- Despite having little or no purpose, some meme coins have valuations in the billions of dollars.
- Ethereum founder Vitalik Buterin suggested linking them to philanthropy or finding other ways to tap into Taders' desire for fun and profit.
Every day, crypto traders exchange billions of dollars of meme coins. Meme coins are completely useless tokens with tickers that often refer to internet memes like Pepe the Frog.
Ethereum co-founder Vitalik Buterin thinks there's a better way.
Meme coin creators should set aside large amounts of their tokens for charity, or better yet, create crypto-based video games designed to help low-income populations. he said in a blog post on Friday.
“I have no interest in coins named after totalitarian political movements, scams, rug pulls, or anything else that is exciting in month N but upsets everyone in month N+1,” he wrote. He mentioned the proliferation of offensive meme coins on the Solana blockchain.
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“At the same time, I value people's desire to have fun, and I want the crypto space to somehow swim with this trend, rather than against it.”
meme coin mania
Dogecoin is the original meme coin. This was made as a joke in his 2015, poking fun at the speculative frenzy that often swept the crypto economy.
It was never intended to be digital cash or digital gold like Bitcoin. This did not represent Arbitrum's right to governance in digital cooperatives such as his ARB. There was no built-in yield, nor was it pegged to any other stable asset.
However, Dogecoin's market cap soared to over $88 billion during the 2021 bull market. And paved the way for other equally stupid and useless tokens.
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PEPE took Ethereum by storm last year. This year, Dogwifat has skyrocketed with Solana. The market capitalization of both companies currently exceeds $3 billion.
Most things have no intrinsic value, and their value is determined solely by the gains (or losses) due to hype and the timing of investors' exits.
Memecoin accounted for about 5% of Ethereum transaction fees over the past month, according to data collected by data analyst James Tolan.
And, according to SixDegree Lab, they account for a similar proportion of trading volume on Ethereum decentralized exchanges.
On Thursday, memecoin trading volume topped $113 million on Ethereum.
positive sum token
“If people value having fun, and financialized games seem to provide that at least sometimes, could there be a more positive-sum version of this whole concept?” Buterin said.
His initial idea is fairly simple. A few percent of newly minted meme coins, or transaction fees generated by meme coins, should be set aside for charity.
Buterin says the most successful example of this may be Dogelon Mars, an Elon Musk-themed token.
He transferred $145 million worth of Dogeron to the Methuselah Foundation in 2021, according to the foundation's website. The foundation is a space travel and anti-aging nonprofit organization dedicated to “making 90 the new 50.”
This was 43% of Dogeron's circulating supply and caused panic among other investors who feared that the fire sale would destroy the value of the token. However, the non-profit organization has pledged to be a good steward of the token.
“We intend to take a similar nurturing approach to our Degeron Mars holdings, as the value of cryptocurrencies is “We understand that, like baseball cards and other collectibles, we depend on maintaining the public's trust and capturing the imagination.” said in a statement at the time.
“We hope $ELON continues to increase in value over the long term.”
Later that year, Dogeron owners voted to fund a Methuselah-led experiment.
“The community has donated funds to send our award-winning vascular tissue science to the International Space Station (ISS), where we can continue our experiments beyond Earth's gravity,” the nonprofit said. I mentioned it on my blog.
“The ability to grow human organs will be important for crews who will eventually be involved in deep space travel.”
Although the value of the token has soared since the hectic days of 2021, Vitalik believes the foundation has delivered on its promise.
“The two Methuselah Foundations and the Dogeron Mars community appeared to have a positive-sum relationship with each other, including retroactively converting $ELON into a charitable coin,” Buterin said.
Other philanthropy-related coins have been less successful.
GiveWell Inu (named after the Shiba Inu, like most dog-themed meme coins) donated its proceeds to GiveWell, Buterin said. However, it is discontinued and there are only 1-2 transfers per day on average.
video game
Buterin is more optimistic about the impact of cryptocurrency-based video games.
While some criticize the so-called play-to-earn model employed by crypto-based games such as Axie Infinity, Buterin calls it a “Robinhood game”, one designed to benefit low-income players. Looking forward to new crypto-based games.
“If our goal is to satisfy people's desire to have fun, we need to create more complex and interesting games than simple copy-and-paste coins,” he wrote.
Additionally, “games that financially enrich players, especially those from low-income families, are more likely to leave the community better off than when they joined.”
alex gilbert is DL NewsDeFi correspondent based in New York. Contact us at aleks@dlnews.com.
