1. Project Status

1.1 Business Overview

PEPE is a MemeCoin issued on Ethereum on April 17, 2023, relying on pure meme-driven, positioning itself as "the people's token". The creation of PEPE aims to pay tribute to the internet memes of Pepe the Frog created by Matt Furie, leveraging the popularity of MemeCoins such as Shiba Inu and Dogecoin, and establishing itself as a top MemeCoin in the industry.

In the market operation, PEPE has attracted a lot of attention from the cryptocurrency community by implementing tax exemption policies, rewarding long-term stakeholders through a redistribution system, and maintaining the scarcity of PEPE tokens through a burn deflation mechanism.

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 a landscape photographer in the United States. He has a criminal record for illegal activities in multiple wilderness areas, sacred indigenous areas, and other drone-restricted areas.

Matt Furie is the original creator of PEPE the Frog. As an American cartoonist and illustrator, he is famous for creating the frog Pepe, a character from his "Boy's Club" series, which was first introduced in 2005. It was initially designed as a green humanoid frog and later evolved into various internet memes, widely spread on the internet in the late 2000s and early 2010s.

It is worth noting that in August 2023, the price of PEPE experienced a big dump of 20%. The founder, Testa, faced scrutiny, and there were reports stating that he and team members stole over $15 million worth of PEPE from the project's multisig wallet. The other team members of PEPE had Telegram handles @billyoptions, @zerozevia, and @ekim222 (all of which have been deleted now).

1.3 Products/Technologies

PEPE's birth is positioned as "the most memorable MemeCoin in existence". However, according to the official website, PEPE has no intrinsic value or product technical connotation - "PEPE is a MemeCoin without intrinsic value or financial return expectations. There is no formal team or roadmap, so it can be said to be completely useless, purely for entertainment."

But in the encryption field, this is not uncommon. After all, many 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

The first stage is to list PEPE on CoinMarketCap and CoinGecko, promote community growth, conduct marketing activities, and increase visibility and influence.

In the second phase, PEPE will be listed on major centralized exchanges to increase trading volume and liquidity, improve market capitalization and ranking, and attract more investors and partners.

Currently, in phase three, PEPE is listed on various top-tier exchanges, kicking off the team's "era of memes" plan to build an ecosystem for memecoins, including NFTs, games, and charity.

2. Market Data

2.1 Official Website Data

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

2.2 Social media data

3. Competitive Analysis

3.1 Track Scale

MemeCoins usually have no practical use and mainly rely on emotional appeal and community engagement. Between 2020 and 2021, memecoins like $DOGE and $SHIB have established their own positions, showcasing the unique charm of the memecoin market. Currently, the total market capitalization of all memecoins is about $60 billion, with prominent positions in the top 50 cryptocurrencies by market capitalization, including Dogecoin, Shiba Inu, Dogwifhat, and PEPE. However, this number is still lower than the nearly $100 billion peak driven by Dogecoin in early 2021.

Originally, 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 its community's enthusiastic participation has made it the center of a vibrant memecoin market. After the Denchun upgrade, thanks to the significant drop in transaction fees on DEX, Base Chain has also become a major platform for trading MemeCoin.

3.2 Competitive 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%. The TOP5 are DOGE, SHIB, PEPE, WIF, and FLOKI.

In the ETH ecosystem, PEPE, as the top project of MemeCoin, has a far leading trading volume compared to other popular MemeCoins such as TRUMP, PORK (TOP 2-4), and FLOKI. However, compared to SHIB, the top 3 PEPE still has about three times the room for growth, but its development speed is much faster, and the expected growth and market capitalization performance are also more anticipated. For example, SHIB took 90 days in 2021 to reach 100,000 holder addresses, while PEPE took less than 30 days to surpass 100,000+ holders.

Observing the development pattern of the top MemeCoins, when the consensus demand for Meme narratives reaches saturation, it will shift towards exploring substantial functionalities to expand user base and support market capitalization, such as DOGE announcing the launch of ecosystems like ShibaSwap, NFT, etc. In other words, the first phase is the initial run of the financial wheel, followed by the second phase of narrative implementation. In the roadmap stage three, PEPE coin will also continuously explore new application scenarios to support its market capitalization growth.

3.3 Differential Advantage

Compared with other MemeCoins, PEPE has natural artistic and communicative qualities. PEPE originates from "Pepe the Frog," which is 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 accumulated years of popular "Pepe the Frog" meme is the core factor behind the development of PEPE. By leveraging the cultural appeal of this meme, PEPE cleverly combines the advantages of blockchain technology with the viral nature of the Pepe the Frog meme. Through the collective power of internet culture and the unique attributes of the crypto community, PEPE has created a Memecoin with strong community consensus.

