Author: David Hoffman, Bankless; Translated by: Baishui, Golden Finance
Meme coins have sparked intense discussion.
Some see them as degenerate distractions—inefficient, zero-sum games that profit at the expense of others. Others see them as a grassroots reaction to top-down elite and venture capital influence.
We all know the debate — the industry has had this conversation countless times. However, like many aspects of cryptocurrency, the arc of memecoin is dynamic and adaptive, not inert.
We have reason to be optimistic about the future of Memecoin.
The term meme coin has become overused and overly broad. Not all tokens labeled as meme coins fit the stereotype of empty, lazy gimmicks. Some tokens started out as meme coins but evolved into something more, but due to inertia, people still end up labeling them as meme coins.
Platforms like Pump.fun have enabled the creation of tokens, the growth of token numbers, and the democratization of access. Of course, with low barriers to entry, most of these tokens are lightly created — a funny name, a quirky picture — meant to entertain and little else. However, amid the noise, some memes gain substance and drive value in unexpected ways.
Pump.fun, Clanker, and Token Launchpad make it very easy to create liquid tokens. Permissionlessness and accessibility are the core value propositions of our industry.
More convenient
The direction of development of the crypto industry has always been to increase the accessibility of token making for ordinary individuals.
The history of cryptocurrency is one of increasing accessibility to token creation. Every bull run brings new mechanisms:
2013: People learn that it’s not hard to fork Bitcoin’s codebase and create a new blockchain.
2017: Ethereum introduces ERC-20 tokens without launching a full blockchain.
2021: NFTs and minting mechanisms unlock another token standard and distribution mechanism, turning quirky images into speculative assets.
2024: Pump.fun combines token minting and AMM liquidity, all packaged into a simple interface.
This model goes beyond tokens. Why are there so many L2s? Because Optimism’s OP stack reduces the cost of creating rollups. Conduit goes a step further by creating a front end for L2 creation.
The latest innovation in token creation is Clanker, an LLM Warpcast account where Warpcast users can simply tag Clanker with a stock ticker and an image, and Clanker will automatically mint tokens and launch a Uniswap V3 pool, skipping the frontend entirely.
Beyond Meme Coin
Critics often conflate token launchpads like Pump.fun or Clanker with the tokens they produce. While many of the tokens that appear on these platforms are classic meme coins, the launchpads themselves are neutral tools.
For example:
GOAT is the token associated with the first AI agent, from Pump.fun. GOAT is now a valid investment for those who want exposure to the Truth Terminal IP. Is there cash flow? No. Is there a direct correlation between GOAT and Truth Terminal? No, the relationship is tenuous and indirect. Will the price of the token increase as the Truth Terminal brand scales? I don't know, it's not investment advice, but it could be, that's why people buy GOAT.
ANON is launched on Clanker, providing easy access to ZK anonymous Farcaster accounts. If you have enough ANON tokens, you can tweet anonymously from both Anon Farcaster and Twitter accounts. That’s practicality.
We should learn to distinguish between tokens and launchpads. Pump.fun is not a meme coin launchpad. It is a token launchpad. A good launchpad will only make it easier to issue meme coins.
New creation mechanism
Let’s discuss the benefits of token launchpads. We can lecture on the ethics of the products they produce later.
In 2023 and 2024, cryptocurrencies are plagued by high FDV, low circulating token distribution.
Points + High FDV Low Float is the product of an unfortunate combination of factors, primarily an excess of venture capital and the most stringent regulatory environment ever seen for cryptocurrencies.
As a result of this convergence, points and airdrop tokens emerged and were co-opted by sophisticated, extractive airdrop sybil takers, which created toxic and perverse incentives, falsified metrics, and little to no actual value distributed to the intended stakeholders.
Meme Coin is a completely opposite token distribution mechanism.
You can be the 7th person to buy a token with a market cap of less than $1 million and a 100% liquid token supply.
This token generation mechanism has its merits!
