Whether you love them or hate them, memecoins are undeniably popular in 2024. Emin Gün Sirer, the founder of Avalanche, recognizes the risks involved in investing in these new coins, but believes they bring value and attract new users to the cryptocurrency ecosystem.
During an exclusive interview with Cointelegraph’s Ezra Reguerra at Token2049 in Dubai, Gün Sirer discussed the advantages and disadvantages of memecoins across various blockchain protocols, including Bitcoin, Ethereum, Solana, and Avalanche. In recent months, memecoins have made fortunes for some investors while causing losses for others.
Gün Sirer stated that memecoins are beneficial for the industry because they attract people and keep them engaged and focused on the potential of blockchain technology. However, he acknowledged that critics argue that memecoins do not add any value to the ecosystem, similar to the initial skepticism surrounding nonfungible tokens (NFTs). Gün Sirer emphasized that the value of memecoins lies in their ability to attract newcomers, rather than solely in the prospect of making profits.
As someone who has been involved in the cryptocurrency space for a long time, Gün Sirer confessed that he initially criticized memecoins like Dogecoin and Shiba Inu. However, he eventually recognized their purpose, which may not be apparent to older generations. He sees memecoins as a way for younger, risk-taking crypto enthusiasts to showcase their ability to identify promising projects.
Gün Sirer explained that the purpose of memecoins is social signaling. Just as some individuals use a Bored Ape Yacht Club NFT as their profile picture to demonstrate their trading success, memecoin investors use these tokens to indicate their financial gains. He noted that most memecoin traders do not hold their tokens for the long term, and success in this trend relies on the ability to adapt to the ever-changing value of different memecoins. Luck also plays a role, as traders need to be at the forefront of community movements and make accurate predictions.
The founder highlighted that memecoins have gained a premium among those who understand the memes and get involved early in projects. Avalanche has fostered a thriving memecoin culture on its protocol, and Gün Sirer revealed that the Avalanche Foundation was one of the first players in the cryptocurrency ecosystem to support memecoins. He expressed a desire to see the community continue to grow.
In conclusion, memecoins have become a significant trend in the cryptocurrency world, attracting both excitement and criticism. While their value may not be immediately apparent to everyone, Gün Sirer believes they serve a purpose by bringing in new users and allowing risk-takers to demonstrate their trading skills. Whether you’re a fan or not, memecoins are here to stay in 2024.