Whether you love them or hate them, memecoins have taken the cryptocurrency world by storm in 2024. Emin Gün Sirer, the founder of Avalanche, acknowledges the risks involved in jumping on the memecoin bandwagon but believes that they are bringing value and new users to the cryptocurrency ecosystem.
During an exclusive interview with Cointelegraph’s Ezra Reguerra at the Token2049 conference in Dubai, Gün Sirer discussed the advantages and disadvantages of memecoins across various blockchain protocols, including Bitcoin, Ethereum, Solana, and Avalanche. These memecoins have made fortunes for some and caused losses for others in recent months.
Gün Sirer emphasized that memecoins are beneficial for the cryptocurrency space because they attract and engage people, keeping them excited and focused on the potential of the technology. While critics argue that memecoins have no value, similar to the detractors of nonfungible tokens, Gün Sirer believes that their value lies in their ability to attract newcomers to the industry.
Admitting his initial skepticism towards memecoins like Dogecoin and Shiba Inu, Gün Sirer eventually recognized their purpose, which may not be obvious to older generations. He sees memecoins as a means for younger crypto enthusiasts to showcase their ability to make wise investment choices.
Gün Sirer explained that the purpose of memecoins is social signaling. Just as some people use a Bored Ape Yacht Club NFT as their profile picture to demonstrate their trading success, memecoin traders use these coins to signal their financial prowess.
The CEO of Ava Labs stated that most memecoin traders do not hold their tokens for the long term. Instead, the success of memecoins relies on the ability to adapt to the constantly changing value dynamics between different memecoins. Gün Sirer acknowledged that luck also plays a role in this type of trading, as traders must be at the forefront of community movements and make accurate predictions.
This is why memecoins have gained a premium among those who understand the meme culture and can act quickly on new projects. Gün Sirer highlighted the thriving memecoin culture on the Avalanche protocol and revealed that the Avalanche Foundation was one of the first players in the cryptocurrency ecosystem to embrace memecoins. The influx of users to Avalanche is a direct result of the popularity of memecoins.
In conclusion, memecoins have become a significant trend in the cryptocurrency industry, attracting new users and bringing excitement to the space. Despite their critics, Gün Sirer recognizes the value of memecoins in terms of social signaling and their ability to engage younger crypto enthusiasts.