From Meme to Encryption: Exploring the Evolution and Risk Challenges of PEPE

Memecoin seems to be a necessary product of the cyclical market fluctuations in the crypto industry, and every now and then, a brand new Memecoin is hyped up by the market.

Take for example the recent hit PEPE Memecoin, which has been in the top 100 in less than a few weeks of its launch and has a total market cap of $400 million. In this post, we will explain what PEPE Memecoin is? and the related backstory.

I. What is Memecoin?

Meme has become the oldest element on the Internet (Meme, translated in Chinese, refers to an idea or culture, a style of image, etc. that spreads quickly through the Internet). It has been around since the early days of Web1 and will continue to be around for a long time to come.

So it's no surprise that Meme is entering the crypto industry. While most Token tend to focus on some sort of utility, Memecoin focuses on going viral through the viral speed of Meme to go viral.

Specific examples include Dogcoin (DOGE), which was the first Memecoin to garner public attention and has grown stronger in the crypto-asset landscape over time, others include the likes of SHIB, FLOKI, and others. And now, PEPE Memecoin is as hot as probably no other Memecoin has ever been before.

II. History of PEPE Memecoin

PEPE Memecoin was launched in mid-April 2023, with the first entry point on the block browser Etherscan on April 18.

Less than three weeks later, the crypto asset's market cap exceeded $420 million, placing it among the top 100 Tokens in terms of total market cap.

At the time of writing (Last Updated May 2, 2023), PEPE has been listed on major trading platforms such as Firecoin, MEXC, and OKX. In addition, it can be used on multiple DEXs (e.g. Uniswap).

1. What is PEPE Memecoin?

According to the official website, PEPE memecoin is designed to mean "the most memorable Memecoin in existence", while referring to other popular Tokens such as SHIB, FLOKI, DOGE, etc. several times.

By design, PEPE has no intrinsic value, which is clearly stated on the website: "PEPE is a Memecoin with no intrinsic value or financial return expectations. there is no official team or roadmap, so it is completely useless and for entertainment purposes only."

This is nothing new in the crypto space though, after all, many kinds of Memecoins have appeared in the past without making any claims or warning users outright that they have no value whatsoever.

2. The connection to Pepe the Frog Meme

While relying on the popular Meme to go viral, the team behind PEPE claims to have no connection to Pepe the Frog: "PEPE Coin is in no way connected to Matt Furie and his creation, Pepe the Frog Meme.

Image source: Wikipedia

On the contrary - PEPE Coin's vision is "a tribute to the Memecoin we all love and recognize".

As a brief introduction to Pepe the Frog, a cartoon character created by cartoonist Matt Furie, Pepe made his debut in Furie's comic strip Boy's Club in 2005, and in 2008, Pepe was picked up by 4chan and spread as an emoji pack on 4chan.

3. The purpose and vision of PEPE Memecoin

While joking about not having any plans, the team presented three phased development expectations in the form of three different roadmap phases, as shown in the following screenshot from the official website:

The page shows that the Phase 1 route includes

- Release

- Go live CoinGecko/Coinmarketcap market cap ranking

- 1k+ holders

- Use Meme power to get the trending on Twitter

The Phase 2 route includes:

- Achieving Community Partnerships Pepe Times Digital Newsletter

- Forming a Discord community of holders, etc.

- 10,000+ holders on CEX

Phase 3 routes include.

- PEPE Merchandise

- PEPE Academy

- PEPE Tools

- Listed T1 Trading Platform

- 100,000+ Holders

- PEPE Acquisitions

Total PEPE supply is almost 420.07 billion (420,690,000,000,000,000), which is actually a tribute to the popular Meme numbers 4:20 and 69 (these numbers have specific meanings in a given culture).

Currently, according to the official website, 93.1% of the PEPE supply has been sent to the liquidity pool, while the remaining 6.9% is stored in a multi-signature wallet that will be used for future listings on CEX, LP, and can be tracked using the ENS name "pepecexwallet.eth".

4. PEPE Memecoin Ecosystem

The PEPE Memecoin ecosystem is growing in number. According to Etherescan, at the time of this writing on May 1, two weeks after its initial launch, the number of holders had already surpassed 65,000.

Source: Etherscan

Its official Telegram group has more than 25,000 members and hundreds of thousands of messages per day. Its official Twitter feed was created in April, but as of now (May 3) has more than 190,000 followers.

III. Risks and challenges

Like most Memecoin, which tends to go viral, PEPE has some risks and challenges.

1. Market volatility

PEPE has been one of the most volatile crypto assets since its creation, with huge price fluctuations. For example, on May 1, it more than doubled in price, rising more than 100% that day. While this sounds particularly attractive, it's also important to note that it comes with a host of risks.

There is a popular saying in the crypto space that goes something like this, "Price goes up like a staircase and down like an elevator."

This suggests that while PEPE appears to be "only going up," it could also lose all of its value very quickly. Note that the creators themselves have said that it has no intrinsic value, so its value basically depends on how much people are willing to pay for it. This is not uncommon in circles, and the concept of value itself is a social construct, but the risk is especially magnified with newly minted Memecoin.

In addition, many CEXs suffer from a lack of the necessary liquidity to cash in on earnings-related issues. This means that even if someone is able to complete the most important trade of their life, they may not have enough liquidity to cover their position.

As an example, someone turns a $27 PEPE investment into a staggering $1 million, but is unable to fully liquidate it due to various liquidity-related issues. Of course, this concern may subside if PEPE stands the test of time and is listed on more centralized trading platforms where liquidity tends to be deeper.

2. Security Risks

The more popular Memecoin becomes, the more scams are associated with it. For example, here's a message from the official PEPE Telegram group:

Some community members have contacted us about dusting/token scams (cyber attacks) happening in our Deployer wallet and CEX wallet: anyone can attack transactions and send these Tokens to our wallet. If this were to happen, every Coin would be a scam. Many hackers are attacking our wallets to make them look like airdrops or Token transactions that we make to trick people into interacting. Beware! Do not buy any of these Tokens or interact with unknown contracts to avoid property damage.

In general, whenever interacting with the DeFi ecosystem, it is absolutely essential to follow some basic crypto asset security to avoid being scammed as much as possible.

IV. Summary

With a total market cap of over $400 million in just two weeks after its launch, PEPE Memecoin has certainly managed to create a stir in the crypto asset market. Many compare PEPE to other Memecoin (e.g. SHIB, DOGE, FLOKI, etc.), but only time will tell if this Meme-derived Token will continue to exist.