1、Project Overview
1.1 Business Summary
PEPE is a MemeCoin launched on Ethereum on April 17, 2023, driven purely by memes and positioning itself as the “People’s Token.” PEPE aims to leverage the popularity of other MemeCoins like Shiba Inu and Dogecoin, paying homage to the internet meme Pepe the Frog, created by Matt Furie. The project aspires to establish itself as a leading MemeCoin in the industry.
In its market operations, PEPE has garnered significant attention from the cryptocurrency community through its tax-free policy, a redistribution system rewarding long-term stakeholders, and a deflationary mechanism maintaining PEPE token scarcity.
1.2 Team Background
Zachary Testa, the founder of PEPE, was born in 1997 in Phoenix, Arizona, USA. He graduated from Arizona State University in 2018 with a degree in marketing and is also an American landscape photographer known for his illegal activities in various wilderness areas, sacred indigenous sites, and other no-fly zones.
Matt Furie, the original creator of PEPE the Frog, is an American comic artist and illustrator famed for creating Pepe the Frog, a character from his 2005 “Boy’s Club” series. Initially designed as a green anthropomorphic frog, it evolved into a widely spread meme in the late 2000s and early 2010s.
Notably, in August 2023, PEPE’s price plummeted by 20%, and Testa faced scrutiny amid reports that he and team members stole over $15 million worth of PEPE from the project’s multi-signature wallet. Other team members, previously known as @billyoptions, @zerozevia, and @ekim222 on Telegram, have since deleted their accounts.
1.3 Product/Technology
PEPE positions itself as the “most memorable MemeCoin in existence,” but according to its official website, it has no intrinsic value or technological substance: “PEPE is a MemeCoin with no intrinsic value or expectation of financial return. There is no formal team or roadmap, and it is entirely useless and purely for entertainment purposes.”
In the crypto realm, this is not uncommon, as many past MemeCoins have similarly warned users of their lack of inherent value.
1.4 Development Roadmap
Phase One: List PEPE on CoinMarketCap and CoinGecko, promote community growth, carry out marketing campaigns, and increase visibility and influence.
Phase Two: List PEPE on major centralized exchanges, boost trading volume and liquidity, increase market cap and ranking, and attract more investors and partners.
Current Phase Three: List PEPE on top-tier exchanges, launch the so-called “Meme Era” plan, and build an ecosystem of meme tokens, including NFTs, gaming, and charity.
2、Market Data
2.1 Official Website Data
From February 2024 to April 2024, the official website data shows a total of 990.13K visits, with an average monthly visit of 330.04K. The bounce rate is 72.42% (moderate, given the simple structure of the website). User visits are relatively evenly distributed across regions, and direct and shared visits account for over 75%, indicating a low proportion of spam data and significant community-driven traffic.
2.2 Social Media Data
3、Competitive Analysis
3.1 Market Scale
MemeCoins typically have no practical use, relying mainly on market sentiment and community engagement. From 2020 to 2021, MemeCoins like $DOGE and $SHIB established their market presence, showcasing the unique appeal of MemeCoin markets. The total market capitalization of all MemeCoins is currently around $60 billion, with Dogecoin, Shiba Inu, Dogwifhat, and PEPE among the top 50 cryptocurrencies by market cap. However, this is still below Dogecoin’s peak of nearly $100 billion in early 2021.
Initially, MemeCoins were concentrated in the ETH ecosystem, but with the rise of high-performance networks, Solana has become a significant network for MemeCoin trading. Following the Dencun upgrade, Base Chain has also become a major platform for trading MemeCoins due to the significant reduction in DEX transaction fees.
3.2 Competitive Landscape
According to Coingecko data, MemeCoins were the most profitable crypto sector in Q1 2024, with an average return rate of 1312.6%. The top five MemeCoins were DOGE, SHIB, PEPE, WIF, and FLOKI.
Within the ETH ecosystem, PEPE, as the top MemeCoin, leads significantly in trading volume, far surpassing other popular MemeCoins like TRUMP, PORK, and FLOKI. Although PEPE, the third largest MemeCoin, still has about three times the market gap compared to SHIB, its faster growth rate and market cap performance make it a promising investment. For example, SHIB took 90 days to reach 100,000 holders in 2021, while PEPE took less than 30 days to surpass 100,000 holders.
Observing the development patterns of leading MemeCoins, after the consensus demand for Meme narratives is saturated, they tend to explore substantial functionalities to expand their user base and support their market value, such as DOGE announcing the launch of ecosystems like ShibaSwap and NFTs. Therefore, PEPE is expected to continuously explore new application scenarios in its third roadmap phase to support its market value growth.
3.3 Differentiation Advantage
Compared to other MemeCoins, PEPE has an inherent artistic and viral advantage. PEPE is derived from “Pepe the Frog,” an original work by artist Matt Furie, which has been popular on the internet since 2005, providing a strong cultural foundation and recognition.
