cryptopolitan.com
Speaking to Bankless Podcast host David Hoffman on Tuesday, anonymous co-founder of Pump.fun Alon said that the memecoin market will not fall like as was the case with Luna network and defunct crypto exchange FTX.
Alon told listeners to “not believe” the idea that memecoins are a passing trend, stating that they have existed in various forms for over a decade. He likened early ICOs, DeFi food coins, and even NFTs to memecoins, arguing that all of these speculative assets follow similar market patterns.
“Pump.fun played a significant role in expanding the ecosystem by making participation simpler and ensuring a baseline level of security,” he said.
Yet, he disputed the theory that memecoins are responsible for the crypto market’s struggles and coined it to a lack of compelling use cases in the industry.
Memecoins struggle like the rest of the crypto market, insists Alon
The Solana memecoin launchpad co-founder insists that many projects have failed to grow, even from a position of large valuations. “If you created an L1 or L2 chain years ago and failed to attract users or product-market fit, it’s no surprise people are upset when their investments lose value,” he said.
Using Hyperliquid as an example, Alon discussed how some successful projects can deliver sustainable utility and have strong community backing.
“The demand for altcoins is still there,” he continued, “The problem is that too many teams have been focused on infrastructure rather than building applications that people actually use.”
Do memecoins have a future?
When Hoffman pressed Alon on what he envisions for the future of memecoins, he said that he would like to drive the sector away from the financial nihilism narrative, where trading is seen as purely speculative.
“People aren’t just trading these tokens for financial gain,” he explained. “There’s value in entertainment, in drawing attention to new projects, and in creating communities. I want to see fewer bad actors driving people away and more effort put into fostering a sustainable experience.“
He admitted that Pump.fun will have to set the standards for responsible trading. “Culture is shaped from the top down,” he said, suggesting that better oversight of trading trends could improve the industry’s already tainted reputation.
Alon also said that he believes the longevity of memecoins lies in creating products that users return to daily.
“It doesn’t have to be the same euphoria we saw in November or January, but if we can build something that people engage with consistently, that’s a win.“
Over 8.7 million tokens launched, only a few survive
Hoffman brought up a report from Chinese blockchain journalist Colin Wu, stating that since Pump.fun was launched on January 14, 2024, the platform has seen over 8.7 million tokens created, generating $600 million in revenue. Still, only four tokens have maintained a market cap exceeding $100 million.
Naysayers insist that memecoins trades are only good for short-term gains, akin to gambling wins made in a casino, a chatter that Alon said could feel vindictive, but it was unfair to the industry.
“It’s easy to criticize memecoins when the entire market is down over 50%,” he said. “In November, the cumulative market cap of Pump.fun tokens was around $8 billion. No one was questioning their validity back then.”
He discouraged listeners from making comparisons to the NFT crash, reiterating that despite significant losses, many NFT collections still hold substantial value.
“Pudgy Penguins, for instance, is still worth hundreds of millions. Just because an asset experiences a speculative bubble doesn’t mean it becomes worthless.“
Alon told Hoffman that memecoins have been around for over a decade, and crypto investors have been trading the assets for the length of that period. He finds it difficult to explain why user behavior would suddenly change after so many years.
“Memecoins have been part of crypto for over ten years,” he said. “Why would that suddenly stop now? The market will decide which platforms survive, but memecoins aren’t going away.”