The Evolution of Memes and Their Place on Blockchains

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Whether you love them or hate them, memecoins have become a cornerstone of the crypto economy. Memecoins are not known for their technical innovation or pushing the boundaries of blockchain scaling, and some skeptics claim that they should have no value at all. Some builders in the blockchain ecosystem even believe memecoins have overshadowed their earnest work and damaged crypto’s overall brand and image. However, due to their viral nature and relatability, memecoins have proliferated across the broader crypto market and amassed significant value.

Fundamentally, memes are ideas, symbols, or behaviors that are passed inside or between subcultures. History shows that memes have existed for centuries in human civilization through different forms and across different mediums. They will likely continue to exist and be rendered on the most widely used channels of communication. The COVID-19 era saw a notable rise in meme stocks, with investors gathering online in places like r/wallstreetbets to signal dissatisfaction with the status quo by investing in equities that were heavily shorted by Wall Street incumbents, most notably GameStop. Permissionless blockchains have seen the phenomenon expand further. Dogecoin was perhaps the original memecoin, but in more recent years memecoins have exploded in popularity. We estimate that memecoins on permissionless blockchains today have an aggregate market cap of more than $60bn. The growth of memecoins builds on the monetary connection shared by holders of non-fungible token projects and suggests that communities, cultures, groups, and trends may increasingly rely on monetary instruments for cohesion and speculation.

Memes and Expression Through the Ages

While the contents of memes and the messages they portray have evolved with social, cultural, and technological shifts in society, the digital pictures we share and laugh at today are intrinsically nothing new. They are simply the continuation of something that has evolved over thousands of years along with the earliest human beings. Storytelling is integral to humanity, and whether organic marketing or intentional propaganda, viral memetic images, prose, and concepts have played influential roles in the formation and alteration of human society. From cave paintings to Roman graffiti, viral anonymous pamphlets to newspaper comics, widely-shareable images and concepts have passed knowledge, helped topple governments, and driven societal changes through the ages.

Although memes in this general sense have always existed, two important components have fundamentally changed throughout history: the medium through which they are expressed and their means of distribution. The oral traditions of ancient societies, in which complex histories were condensed into memorable, repeatable tales, were essential for passing knowledge to future generations. Viral imagery, widely used in ancient Greek and Roman societies often to convey political messages, has become more potent over time as creation and transmission methods became more advanced and accessible. Blockchains are the next stage in the evolution of memes due to the widespread standardization of their technologies, the permanence and uncensorable nature of their ledgers, and their global accessibility.

Evolution of Memetic Canvases

From the dawn of human existence, the innate desire to express and share experiences, emotions, and ideas has been a driving force in the development of communication and culture. The earliest humans, equipped with nothing more than charcoal and chisels, etched their thoughts and observations onto cave walls and stones, creating the first known “memes.” These primitive memes, believed to be traded hand-to-hand between people, served as a testament to the fundamental human need for connection and the sharing of cultural and expressive elements.

As civilizations flourished and technology advanced, so did the mediums upon which memes were depicted. Paints, ink, tablets, and paper became the new canvases, giving rise to beautiful frescos in ancient public buildings, distasteful graffiti on the Roman Coliseum, and satirical cartoons in newspapers.

The birth of the modern internet meme in 1993 marked the last paradigm shift in the way we express and share ideas. The digital realm, via email and message boards, became the new frontier for memetic evolution, allowing individuals to engage with and share memes on much larger and expressive scales.

Today, the advent of memecoins put us on the precipice of another transformative moment in the history of expressive canvases and distribution, and thus inter-human communication. The widespread use of blockchains as a canvas for memes and peer-to-peer (P2P) networks as the rails for their dissemination signify a new era in the evolution of human communication and culture. Just as the printing press revolutionized the spread of ideas (and eventually memes) in the 15th century, and the television and the internet transformed the same in the 20th century, blockchains are poised to redefine the way we create, share, and consume memes, and information generally, in the 21st century.

Evolution of Memetic Distribution

In the early days of human civilization, memes were presumably exchanged by hand between individuals, a process that, while inefficient for mass dissemination, was the most advanced form of communication at the time. As humans developed more sophisticated tools and techniques for communicating, such as writing, printing, and painting, the distribution of memes became more widespread. Graffiti on the walls of buildings and paintings in public spaces allowed for a broader audience to engage with these cultural elements, even if the transportability of the memes themselves remained limited.

The advent of newspapers marked a significant milestone in human communication and the distribution of memes in the form of comic strips and cartoons. While the creation of memes in this medium was more gated, the proliferation was much easier, thanks to the use of cars, bicycles, and storefronts as distribution rails. These vehicles, which were among the most important advancements of their times, allowed for the rapid dissemination of information, ideas, and culture across vast audiences.

