BitMEX co-founder Arthur Hayes is cautioning against labeling all memecoins as “stupid.” He believes that memecoins can actually have a positive impact on the blockchain networks they are launched on. Hayes argues that memecoins bring value to the crypto sector by attracting attention and bringing in new users and developers to blockchains. He specifically mentions Solana and Ethereum as the networks that are best positioned to benefit from the attention generated by memes.
Hayes points out that last year, Solana experienced significant growth in network activity following a memecoin frenzy in November. Many non-meme projects also launched on the network in the months that followed. Similarly, Bitcoin saw increased network and development activity after the introduction of BRC-20 tokens and Ordinals around the same time.
Real Vision CEO Raoul Pal, who interviewed Hayes, believes that memecoins will continue to grow in popularity among younger crypto investors, taking advantage of the “gaming mentality” prevalent in Gen Z and millennials. Pal sees memecoins as a form of gaming with money.
Both Pal and Hayes acknowledge that the attention surrounding memecoins will persist in the future. They mention the upcoming projection of the Solana-based memecoin dogwifhat (WIF) on the Las Vegas Sphere as a testament to this. WIF recently surpassed the Ethereum layer-2 network Arbitrum (ARB) in terms of total market capitalization.
Despite the potential benefits, industry executives warn of the risks associated with memecoins. Franklin Templeton, a US investment firm, highlights the lack of fundamental value or utility in memecoins, making them prone to risks. Ethereum co-founder Vitalik Buterin also expresses his disinterest in memecoins but encourages investors and developers to find ways to make them useful or charitable.
Although memecoins come with risks, they have been the best-performing asset class in the crypto sector in the last month, according to data from CoinGecko. In the past week, memecoins listed on CoinGecko have gained an aggregate of 20%, outperforming layer-1 network tokens and decentralized finance (DeFi) tokens.
In conclusion, while memecoins have their drawbacks, they continue to attract attention and perform well in the crypto sector.