Author: LucaNetz, Pudgy Penguins NFT CEO
Compiled by: Rhythm Little Deep
Editor's Note: The article focuses on the rise of Meme coin and its potential and limitations. The author believes that although Meme coin is a unique carrier of cryptocurrency speculation mechanism, its development is limited by the lack of innovation, stagnation and pure reliance on hype. The article proposes that Meme coin should evolve into "social currency" to promote the development of the crypto industry. Social currency is the evolution of Meme coin. Its success depends on execution rather than luck, and may eventually lead to new changes in the crypto field.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
The past 18 months have been a rollercoaster for the cryptocurrency market, and amidst this chaos, we’ve witnessed the rise of meme coins. While meme coins are not new — in fact, they are one of the oldest forms of cryptocurrency — they have once again proven themselves to be the preferred vehicle for participating in cryptocurrency’s most unique mechanism: speculation.
Despite their pure, almost artistic nature, meme coins have a dark side. No, the problem isn’t with insiders or a small group — this is a problem that plagues the entire cryptocurrency space. The real problem, in my opinion, is a lack of effort, a failure to grasp the timing, and people’s complacency about building meme coins. Maybe I’m naive, but I refuse to accept that meme coins will stop here — at least I hope not.
I’m a big believer that the Trojan Horse for crypto adoption is intellectual property (IP), as it builds credibility in areas where the trust ladder is lacking, and meme coins, like NFTs, are a form of IP. Meme coins have a huge opportunity to advance the crypto industry by getting into the minds of everyday people. However, instead of pushing the boundaries of what crypto-native characters could do, they’ve become stagnant, unoriginal, and mediocre on their way to transcendence. I’m concerned that they’ll do more harm than good if the status quo is maintained. For this category to thrive, meme coins must evolve, and I firmly believe that evolution is to become social currencies — tokens that will move beyond lazy pumps and dumps into scalable, memorable, and beloved IP.
My argument is not to replace meme coins with social currencies, but to add a final stage to their growth roadmap. Meme coins must graduate from meaningless images on the chain to productive and perceptive social currencies that can drive the development of the crypto industry. I believe that existing tokens fall into this category. This article will explore the current status of meme coins, why successful projects should evolve into social currencies, and the impact of social currencies on the crypto space.
First of all, what is social currency?
Social currencies are tokenized assets that represent value within a specific community and are often used to incentivize participation, reward contributions, and enhance brand or community loyalty. They operate similarly to traditional currencies, but their value is derived from social interactions, reputation, and influence.
In layman's terms, social currency is a meme coin with fundamentals - it is progressive, sentient, and focused on cultivating communities that can continuously create viral effects rather than extracting value from short-term hype.
Meme Coin vs Social Currency
Meme coins don’t create virality — they monetize it, draining the hype until it fades. Social currencies are sentient, actively promoting their IP through multiple mediums, partnerships, and integrations, continually generating virality.
Typical life cycle of a Meme coin:
Creativity → Token issuance → Community cultivation → Community embraces narrative → Narrative dies → Community dies
The life cycle of social currency:
Creativity → Token issuance → Community cultivation → Community advocacy narrative → Brand creation → Brand expansion → Ecosystem construction → Globally adopted and recognized currency
In my opinion, all social currencies are initially meme coins, but as potential energy accumulates, they must evolve into social currencies. The following figure accurately shows this process.
I love this picture because it shows that social currency is not a replacement for meme coins, but an evolution of them. To me, social currency is meme coins backed by real value. Anyone can issue meme coins, but only the best can inject real value into them.
If you believe that liquid crypto assets will be primarily a retail asset class, then you believe in meme coins and their success. If you believe that institutional capital will eventually flow into altcoins, then you have to expect fundamentals to dominate. Social currencies have the best of both worlds - they have the retail appeal of meme coins, but they are interesting enough to attract institutional participation. In my opinion, social currencies combine the best of meme coins and utility tokens.
When analyzing the flaws of meme coins, it is clear that they could have much more potential, but we have allowed social consensus to convince us that "meme coins should not do anything, and have always been this way." I personally refuse to accept this as the future norm for this space. To understand my frustration, it is necessary to first unpack the factors that currently limit meme coins and how social currencies can resolve these problems.
Meme Coin’s flaws
Stagnation: The trend fades and loses momentum
Stigma: 99% of speculators lose money and are not long-term holding targets
PvP mode: designed for short-term traffic, becoming a game of grabbing chairs for existing users
Lack of infrastructure to attract new users
· No real belief support except fantasy narrative - no fundamentals
· Success often depends on fantasy and luck
Advantages of social currency
· Perception: Ability to both create and capture trends, maintaining continuous relevance
New narrative: Combining the durability of Meme coins with real fundamentals to support growth, suitable for long-term holding
PvE mode: aims to promote the development of the crypto industry and attract new users
Continue to create demand through content initiatives, brand partnerships and IP growth
· Build real things that transcend the industry and enhance the recognition and belief of holders - there is a real belief foundation
Success is not based on luck or narrative, but on real fundamentals
Sentience vs. Insensitivity
For traders and investors, the core difference between meme coins and social currencies is perception - the ability to remain relevant. Social currencies have perception and meme coins do not, which is the key thing traders should pay attention to. Perception = relevance = attention = potential. Unless you are a crypto legend (like DOGE), anything without perception will eventually die.
Reading this, some people may be thinking: "I don't want Meme Coin to take any execution risk."
This psychological warfare started with NFT art collectors in 2020, and I am amazed that we have perpetuated this narrative. My rebuttal is simple: things without execution risk are completely dependent on luck. Execution risk is the only risk worth taking, and if your position is not dependent on execution, I can say with absolute certainty that in 999,999/1,000,000 cases, you will perform worse than someone who bets on execution (although I still wish you good luck).
The future of social currency
To realize their true potential, meme coins need to advance to social currencies in the final chapter of their evolution. Tokens that create culture, foster deep community bonds, and integrate real-world applications will define the new era of crypto. The shift from stagnant speculative assets to dynamic, engaged ecosystems is not only necessary, it is inevitable.
Now the question you need to think about is: Who will lead this change?
