Pepe coin, and what a meme coin actually is

Most explanations of a meme coin start by apologising for the subject. This one does not need to, because the project supplies the most accurate sentence available about itself: PEPE describes itself as a meme coin with no intrinsic value and no expectation of financial return.

That is usually read as legal boilerplate and skipped. It should be read as a specification. Almost everything that confuses people about this category follows from taking it literally.

What it is, mechanically

PEPE is an ERC-20 token on Ethereum, launched in April 2023. There is no product behind it, no protocol collecting fees, no treasury generating revenue, and no roadmap of the kind a protocol publishes. The token does one thing, which is exist and be transferable.

Its entire supply was issued at launch: 420,690,000,000,000 tokens. The number is a joke — 420 and 69 concatenated — and the fact that the supply is a punchline rather than a calculation is not incidental. A protocol chooses a supply schedule to serve some economic function. Here there is no function to serve, so the number could be anything, and it was chosen to be funny.

What the token actually contains is a reference to a cartoon frog.

The character, which has its own history

Pepe the Frog was created by the cartoonist Matt Furie in the comic Boy’s Club and spent years as an ordinary, widely-used internet reaction image. It was then adopted heavily by parts of the alt-right, and in 2016 the Anti-Defamation League added it to its hate symbol database.

The ADL’s own entry qualifies that designation carefully: so many Pepe memes are not bigoted that the image has to be judged in context, and posting one does not make someone a racist or a white supremacist. Furie objected to the listing, saying the character means many things to many people, and subsequently worked with the ADL on a #SavePepe campaign to reclaim it.

This belongs in an explainer about the token rather than in a footnote, because the token’s only content is the association. An asset whose entire substance is a cultural reference inherits whatever that reference is carrying, including the contested parts. That is a property of the thing, not a moral aside about it.

What holds the price up

Nothing that produces cash. There are no fees accruing, no revenue, no redemption right, no collateral, and no counterparty who owes you anything. This is the sharpest available contrast with a stablecoin, where the peg is held by a redemption promise or a collateral mechanism that can be examined and argued about.

The price of PEPE at any moment is the balance of what people are willing to pay and what holders are willing to accept, and nothing else feeds into it. Which means the underlying asset — the thing the price actually tracks — is attention.

That is not a criticism. It is the stated design, and it has a consequence worth being explicit about: the analytical apparatus people bring from other assets does not attach. There is no fair value to be above or below, no multiple to compare, no cash-flow model to discount, and no fundamentals to diverge from. Analysis that talks about a meme coin being undervalued is using a word that has nothing to refer to.

The multisig, and the part that generalises

On 24 August 2023, roughly 16 trillion PEPE — around $15 million at the time — left the project’s multisig wallet, was moved to exchanges and sold — roughly four per cent of the total supply. The remaining team attributed it to former members of the project.

The instructive detail is not the amount. It is that the signing threshold had been cut from five of eight signers to two of eight.

A multisig is often described as though it were a security property — the wallet is a multisig, therefore the funds are safe. It is not. It is a rule about who must agree, and on most implementations that rule is itself editable by the people it governs. The protection is worth exactly what the signer set and the threshold are worth at the moment of the transaction, not what they were worth when the arrangement was announced.

That generalises well past this token. Wherever a project points at a multisig as reassurance, the questions are who the signers are, how many are required, and who can change either answer.

The questions that do apply

There is no business to evaluate, but a token is not opaque. What can be checked, on-chain, by anyone:

• Whether supply can change. Can anyone mint more, and can anyone freeze or seize balances?
• Where the concentration is. How much sits in a small number of addresses, and are those addresses identifiable as team, exchange or unknown?
• Whether the liquidity can leave. Pool depth is what lets a position be exited at something like the quoted price, and pool depth is withdrawable by whoever provided it.
• Where allocations sit and who controls them — the question the multisig episode answers for this token by example.

None of that tells you what the price will do. All of it tells you what can happen to you that is not price.

Where this leaves the category

Meme coins are not failed protocols. They are a different kind of object, whose content is attention rather than cash flow, and they should be described that way rather than measured against a standard they never claimed to meet.

It also means this publication has very little to say about them on an ongoing basis. What moves here is price and attention, both faster than anything with an editorial process can usefully report, and neither of them is the sort of thing the AI Citation Index measures. This piece exists to explain a structure, not to track an asset, and nothing in it is a recommendation in either direction.

If you do hold something in this category, the custody question is unchanged and worth reading separately: exchange or self-custody covers the trade, and hot versus cold storage covers where the line sits.