Source: MIIX Capital

1. Project Status

1.1 Business Overview

PEPE is a MemeCoin issued on Ethereum on April 17, 2023. It is driven by pure memes and positioned as "the people's token". PEPE was created to take advantage of the popularity of MemeCoins such as Shiba Inu and Dogecoin, pay tribute to the Pepe the Frog online meme created by Matt Furie, and establish itself as the top MemeCoin in the industry.

In market operations, PEPE has attracted a lot of attention from the cryptocurrency community by formulating a tax-free policy, a redistribution system that rewards long-term stakeholders, and a destruction deflation mechanism that maintains the scarcity of PEPE tokens.

1.2 Team Background

Zachary Testa, founder of PEPE, was born in Phoenix, Arizona, USA in 1997. He graduated from Arizona State University in 2018 with a degree in marketing. He is also an American landscape photographer who has a record of violating laws in multiple wilderness areas, sacred indigenous areas, and other areas where drones are prohibited.

Matt Furie is the original creator of PEPE the Frog. As an American comic artist and illustrator, he is famous for creating Pepe the Frog, a character in his "Boys Club" series, which he first launched in 2005. It was originally designed as a green humanoid frog, and later evolved into a variety of memes and spread widely on the Internet in the late 2000s and early 2010s.

It is worth noting that in August 2023, the price of PEPE plummeted by 20%, and the founder Testa faced scrutiny. It was reported that he and team members stole more than $15 million worth of PEPE from the project's multi-signature wallet. The telegram handles of other PEPE team members are @billyoptions, @zerozevia and @ekim222 (now all deleted).

1.3 Product/Technology

PEPE was born to position itself as "the most memorable MemeCoin in existence", but according to the introduction on the official website, PEPE has no intrinsic value and product technology connotation - "PEPE is a MemeCoin with no intrinsic value or financial return expectations. There is no formal team or roadmap. It can be said to be completely useless and is only for entertainment."

But in the field of encryption, this is not uncommon. After all, many types of MemeCoins that have appeared in the past have not made any statements and directly warned users that they have no value.

1.4 Development Roadmap

In the first stage, PEPE will be listed on CoinMarketCap and CoinGecko to promote community growth, carry out marketing activities, and increase visibility and influence;

In the second stage, PEPE will be listed on major centralized exchanges to expand trading volume and liquidity, increase market value and ranking, and attract more investors and partners;

Currently, it is in stage three, listing PEPE on various first-class exchanges, launching the team's so-called "Meme Era" plan to create an ecosystem of meme coins, including NFT, games, charity, etc.

2. Market data

2.1 Official website data

From February 2024 to According to the official website data in April 2024, the total number of visits was 990.13K, the average monthly visit was 330.04K, and the bounce rate was 72.42% (medium, the official website structure is simple). The user access data in each region is relatively uniform, and direct access and shared access account for more than 75%, which may indicate that the proportion of dirty data in the access user data is not high, and most of them are the result of community interaction and communication.

2.2 Social media data

3. Competition analysis

3.1 Track scale

MemeCoin usually has no practical use, mainly relying on emotions and cultivating community stickiness. Between 2020 and 2021, memecoins such as $DOGE and $SHIB established themselves, demonstrating the unique charm of the memecoin market. At present, the total market value of all memecoins is about $60 billion, among which Dogecoin, Shiba Inu, Dogwifhat and PEPE occupy a prominent position in the top 50 cryptocurrencies by market value, but this figure is still lower than the peak of nearly $100 billion driven by Dogecoin in early 2021.

Initially, MemeCoin was mainly concentrated in the ETH ecosystem. With the rise of high-performance networks, the Solana network has become an important network for MemeCoin transactions, and the enthusiastic participation of its community has made it the center of a vibrant memecoin market. After the Denchun upgrade, Base Chain has also become the main platform for trading MemeCoin thanks to the significant reduction in transaction fees on DEX.

3.2 Competition Status

According to Coingecko data, in the first quarter of 2024, MemeCoin became the most profitable encryption track, with an average return rate of 1312.6%, among which the TOP5 were DOGE, SHIB, PEPE, WIF and FLOKI.

In the ETH ecosystem, PEPE, as the TOP1 project of MemeCoin, is far ahead in terms of trading volume. Other popular MemeCoins, such as TOP 2–4 TRUMP, PORK, and FLOKI, are all far behind PEPE. However, compared with SHIB, although TOP3 PEPE still has about 3 times the space, its development speed is much faster, and its expected growth and market value performance are more worth looking forward to. For example: SHIB took 90 days to reach 100,000 holder addresses in 2021, while PEPE took less than 30 days to break 100,000+ holders.

Observing the development law of the head MemeCoin, when the consensus demand of Meme narrative reaches saturation, it will turn to pursue substantive functional exploration to expand users and support market value, such as DOGE began to announce the launch of ecosystems such as ShibaSwap and NFT. In other words, the first stage is the financial flywheel that runs first, and then the second stage is the landing of narrative. PEPE coin will also continue to explore new application scenarios in the process of Phase 3 of the roadmap to support the growth of its market value.

