BitMEX co-founder Arthur Hayes said one should be careful before labeling all memecoins as “stupid,” arguing they can be a net positive for the blockchain networks they’re launched on.
In a March 30 interview with Real Vision CEO Raoul Pal, Hayes argued that memecoins bring value to the crypto sector by drumming up attention and then accruing new users and engineers to blockchains.
“You can poo-poo these things as stupid and valueless, but if it brings attention and more engineers to the space, it’s positive value for the chain itself.”
“The chains that can support this culture are going to be the chains that have value,” Hayes said, adding that Solana and Ethereum stand as the most well-positioned networks to capture the flow of attention from memes.
Last year, Solana network activity grew considerably after a memecoin frenzy in November — with many non-meme projects launching on the network in the following months.
Similarly, network and development activity on Bitcoin has grown significantly after a flood of BRC-20 tokens and Ordinals around the same time.
Pal believes memecoins would likely grow increasingly popular among younger crypto investors, capitalizing on the “gaming mentality” present in Gen Z and Millennials.
“This is the same thing, just gaming with money,” said Pal.
Both Pal and Hayes noted that the attention flowing into memecoins would continue for some time into the future, with Solana-based memecoin Dogwifhat (WIF) slated to be projected on the Las Vegas Sphere sometime in the coming months.
The dog-themed memecoin recently flipped the Ethereum layer-2 network Arbitrum (ARB) in terms of total market capitalization. At the time of publication, WIF commands a market cap of $4.5 billion, while ARB stands at $4.4 billion.
Industry executives, however, argue there are also countless risks that come along with memecoins.
In a March 14 investor note, United States investment firm Franklin Templeton wrote that while memecoins may present an opportunity for “quick profits,” — they are prone to risks that arise from lacking any fundamental “value or utility.”
In a March 29 blog post, Ethereum co-founder Vitalik Buterin expressed his general disinterest in memecoins. However, he asked crypto investors and memecoin developers to find a way to make the tokens useful or charitable — instead of merely denouncing them or “virtue signaling” to those who trade them.
“I value people’s desire to have fun, and I would rather the crypto space somehow swim with this current rather than against it,” Buterin wrote.
Related: Dogwifhat en route to $10? WIF is now the third-biggest memecoin as whales hold tight
Despite the risks, memecoins have been the best-performing asset class within the crypto sector in the last month, according to data from CoinGecko.
In the last week, memecoins listed on CoinGecko have gained an aggregate of 20%, compared to 6% for layer-1 network tokens and 5.4% for decentralized finance (DeFi) tokens.
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