The Meme Coin Phenomenon: How Social Activity Shapes the Crypto Market

Follow the journey of meme coins, from the inception of Dogecoin to the new wave of coins like PEPE and WOJAK. Explore how community-driven social activity fuels these internet-born currencies, with case studies of Shiba Inu and Floki.


In 2021, meme coins became incredibly popular in the crypto world, with coins like Dogecoin and Shiba Inu gaining a lot of attention. These memes made some people very wealthy, but others lost a lot of money by investing in them. Now, in 2023, new meme coins like PEPE, WOJAK, TURBO, and LADYS have emerged, bringing both excitement and risks for crypto traders.

In this article, we will learn about meme coins and how they became so popular. We'll also look at the problems they can cause. By understanding meme coins better, we can make smarter decisions in the crypto market.

What is a Meme Coin?

Meme coins are a unique form of digital currency that draws inspiration from funny internet content. Unlike traditional cryptocurrencies, like ETH and BTC, they do not have a distinct value or purpose. Instead, meme coins rely on the enthusiasm and backing of online communities to generate interest.

Meme coins can be quite unpredictable, and their value can change dramatically in a short period. They are influenced by factors such as online discussions and the attention they receive from celebrities.

The Origins of Meme Coins

The journey of meme coins began with the creation of Dogecoin in 2013. Dogecoin, symbolized as DOGE, is almost identical to Litecoin, one of the early alternative cryptocurrencies that emerged after Bitcoin.

Most people don't know, but Dogecoin experienced a significant rise in 2014. During that time, it reached a market capitalization of $87 million, positioning itself among the top five coins in the crypto market.

Years later, in 2017, Dogecoin experienced another rally, taking advantage of a more mature market. During this period, the dog-themed coin achieved a market capitalization of approximately $2 billion. However, despite beating the previous highs, it wasn’t near the top #10 rank.

Now, the real craziness happened in 2021 when Dogecoin's market capitalization skyrocketed from approximately $700 million to $90 billion within a matter of months! By May 2021, Dogecoin had regained its position at the top, securing the top #4 position among the coins with the highest market capitalization.

Following the trend of Dogecoin, numerous other meme currencies emerged. Some of these coins, such as Shiba Inu, Floki, and Baby Doge, followed the same pattern as Dogecoin with their dog-inspired themes. Meanwhile, other meme coins, like SafeMoon, gained popularity simply for being memes.

Source: Coingecko

The Importance of Social Activity - Heimdall’s Social Score

Communities and their social activity play a vital role in the success of projects in the crypto market. When it comes to meme coins, this becomes even more important because the value of these coins relies entirely on the community.

Memecoins are funny, but they don't have any practical use case. People don't trade these coins because they need them for something specific. Instead, the value and popularity of them are determined by the collective support and engagement of the community.

As you may already know, Heimdall is a specialist when it comes to social analysis. In this section, we will introduce some of the features enabled by our algorithms, which can assist you in identifying emerging trends in the crypto market.

To do that, we’ll present two examples of meme coins and their social data.

Shiba Inu

Source: Coingecko and Heimdall Research

SHIB experienced increased social activity towards the end of 2021. The social score reached significant levels before the price movement.

However, it's important to note that this isn't always the pattern. In certain instances, influential market players may buy low market-cap meme coins and artificially increase their prices, which subsequently attracts social attention.

Another feature of Heimdall is the Social Map, where you can find the most influential Twitter accounts of a specific crypto community.

Source: Heimdall Research


Source: Coingecko and Heimdall Research

In the case of FLOKI, we observe a similar pattern to SHIB. Initially, there was a significant rise in social activity, which was followed by a steady price increase over a period of time. Eventually, the price of FLOKI skyrocketed, and that’s when the social score also found its all-time high.

However, it's noticeable that in both cases, the price quickly declined. This rapid fluctuation allows some individuals to make gigantic profits. Unfortunately, many people join the trend too late and end up losing money in a short period of time.

FLOKI’s Social Map

Source: Heimdall Research

What happens to successful Meme coins?

Meme coins are initially created and supported purely because of their meme value. But what happens when they gain social approval and start attracting significant attention in the crypto market?

Well, this is an intriguing question and to answer it, let’s dive into Shiba Inu’s development.

Shiba Inu

After the successful rise of the meme coin SHIB, the project took steps to evolve beyond just being a meme in the market.

To achieve this, an ecosystem was created around Shiba Inu, offering the following features:

  • ShibaSwapDEX

ShibaSwap is a decentralized exchange designed specifically for the SHIB community. It allows users to trade various tokens and earn rewards using $SHIB, $BONE, and $LEASH, which are ecosystem tokens.

  • Shiboshis NFT Collection:

Within the Shiba Inu ecosystem, there is a native NFT collection called Shiboshis. These NFTs can be traded on ShibaSwap.

  • Shiba Eternity

Shiba Eternity is a free collectible card game developed by PlaySide Studios. The game transports players into a world inhabited by Shiboshis.

In the future, holders of the Shiboshis NFTs will be able to use them in the game, providing a “real utility” for these unique tokens!

  • Shibarium

The Shiba ecosystem, including the main token SHIB, currently operates on the Ethereum blockchain. However, Ethereum has limitations in terms of scalability. It often experiences high fees and network congestion, which can negatively impact the user experience and prevent many people from joining the ecosystem.

To solve this problem, Shibarium was created as a Layer 2 blockchain solution. It gives users an alternative platform to participate in the Shiba ecosystem without worrying about expensive fees.

The Risks of Meme Coins

The recent popularity of Meme coins like PEPE and TURBO has brought a lot of excitement to the crypto market, introducing even tokens on the Bitcoin blockchain, called BRC-20!

However, investing in these coins can be risky. While some people have made a lot of money quickly, many others have lost due to the coins losing value or falling victim to scams.

To help you understand better, here are some of the main risks to consider when investing in Meme Coins:

  • Unpredictable Prices: Meme coins can have wild price swings, which means their value can change a lot and quickly. This can lead to big gains or losses.

  • Unclear Value: Unlike regular cryptocurrencies, meme coins often don't have a clear purpose or real value. Their worth is mostly based on Social Activity.

  • Liquidity: Some Meme coins may not have as many buyers and sellers compared to well-known digital assets. This can make it harder to trade large amounts without affecting the price.

  • Scams: The popularity of meme coins has attracted scammers who try to take advantage of people. It's important to be cautious of fake projects and misleading information that could result in losing your money.

You should look at meme coins with the mindset of gambling. Invest only the amount you can afford to lose, and exercise caution as it can become addictive. It's important to be mindful of the risks involved and make responsible decisions to protect your financial well-being.


Meme coins have undeniably made a big impact in the crypto market, capturing the attention of many investors and enthusiasts. Their unique nature, driven by internet memes and community engagement, has led to both incredible gains and substantial losses. Meme coins should be approached with caution, as their prices are highly unpredictable, and their value often lacks a clear purpose or utility.

By leveraging the power of social analysis, Heimdall can help you identify emerging trends, monitor social engagement, and gauge the level of community support for specific meme coins. This enables investors to make more informed decisions and potentially find opportunities for profitable moves.

In summary, by understanding meme coins, being aware of the risks involved, and using tools like the Heimdall social score, investors can make more informed decisions in the crypto market.

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