\n
![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/08\/GettyImages-1318956098-e1723051585755.jpg?w=2048\")
<\/p>\n [ad_1]
\n<\/p>\n
A report out yesterday offers a sobering reminder of the perils of investing and trading in the currency of internet humor. So-called \u2018memecoins<\/a>\u2018\u2014like Dogecoin, Pepe, and Shiba Inu\u2014have become the fastest-growing niche of the cryptocurrency industry\u2019s revival this year. The number of meme-related projects is up over 440% over the past two years, making the sector the fourth most valuable in crypto, ranking higher than decentralized finance and blockchain-related services, according to BDC Consulting<\/a>.<\/p>\n A new Chainplay report, however, offers a sobering take on how little is behind many memecoin projects. Titled the State of Memecoin 2024<\/a>, the report notes the average lifespan of one of these coins is just one year\u2014a third the lifespan of an average crypto project. Aligning with this high turnover rate,\u00a0nearly 60% of memecoin investors view these assets as short-term investments, and 97% of memecoins have already ceased to exist.<\/p>\n Each month, over 2,000 memecoins disappear, on average. The so-called \u201cdeath rate\u201d\u2014classified by various metrics such as a deleted website, inactive Twitter, or under $1,000 market cap\u2014varies across blockchains. Base leads with a death rate of 67%, followed by Solana at 54%, and Ethereum at 37%. So, in other words, on Base, two-thirds of memecoins ever created have already gone out of business.\u00a0In terms of the prevalence of scams, the report found that over half of all memecoins are deemed malicious, and one-third of investors have reported losses due to scam tokens.<\/p>\n Love them or loathe them, one in six new (those in the market for less than six months) investors describe memecoins as a \u201cmust-have\u201d part of their portfolio, according to the report. But why?<\/p>\n Proponents regard memecoins as the purest iterations of crypto\u2019s ultimate promise\u2014to democratize finance. Anyone can launch a memecoin in the name of anything. Among the top 300-ranking currencies: \u2018Smoking Cat Fish\u2019, \u2018Kamala Horris\u2019 and \u2018I love puppies.\u2019 Merging finance, internet trends, and gambling, investors flock to the speculative assets during viral moments. Even celebrities such as Caitlyn Jenner, Iggy Azalea and Andrew Tate<\/a>, have sought to cash in on the frenzy. <\/p>\n \u201cI\u2019m someone that naturally has so many memes over the course of my career, and things go viral on purpose or accidentally, that I felt like it was a space I probably could really engage,\u201d Azalea previously told Fortune<\/em><\/a>, following the launch of her coin Mother.\u00a0<\/p>\n But critics argue they keep both crypto\u2019s pump-and-dump stigma alive.\u00a0In June, Ethereum\u2019s founder Vitalik Buterin, posted a take-down<\/a> of celebrity memecoin culture on X<\/a>. Memecoins should \u201chave some kind of public-good goal\u201d instead of \u201cfinancialization as a means toward an end.\u201d Tokens should last a decade or more, \u201crather than bubbling around for a few months and then being forgotten,\u201d he added.\u00a0<\/p>\n Omid Malekan, an adjunct professor at Columbia Business School, sees the tokens as a symptom of the \u201ceconomic nihilism\u201d symbolic of the times. \u201cAlong with meme stocks, and the growth in traditional forms of gambling, memecoins are yet another indication that people feel like they need to do risky things with their money to get ahead,\u201d he told Fortune<\/em>.<\/p>\n<\/div>\n\nMemecoins divide crypto<\/h2>\n