Memecoins
Make good use of memecoins, says Ethereum co-founder Vitalik Buterin – and he has examples – DL News
- Despite having little or no utility, some memecoins have a valuation in the billions.
- Ethereum founder Vitalik Buterin suggested tying them to charity or finding other ways to exploit taders’ desire for fun and profit.
Every day, crypto traders trade billions of dollars worth of memecoins – blatantly useless tokens with tickers that often point to internet memes like Pepe the Frog.
Vitalik Buterin, co-founder of Ethereum, believes there is a better way.
Memecoin creators should set aside a large portion of their tokens for charitable causes – or, better yet, create crypto-based video games designed to help low-income gamers, he said on his site Internet. Blog Friday.
“I have no enthusiasm for coins named after totalitarian political movements, scams, rugpulls or anything that seems exciting in month N but leaves everyone upset in month N+1,” said he writes, referring to an eruption of offensive memecoins on the Solana blockchain.
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“At the same time, I appreciate people’s desire to have fun, and I’d rather the crypto space somehow swim with that current rather than against it.”
Memecoin mania
Dogecoin is the original meme coin. It was made as a joke in 2015, mocking the speculative frenzy that often gripped the crypto economy.
It wasn’t digital money or digital gold, like Bitcoin. This did not represent governance rights in a digital cooperative, such as Arbitrum’s ARB. It had no integrated return, nor connection to another stable asset.
But Dogecoin’s market cap surged to over $88 billion during the 2021 bull market. And paved the way for other equally stupid and useless tokens.
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Last year, PEPE has taken Ethereum by storm. This year, Dogwifhat jumped on Solana. Both now have a market capitalization above $3 billion.
Most have no intrinsic value and their value is entirely determined by hype and the investor’s gain (or loss) by the timing of its release.
Memecoins accounted for around 5% of Ethereum transaction fees over the past month, according to data collected by data analyst James Tolan.
And they represent a similar percentage of trading volume on Ethereum’s decentralized exchanges, according to SixDegree Lab.
Thursday, meme coin trading volume overcome $113 million on Ethereum.
Positive sum tokens
“If people value having fun, and financialized games at least sometimes seem to offer that, then could there be a more positive-sum version of this whole concept?” » said Buterin.
His first idea is rather simple: a certain percentage of a newly issued memecoin, or the transaction fees it generates, should be set aside for charity.
According to Buterin, the most successful example might be Dogelon Mars, an Elon Musk-themed token.
In 2021, he transferred Dogelon worth $145 million to the Methuselah Foundation, a space travel and anti-aging nonprofit dedicated to “making 90 the new 50,” according to its website .
This was 43% of Dogelon’s circulating supply, causing panic among other investors, who feared a fire sale that would destroy the token’s value. But the non-profit association promised be a good steward of the token.
“We will take the same nurturing approach with our Dogelon Mars holdings because we understand that the value of cryptocurrency depends on maintaining public trust and capturing their imagination, just like baseball cards or other objects of value. collection”, David Gobel, co-founder and CEO of the foundation. said in a statement at the time.
“We want $ELON to continue to gain value over the long term.”
Later that year, holders of Dogelon vote to finance an experiment led by Methuselah.
“The community has donated funds to send award-winning vascular tissue research to the International Space Station (ISS), where experiments can continue beyond Earth’s gravity,” the nonprofit said on his blog.
“The ability to grow human organs will be important for crews who will eventually be involved in deep space travel.”
While the token’s value has exploded since the heady days of 2021, Vitalik believes the foundation has delivered on its promise.
“Both Methuselah Foundations and the Dogelon Mars community appear to be developing a positive-sum relationship with each other, retroactively converting $ELON into a charity coin,” Buterin said.
Other charity-related pieces were less successful.
GiveWell Inu – named after a Shiba Inu, like most dog-themed memecoins – donated its profits to GiveWell, Buterin noted. But it’s limited deceasedwith only one or two transfers per day on average.
Video games
Buterin is more optimistic about the impact of crypto-based video games.
While some have criticized the so-called play-to-earn model employed by crypto-based games such as Axie Infinity, Buterin hopes to see “Robin Hood games” – new crypto-based games designed to benefit players at low income.
“If the goal is to satisfy people’s desire to have fun, we should not create simple copy-and-paste coin-ops, but rather more complicated and interesting games,” he wrote.
Additionally, “games that improve the economic situation of low-income gamers, in particular, are more likely to leave their communities better off than they were before.”
Aleks Gilbert is DL News‘ DeFi correspondent based in New York. You can reach him at aleks@dlnews.com.