3.4 Risks and Issues

PEPE, as one of the top 3 tokens of MemeCoin, faces risks of significant fluctuations and poor market capitalization stability, just like other MemeCoins. Once the sentiment turns towards market capitalization and token price, there may be a substantial decline. Although PEPE may have already brought high returns to many investors, investing in MemeCoins still requires caution and patience.

In addition, the incident of the PEPE team member stealing over $15 million worth of PEPE from the project's multisignature wallet has had a huge impact on the community. Now, with the soaring market cap of PEPE, this incident seems to be in the past. However, there may still be remaining risks and potential for community unrest and token value fluctuations. It is recommended to closely follow the situation.

4. Token Valuation

4.1 Token Model

The total supply of PEPE is nearly 420.7 billion (420,690,000,000,000,000), a nod to the popular meme numbers 4:20 and 69 (which have specific meanings in certain cultures). The official website claims that there is no pre-sale in the PEPE Token, zero taxes, the LP has been burned and the contract has been abandoned.

4.2 Valuation Analysis

MemeCoin's valuation model differs greatly from that of traditional financial assets, mainly because the value of MemeCoin depends on factors such as narrative size, frequency of emotional awakening, and celebrity effects, which are difficult to quantify accurately with mathematical models. Although some MemeCoin projects have found innovative approaches by integrating NFTs, decentralized finance (DeFi), or community-driven initiatives, many projects focus primarily on humor and irony as emotional value, which lacks fundamental technical value and limits the valuation model of MemeCoin.

First of all, in the Memecoin field, the market capitalization of the top 1 DOGE is currently 20.8 billion US dollars (maximum 100 billion), SHIB's market capitalization is 14 billion US dollars (maximum 50 billion US dollars), and the market capitalization of PEPE is currently 3.9 billion US dollars. They are all in full circulation, and PEPE's inherent dissemination attributes give it a greater comparative advantage in competition. It has great potential in terms of pumping ability and value shaping ability.

Next, for Meme, narrative is the product, culture is the product, community is the product. Although it is difficult to precisely quantify the value of MemeCoin, it can be roughly judged using some valuation formulas. The narrative in the formula is the Meme product itself, and the numbers are deviation factors that are difficult to accurately calculate and include multiple factors. If extended, the valuation = narrative size (the scope that affects the market) + frequency of emotional arousal + celebrity effect (KOL recognition and influencing ability) + SOV (Share of Voice: media share ratio) and other multiple factors combined.

In the AI-generated token scores based on market trends, historical performance, on-chain transactions, Twitter, and news content analysis, PEPE currently ranks second with a score of 63, which reflects a greater potential opportunity to invest in this token in the next 24 hours.

PEPE token has risen by 6.1% in the past 7 days and has received positive sentiment from some KOLs on Twitter in the past 24 hours. PEPE has been mentioned 8 times by 6 KOLs, with a total view count exceeding 208,947. The accounts mentioning PEPE include ColdBloodShill, cryptogems555, ai_9684xtpa.

PEPE's valuation = Narrative size (90 out of 100 in the Memecoin field) + Frequency of emotional arousal (80 points) + Celebrity effect (70 points) + SOV (50 points) = 290 points (out of a total of 400 points).

Finally, as of May 15, 2024, according to Coinglass data: The open positions of PEPE contracts have surged by 24.43%, reaching 139 million US dollars, while the trading volume of derivatives has increased by 19.72%, reaching 2.063 billion US dollars. This may further drive short-term fluctuations in PEPE coin, coupled with frequent trading by whales and the continuation of the Meme market cycle, the market remains optimistic about the long-term prospects of PEPE coin.

4. Summary

As a MemeCoin project, PEPE lacks substantial product and technical support. At the same time, the malicious cash-out history of the PEPE team and the potential legal scrutiny that the founder may face have added more uncertainty to the development of PEPE. These are also the risk factors that need to be considered when investing in PEPE.

But PEPE's inherent communicative properties give it a unique comparative advantage, and it has already established a presence in the MemeCoin market through its success in the community and cultural narrative. The continuous speculation by a large number of Whales has also provided a certain foundation for the long-term rise of PEPE.

In terms of market capitalization, PEPE is relatively undervalued compared to DOGE and SHIB, and has the potential to achieve higher growth in the long term. However, due to the current overall market weakness, it is recommended that investors adopt a cautious wait-and-see investment strategy, closely monitor the further developments of the project team, and observe changes in community activity and market sentiment in order to adjust investment decisions in a timely manner.

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