytics community.
Data Source: Footprint Analytics Meme Token Dashboard
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.