{"id":472953,"date":"2025-04-05T18:00:16","date_gmt":"2025-04-05T17:00:16","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=472953"},"modified":"2025-04-05T16:01:58","modified_gmt":"2025-04-05T15:01:58","slug":"memecoins-broke-crypto-now-they-might-fix-it","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/memecoins-broke-crypto-now-they-might-fix-it\/","title":{"rendered":"Memecoins broke crypto\u2014now they might fix it"},"content":{"rendered":"<p><em>The following is a guest post and opinion of Shibtoshi, Founder of SquidGrow.<\/em><\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/cryptoslate.com\/memecoins\/\">Memecoins<\/a> have created unprecedented chaos within the crypto industry. Most analysts see the chaos as a binary \u2014 some criticize memecoins as mere speculative assets, while others defend them for challenging low-float-high FDV VC-backed tokens.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But we need a new perspective. One that breaks the binary, accepting memecoins as speculative assets <\/span><i><span style=\"font-weight: 400;\">and<\/span><\/i><span style=\"font-weight: 400;\"> a statement against VC tokens, leading to chaotic market scenarios. Acknowledging memecoins\u2019 potential to breed chaos, it identifies chaos as the birthstone of a new utility-driven token economy.<\/span><\/p>\n<h2><b>Memecoin chaos is good for the industry<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Memecoins <\/span><span style=\"font-weight: 400;\">led<\/span><span style=\"font-weight: 400;\"> investor mindshare in 2024 and emerged as the most popular market narrative<\/span><span style=\"font-weight: 400;\">. Driven by relatable humor, collective mimetic desire, and virality, the memecoin market rose to <\/span><span style=\"font-weight: 400;\">$137 billion<\/span><span style=\"font-weight: 400;\"> in December 2024.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unlike high-value token launches of VC-backed coins denying fair entry to retail investors, memecoins offer an equitable playing field. No wonder more than <\/span><span style=\"font-weight: 400;\">42%<\/span><span style=\"font-weight: 400;\"> of investors were first-time buyers when US President Donald Trump and First Lady Melania Trump launched their memecoins.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At Consensys 2024, Riva Tez of LayerZero Labs <\/span><span style=\"font-weight: 400;\">explained<\/span><span style=\"font-weight: 400;\"> that memecoins help crypto win the \u2018narrative war\u2019 due to their resonance with common people. Indeed, for memecoins, speculation is a vital use-case and essential feature of its functionality.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But empty speculation can also be a bug. That\u2019s what happened with memecoins, as its market cap dropped by 60% to around <\/span><a href=\"http:\/\/cryptoslate.com\/cryptos\/meme\"><span style=\"font-weight: 400;\"><strong>$53 billion<\/strong><\/span><\/a><span style=\"font-weight: 400;\"> in March 2025. Although external factors like geopolitical tensions and global trade wars negatively affected market activity, some intrinsic issues also contributed to memecoins\u2019 collapse.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Malicious actors duped gullible retailers and <\/span><strong>extracted<\/strong><span style=\"font-weight: 400;\"> capital through <\/span><a href=\"https:\/\/cryptoslate.com\/solana-risks-becoming-memecoin-hellscape-mirroring-bnb-chain-in-2021\/\"><span style=\"font-weight: 400;\"><strong>scams<\/strong><\/span><\/a><span style=\"font-weight: 400;\"> like rug pulls, fake presales, pump-and-dump schemes, and phishing attacks. The collapse of the Libra token, endorsed by Argentine President Javier Milei, was the final nail in the coffin. It wiped out <\/span><a href=\"https:\/\/cryptoslate.com\/public-trust-in-argentine-president-javier-milei-craters-after-libra-memecoin-scandal\/\"><span style=\"font-weight: 400;\"><strong>$4 billion<\/strong><\/span><\/a><span style=\"font-weight: 400;\"> of retail money and eroded investor confidence.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Everything was good with memecoins until it wasn\u2019t. The market descended into complete chaos. But the memecoin chaos initiated a much-needed churning within the industry. Stakeholders realized memecoins wouldn\u2019t succeed in the long term with their speculative potential and as an alternative to VC tokens.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The memecoin chaos serves as a wake-up call, albeit a delayed one. Chaotic markets led investors and token developers to realize the necessity of a utility-driven token economy for sustainable value generation. Without altering memecoins\u2019 core thesis, stakeholders must use the chaos as an opportunity to plug utilities into the memecoin market.