Meme coins may have seen exponential growth in 2021, but as with all cryptocurrencies, trading and investing in them carries high financial risk.

First of all, the tokenomy of meme coins can be concerning. Let’s take Bitcoin as an example. It has its blockchain, a well-written, a well-established ecosystem, and a deflationary nature. Additionally, we have seen increased institutional adoption of Bitcoin in recent years. Its ecosystem, use cases, and fundamentals are often defined by the collective jokes of the community. Only a few meme coins have been created from the technology of the main cryptocurrencies. For example, DOGE’s technology derives from Litecoin (LTC), while SHIB was built on the Ethereum blockchain.

Another potential risk is that meme coins are largely community-driven and more speculative than cryptocurrencies with larger market caps. This volatility constantly leads to unexpected cycles of inflation and selling. The life cycle of meme coins is generally short. Their prices can rise thousands of times due to celebrity hype or FOMO, or plunge unexpectedly when the community decides to move on to the next meme coin.

As the market for meme coins continues to grow, be aware that there may be projects that take advantage of the hype to scam traders. For example, Squid Game (SQUID), a meme coin inspired by the popular Netflix series, appreciated more than 86,000% in just one week. However, the development team of the project suddenly applied a rug pull (liquidity withdrawal) taking all the funds, which caused the price to crash by 99%. The worst thing is that the holders were not allowed to sell their SQUID tokens. Therefore, you should always be careful and do your own research (DYOR, Do Your Own Research) before trading or investing in meme coins.

Overview of Popular Meme Coins

Dogecoin (DOGE) and Shiba Inu (SHIB) are the market leaders of the meme coins with the highest market capitalizations. Following the success of DOGE and SHIB, a large number of dog-themed meme coins entered the market and gained traction during the second half of 2021.

Dogecoin (DOGE)

The creators of Dogecoin (DOGE) are two software engineers named Billy Markus and Jackson Palmer. They created this coin in 2013 inspired by the meme of a Shiba Inu dog, and was intended as a joke cryptocurrency to attract the attention of the general public. Being a Litecoin (LTC) fork, DOGE adopts the same Proof of Work (POW) mechanism and lacks a maximum supply.

Shiba Inu (SHIB)

Shiba Inu (SHIB) is DOGE’s rival and is often referred to as the “Dogecoin killer”. The name of SHIB comes from a breed of dog of Japanese origin. She was created in August 2020 by an anonymous developer named Ryoshi. The main difference between DOGE and SHIB is that the latter has a limited supply of 1 billion tokens, of which 50% were burned and donated to charity. The SHIB ecosystem also includes a decentralized exchange, an NFT art incubator, as well as various NFTs and an NFT game .

.Dogelon Mars (ELON)

Dogelon Mars (ELON) closely follows the canine duo in terms of popularity. As the name suggests, ELON takes its name from Tesla CEO Elon Musk and his passion for his SpaceX company. ELON is a fork of Dogecoin and has a circulating supply of 557 billion tokens. From its launch in April 2021 to November 2021, the price of ELON has increased by more than 3,780%.

Akita Inu (AKITA)

There are many other meme coins that use Japanese dog breeds as pets, for example, Akita Inu (AKITA), Kishu Inu (KISHU), and Floki Inu (FLOKI). AKITA was heavily inspired by DOGE. It came out in 2021 on Uniswap as an ERC-20 token. Its tokenomy is very similar to SHIB. Like SHIB developer Ryoshi did, the AKITA team locked up 50% of their total supply in Uniswap, while the remaining 50% was sent to Ethereum co-founder Vitalik Buterin. However, the total supply of AKITA is only 100 billion tokens, which is 1/10 of the total supply of SHIB. AKITA gained traction along with the rest of the dogcoins in May 2021, and is considered by some in the community to be another “Dogecoin killer”.

Samoyedcoin (SAMO)

Samoyedcoin (SAMO) is a canine meme coin project built on the Solana blockchain. At the time of its launch, 13% of SAMO’s supply was airdropped to community members. According to its website, SAMO’s roadmap includes coin burn events, airdrop tools, a decentralized exchange (DEX), and the creation of NFTs. Samoyedcoin recently gained popularity due to a sudden price increase. SAMO appreciated more than 4,300% in the course of a month. In October 2021, the price went from 0.005 USD to more than 0.22 USD in just 30 days.

Kishu Inu (KISHU)

Kishu Inu (KISHU), another dog-themed meme coin, has grown exponentially since its launch in April 2021. KISHU includes staking rewards for active users, non-fungible tokens (NFTs), and a DEX called Kishu Swap. Its popularity has been increasing and it has registered more than 100,000 holders and two billion dollars of market capitalization in just one month since its launch.

SafeMoon (SAFEMOON)

Another newcomer meme token that capitalized on the recent bull run is SafeMoon (SAFEMOON). It is a BEP-20 token launched on Binance Smart Chain (BSC) in March 2021. SAFEMOON rewards old holders by penalizing those who sell the token with an exit fee of 10%: half of this fee is distributed to current SAFEMOON holders, while the other half is burned. It attracted the attention of retail investors after its price skyrocketed in April. As of November 2021, SAFEMOON had an ROI of 9418.54% according to CoinMarketCap.

Read more about: What is MEME?

Conclusion

With new meme token entering the market every day and traders hoping to replicate the gains generated by DOGE and SHIB, it is important that you do your own research before committing to any of these meme token. Keep in mind that meme token are very volatile compared to other digital currencies. Trading and investing in cryptocurrencies carries a high risk. Meme token are largely community-driven and can crash unexpectedly, so you should never invest more than you can afford to lose.