April 02, 2024 | Read Online

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"We need a name for the new replicator, a noun that conveys the idea of a unit of cultural transmission, or a unit of imitation."

- Richard Dawkins, The Selfish Gene, 1976

Coinum Memeticus: A Taxonomy of Memecoins

When Richard Dawkins sought a term for his concept of a "unit of cultural transmission" he settled on "meme" — a mashup of "gene" (for an ability to propagate itself) and "mimeme" (Greek for "something imitated").

Dawkins coined the term in 1976, but it didn't catch on until the advent of internet memes, the cultural significance of which was recognized by the Merriam-Webster dictionary in 1998:

Meme, noun, [ˈmēm]: an amusing or interesting item (such as a captioned picture or video) or genre of items that is spread widely online especially through social media.

The next great evolution of the term occurred in 2013 with the advent of Dogecoin — the cryptocurrency intended as a joke and that later became known as the first "memecoin."

This seminal event has not yet been acknowledged by Merriam-Webster, which seems like a grave oversight — especially as they have acknowledged meme stocks:

Meme stock, noun, [ˈmēm ˈstäk ]: a stock that experiences a temporary sudden surge in popularity and price due to a coordinated effort (such as a viral social media campaign) by small investors.

I'm not sure how to explain this — I guess because meme stocks, being sanctioned by the SEC and listed on NYSE and Nasdaq, have an air of legitimacy (relatively speaking) that memecoins do not?

But memecoins predate meme stocks by nearly a decade.

Also, they are in every way superior. Memecoins are more popular, more fun, more valuable and more numerous than meme stocks.

They have proven far more lasting, too. GameStop shares have been down —only since they inspired the term meme stock in 2021, AMC shares hit an all-time low of $3 today, and Bed Bath and Beyond shares were delisted months ago.

Memecoins, by contrast, are booming. Again.

The ivory-tower lexicographers at Merriam-Webster, however, have probably not noticed that Dogecoin is back to a $27 billion market cap ($7 billion more than GME at its 2021 peak!), that dogwifhat is up 25-fold this year, or that cat in a dogs world, just seven days old, is already worth $640 million.

Nor are they likely to take notice any time soon — so we are just going to have to do their work for them.

The family tree

Unfortunately, we cannot simply take Merriam-Webster's definition of meme stock and replace "stock" with "coin."

For one thing, unlike the short mania in meme stocks, the surge in memecoins has not been "temporary."

Nor are booming memecoins always the result of a "coordinated effort" or the enthusiasm exclusively of "small investors" — and they're not always amusing.

Memecoins are far more varied than meme stocks, so an adapted definition of the latter will not suffice.

To arrive at a better one, then, we'll have to start by building a rigorously defined taxonomy of memecoins, including a scientific naming convention consistent with Dawkin's methodological treatment of memes (in case this email is forwarded to the great evolutionary biologist, as seems highly likely).

Memecoins — genus/species: memeticus coinum:

Pure meme — memeticus maximus: The purest distillation of tokenized memes, those coins that truly do nothing, whose value is strictly a function of their ability to attract attention. (WIF, PEPE)

Productive meme — memeticus profitus: Coins that are primarily associated in the popular imagination with a meme (a photo of a dog, say), but that also have an element of fundamental value derived from revenue earned through some sort of functionality. (BONK)

Utility meme — memeticus pragmatix: Coins that derive most of their value from a meme, but that also have utility because they are required to execute some on-chain activity. (FLOKI, SHIB)

Native-token meme — memeticus nativus: Coins that derive value from an idea, but that are also the native token of a blockchain. (DOGE, BTC)

Meme in disguise — memeticus incognito: Coins that claim to have current or future earnings power, but are in fact monetizing people's desperation to get in on some trend. (Every AI token?)

De facto meme — memeticus defactus: The closest cousin to meme stocks — coins that have (or potentially have) real earnings power or demand drivers, but whose sky-high valuation is at least 90% attributable to an associated meme. (WLD)

Money meme — memeticus monetarious: Coins whose value is a function of people's unfalsifiable belief that it is money. (BTC, gold)

Make it make sense

Here, then, is my submission to the lexicographers of Merriam-Webster:

Memecoin noun, [ˈmēm ˈkȯi-n]: Cryptocurrency that derives some or all of its value from a meme.

That may seem overly simplistic after all the hard work we put into our taxonomy, but that is kind of the point.

The memecoin ecosystem is far more varied and diverse than the name suggests and its definition therefore needs to be sufficiently broad to account for it all — broad enough even to include even bitcoin.

(Which I may or may not be including just to trigger you).

Memecoins are more than just pictures of dogs, cats and (most recently) US presidents.

They are silly, yes, and it may be intellectually correct to dismiss them entirely — it may even turn out to be directionally correct, too.

But the risk is that without an understanding of memecoins, crypto won't make sense to you for the next long while.

The memecoin taxonomy should help it all make sense.

― Byron Gilliam

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In today's episode Kyle Samani from Multicoin Capital joins Michael and Hart to discuss the complex dynamics of network effects in the blockchain ecosystem. The conversation dives deep into the different types of network effects at play, the phenomenon of anti-network effects caused by high gas fees, and the potential for blockchain technology to revolutionize global finance.

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Daily Insights

Lyn Alden @LynAldenContact

If the Fed keeps rates steady, then federal interest expense will increase $500B throughout the year.

If the Fed cuts rates by 1.5% then they will increase interest expense by only $100 billion. But if they do that, they increase the risk of oil price re-acceleration.

Apr 2, 2024

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Jurrien Timmer @TimmerFidelity

What time is it in the cycle? Now that we are 17 months into a bull market cycle, it's worth asking how much life there is left. How long can this broadening bull continue?🧵

Apr 2, 2024

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