<\/span><\/p>\n<h2><b>Harnessing the potential of chaos<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">During the <em>Memecoin Supercycle<\/em> keynote speech at Token2049 Singapore, Murad <\/span><a href=\"https:\/\/www.youtube.com\/watch?v=6nqzwdGxTGc\"><span style=\"font-weight: 400;\"><strong>said<\/strong><\/span><\/a><span style=\"font-weight: 400;\"> the token is the product. In a chaotic memecoin market, the token itself is not enough to drive value for investors. Instead, token developers must leverage the product and find new avenues to monetize them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Memecoins are still isolated in a closed circular economy, with investors rotating between different tokens on trading apps to book profits. To stabilize the memecoin chaos, they must diversify into yield farming, staking, and liquid staking options to generate fresh market liquidity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In other words, memecoins must break free from a gambler\u2019s epiphany of creating generational wealth to become DeFi\u2019s key product. Investors must also stop perceiving memecoins as chips in a <\/span>casino<span style=\"font-weight: 400;\"> and instead deploy them in financial markets.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The memecoin chaos demonstrates the need to expand from a product to a fully operational crypto ecosystem. The product must be a foundational stone to build utility-focused dapps for solving real-world problems.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, a memecoin project can launch a <\/span><span style=\"font-weight: 400;\">a decentralized application or SaaS tool<\/span><span style=\"font-weight: 400;\"> to cater to the broader DeFi audience. The exchange can redirect the profits into the memecoin as buybacks, maintaining a steady capital flow to prevent price crashes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Most of the memecoin chaos has resulted from rug pulls and pump-and-dump schemes, eroding investor trust in the asset class. <a href=\"http:\/\/cryptoslate.com\/cryptos\/meme\">Memecoin projects<\/a> can restore confidence <\/span><span style=\"font-weight: 400;\">by building tools that solves pain points in the market such as liquidity lockers<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On a different note, the memecoin community holds the key to chaos. Highly paid project ambassadors, celebrity content creators, and influencers often care little about the project beyond their paychecks. They\u2019ll bulk-purchase tokens and dump them at the slightest hint of a price crash or insider tip-offs.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thus, memecoin chaos is an important reminder to focus on building an organic and well-knit community. This community will provide unwavering support to the memecoin ecosystem, bolster its utilities, and safeguard the token from abrupt price activity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After the chaos subsides, meme tokens shouldn\u2019t abandon their fun quotient to imitate serious financial instruments. Instead, the chaos is a clarion call to merge utility with humor to develop an inclusive and sustainable financial ecosystem.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the Pulitzer-nominated book, \u2018Chaos: Making a New Science,\u2019 James Gleick wrote, <\/span><i><span style=\"font-weight: 400;\">\u201cChaos is a science of process rather than state, of becoming rather than being.\u201d<\/span><\/i><span style=\"font-weight: 400;\"> The memecoin chaos is also undergoing a <\/span><i><span style=\"font-weight: 400;\">scientific process<\/span><\/i><span style=\"font-weight: 400;\"> of <\/span><i><span style=\"font-weight: 400;\">becoming<\/span><\/i><span style=\"font-weight: 400;\"> a utility-driven meme economy from <\/span><i><span style=\"font-weight: 400;\">being<\/span><\/i><span style=\"font-weight: 400;\"> a purely speculative asset with no intrinsic value.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For the crypto industry, the memecoin chaos is a moment of reckoning. From here on, meme tokens will usher in a new era of on-chain finance.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The following is a guest post and opinion of Shibtoshi, Founder of SquidGrow. Memecoins have created unprecedented chaos within the crypto industry. Most analysts see the chaos as a binary \u2014 some criticize memecoins as mere speculative assets, while others defend them for challenging low-float-high FDV VC-backed tokens. But we need a new perspective. One [&hellip;]<\/p>\n","protected":false},"author":1576,"featured_media":473059,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25891,77032,36],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Memecoins broke crypto\u2014now they might fix it<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/memecoins-broke-crypto-now-they-might-fix-it\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Memecoins broke crypto\u2014now they might fix it\" \/>\n<meta property=\"og:description\" content=\"The following is a guest post and opinion of Shibtoshi, Founder of SquidGrow. 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