PEPE & Memecoin Mania
The Blockchain Sector 2023-05-1
Investing in the blockchain sector can be brutal, especially as you venture up the risk curve assessing less liquid tokens.
Memecoins are the epitome of degeneracy in crypto markets. They hold zero utility and act as a ponzi game in a player vs player environment.
However there is a reason they capture a lot of attention and ultimately market interest. Many memecoins are simple ERC20 tokens with “fair launch” mechanics that provide permissionless interaction.
Pepe was a good example of this, you can check out my analysis of the token contract here: https://jamesbachini.com/pepe-memecoin/
Permissioned functions were negated when the developers relinquished owner authority to the 0x0 address. This meant that no user, including developers had any special privileges or allocations over any others.
There has been some analysis that during the initial period after launch a small amount of the supply got bought up by a handful of wallets but this was openly done via a Uniswap liquidity pool.
Pepe was arguably a “fair launch” token. The risk to reward on these is skewed with massive upside and very little downside.
In this video I created a simple MyMeme token and deployed the entire supply to a Uniswap v3 liquidity pool. No one can sell into this pool unless they previously purchase tokens.
At time of launch of one of these tokens, there is only upside because the price can only appreciate. All the tokens are on exchange and no one has any to sell, so price can only go up from the starting point. As more traders pile on this upside decreases and the risk of a market wide sell off taking price lower becomes very much a reality.
Pepe was a great success and now has a market cap exceeding $1B USD. It has been listed on leading exchanges such as Binance and captured the imagination of investors and traders alike.
Pepe and other memecoins highlight the opportunity present in decentralized finance to create fair, open, permissionless digital assets… and then speculate on them like complete degenerate gamblers ❤️
Recent Research Posts
How To Create Your Own Memecoin With Solidity and Uniswap
What is Pepe | A Memecoin Story
MEV Uncovered | The Dark Side Of DeFi
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