Galaxy Digital (aka “Galaxy”), a leading crypto and blockchain-focused investment firm founded by Mike Novogratz, has recently released a comprehensive research paper — about the development of memes and their role in bockchain technology — authored by Zack Pokorny, a Research Analyst at the firm. This paper delves into the intriguing world of memecoins and their significant influence on the crypto economy.
Galaxy emphasizes that memecoins, despite their lack of technical innovation or blockchain scaling advancements, have become a pivotal element of the crypto market. Memecoins, Galaxy notes, are viral and relatable, leading to their proliferation and substantial value accumulation across the crypto landscape.
According to Galaxy, memes have been an integral part of human culture for centuries, serving as ideas, symbols, or behaviors transmitted within and between subcultures. The firm highlights that memes have historically played influential roles in societal changes, from cave paintings and Roman graffiti to newspaper comics.
Galaxy outlines the evolution of memes from ancient times to the digital age. The firm describes how early humans used charcoal and chisels to create primitive memes, which evolved through various mediums such as paints, ink, and paper. The paper claims that the modern internet meme, born in 1993, marked a paradigm shift, enabling individuals to share memes on a larger scale.
Galaxy posits that blockchains represent the next stage in the evolution of memes. The firm argues that blockchains offer a standardized, permanent, and uncensorable platform for memes, making them globally accessible and further enhancing their distribution.
Galaxy describes memecoins as tokenized depictions of internet memes or humorous events, native to blockchains and tradable on decentralized exchanges (DEXes). The firm explains that memecoins, such as Dogecoin, often have characters or visuals associated with them, similar to traditional internet memes.
Galaxy notes the ease with which memecoins can now be launched, thanks to services that automate token creation and liquidity pool establishment. This ease of launch, it says, has led to a surge in the generation and speculation of memecoins on an unprecedented scale.
Galaxy acknowledges that most memecoins lack real utility, often serving as speculative assets. The firm highlights that the volatility of memecoins attracts users, driving the adoption of blockchains as a canvas for cultural and emotional expression.
Galaxy provides an in-depth analysis of the on-chain activity and value driven by memecoins. The firm reports that Solana is the primary blockchain for memecoins in 2024, with a significant increase in token launches and swap volume.
Galaxy explores the secondary activities generated by memecoins, such as the integration of $BONK into the Solana ecosystem. The firm suggests that memecoins can serve as liquidity for new application plumbing, potentially leading to the development of durable blockchain adoption in the future.
In a recent Forbes report, Sandy Carter, COO of Unstoppable Domains, highlights the unique position of meme coins in the cryptocurrency market. Carter says that although memecoins initially gained attention through internet jokes, some of them, such as Dogecoin (DOGE), have shown remarkable resilience and significant market performance, with top tokens yielding returns of over 1,300% in 2024.
Forbes attributes meme coin success to speculation and celebrity endorsements, like Elon Musk’s support for Dogecoin. She does note, however, that the real value lies in their utility. Shiba Inu (SHIB), for instance, partnered with Zama.ai to enhance identity, security, and risk management through fully homomorphic encryption, setting in Carter’s view new standards in both the crypto and traditional financial industries.
Celebrity influence also impacts the market, as seen with Iggy Azalea’s Mother Iggy coin, which surged 1,200% in one week. However, celebrity backing alone isn’t enough, as evidenced by Caitlyn Jenner’s coin, which plummeted in value.
Carter emphasizes the importance of community engagement for memecoin success, using Floki as an example. She mentions that Floki has evolved into “The People’s Cryptocurrency,” supporting utility projects, NFTs, and integrating with the Valhalla Metaverse and an NFT marketplace, boosting its market cap to over $2.5 billion.
Forbes notes that memecoins built on established blockchains, like Bonk on Solana, are robust and suitable for decentralized finance applications. Investors should thoroughly research a memecoin’s utility, community engagement, and development team, as long-term value depends on solving real-world problems and offering useful functions beyond existing cryptocurrencies.
Featured Image via Pixabay