The rise of the television and internet ushered in a new era of memetic distribution, democratizing access to memes and making them viewable from anywhere in the world. The privilege that once determined access to memes was largely eliminated, as anyone with an internet connection or access to TV broadcasting could engage with and share these cultural elements. As these technologies and their adoption progressed, the creation of memes became increasingly simple, with tools and platforms emerging to facilitate their production and dissemination.

Throughout history, memes have consistently found their way into the most advanced, impactful, and widely adopted communication channels of their time. All of which had a significant impact on humanity.

The adoption of blockchains as a medium for memetic expression underscores the growing importance of this technology as a central platform for the sharing of ideas and experiences in the purely digital age.

Memes on Blockchains

Memecoins are tokenized depictions of internet memes or other humorous events or concepts. They are native to blockchains and transferable, available for use in blockchain-based applications, and tradable on secondary markets like DEXes. Often expressed through their tickers, or strings of letters that identify them, memecoins also have characters or other visuals associated with them, just like memes as most people know them today. For example, Dogecoin is a layer 1 blockchain created in 2013 to satirize Bitcoin and relied upon a viral Shiba Inu photo that had recently become popular online. Dogecoin was a fork of Bitcoin that launched before the rise of tokenization, so $DOGE needed its own layer 1 blockchain to exist. Today, existing layer 1 blockchains like Ethereum, Solana, and even Bitcoin have the capability to carry and launch non-native tokens, and their ecosystems are equipped with out-of-the-box token contracts, decentralized exchanges, and other tools to facilitate the launching of tokens.

Behind every memecoin is a contract tied to a layer 1 blockchain or layer 2 network that specifies the name of the memecoin, its supply, and other details outlining its digital identity. A memecoin can only be deployed by launching one of these token contracts. In earlier blockchain eras, launching a token was mostly costly and difficult, as it required the technical ability to write or adjust the contract, launch it on a blockchain, and create a liquidity pool on a DEX for people to trade it. Today, much of the difficulty has been abstracted away by services that automatically launch tokens and create liquidity pools after users input the details of their memecoin. Most recently, Pump.Fun has become a popular place to launch a memecoin, but there are many out-of-the-box token contracts that are easily deployable on various blockchains. The relatively newfound ease of launching a memecoin has created a flywheel effect that has led to the generation of memecoins and speculation on them at an unprecedented scale.

Gambling as a Means of Distribution

Almost by definition, with very few exceptions, memecoins have no real utility. While Dogecoin is the gas token used to buy blockspace on the Dogecoin blockchain, today’s memecoins are almost exclusively the native gas token for nothing at all. Instead, memecoins are typically blockchain tokens with no corresponding gas or application use that are often promoted by creatives, held by communities, or speculated upon by traders as an outlet to bet on the relative rise or decline of the virality of the underlying meme itself. Their lack of underlying fundamental uses makes memecoins notoriously volatile, and their volatility serves as a vector pulling users in and making them, along with the blockchains that host them, more widely used and known. Hope for wild gains and overnight wealth is the motivation for many people’s interests in memecoins. Adding the possibility of financial wealth was the catalyst that originally, and still to this day, turbocharged the adoption of memecoins on blockchains as a canvas for cultural and emotional expression.

Some say this is a flaw that shows memecoins are temporary or will fizzle out as people make and lose money. However, as we’ve noted, memes have always existed, as has the desire to earn money quickly. While memes in the internet age have become ubiquitous, until recently they haven’t been assets that could be monetized and traded. Blockchain tokenization has married the virality of potent messages with the human desire to seek wealth. This combination is new and is likely to continue to remain popular.

Memes by the Numbers

In this section of the report, we will examine the on-chain activity and value driven by memecoins over the past few years.

Solana is the primary blockchain for memecoins in 2024. Solana’s low-fee environment lowers the barriers for users seeking to create and trade memecoins, and fast transaction confirmation speed makes the experience of using the blockchain comparable to loading memes up on an internet browser. The end of 2023 marked an inflection point for the presence of memes on chain. Averaging about 9,000 new tokens per day from August to November of 2023, Solana now averages more than triple that at 28,000 per day. At its peak, it topped 100,000 new tokens per day using the 30-day moving average (670,000 outright). While all these tokens aren’t memecoins, the large meme culture that exists on Solana allows it to serve as a proxy for the creation of memecoins in general in the crypto space.

The top Solana memecoins by market cap have averaged between $91 million and $109 million of on-chain swap volume over the last 30 days. Bonk and WIF, the two largest Solana memecoins by market cap, have averaged 59% of the volume over this period.

