Social currencies are the future of memecoins

Original Title: Social currencies are the future of memecoins

The cryptocurrency market over the past 18 months has been like a roller coaster, and amidst this chaos, we have witnessed the rise of memecoins. Although memecoins are not a new phenomenon—indeed, they are one of the oldest forms of cryptocurrency—they have once again proven themselves to be the preferred vehicle for participating in the most unique mechanism of cryptocurrency (speculation).

While memecoins are essentially pure and almost artistic, they also have a dark side. No, the problem is not with insiders or small groups—this is a common ailment that plagues the entire cryptocurrency space. In my view, the real issue lies in a lack of effort, failure to seize opportunities, and people's complacency in building memecoins. Perhaps I am too naive, but I refuse to accept that memecoins should stop here—at least I hope that is not the case.

I firmly believe that the Trojan horse for the widespread adoption of cryptocurrency is intellectual property (IP), as it can establish credibility in a realm lacking a trust ladder, and memecoins, like NFTs, are a form of IP. Memecoins have a tremendous opportunity to drive the development of the crypto industry by deeply engaging with the minds of ordinary people. However, they have not broken through the potential boundaries of their crypto-native roles; instead, they have stagnated on the path of transcendence, lacking originality and being mundane. I worry that if the status quo is maintained, the drawbacks will outweigh the benefits. For this category to thrive, memecoins must evolve, and I firmly believe the direction of evolution is to become social currencies—tokens that transcend lazy pump-and-dump schemes and transform into scalable, memorable, and beloved IP.

My argument is not to replace memecoins with social currencies but to add a final stage to their growth roadmap. Memecoins must graduate from meaningless on-chain images and evolve into social currencies that can drive the development of the crypto industry, possessing productivity and perception. I believe there are existing tokens that belong to this category. This article will explore the current state of memecoins, why successful projects should evolve into social currencies, and the impact of social currencies on the crypto space.

First, what are social currencies?

Social currencies are tokenized assets that represent value within a specific community, typically used to incentivize participation, reward contributions, and enhance brand or community loyalty. They operate similarly to traditional currencies, but their value derives from social interactions, reputation, and influence.

In simple terms, social currencies are memecoins with fundamentals—they are progressive, perceptive, and focused on nurturing communities that can sustainably create viral effects, rather than extracting value from fleeting hype.

Memecoins vs Social Currencies

Memecoins do not create viral effects—they monetize viral effects, draining the heat until it fades. In contrast, social currencies possess perception and can actively promote their IP through various media, collaborations, and integrations, continuously generating viral effects.

Typical lifecycle of a memecoin:

Lifecycle of a social currency:

In my view, all social currencies initially start as memecoins, but as momentum builds, they must evolve into social currencies. The following diagram accurately illustrates this process.

I love this diagram because it shows that social currencies are not meant to replace memecoins but are their evolved form. To me, social currencies are memecoins backed by real value. Anyone can issue a memecoin, but only the best can inject real value into it.

If you believe that liquid crypto assets will primarily belong to the retail asset category, then you are believing in memecoins and their success. If you believe that institutional capital will eventually flow into altcoins, then you must expect fundamentals to dominate. Social currencies combine the advantages of both—retail appeal from memecoins and the engaging qualities sufficient to attract institutional participation. In my view, social currencies blend the essence of memecoins and utility tokens.

When analyzing the flaws of memecoins, it is clear that they could have more potential, but we allow social consensus to convince itself that “memecoins should be ineffective, and it has always been this way.” I personally refuse to accept this as the future norm of the field. To understand my frustration, one must first dismantle the current constraints on memecoins and how social currencies can resolve these issues.

Flaws of Memecoins

Advantages of Social Currencies

Perception vs Non-Perception

For traders and investors, the core difference between memecoins and social currencies lies in perception—the ability to maintain continuous relevance. Social currencies possess perception while memecoins do not, which is the key that traders should focus on. Perception = Relevance = Attention = Momentum. Unless you are a crypto legend (like DOGE), anything without perception will ultimately fade away.

At this point, some may think: “I don't want memecoins to bear any execution risk.”

This psychological battle began with NFT art collectors in 2020, and I am surprised that we have continued this narrative. My rebuttal is simple: things without execution risk rely entirely on luck. Execution