Author: Socra, Golden Finance
PEPE, WIF, MEW, BOME... New wealth codes always seem to emerge in the meme coin sector, but is this really good for the currency circle?
On April 25, a16z Crypto CTO Eddy Lazzarin publicly criticized Memecoin, saying that it undermined the "long-term vision" of cryptocurrency, tarnished the "public, regulators and entrepreneurs"' views on the industry, and acted as a casino for a "relatively small number of people."
And before that, a16z partner and a16z crypto director Chris Dixon also wrote that Meme coins have flourished due to lagging regulation, but these coins have also made it difficult for crypto companies and blockchain tokens with more efficient use cases to develop efficiently.
For believers of Memecoin, especially investors, the above a16z's remarks are too harsh, because some so-called blue chip projects in the currency circle have also cut countless people. There is even a view that the currency circle is a casino, and the chips are not high or low, and winning money is the kingly way. So what is the existence of memecoin in the eyes of various professionals in the encryption industry?
Origin
Memecoin refers to cryptocurrencies that are derived from Internet emoticons, funny pictures or other humorous elements. At the end of 2013, a software engineer used the Internet emoticon package Doge to issue Dogecoin with the original intention of joking. It can be said that Dogecoin started the craze of memecoin.
Compared with mainstream cryptocurrencies such as Bitcoin and Ethereum, the price fluctuations of memecoin are more violent, but they are also subject to speculation by speculators. Some people got rich overnight, spreading FOMO emotions, but more people lost everything.
Another feature of meme coins is that the supply is huge, and there is no upper limit. For example, the total supply of Shiba Inu Coin (SHIB) is 100 trillion, and Dogecoin has no upper limit on the supply, and the circulation has exceeded 100 billion.
Usually, meme tokens do not have a destruction mechanism. Due to the huge supply, the price is relatively low, and millions of meme tokens can be bought for only $1. Therefore, the purchase threshold of meme coins is low, and investors have a high degree of participation.
One of the reasons for the rise of meme coins is community promotion. The price of coins is often affected by the emotions of social media and online communities, such as Musk's tweets, Trump's campaign, squid games, and the Spring Festival Gala. Meme coins have also risen rapidly with the momentum of hype, with a soaring market value and an endless stream of new products.
It is precisely because memecoin can continue to create myths of wealth that many investors are flocking to it and never get tired of it. Even the crypto market is more enthusiastic about Memecoin than other sectors. The community circulates "value investment is empty, and meme lives in the palace". Therefore, people who claim to be chain builders will question the current situation of Memecoin.
Opponents: Memecoin hinders the technological development of the crypto industry
This year, a16z took the lead in raising the banner against Memecoin.
a16z Crypto CTO: Memecoin has changed the public, regulators and entrepreneurs' views on cryptocurrency, making it look like a risky casino, which has deeply affected the decision-making of regulators/laws and blockchain builders. I see this damage every day.
Chris Dixon, former partner and head of a16z crypto: The lack of regulation has allowed Meme coins to spread, while innovative projects have struggled. Investors ultimately face more risks, not less.
Previous "meme coins" embody various aspects of Internet culture and are mostly harmless, while other Meme coins are not.
Compound Managing Partner: Seeing the (current situation) of meme coins will lead to the loss of cryptocurrency developers, even more serious than the bear market in the past few years.
ZachXBT: In the past month, 12 Solana pre-sales of Meme coins have raised more than 180,650 SOL (about 26.7 million US dollars) Rug, suggesting that the community be wary of future projects launched by these founders.
Supporters: Memecoins shape new industries
Jesse Walden, former partner of a16z and founder of Variant Fund: I think it is very controversial which one has caused more damage: a. Projects that promise breakthrough technology to cover up token liquidity plans; b. Memecoins that don't promise anything except volatility and entertainment.
Memecoins are risk-proof, while the former are not. We should focus more on combating the former.
Electric Capitl Partner: Many people use memecoin as an example of how fraudulent and meaningless cryptocurrency is.
But paradoxically, memecoin needs blockchain to exist. If memecoin is a socio-economic game, then you need a platform that can continuously enforce the rules of the game and have global influence.
6thManVentures Co-founder: People who participate in memecoin do not prevent them or others from participating in other blockchain use cases (DePin, DeFi, games, social, payments, etc.).
Avalanche founder Emin Gün Sirer said in an interview with Cointelegraph that although investing in Memecoins is risky, they are bringing value and new users to the crypto ecosystem.
Gün Sirer pointed out that although Memecoins are not seen as valuable investments by the outside world, their real significance lies in attracting more young newcomers to the crypto field in an interesting form. For this group of people, Memecoins trading is a social signal that can show their ability to select coins and make profits, just like some people use Bored Ape Yacht Club NFT as an avatar to show off their wealth.
Runestone founder: I like the ORDINALS•ARE•DEAD meme.
VoltCapitalFounder: Believe it or not, the garbage signals in the crypto space used to be worse than or even worse, it's inherent. A helpful reconstruction is that retail investors are becoming more and more mature in this cycle - tired of being sold off, so they target long-tail assets and turn them into profits.
MechanismCapPartner: The speculative value of most token networks is far greater than the fundamental value, and memecoin refines speculative value into a game that all retail can participate in; and predatory high FDV token issuance (even with promising technology) makes it almost impossible for retail to win. Memecoin actually reveals the real structural problem
KOL Hongshen@hongshen6666btc: I oppose a16z's claim that meme has a negative impact on the industry. How many of those so-called value coins really have value? They are all drawn in white papers, and then raised, hyped, and raised to let retail investors take over, especially in this bull market, the market value starts at 1 billion. The key is that after experiencing the Luna explosion and projects like dot, who dares to advocate so-called value investment? It is better to play meme.
KOL Li Ping@liping007: a16z CTO said that Memecoin is a casino, and the essence of currency speculation is a probability game. In terms of the value coins harvested by the team and VC, it is also a gamble. The VC cost is 1/10 of the retail investor's takeover price. What is the retail investor's winning rate? From the perspective of long-term value, I think that in the free currency competition, it may be a Meme coin that will be widely accepted by people all over the world, rather than the so-called value coin.
Summary
A stone stirs up a thousand waves, and a16z's remarks have triggered a great discussion on the value of Memecoin. From a practical point of view, Memecoin naturally has no use function; from an investment point of view, it may not be inferior to some so-called valuable projects at present. Therefore, it is somewhat unfounded to accuse Memecoin of hindering the construction of encryption projects.
However, investors need to pay attention that although a few traders have made a lot of money through Memecoin, it is a common phenomenon that they lose all their money due to market fluctuations.
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