According to Kain Warwick, the founder of Synthetix, memecoin trading can be highly beneficial for decentralized exchanges (DEXs) as it attracts a large number of non-traditional decentralized finance (DeFi) traders. Warwick expressed his belief that speculation, which is often associated with memecoins, is actually valuable and shouldn’t be dismissed. He also disagreed with critics who claim that memecoins lack utility.
Warwick, who is preparing to launch his on-chain gateway platform called Infinex this month, explained that memecoin trading leads to increased DEX volume, which in turn forces DEXs to develop better tools.
In recent months, memecoin trading has experienced a surge in popularity. Most of the trading activity occurs on DEXs because it is easy and inexpensive to create tokens using tools like Pump.fun. However, the majority of memecoins are short-lived and don’t last long enough to be listed on centralized exchanges.
According to DefiLlama, DEX volumes in March reached a nearly two-and-a-half-year high of $267.9 billion, just below the record of $292 billion set in November 2021 during the peak of the previous market cycle. In April, DEX volumes dropped by 26.8% to $196 billion, but it was still the seventh-strongest month overall.
During the ETHGlobal Pragma Sydney event on May 2, Warwick emphasized that memecoins, nonfungible tokens (NFTs), and GameFi have a strong appeal to the average person because they tap into human emotions and cultural ideas. He stated that these concepts are more interesting and accessible compared to traditional DeFi.
Warwick also noted that while finance has an impact on everyone, it’s not something people think about on a daily basis. He believes that the average person is more passionate and interested in games, movies, and music. In his opinion, memecoins serve as an effective gateway to spark interest in DeFi and crypto.
Warwick described memecoins as “quite useful” because they act as a hook to engage people in the world of DeFi and crypto. He finds elegance in their simplicity, as they don’t involve complex financial concepts like yield, revenue, or cash flow. Instead, it’s a simple decision of whether the memecoin represents a cool, dumb idea that one wants to own or not.
In conclusion, memecoin trading has proven to be valuable for DEXs, attracting non-traditional DeFi traders. Warwick sees the appeal of memecoins and believes they can serve as a gateway to engage people in the world of DeFi and crypto.