The Future Potential of Memecoins
In our last article, we discussed the development of memecoins and highlighted some well-known examples. While these coins generally lack intrinsic utility beyond trading, making them highly speculative, there are instances where memecoins have introduced innovative ideas, either by design or by accident. This prompts us to consider how memecoins might evolve further. Currently, their prominent applications include charitable contributions, utility-focused development, gamification, and serving as currency.
Charitable Contributions
The widespread appeal and community-driven nature of memecoins make them ideal for harnessing collective efforts toward innovative projects, such as charitable causes. The Dogecoin community has actively engaged in charitable activities, one of the most notable being the Doge4Water campaign, which successfully raised over $30,000 to build wells in Kenya.
This philanthropic use of memecoins is further highlighted in Vitalik Buterin’s article “What Else Could Memecoins Be?” He recounts an incident where he was gifted half the supply of a memecoin, which he then donated to a charitable foundation. This action led to the development of a positive-sum relationship between the foundation and the memecoin’s community, where the memecoin was retroactively converted into a charity coin. Memecoins have shown their potential beyond mere speculation, fostering community-driven charitable efforts and social good.
Utility-Focused Development
A promising avenue for memecoins is transitioning to a utility-focused model. After gaining popularity through low barriers to entry, memecoins can leverage their strong communities to develop ecosystems around their tokens. Shiba Inu is a prime example of this transition. It started as a memecoin and has since introduced many innovative use cases. For instance, ShibaSwap, a DeFi platform, enables $SHIB holders to earn passive income by providing liquidity, staking, and token swapping. The continually evolving ecosystem gives $SHIB a significant utility-driven edge over other memecoins.
Gamification and Entertainment
Gamification represents another potential path for memecoins. Vitalik mentioned his trip to Southeast Asia, where he frequently encountered stories about the benefits of the play-to-earn feature in Axie Infinity, which significantly improved the economic situation for low-income individuals.
An example of gamification in memecoins is $Floki, which started as a memecoin and has since developed Valhalla, a play-to-earn NFT metaverse game. This game enables users to earn $FLOKI through various in-game activities. By adopting play-to-earn models, memecoins can provide entertaining gaming experiences while benefiting those in poverty.
Currency
Another growing use case for memecoins is as a payment option. An increasing number of crypto-friendly businesses are now accepting cryptocurrencies for payments. Elon Musk, who has frequently supported Dogecoin, has introduced select Tesla merchandise that can be purchased using Dogecoin. As the crypto industry gains wider acceptance, we expect more firms to gradually accept cryptocurrency payments, with some memecoins likely to become viable options.
Fun Can Be Positive Sum
Despite the rapid development of memecoins, many seem to have forgotten their original spirit. Dogecoin, the first memecoin, was created as a “fun and friendly internet currency” to satirize the wild speculation in cryptocurrencies at the time.
We have now proven that when communities unite for fun and shared goals, the impact can be profoundly positive and far-reaching. Projects that people enjoy participating in can have significant positive effects. As Vitalik Buterin suggests, “money is zero-sum, but fun can be positive-sum.”