3.3 Differential Advantages

Compared with other MemeCoins, PEPE has natural artistry and communication. PEPE comes from "Pepe the Frog", an original work by artist Matt Furie. The character has been popular on the Internet since 2005 and has a deep cultural foundation and recognition.

This "Pepe the Frog" meme, which has accumulated many years of popularity, is the core factor in the development of PEPE. PEPE uses the appeal of the meme culture to cleverly combine the advantages of blockchain technology with the spread of the PEPE the Frog meme, and uses the collective power of Internet culture and the unique attributes of the crypto community to create a Memecoin with a strong community consensus, such as PEPE.

3.4 Risks and Issues

As the TOP3 token of MemeCoin, PEPE, like other MemeCoins, faces the risk of volatile fluctuations and poor market value stability. Once sentiment turns to market value and coin prices, there will be a sharp drop. Although PEPE may and has brought high-multiple returns to many investors, investing in MemeCoin still requires caution and patience.

In addition, members of the PEPE team previously stole more than $15 million worth of PEPE from the project's multi-signature wallet. The PEPE incident had a huge impact on the community. Now, with the soaring market value of PEPE, the incident seems to have become a thing of the past, but whether there are still risks left and whether it may cause community turmoil and token market value fluctuations remains unknown. It is recommended to pay close attention.

4. Token Valuation

4.1 Token Model

The total supply of PEPE is nearly 420.7 billion (420,690,000,000,000), a number that pays tribute to the popular Meme numbers 4:20 and 69 (these numbers have specific meanings in specific cultures). The official website claims that there is no pre-sale of PEPE tokens, zero taxation, LPs have been destroyed and the contract has been abandoned.

4.2 Valuation Analysis

The valuation model of MemeCoin is very different from that of traditional financial assets. The main reason is that the value of MemeCoin depends mainly on factors such as the size of its narrative, the frequency of emotional arousal, and the celebrity effect, which are difficult to accurately quantify using mathematical models. Although some MemeCoins have found innovative ways to integrate NFTs, decentralized finance (DeFi), or community-driven initiatives, many projects focus mainly on emotional values ​​such as humor and satire. This lack of fundamental technical value also leads to limitations in the MemeCoin valuation model.

First, in the Memecoin track, the current market value of TOP 1 DOGE is 20.8 billion US dollars (up to 100 billion), SHIB is 14 billion US dollars (up to 50 billion US dollars), and PEPE is currently worth 3.9 billion US dollars. They are all in full circulation, and PEPE's natural communication attributes give it a greater comparative advantage in the competition, and its rising ability and value shaping ability have great potential.

Secondly, for Meme, narrative is product, culture is product, and community is product. Although it is difficult to accurately quantify the value of MemeCoin, some valuation formulas can be used for fuzzy judgment. The narrative in the formula is the Meme product itself, and the number is a deviation factor containing multiple factors that is difficult to accurately calculate. If extended, valuation = narrative size (market impact) + emotional arousal frequency + celebrity effect (KOL recognition and ability to bring goods) + SOV (Share of Voice: media share) and other multiple factors.

In the AI-generated token scores based on market trends, historical performance, on-chain transactions, and Twitter and news content analysis, PEPE currently ranks second (63 points), reflecting a greater potential opportunity to invest in the token in the next 24 hours.

The PEPE token has increased by 6.1% in the past 7 days and has received positive emotions from some KOLs on Twitter in the past 24 hours. PEPE was mentioned 8 times by 6 KOLs, with a total of more than 208,947 views. The accounts that mentioned PEPE included ColdBloodShill, cryptogems555, and ai_9684xtpa.

PEPE's valuation = narrative size (90 points/100 in the Memecoin field) + emotional arousal frequency (80 points) + celebrity effect (70 points) + SOV (50 points) = 290 points (total score 400 points)

Finally, as of May 15, 2024, Coinglass data showed that PEPE's open interest surged 24.43% to US$139 million, while derivatives trading volume surged 19.72% to US$2.063 billion, which may further drive short-term volatility in PEPE coins. Coupled with the recent influx of frequent transactions by whales and the continuation of the Meme market cycle, the market is optimistic about PEPE. The long-term prospects of PEPE coin remain optimistic.

4. Summary

As a MemeCoin project, PEPE lacks substantial product and technical support. At the same time, the black history of the PEPE team's previous malicious cashing out and the legal review that the founder may face have added more uncertainty to the development of PEPE, which is also a risk factor that needs to be considered when investing in PEPE.

However, PEPE's inherent communication attributes give it a unique comparative advantage, and it has already occupied a place in the MemeCoin market with its success in community and cultural narrative. The continued hype of PEPE by a large number of whales also provides a certain growth foundation for the long-term development of PEPE.

In terms of current market value, compared with DOGE and SHIB, PEPE is in a relatively undervalued state and has the opportunity to achieve higher growth in the big cycle market. However, as the overall market is currently weak, investors are advised to adopt a cautious wait-and-see investment strategy, pay close attention to further developments of the project team, monitor community activity and changes in market sentiment, so as to adjust investment decisions in a timely manner.