On day one, the entire supply of tokens is on the market. That's good. This eliminates different classes of investors locking up tokens. Everyone gets the same valuation. Everyone is a level investor.
Still, there are insiders and cabals that could sabotage a token when it is created via a launchpad. Furthermore, the principal-agent problem between token creators and token buyers has not been solved. Fully liquid token issuance does not solve fundamentally human problems. Humans are imperfect and easily corruptible.
Regardless, the ability to launch a token with 100% of the supply on the market and instant AMM liquidity is a novel and valuable mechanism with strong merits that we should not throw away despite its potential for abuse.
We should add it to our toolbelt of token creation mechanisms, alongside ICOs and NFT mints, as an efficient way to launch and distribute tokens.
All tokens start with a Meme
I encourage people to consider the potential of creating a token for your project using platforms like Pump.fun or Clanker.
Imagine a founder has a promising idea for a product or service. They believe it has value and plan to work long-term to realize its potential. To support their project, they decide to launch a token, either to decentralize governance, manage system risk, collect fees, or for any other possible reason.
This founder can:
Raising funds from venture capital firms
Conduct an ICO
Launch a token on the Token Launchpad
All of these are valid options, and every founder should consider the merits of each.
Let's consider the last one specifically. Let's say that founder also launches a token early in the life of the project. Maybe because they can, they make the token before building any other part of the project. If that's the setup, then the token is a meme. The founder has an idea for a plan, maybe a document. They share it with others in an attempt to get the meme into other people's brains, but it's still a meme nonetheless.
Take the recent Clanker token $NATIVE for example. This Derek requested a token for his Farcaster project, which was apparently intended to build a new type of Farcaster client.
Maybe the story ends here! Maybe Derek has no intention of building Native, he just requested a Clanker token with a 1 tweet long story about possibly building Native. Maybe Derek has been working on Native for over a year. Who knows! I certainly don’t know. Derek needs to prove this to the market. But, nonetheless, the token is fully liquid and potential buyers can make their own decisions based on the information they have.
There is definitely a big principal-agent problem here. Founders can talk about their project as a means of convincing people to buy the tokens they created, and then they can dump the tokens, which may have been the plan all along.
After writing the above, Derek tweeted that he had locked up his token supply for a year! That guy minted his own tokens, bought his own supply (cheap), and then chose to tie himself to the mast. Legitimate projects with legitimate efforts can spawn from token launchpads, even if they also primarily launch worthless meme coins!
This is what we saw with many ICOs in 2017, and the industry as a whole has woken up to the idea of VC psychological warfare to spin stories around worthless projects. The principal-agent problem exists regardless of the token creation mechanism. It’s just that different groups of people are doing the psychological profiling.
Nonetheless, Pump.fun and Clanker tokens started out as memes and now represent valid efforts to build something truly revolutionary. Again, think of ANON and GOAT. People just call these meme coins based on the mechanism by which they were created, but they are not meme coins!
Improved Memecoin Mechanism
There are multiple ways to improve the principal-agent gap between token developers and token buyers when using a token launchpad.
What if developers don’t own a portion of the tokens as an upside risk mechanism, but instead own the rights to transaction fee income?
This is the mechanism Flayer is building with their incoming token launchpad, Flaunch. They are building a Uniswap V4 Hook to add some additional functionality and mechanisms to their token launchpad.
1. Transaction Fee Management
Tokens launched on Flaunch split revenue between developers and the community. Like Pump.fun, Flaunch takes a percentage of all transaction fees that pass through its platform. Unlike Pump.fun, Flaunch returns these transaction fees directly to the token developers and token holders (the community).
The developer of the token controls the revenue split between the developers and the community. This is a parameter set at the launch of the token and can be anywhere between 100% community, 0% developers and 20% community, 80% developers. The community must get at least 20%.
The fees collected by the token community can be used to purchase tokens and add them to LPs, and as trading volume increases, the price and liquidity of the token will increase. They call this a "progressive buy wall" and it's a great narrative. The fees collected by developers can be used to fund their Lambos, or can be reinvested into the project to fund development and growth.
