Memecoins
Put memecoins to good use, says Ethereum co-founder Vitalik Buterin – and has examples – DL News
- Despite serving little to no purpose, some memecoins have valuations in the billions.
- Ethereum founder Vitalik Buterin suggested tying them to charity or finding other ways to satisfy taders’ desire for fun and profit.
Every day, cryptocurrency traders trade billions of dollars in memecoins, decidedly useless tokens with tickers that often point to internet memes like Pepe the Frog.
Ethereum co-founder Vitalik Buterin thinks there is a better way.
Memecoin’s creators should set aside a large chunk of the token for charitable causes or, better yet, create cryptocurrency-based video games designed to help low-income gamers, he said in his speech. blog Friday.
“I have no enthusiasm for coins named after totalitarian political movements, scams, scams or anything that seems exciting in month N but leaves everyone shocked in month N+1,” he wrote, referring to a wave of criticism . offensive memecoin on the Solana blockchain.
“At the same time, I appreciate people’s desire to have fun, and I would rather the crypto space somehow swim with this current rather than against it.”
Memecoin craze
Dogecoin is the original meme coin. It was made as a joke in 2015, poking fun at the speculative frenzy that has often engulfed the cryptocurrency economy.
It didn’t have to be digital money or digital gold, in the way of bitcoin. It did not represent governance rights in a digital cooperative, like Arbitrum’s ARB. It had no intrinsic return, nor was it pegged to some other stable asset.
But Dogecoin’s market capitalization rose to over $88 billion during the 2021 bull market. And it paved the way for other equally stupid and useless tokens.
Join the community to get our latest stories and updates
Last year, PEPPER has taken Ethereum by storm. This year, Dogwifhat increased on Solana. Both now have market capitalizations above $3 billion.
Most have no intrinsic value and their value is determined entirely by the hype and the investor’s gain (or loss) since their exit.
According to the data, Memecoins accounted for around 5% of Ethereum transaction fees over the past month data collected by data analyst James Tolan.
And according to SixDegree Lab, they accounted for a similar percentage of trading volume on Ethereum decentralized exchanges.
Thursday trading volume of meme coins surmounted $113 million on Ethereum.
Positive sum tokens
“If people value fun, and financialized games seem to at least sometimes provide it, then could there be a more positive-sum version of the whole concept?” Buterin said.
His first idea is quite simple: a percentage of a newly issued memecoin, or the transaction fees it generates, should be set aside for charity.
According to Buterin, the most successful example could be Dogelon Mars, an Elon Musk-themed token.
In 2021, he transferred Dogelon worth $145 million to the Methuselah Foundation, a space travel and anti-aging nonprofit committed to “making 90 the new 50,” according to its website.
It represented 43% of Dogelon’s circulating supply, sparking panic among other investors, who feared a sell-off that would destroy the token’s value. But the non-profit promised be a good steward of the token.
“We will take the same educational approach with our holdings in Dogelon Mars because we understand that the value of cryptocurrency depends on maintaining public trust and capturing their imagination, just like baseball cards or other collectibles,” David Gobel, co-founder and CEO of the foundation said in a statement at the time.
“We want $ELON to continue to accumulate value over the long term.”
In the same year, the owners of Dogelon voted to finance an experiment led by Methuselah.
“The community has donated funds to send vascular tissue science prizes to the International Space Station (ISS), where experiments can continue beyond Earth’s gravity,” the nonprofit said on its blog.
“The ability to grow human organs will be important for crews eventually involved in deep space travel.”
Although the value of the token has plummeted since the heady days of 2021, Vitalik believes the foundation has kept its promise.
“The two Methuselah Foundations and the Dogelon Mars community appeared to be developing a positive-sum relationship with each other, retroactively converting $ELON into a charitable currency,” Buterin said.
Other charity-related coins have been less successful.
GiveWell Inu, named after a Shiba Inu, like most dog-themed memecoins, donated its proceeds to GiveWell, Buterin noted. But it’s at the limit deceasedwith only one or two transfers per day, on average.
Video games
Buterin is more optimistic about the impact of cryptocurrency-based video games.
While some have criticized the so-called play-to-earn model used by cryptocurrency-based games like Axie Infinity, Buterin hopes to see “Robin Hood games,” new cryptocurrency-based games designed to benefit low-income players.
“If the goal is to satisfy people’s desire to have fun, we should not create simple copy-paste coins but rather more complicated and interesting games,” he wrote.
Furthermore, “games that leave low-income players, in particular, economically better off, are more likely to leave their communities better off than they entered.”
Aleks Gilbert is DL News‘ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.