With growing volume has come an expanding user base. Ten of Solana’s leading memecoins have more than 1.136 million unique holders combined. Note, this figure counts any address that holds more than one of the included memecoins as a single holder. The trend underscores the reach memecoins have made and the speed with which the trend has gone viral.

Memecoins didn’t start on Solana, though. $DOGE is among the earliest and most valuable memecoins in crypto, launching in 2013 and now worth $24 billion as of May 29, 2024. $DOGE was launched on its own blockchain, the Dogecoin network, which you can read about more in this Galaxy Research report. Outside of Dogecoin, Ethereum was the original platform for memecoins through the 2020 – 2022 crypto bull cycle. Serving as the home for iconic memes like SHIB, and more recently PEPE and Harry Potter Obama Sonic 10 Inu, Ethereum played an instrumental role in memes finding a footing on blockchains. Even as activity on Ethereum has migrated to other networks, it still holds the second and third largest memecoins in SHIB and PEPE.

As memecoins have grown in number, they have also grown in size. The top memecoins as of May 29, 2024, combine for $57 billion in value, up 3.5 times from the same day a year prior and 4.8 times from the bear market low. An interesting characteristic of this chart is that four of the seven memecoins pictured were created within the last 511 days of May 29, 2024; with two of the seven launching within 160 days. This highlights the fast-moving nature of memecoins and the lack of staying power they have due to the rapidly evolving culture of humans and the internet today.

As time has passed and people have become more comfortable using blockchains as cultural communication platforms, the types of memes that have come on-chain have become more specific, going from primarily dog and animal coins to memecoins expressing political beliefs and opinions. This shift indicates that blockchains are becoming a more significant means of communication, with memes serving as the primary vessel. The chart below tracks the combined market cap of the top “PolitiFi” tokens, or memecoins that depict figures and symbols around politics.

These types of memes were largely absent on blockchains until the turn of 2024, the year of the United States’ 60th quadrennial presidential election. Memecoins representing political figures were essentially nonexistent in the past despite the capability to launch them having existed for a few election cycles. However, some politicians, such as former U.S. President Donald Trump, experimented with NFTs in the past.

Non-Obvious Memecoin Utility

While memecoins as assets typically offer no specific utility – they aren’t used to buy blockspace as are layer 1 native assets and very few have any governance or application utility – some have resulted in notable secondary activity. For example, the dog-themed memecoin $BONK was launched on Solana shortly after the collapse of FTX at the end of 2022. As it was heavily associated with Sam Bankman-Fried and FTX, the Solana blockchain experienced a significant decline in usage. $SOL itself, the native token of the Solana blockchain, had already dropped 86% in value from its November 2021 all-time high, but dropped another 78% between the collapse of FTX and the start of 2023. $BONK started as an effort to reignite interest in Solana and catalyze on-chain activity by airdropping a free memecoin to Solana developers, app users, and NFT holders. And it worked, in addition to the substantial run-up in price, since launch $BONK has embedded itself into the Solana ecosystem with over 129 integrations across DeFi, Gaming, NFT, and other types of on-chain applications; become a major sponsor of Solana and non-Solana related social/cultural events; and developed its own bonk-specific applications itself such as a Bonk AMM, vesting contracts, and event a gamified fitness application, Moonwalk.

Memecoins can also serve as the liquidity that flows through newly designed application plumbing. The decentralized exchanges and DeFi applications that serve memecoins today may yet become the infrastructure that powers a more traditional tokenized market in the future. Just as MakerDAO was the application that allowed users to turn ETH into a stablecoin but is now one of the leading ways that traditional asset issuers are bringing U.S. Treasuries on-chain, so too might the memecoin explosion lead to the development and evolution of new application primitives that drive more durable blockchain adoption in the future.

Conclusion

Two primary segments have driven the majority of flows and interest in crypto markets in 2024: Bitcoin (particularly given the launch of spot-BTC ETPs in the United States) and memecoins. Other important segments like NFTs, DeFi, and gaming continue to grow and develop, but their tokens have mostly underperformed and the market has not rallied to them as driving narratives. Newer technical concepts remain top of mind, like modularity and re-staking, but they have mostly not yet launched. Bitcoin’s continued outperformance and growing institutional adoption continue to be strong macro-crypto narratives, but the most potent crypto-native narrative in today’s market is memecoins.

While memecoins are seen by many as nihilistic and inherently useless, their existence builds upon generations of viral storytelling, and their activity continues to drive blockchain adoption. The important component of their presence on-chain is less about what they should be worth and more about blockchains being used as the communication rails to proliferate them – as they are poised to become the next rails of expression for society more broadly. With blockchains gaining more traction as a means of communication and cultural exchange, the integration of memes into the technology puts this new medium at par with the likes of the newspaper, car, television, and the internet, all of which were massively impactful on humanity and became globally adopted technologies.