Memecoins are popular despite lacking real-world applications.
Memecoins bring attention to crypto, attracting new users and developers. This benefits the blockchain ecosystem as a whole.
BitMEX's Arthur Hayes argues that blockchains that embrace memecoins (like Ethereum and Solana) tend to thrive.
Despite the risks, memecoins have outperformed other crypto niches like governance, AI and DePIN in market cap.
Crypto has come a long way from being outright misunderstood, to being a popular household concept.
This is even more evident when we add memecoins to the mix.
This class of cryptocurrencies have skyrocketed in popularity and dominance over the years, particularly because of their high volatility, and the fact that they don't exactly need real-world applications to be relevant.
On the flip side, however, memecoins have emerged both as a source of amusement and as the topic of numerous heated debates on the internet.
Memecoins have no real use cases—but does this make them useless?
BitMEX co-founder Arthur Hayes addressed this question in a recent interview, challenging the idea that memecoins are “stupid and useless”
Let’s go over Hayes’ thoughts on the matter. Does the memecoin argument hold any water, or is it riddled with holes?
Granted, the ideas and concepts behind memecoins don’t always make sense.
This class of crypto are often characterized by funny names and playful origins.
We have some like $PEPE, $BONK and DogWifHat ($WIF) with playful undertones, alongside others like $BALLZ and $BRETT (which looks like a rip-off of $PEPE).
These memecoins—particularly in the last two years have ushered in the newest memecoin craze that becomes harder to ignore every day.
Hayes in the interview with Real Vision CEO Raoul Pal on 30 March, argued that chucking memecoins altogether at this time would be premature.
While some crypto community members may scoff at them, they actually play an important part in the crypto ecosystem, mere entertainment.
Hayes argued that memecoins act as catalysts, drawing attention to blockchain networks and fostering engagement from developers, investors and traders.
Furthermore, Hayes says that memecoins play an important role in the “attention economy”.
The buzz generated by memecoins attracts new users and developers to blockchains, contributing to the growth of the ecosystem.
In turn, instead of dismissing them, we should recognize their potential, as well as their value.
Moreover, Hayes maintained that if any chains are capable of embracing memecoin culture (like Ethereum and quite recently, Solana), we can expect said chains to thrive.
Solana’s journey had several ups and downs.
We had the initial buzz with the cryptocurrency’s surge to $260 in May 2022, all before a bitter crash to around $40 in November of the same year.
To top things off, the FTX crash did a number on the cryptocurrency, bringing it straight down to around $9 per coin.
The memecoin market performance
However, in 2023, Solana experienced a surge in network activity, right after memecoin mania officially began in November.
Ethereum has also seen the memecoin market flourish, with the gaming mentality among Gen Z and millennials fueling said memecoin culture.
As Pal aptly put it during the interview, “This is the same thing, just gaming with money.”
As stated, “I have zero enthusiasm for coins named after totalitarian political movements, scams, rug pulls or anything that feels exciting in month N but leaves everyone upset in month N+1”
However, he maintained a nuanced approach, and stated that he values “people's desire to have fun, and I would rather the crypto space somehow swim with this current rather than against it”
Despite the risks, memecoins have been thriving these past few years, even beating several other crypto niches in terms of performance.
According to data from CoinMarketCap, the memecoin market currently boasts a $65 billion market cap, beating the NFT, DePin, AI, governance and metaverse niches.
Overall, while memecoins may draw mockery, eye rolls, or heated debates, they are still an undeniable part of the crypto ecosystem and aren't going under anytime soon.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.