Author: Grace
Original source: Footprint Analytics
On February 4, 2021, Musk posted a Twitter about DogeCoin with the content of the Lion King P picture and updated the follow-up on the 7th. Footprint Analytics data shows that the price of DogeCoin has risen rapidly by 21.43%. On February 19, 2022, DogeCoin will be accepted for food and beverages at the Tesla Hollywood Supercharger.
Thanks to the strong promotion of this "DogeCoin CEO", DogeCoin has achieved success. It can now be traded as a cryptocurrency with circulation value. According to the data collected by Cryptwerk, as of February 25, 2022, 1,069 merchants and organizations have accepted DogeCoin as a payment method. How did DogeCoin succeed? This article will disassemble the reasons behind them one by one.
DogeCoin appeared in 2013 as a tool to ridicule BTC, until 2021 it became a popular token. There are three main reasons for the success:
1. Celebrity
Undoubtedly, celebrity effect is a very important factor for DogeCoin's success. Musk is enthusiastic about DogeCoin, and every time he publishes a tweet, the price of DogeCoin will change accordingly. Or skyrocket, or plummet.
In February 2021, Musk tweeted that Dogecoin is the people's crypto. DogeCoin rose more than 80% within a day.
In May 2021, Musk admitted that DogeCoin was a scam in an interview with the American variety show "Saturday Night Show". DogeCoin plummeted 34%.
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Footprint Analytics - Price of Dogecoin
On August 18, 2021, the DogeCoin Foundation was re-established, listing Musk and Vitalik Buterin as advisors to the board of directors. Musk's celebrity has been recognized for his contributions to the DogeCoin community.
2. Consensus value
Classifying the value of cryptocurrencies can be simply divided into value based on consensus, and recognition by users based on technology.
A typical consensus-based cryptocurrency is BTC. It is recognized as a choice for investment income or currency preservation, and is pursued by users. It has now been recognized by countries such as El Salvador as legal currency in circulation. DogeCoin has also realized circulation value in a small range.
3. Meme bonus
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meme concept
Meme, from the book The Selfish Gene. It originally refers to a substance that can stay in a single subject (usually the human brain) for a relatively long time and retain its core characteristics to spread among different subjects. Now it is more used to study and describe the spread of a cultural phenomenon.
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Meme Token Features
Meme Token is based on meme culture and is destined to be heavily community driven. Changes in the media, fame, and community sentiment can all cause price fluctuations. Meme tokens mainly include DogeCoin, SHIB, ELON, SOS, etc. There are 3 main features:
There is no upper limit on token issuance.
The price is extremely low, usually less than $1, and most of them can be bought for a few cents.
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Footprint Analytics - Meme Token‘s Ranking
Because of its specific cultural connotation, Meme token has a certain ability to attract attention, but the requirements for attracting players to retain are relatively high. There are mainly 4 as follows:
1) Storytelling of cultural connotation. A Meme token needs to have a more interesting story, so that it is more likely to convert attracted players into holders.
2) Benign community atmosphere. The price of Meme token is usually extremely low. Whenever the price doubles by 10 times or 100 times, it is very important whether the community can have some celebrations to motivate holders to continue to go to zero.
3) The degree of ridicule and banter. Enough ridicule and jokes resonate with players and support the token.
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Meme Token Success Stories
Now the more successful Meme tokens, in other words, the ones with larger Market Cap and higher popularity are DogeCoin and SHIB. As of February 18, DogeCoin and SHIB have the tenth and eleventh largest market capitalizations of all cryptocurrencies (excluding Stablecoins). To a certain extent, it can be said that the success of DogeCoin and SHIB is the realization of Meme culture.
As a typical representative of Meme token, DogeCoin has been recognized by many people for its sufficient mockery of BTC, and has also been supported by celebrity Musk (CEO of Tesla and SpaceX). Although one of the founders of DogeCoin has long since given up on DogeCoin, this still cannot prevent DogeCoin from becoming the cryptocurrency with the highest market capitalization.
DogeCoin has achieved great success due to the addition of celebrity effect, consensus value and Meme culture. No longer stay at the single connotation level of ridicule.
1) Enter circulation as a payment method and become the value that can only be realized by becoming a top token.
2) The DogeCoin community raised DogeCoin to sponsor the Jamaican bobsled team to participate in the Sochi Winter Olympics.
3) Raising funds to help MSF (Doctors Without Borders) treat Ebola victims.
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Thoughts on Meme Token
Despite DogeCoin's success, the extreme volatility influenced by celebrities still means high risk. Of course, the release of Meme token is very simple, the maintenance cost is not high, and the degree of community autonomy is great. But this does not mean that Meme token can indulge in all in.
On the contrary, it is not easy for Meme token to be recognized and supported by celebrities, and to resonate. And there are not many use cases for Meme tokens, which are different from tokens of chains supported by technology or tokens of DeFi protocols. In addition, Meme token does not support smart contracts, and pure Meme token has no ecological application.
Therefore, the success of DogeCoin is just an exception. You can try Meme token as an interest, but it is not a good choice as an investment. At least not an all in choice.