This is a more consistent mechanism that helps close the gap between principal and agent. Through this mechanism, developers can monetize transaction fee income. They no longer need to sell a certain number of tokens to fund development. This is highly consistent with NumberGoUp, as transaction fee income increases proportionally with the increase in token price.
2. NFT Ownership
Who the "developer" of a Flaunch token is is determined by the owner of the NFT. Every token release on Flaunch comes with a 1/1, which is where the development transaction fee revenue comes from.
This NFT becomes a composable object around which further structures can be built. You can put that NFT into a multisig and have it managed by a team. Alternatively, the NFT can be managed by a DAO token vote, either a previously launched token or a new governance token.
The possibilities only expand from here.
So, has my stance on Memecoin changed?
I’ve been receiving some criticism on Twitter lately for my apparent move toward meme coins. Indeed, aside from the occasional appreciation of Dogecoin, I’ve never expressed support for meme coins, and on Bankless I’ve stated my preference for productive assets over the inertia of meme coins many times.
I do think Dogecoin may represent the best case scenario for meme coins. Dogecoin is a wholesome story of a community coming together under the banner of funny dog pictures and working together to increase the market value of Dogecoin in the name of good vibes. Additionally, Dogecoin has donated a significant amount of money to a variety of charities including clean water projects in Africa, bee conservation efforts, the American Cancer Society, education, animal welfare, homeless support, and of course, my favorite, sending the Jamaican bobsled team to the 2014 Olympics.
Despite this, there will still be normal, run-of-the-mill, lazy meme coins. These tokens will continue to draw the ire of many because they have a hard time convincing anyone that they are anything other than a speculative PvP internal game with major agency issues that are difficult to sustain.
My preference for productive assets with development arcs remains the same, but my appreciation for the broader potential of memecoin is much broader.
First, I began to envision a world where Memecoins played a much larger role in the internet economy than most people currently imagine.
What if the memecoin economy grows to a size comparable to that of the traditional stock market? Crypto protocols and markets are designed as a superset of the existing financial system, providing unprecedented flexibility and reach. Memecoins can leverage this foundation to become a massive economic ecosystem in their own right. Listening to the vernacular of Zoomers and Generation AI makes it clear: Memes are at the core of internet culture, and memecoins will naturally play an important role in internet finance.
While Meme coins are currently in a speculative hype cycle similar to ICOs or NFTs and may face market liquidation, they will remain a permanent fixture in the cryptocurrency space. The need to get in on new and exciting things early will never go away. In this sense, I began to accept the long-term potential of Meme coins and changed my perspective.
Second, as shown throughout this article, I see increasing opportunities for memecoins to evolve into something greater than the memes they were born from. Through additional mechanisms, these tokens can be transformed into the foundational “currency legos” that support more physical systems. As memecoins have the potential to evolve into something more sustainable and productive, their palatability to me increases.
Let's explore memecoin together
We are the ones with agency. I choose to believe that we can harness the power of the meme coin that people clearly love and build mechanisms to move the meme coin in a positive direction, rather than in a disgusting direction.
When Pump.fun added live streaming, it began optimizing for attention and virality, and we all know the cost of optimizing for this outcome. When Pump.fun removed live streaming, the platform took an important step away from depravity and toward health. With this simple trick, it weakened the incentive for deplorable behavior and created space for more productive outcomes.
I think there are more tricks and mechanisms that can continue to improve the nature of memecoins. The memecoin industry is huge and it is here to stay. There is a lot of resources left to be extracted in the memecoin space to create sustainable value.
So, this is a call to startups! Build the Memecoin infrastructure to help Memecoin become more valuable. Help solve the principal-agent problem that exists in all token creation events.
Clanker and Pump.fun both produce unbreakable meme coins. These tokens have no backdoors — no one can mint more tokens, and no one can create honeypot traps. These are examples of token infrastructure that helps keep users safe.
There are many more mechanics like this. Let's find them!
