Meme coin mania sees over 138 tokens launched in April

As a researcher with a background in blockchain technology and meme coin market trends, I’ve been closely monitoring the explosive growth of this niche segment during the second quarter of 2023. The meteoric runs of popular tokens like Dogwifhat in the first quarter have been followed by an influx of new memecoins entering the market. According to CoinMarketCap, over 138 new ERC-20 memecoins were launched last month alone, with the actual number likely much higher considering not all tokens are listed.

During the second quarter of this year, meme coins continued to be a buzzing topic in the cryptocurrency world, with significant price surges experienced by well-known tokens such as Dogecoin, which had already gained considerable attention in the first three months.

As a blockchain researcher, I recently observed that more than 138 new memecoins were introduced on CoinMarketCap within the past month, all adhering to the Ethereum Request for Comments (ERC-20) standard.

The figure represented by CoinMarketCap is just a small portion of the total number of newly deployed tokens over the past month, which saw a significant increase of over sevenfold compared to last April.

Meme coin speculation boosted by advanced tooling

Two years ago, creating your own meme coin or cryptocurrency was a challenging endeavor that only technically adept individuals could undertake. But now, with advancements in blockchain technology and user-friendly tools, it’s as simple as a few clicks, enticing more people to join the market.

Recent developments in token standards have made it easier for developers to create wrappers, such as Runes on Bitcoin (BTC), and define new types like SRC-20, DRC-20, and ASC-20 on EVM chains. This has led to an influx of innovation and reduced the threshold for entry into the market. Meanwhile, the introduction of these standards and streamlined transaction processes has attracted liquidity away from established players like Ethereum (ETH) towards emerging competitors such as Solana (SOL).

As a crypto investor, I’ve noticed that Solana has taken over as the go-to destination for meme tokens, according to recent data from CoinMarketCap. This trend started gaining momentum last year. In contrast, just three years ago, investors like myself had to focus almost exclusively on Ethereum-based projects such as Dogecoin (DOGE), Floki Inu (FLOKI), and Shiba Inu (SHIB) if we wanted to find sufficient liquidity in the market.

Meme coin mania sees over 138 tokens launched in April

Meme coin oversaturation fears

New users and investment are now drawn to a wider range of meme plays, which is a positive development. However, this shift brings new challenges, making the experience somewhat more complicated than before.

Advanced tools and enhanced decentralized systems have resulted in an overabundance of meme coins in the cryptocurrency market. According to Crypto Koryo’s analysis on X, a significant number of these tokens are likely to be worthless, making it challenging for traders to distinguish potential profitable investments.

In simpler terms, this market isn’t just experiencing a bull run. The excessive number of meme coins is increasing at an alarming rate. If you adopt a fully on-chain approach and aim to get in early, risk reward (RR) can be profitable when it succeeds but the success rate is minimal. Alternatively, if you follow a social approach and wait for trends to dominate social media before investing, your win rate would be higher, but you’d likely miss out on substantial RR opportunities.

Crypto Koryo, blockchain researcher

Read More

2024-05-06 17:54