Meme coins: Shiba Inu, Dodgecoin cryptcurrencies explained

But when Elon Musk tweeted his support for dogecoin, its value quickly increased, paving the way for a proliferation of copycat coins.

What is a meme coin?

A meme coin is a form of cryptocurrency connected with a popular meme, which makes them particularly attractive to younger investors, The Sun reported.

Like earlier currencies such as bitcoin, meme coins can be invested in and traded on cryptocurrency platforms.

Why have meme coins become so popular?

Before Musk put his backing behind dogecoin, the currency was mainly used to tip Reddit users and for specific causes – like sending the Jamaican bobsleigh team to the Olympics.

The billionaire‘s tweets included: “Tesla merch buyable with dogecoin” and ”I will eat a happy meal on TV if @McDonalds accepts dogecoin”.

And with that, the value of dogecoin increased to $80 billion in May 2021.

We also saw the introduction of many more meme coins, by those looking to capitalise on the success of dogecoin.

What are the most popular meme tokens?

Dogecoin

The old favourite remains top dog when compared with other meme coins in terms of proportion of the cryptocurrency market.

Shiba Inu

This newer member of the canine coin club comes in at second and has, at times, even topped dogecoin in value.

It is named after Japanese hunting dog breed Shiba Inu.

Doge Killer (LEASH) is part of the Shiba Inu ecosystem, but has taken on a life of its own as its value surged in February 2022.

Dogelon Mars

Perhaps a declaration of support wasn‘t enough for the man for whom the sky isn’t even the limit – who can head into space on his own rocket.

He has been connected with the creation of Dogelon Mars, which has the third-highest proportion of the cryptocurrency market out of all meme coins.

Samoyedcoin

Named after samoyed dogs, originating in north eastern Siberia, the samoyedcoin comes in at number four.

Monacoin

Dog memes are dropped for cat memes for Monacoin, which holds the fifth-largest proportion of the cryptocurrency market out of all meme coins.

How are meme coins and tokens different from other cryptocurrencies?

Aside from their fun designs, meme coins differ from many other forms of cryptocurrencies – such as bitcoin – as there is not a fixed amount of them.

Meme coins also have few or no apps dedicated to them.

What are the dangers of meme tokens?

They might look as innocent as a puppy, but investing in meme coins has been likened to gambling in terms of unpredictability.

Compared with other types of cryptocurrency that have limited supply and a more resilient store of value, high returns are more uncertain.

There’s also the danger of the “rug pull” – in which investors abandon a project and keep the money made through investments for themselves.

Sudden hype around a project and spike in coin prices can point to a “rug pull”, while projects that lock their pooled liquidity for a fixed period tend to be safer.

This story was originally published by The Sun and has been reproduced with permission.