Compiled by: Wu Says Blockchain
Original link:
https://x.com/nic__carter/status/1850530740217196766
As the 2024 U.S. elections approach, discussions about memecoins within the crypto community have become a hot topic on Twitter. Their dramatic price fluctuations, rapidly growing user base, and confrontational stance towards the mainstream financial world make them a unique market phenomenon. On the evening of October 27, several well-known influencers in the crypto world engaged in intense discussions about the future of memecoins.
Omid Malekan: Memecoins and Economic Populism
The origin is a long article about memecoins published on the X platform by Omid Malekan, a professor at Columbia Business School and blockchain writer. (Omid Malekan is well-known for explaining complex cryptocurrency phenomena to the public in a clear and understandable way, earning him the title of 'explainer'). Omid Malekan initially wrote in his tweet: "Memecoins themselves are a manifestation of economic populism; they are a rebellion against the venture-capital-supported tokenomics."
He pointed out that the popularity of memecoins reflects investors' dissatisfaction with the current token issuance mechanisms, especially those tokens controlled by venture capitalists, which often lack transparent distribution and fair circulation mechanisms. Malekan further explained that this phenomenon is partly driven by regulatory policies led by SEC Chairman Gary Gensler and Senator Elizabeth Warren. The strictness of these policies has forced the crypto market to adopt extreme measures such as geographical blocking of airdrops and VPN bans.
However, Malekan believes that if the Republican Party wins in the upcoming U.S. elections, these policies will undergo significant changes, and the regulatory environment may become more lenient. He wrote: "A Republican victory will bring back mechanisms like ICOs and airdrops, which can provide real economic benefits to token holders, while memecoins lack such benefits." He concluded that if U.S. cryptocurrency regulation returns to rationality, it will negatively impact the memecoin market, as the market will refocus on decentralized applications (dApps) and other projects with more real value, leading to a prolonged bear market for memecoins. "Every joke has its end," Malekan warned investors, implying that memecoins will ultimately lead to losses for the majority.
Nic Carter: The Memecoin Phenomenon Under SEC Oppression
Subsequently, renowned crypto venture capitalist and Castle Island Ventures partner Nic Carter quoted Malekan's long article to express his views. Carter pointed out in the tweet: "Memecoins are largely a response to the SEC's oppressive regulation. If the SEC finds reason, the demand for trading memecoins will decrease."
Carter further explained that while the demand for memecoins may decrease, there will always be a portion of people who continue to trade memecoins, as this phenomenon has persisted for a decade. Carter emphasized that the appeal of memecoins stems from their implication of equality, but he also pointed out: "Once those so-called 'evil venture capitalists'—also known as institutional capital—learn how to leverage memecoins, they will coordinate activities to drive up memecoin prices, while ordinary investors will only hear about it once the token market cap has already reached $1 billion." Carter warned of the potential inequalities in the memecoin market, where institutional capital will ultimately take over these seemingly grassroots market opportunities.
Cobie: Early Participation Opportunities in Memecoins
Another KOL, Cobie, replied to Carter's tweet, stating: "The reason memecoins are popular is that people want to buy assets that can rise in price, rather than those that have already reached valuations in the tens of billions and are in long-term decline." Cobie noted that ordinary investors are increasingly finding it difficult to participate early in non-memecoin projects, as most projects have already gone through multiple private funding rounds by the time they officially list. He believes: "Even if SEC policies shift to support DeFi, the reality is that no one wants to buy assets on Binance."
Andrew Kang: Reassessing Tokenomics Design
Andrew Kang, a partner at Mechanism Capital (another well-known identity is as a major short seller in crypto, going from 0 to a nine-digit asset), also joined the discussion. Kang criticized the existing token lock-up designs, arguing that long-term lock-ups not only fail to have a positive impact but actually increase market instability. "It's best not to set a lock-up period for investors, but to allow as many tokens as possible to enter circulation on Day 1."
Kang further explained: "Long lock-up periods will only postpone the problem and become a continuous challenge for project teams." He advocated for more tokens to enter market circulation during the Token Generation Event (TGE), believing this could avoid market volatility caused by subsequent long lock-up periods. He pointed out: "All market participants are potential sellers, and lock-ups won't change that. A free market trading environment is the best solution to the long-term volatility of the crypto market."
Toly Yakovenko: memecoins are a form of entertainment
In contrast to the serious discussions by the above KOLs, Toly Yakovenko, co-founder of Solana Labs, humorously replied to Malekan's tweet: "Trading memecoins is a form of entertainment. It's like a Keynesian beauty contest, guessing what people think is the most interesting. Trading other assets is work. If possible, people would prefer to work less and have more fun." Toly Yakovenko's viewpoint emphasizes the irrational side of memecoins, as investors are more willing to treat them as a form of entertainment rather than a serious economic activity.
Murad Mahmudov: Memecoins and Global Currency Supply
Finally, the recently prominent meme influencer KOL Murad Mahmudov also joined the discussion at Token 2049. Murad replied to Malekan's long post, stating: "99% of memecoin buyers don't care about politics, the rise of memecoins is directly related to the ongoing increase in global currency supply, rather than the results of a single election."
Murad emphasized that the increase in global currency supply is a key factor driving the rise of memecoins, and that even a Trump victory would not change this fact. He further stated: "Memecoin buyers don't even care about trading assets that have legitimate income and open fee switches. The increase in global currency supply makes attention more important than fundamentals and cash flow." In his view, as liquidity in the global economy becomes more rampant, the attention resources in the market gradually replace traditional economic fundamentals, becoming key to determining the value of memecoins.