The Memecoin Shenanigans Are Just Getting Started

For all the silliness, memecoin fever has been embraced by some corners of the crypto industry. In search of outsized returns, there are few hedge funds Invest in memecoins this year. Other investment firms, such as Pantera Capital, called MemeCoin “the trojan horse” will probably introduce people new to crypto.

The idea is that memecoin activity on a particular crypto network will translate into a ready audience for future projects with practical utility built on the same underlying infrastructure, said Robert Lay, a crypto analyst at market data company Pitchbook. “It brings some kind of tangential value to other real projects,” Le said.

But others say the memecoin phenomenon could hurt crypto by perpetuating the view that the industry is nothing more than a haven for gamblers and grifters. “At best, it looks like a risky casino. Or a series of false promises covering up a casino,” wrote Eddie Lazarin, CTO of the crypto division of venture capital firm a16z in April. “It profoundly affects adoption, regulation/law and manufacturer behavior. Seeing the damage every day. You should too.”

The irony is that memecoins have largely escaped the attention of US financial regulators under the Biden administration, while entrepreneurs are trying to establish meaningful crypto use cases. For investigation purposessaid Chris Dixon, head of a16z Crypto, in an interview with WIRED last year. “Stupid crypto things like Dogecoin, which is completely pointless and silly—it’s perfectly legal,” Dixon said.

There’s a possible future where memecoins could be used by entrepreneurs as a vehicle to raise capital for serious crypto projects without providing equity, Khan said. But for now, they represent financial speculation at its worst. “We’ve constantly been in this place where we as an industry are seen as a decentralized version of Macau or Vegas. It does nothing to help us in that way,” he said.

Whether or not memecoins harm the crypto industry’s prospects or reputation, some form of crackdown is likely, industry observers say, given the amount of money flying around and the level of risk traders face.

“Memecoins is absolutely a PvP game. To win, someone has to lose. A lot of people who can afford to lose the least amount of money lose the most,” Khan said. “There has to be a crackdown at some point.”

Because memecoins defy easy comparisons to traditional investment assets, Le says, they are likely to be regulated by gambling authorities. “It is basically unregulated gambling. It will probably come down to the scope of whoever is the gambling regulator in each country,” he says. “Through the grapevine, I’ve already heard some state regulators in the United States talking about some sort of regulation.” Pump.Fun declines to comment.

Until such a time though, MemeCoins will continue their work. On December 5, Hayley Welch of “Hawk Tuah” fame launched a coin, which Lost 95 percent of its value The first hour of trading, leading to an outcry. Traders were throwing money that day PNUTA coin modeled after The celebrity squirrel was euthanized late last year By the New York State Department of Environmental Conservation, the value is currently over $1 billion.

Since launching Mother, Azalea has relentlessly promoted the coin to her 7.7 million followers on X, provocative picture And Meme post. Part of his plan to ensure the longevity of his coin — a rarity in the Miocene — is to establish some sort of utility for it. currency now accepted as payment by a telecom startup in which Azalea has a stake “I plan to be here for the long haul. And I will be,” she says.

Finally, Azalea hopes to introduce MemeCoin to other business opportunities—including setting up her own venture fund—to prove to prospective partners and investors that she can identify and drive the zeitgeist. do

“I’ve always been a big shitposter,” she says. “I like to bait, to troll, to say things that are a little provocative. I like to say something and move in a way that I know will be memorable … it’s about virality, in the end.”