Each new crypto bull cycle has brought prominent fads. In 2016, those included initial coin offerings, while in 2021 it was NFTs. This time around, it’s memecoins as a flood of new novelty tokens with names like Bonk and Dogwifhat find traction alongside the original memecoin, Doge, and its imitators like Shiba Inu and Pepe. The process has recently been supercharged thanks to an explosion of coins on the Solana blockchain and services like Pump.fun that makes it easy for nontechnical people to spin up and list tokens.
Here’s how DeFi news site The Defiant describes Pump.fun: “The launch process is as simple as clicking ‘Start a new coin’ and inputting a name, ticker, description, and imagery for branding, with a deployment cost of 0.02 SOL, or $3.50 at current prices. Prior to the token going live, the issuer has the option to purchase more of the token at the launch price, and after doing so, it is off to the races.”
This is yet another example of how, every cycle, crypto tools become more accessible to ordinary consumers. In most cases, I find myself cheering on the new development but, in the case of memecoins, I just can’t. Tools like Pump.fun reflect the worst aspects of the crypto industry—mindless speculation and greed that pretends to be something more.
Sure, I get the appeal of memecoins. They are a way to build new communities around a goofy idea like silly dogs or cranky frogs and can be a fun way to commemorate celebrities or events like the passing of Queen Elizabeth II. I’m also a believer that people should be left alone to do what they like with their money. If someone wants to go on a spree at a casino blackjack table or dump their savings into a timeshare in Haiti, well that’s ultimately their business. Likewise, if they want to invest in Floki or Grok instead of Bitcoin or bonds. As they say in Proverbs, don’t get between a fool and his folly.
And yet. The thing that bugs me about memecoins is they are not just harmless fun. While the boosters of many memecoins like to tout them as a joke that took on a life of their own—as was the case with Doge—the reality is they are no better than Ponzi schemes. Cynical hucksters work together to launch memecoins in the guise of creating a community or whatever but are really motivated by finding gullible people to fleece.
Unlike other blockchain projects that are trying to build a better computer network or new types of online governance, memecoins are proudly useless. And that’s fine until you think of the many young people who could be building wealth by buying Vanguard shares or I bonds—which let them share in the wealth of companies or governments—but are instead setting their scarce cash on fire purchasing digital dogs. Maybe I’m getting old, but I think we owe it to the next generation to teach financial literacy and steer them away from scams dressed up as investments.
And if appealing to the better instincts of the crypto industry doesn’t work (spoiler: it rarely does), then self-interest might do the trick. Lest anyone forget, the industry is facing the most ferocious regulatory crackdown in its history, and tokens like Bonk are only going to provide more fodder for agencies bent on repressing it. Stay away from memecoins.
Jeff John Roberts
[email protected]
@jeffjohnroberts
DECENTRALIZED NEWS
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Sam Bankman-Fried filed an appeal of his conviction for fraud and 25-year prison sentence. (WSJ)
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