There’s a false impression that memecoins are serving to folks out of poverty that I believe is absolutely hurting the universe. Moreover, I believe that chains like Solana and Avalanche, that are receiving elevated consideration because of the memecoin fervor, are extremely overheated. Memecoin volumes are basically vainness metrics just like likes and followers on social media platforms with no actual substance.
Anybody engaged on the web2 will know that the actual social media engagement KPIs are engagement, person generated content material, hyperlink clicks and gross sales conversions. I like that, and followers are primarily good for one thing aside from self-serving egotism. In Web3, the on-chain metrics that networks ought to be involved with are augmented by “faux” memecoin visitors, which can drop the second the shitcoin on line casino novelty wears off.
Try the OG memecoin community, BNB Chain, which noticed an enormous improve in utilization in 2021 on account of buying and selling memecoins on PancakeSwap. In 2021, it reached round 17 million token transactions per day, however has since elevated to round 5 million. Nonetheless, 5 million token transfers per day seems like a wholesome metric, proper?
Nevertheless, after we take a look at the highest tokens carried on chain, we discover that the majority are both memecoins or faux rip-off tokens, based on BSC Scan.
Many of the tokens pictured above with out the emblem are rip-off tokens designed to trick customers into buying and selling them to steal funds. For instance, the USDT token with 1.2 million distinctive transfers within the final seven days just isn’t an actual token issued by Tether.
Solana, with its pre-sale memecoin circus rescuing a failed cellular launch and Avalanche pumping its “group token” economic system by shopping for tokens into its coffers, might properly find yourself like BNB Chain with the course they are going.
I am not towards the idea of memecoins, however I imagine they need to be handled just like the playing exercise they’re. Moreover, it’s seemingly that Solana and Avalanche will now be a part of the BNB Chain as a playing community filled with a mix of fraudulent tokens and memes with no materials worth.
Do not forget that buying and selling memecoins is basically Russian roulette and the objective is to not be the liquidity of the whales on exit.
I used to be an early adopter of dogecoin in 2014 after I mined cash utilizing graphics playing cards from my video manufacturing firm. On the time, the time period ‘memecoin’ wasn’t even a phrase, as Doge was the one one which existed. I grew to become a giant fan of the idea as a method to make “magical web cash” that aligned with the web tradition of the time. Doge memes have been all the fad, so Dogecoin was a enjoyable method to find out about cryptocurrencies and probably be a part of a digital medium of alternate for a world nonetheless studying the “web”.
For full transparency, I offered all of my Doges for bitcoins on the finish of 2015 and presently maintain a minimal quantity out of nostalgia.
Nevertheless, the present memecoin market has nothing to do with providing a enjoyable digital forex that can be utilized totally free on-line buying and selling. There isn’t a software for any memecoin aside from to hope the ‘quantity goes up’. Lately, Bitcoin content material creator Layah Heilpern mentioned:
“Meme cash and shitcoins are actually altering folks’s lives right here. There isn’t a different {industry} that lets you turn into a millionaire in a matter of weeks and even days.”
These are harmful tales as a result of they make folks assume they’ll change their lives with memecoins. The truth is that the majority both purchase too late or maintain too lengthy. They could be paper millionaires for some time, however they hardly ever materialize the income in bitcoin or fiat. Both their perception in additional positive aspects prevents them from promoting earlier than the market inevitably crashes, or a scarcity of liquidity hinders their potential to promote.
Cryptoquant founder Ki Younger Ju appears to share a few of my sentiments when he feedback as we speak,
“Meme cash are hurting the crypto {industry}.
It is irritating to see billion-dollar memecoins overshadow the hard-working groups constructing respectable merchandise to advance the {industry}.
Simple cash can not drive industry-wide progress, because the ICO explosion of 2018 confirmed.”
For context, E book of Meme (BOME) has reportedly reached a market cap of $1 billion, resulting in an inflow of recent merchants. Nevertheless, DEX knowledge confirmed liquidity round $64 million when it first hit the milestone. Since then, CEX listings have helped push buying and selling quantity to over $2 billion up to now 24 hours.
Slerf, one other Solana presale token, introduced that the founder “by chance” burned all of the presale tokens together with LP earlier than itemizing on CEX and now has $700 billion in quantity and $200 million market cap as we speak alone.
Essentially the most talked about memecoin of the final month, Dogwifhat (WIF) categorically states,
“WIF isn’t just a cryptocurrency; it’s a image of progress, for futuristic transactions, a beacon for individuals who assume forward. It’s clear that the long run belongs to those that embrace improvements like WIF, push boundaries and pave the best way for a brand new period in finance and expertise.”
Do not be fooled although; not like Dogecoin 10 years in the past, these “tokens” of progress are solely meant to do one factor, to make somebody wealthy by dumping small traders enjoying the shitcoin on line casino lottery.
Chains that change their focus to assist the group facet of digital property to encourage innovation and engagement blah blah may say what they imply ie.
“Web3 has turn into so noisy that the one approach we will get consideration is to turn into a on line casino, however we do not wish to say that, so we’ll fake it is a ‘group’.”
Within the phrases of many millennial moms, “I am not mad, I am simply upset.” I maintain Solana, BNB Chain and Avalanche in my portfolio; this isn’t a brief vendor message. I merely wish to increase consciousness about memecoins and do away with the “group” advantages. I believe the one meme group was Dogecoin, however even from that the unique builders gave up.
So let’s name a spade a spade and admit that memecoins are a bet. Then add applicable caveats as an alternative of pretending to be an innovation.
