Memecoin is entering what’s known as the “supercycle phase” – an apt choice of words when you need to shout out to unsuspecting investors that something epic is coming.

That was the theme of Murad Mahmudov’s Token2049 talk, titled “Memecoin Supercycle,” to which more and more crypto Twitter users seem to be subscribing.

Mahmudov believes that we should embrace memecoins because they give us hope, fun, identity, belonging, emotional connection, ways to reduce loneliness, and ways to participate in collective artistic expression and imagine reality.

Let's review first.

According to CoinGecko, the entire memecoin market is worth $53 billion, or about 2.3% of the entire $2.3 trillion cryptocurrency market cap. Pump.fun launched in January 2024, and about 2.3 million memecoins have been created since then.

How many of these memecoins are “successful” for investors?

The answer is, not much. According to @Adam_Tehc’s August data, 64.7% of Pump.fun traders on Solana were losing money or breaking even at best. Only 3% made over $1,000 in profit, and only a handful of 0.0028% of wallets made a $1 million moonshot on memecoin.

Part of the “why memecoins” debate is because VC-backed altcoin alternatives suck.

Granted, there’s some truth in this. Most venture-backed tokens have seen only down charts in their CEX listings, they’ve shrugged off questionable insider investor token economics, and many of their products haven’t panned out (around 18% of crypto companies that raised money in 2022 have already shut down, according to Lattice Funds).

But I think the solution is to get these things right rather than diving headfirst into memecoins and throwing the baby out with the bathwater.

Recall, for example, that the history of the Internet is littered with failed companies that raised billions of dollars in funding. Recalling the dot-com bubble, journalist Maggie Mahar estimated that by February 2002 (two years after the bubble peaked), about 100 million investors had lost about $5 trillion in the stock market.

Today, the Internet is indispensable. We didn’t get there by doubling down on speculative use cases, so to speak.

Memecoin does not pretend to be trying to create a socially innovative product, which has been wrapped up in a marketing swirl and portrayed as an investor advantage.

But failed cryptocurrency projects at least bring with them lessons and knowledge of great social significance that are being learned and applied in the industry.

We know that algorithmic stablecoins might not be a good idea given Terra’s spectacular collapse.

We know from the modest improvements in cost of decentralized storage solutions like Filecoin (relative to centralized competitors like AWS) that data is unlikely to be a breakthrough use case for DePIN.

We know from the decline of Axie Infinity that the next wave of blockchain-based games are unlikely to be based on earn-while-playing mechanics.

In fact, the point here is that we don’t know what will and won’t work until entrepreneurs (and, unfortunately, many scammers along the way) try it. After all, that’s the whole point of permissionless markets: to allow a range of experiments to flourish simultaneously.

If memecoins do experience a “supercycle,” it does raise a huge question: So what? What has the blockchain industry proven to itself, the outside world, and regulators, aside from people’s desire to gamble long-term?

Cryptocurrency is not designed to make you rich. If that happens along the way, congratulations, but crypto exists to set you free.