The long-standing popularity of the “Pepe the Frog” meme is a core factor in PEPE’s development. By leveraging the appeal of meme culture, PEPE cleverly combines the advantages of blockchain technology with the virality of the PEPE the Frog meme, creating a MemeCoin with strong community consensus through the unique attributes of the crypto community.
3.4 Risks and Issues
As one of the top three MemeCoins, PEPE faces significant risks of volatility and market cap instability, similar to other MemeCoins. A shift in sentiment can lead to a sharp decline in market cap and token price. Although PEPE may have brought high returns to many investors, investing in MemeCoins still requires caution and patience.
Additionally, the previous incident where PEPE team members stole over $15 million worth of PEPE from the project’s multi-signature wallet had a significant impact on the community. While this incident seems to be in the past with PEPE’s rising market cap, the potential risk and community instability remain unknown and should be closely monitored.
4、Token Valuation
4.1 Token Model
PEPE has a total supply of nearly 420.69 trillion tokens (420,690,000,000,000), paying homage to the popular meme numbers 4:20 and 69 (which hold specific cultural significance). The official website claims that PEPE tokens had no presale, zero taxes, LP has been burned, and the contract has been renounced.
4.2 Valuation Analysis
The valuation model of MemeCoins differs significantly from traditional financial assets, primarily because their value is driven by narrative, frequency of emotional engagement, and celebrity influence, making them difficult to quantify precisely with mathematical models. While some MemeCoins have integrated NFTs, decentralized finance (DeFi), or community-driven initiatives, many projects focus on humor and satire, limiting their valuation models due to the lack of fundamental technical value.
Firstly, in the MemeCoin sector, DOGE currently has a market cap of $20.8 billion (peaking at $100 billion), SHIB has a market cap of $14 billion (peaking at $50 billion), and PEPE has a market cap of $3.9 billion. These are all fully diluted valuations, but PEPE’s inherent viral attributes give it a competitive edge, with significant potential for appreciation and value creation.
Secondly, for MemeCoins, narrative is the product, culture is the product, and the community is the product. Although it is challenging to precisely quantify MemeCoin’s value, some valuation formulas can be used for rough estimation. The formula’s narrative represents the Meme product itself, and the figure is a complex deviation factor incorporating multiple elements. Expanding this, valuation = narrative size (market impact scope) + frequency of emotional engagement + celebrity effect (KOL endorsement and promotional capacity) + SOV (Share of Voice: media coverage ratio), among other factors.
Based on AI-generated token scores from market trends, historical performance, on-chain transactions, and Twitter and news content analysis, PEPE currently ranks second with a score of 63, reflecting a higher potential investment opportunity in the next 24 hours.
PEPE token has increased by 6.1% in the past seven days and received positive sentiment from several KOLs on Twitter in the past 24 hours. PEPE was mentioned by six KOLs eight times, with a total view count of over 208,947. The accounts mentioning PEPE include ColdBloodShill, cryptogems555, and ai_9684xtpa.
PEPE’s valuation = narrative size (90/100 in the MemeCoin sector) + frequency of emotional engagement (80) + celebrity effect (70) + SOV (50) = 290 (out of 400).
Finally, as of May 15, 2024, Coinglass data shows that PEPE’s open interest surged 24.43% to $139 million, while derivatives trading volume increased 19.72% to $2.063 billion, potentially further driving PEPE’s short-term volatility. Coupled with frequent large transactions and the extended MemeCoin market cycle, market sentiment towards PEPE’s long-term prospects remains optimistic.
4、Conclusion
As a MemeCoin project, PEPE lacks substantial product and technological support. Additionally, the past malicious cash-out by the PEPE team and the potential legal scrutiny faced by the founder add more uncertainty to PEPE’s development, which is a crucial risk factor to consider when investing in PEPE.
However, PEPE’s inherent viral attributes give it a unique competitive advantage, and it has already established a presence in the MemeCoin market through its successful community and cultural narrative. The continued speculation by large investors also provides a growth foundation for PEPE’s long-term development.
Currently, PEPE appears undervalued compared to DOGE and SHIB, with the potential for higher growth in a broader market cycle. Nonetheless, given the overall weak market, investors are advised to adopt a cautious investment strategy, closely monitor the project’s further developments, and observe changes in community activity and market sentiment to adjust their investment decisions accordingly.
Reference Resources
【2】https://ai.0xscope.com/
【3】https://dune.com/wuligy/PEPE-metrics
【4】https://dune.com/cryptokoryo/Memelords
【5】https://www.coinglass.com/currencies/PEPE
【6】https://foresightnews.pro/article/detail/30961
【7】https://www.rootdata.com/Projects/detail/PEPE?k=NDE0Ng%3D%3D
Note: All of the above opinions are not investment advice. If there are any inappropriate points, please feel free to leave a message to correct them.
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