The rise of meme coins is perhaps the most predatory phenomenon in crypto since the ICO boom. Unlike past tokens backed by real projects, meme coins signal a shift toward more destructive market dynamics. Here’s an analysis comparing DeFi Summer and current meme coin trends:

DeFi Summer:

During DeFi Summer, projects like Uniswap Labs launched protocols with real utility. Users who participated in these platforms were often rewarded with tokens that were tied to the real value of the protocol. When market speculation faded, these tokens still held value because they supported powerful services.

Meme Coin Trends:

Unlike DeFi projects, meme coins are often created by insiders, like “supercumrocket69,” and hyped to attract retail investors. After the price rises, insiders sell their assets, causing the price to crash, leaving behind a pile of tokens with no real value. This is a classic zero-sum game where value is not only redistributed, but also destroyed.

Impact on retail investors:

The hype of meme coins has affected retail investors, such as Friend.Tech and Ore Supply, whose tokens have depreciated significantly despite being beneficial to retail investors. This shows that the speculation of meme coins has drained the capital of retail investors and cannot support the market value of more real projects. Meme coins can only be maintained by suspicious market activities and blind investment by retail investors.

Overall, although speculative bubbles have always existed, there is at least some residual value in past bubbles. However, the meme coin bubble is purely speculative and is draining the value of the crypto ecosystem, making the situation of retail investors worse.