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Forget the halving. Don’t mention ETFs. What then is arguably the most important narrative in crypto?
Memecoins.
Yes, that often-cringeworthy menagerie of anime, animalia and animations collectively are the primary on-ramp into crypto for new users. People are always asking, “Where are the next billion users going to come from?”
The answer is pretty clear — the only remaining question is whether the dog will be wearing a hat or not.
Before fans of self-custody, real-world assets and DeFi (and I’m certainly among them) turn up their noses in disdain, let’s consider some of the very valid reasons for the persistent popularity of memecoins and their kissing cousin, airdrops.
First up is entertainment. People love to be entertained, and they don’t mind spending money on it. The global entertainment and media market is valued at well over $2 trillion, according to analysts from PwC, on par with the overall market cap for all cryptocurrencies. What’s the utility of $DOGE, $PEPE or $BONK, compared to governance tokens or stablecoins? Entertainment in itself is a utility.
People are also attracted to risk. The global casino industry alone is worth more than $150 billion and is growing, according to a ResearchAndMarkets.com report. That doesn’t include sports betting, lotteries or all the other ways that people put down relatively small amounts of money in hopes of winning relatively large amounts of money. (In investment lingo, “asymmetric opportunities.”) Obviously, buying a memecoin carries a lot of this type of risk, but putting in time, resources and energy into a potential airdrop event — where the amount and timing of the reward is uncertain — is an experience undeniably tinged with the thrill of the gamble as well.
Read more from our opinion section: Memecoin mania can teach us something
Organizations and builders support memecoins and airdrops because they can bring liquidity to an ecosystem. They also help capture slices of the exceedingly precious “attention economy,” whose value economists estimate to be in the “trillions of dollars.” It can be argued that the $BONK airdrop and community campaign were the lighter and lighter fluid that reignited the Solana ecosystem. Or just look at how Ordinals and now Runes have turned Bitcoin into a blistering hot network, as opposed to a passive digital-gold-like store of value.
In my position as head of marketing for Moonbeam (which integrates the Ethereum and Polkadot ecosystems), I’ve had a front-row seat for the recent launch of a memecoin on our network and the concomitant entertainment, risk and attention.
Based on my experience, I can attest that admittedly silly memecoins can have seriously positive effects on a network level. New users are attracted by the entertainment value and potential for airdrops. Cross-chain synergies are fostered with other ecosystems where the memecoin has also been launched. And networks that are able to secure a supply of the memecoin can direct those resources to targeted growth areas in strategic areas, in our case, DeFi, gaming, real-world assets, DePIN, AI and more.
But while memecoins are sweet and all, here’s the bitter pill: Besides memecoins, we in crypto have largely created a very bad, very difficult system from a user experience perspective.
Gambling and lotteries comprise the dark side of the traditional financial system, but at least it’s an easy way of participating in the financial system. Memecoins play a similar role in crypto and DeFi — they’re the best on-ramp we’ve got.
If buying $DOGE or the latest Solana microcap leads someone to exploring the broader crypto ecosystem, then it’s a win for everyone who believes in the democratizing potential of blockchain technology and governance.
But if the rest of the crypto ecosystem provides such a poor user experience — or is not perceived as useful by the new memecoin holders — then this year’s nascent bull run will turn out to be another playing-card structure, doomed again to collapse when the bubble pops or macroeconomic conditions next convulse.
Memecoins are hot again — for the moment. It’s now time for “serious” builders to demonstrate real value for new users and capitalize on the attention that dog coins have fetched, because there’s no guarantee they’ll last through the next cycle.