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Source-This post on meme coins is based on the article “Explainer: What are meme coins and should you add them in your portfolio?“ published in “Business Standard” on 25th March 2024.
Why in the News?
Recently, meme coins have gained significant popularity in the digital currency space.
About Meme Coins
1. About: Meme coins are digital currencies created as a form of satire or humorous tribute to the internet culture. They are also known as ‘memetic tokens’ or ‘community coins’.
2. Features:
a) Meme coins have branding and names inspired by internet memes, jokes, or phenomena. They are humorous and designed for virality, often featuring quirky logos to appeal to the widespread online community.
b) The nature of these coins are highly volatile as they are driven by the current buzz surrounding the token.
c) They typically have a massive or uncapped supply, leading to very low values per token.
d) These coins leverage blockchain technology, often utilising smart contracts on platforms like Ethereum and Solana.
e) It is easy to create a meme coin as compared to traditional cryptocurrencies. Virtually anyone can launch a meme coin with minimal technical expertise and resources.
3. Some of the famous meme coins are Dogecoin, Shiba inu, Retik Finance.
4. Risks associated with meme coins:
a) The prices of meme coins can experience rapid fluctuations, making them risky investments.
b) These coins are primarily driven by speculation and community engagement, lacking fundamental value or unique use cases.
Read more: cryptocurrency
UPSC Syllabus: Economy
