The recent buzz surrounding memecoins in 2024 has attracted criticism from Changpeng ‘CZ’ Zhao, the founder of Binance, who has described the current memecoin landscape as “peculiar.”
Advocating for a shift in priorities, Zhao has urged the blockchain community to focus on developing tangible real-world applications rather than engaging solely in speculative token trading.
Zhao voiced his sentiments on a platform, stating,
“While I appreciate memes, I find the current trend of memecoins ‘odd.’ Let’s channel our efforts into creating practical blockchain solutions.”
This viewpoint caused a ripple effect in the market, leading to increased selling pressure on well-known meme tokens like Dogecoin [DOGE], Shiba Inu [SHIB], Pepe [PEPE], and Bonk [BONK], resulting in a decline in their values.
Community Response to CZ’s Memecoin Critique
Interestingly, CZ’s critique of meme cryptocurrencies emerged shortly after Binance introduced futures trading for two new meme tokens, WHY and CHEEMS, on the BNB Chain.
However, the launch timing proved unfavorable as both tokens experienced a significant drop in value shortly afterward.
Reflecting on this, Dan Crypto Larp, an individual within the platform community, commented,
In alignment with Changpeng Zhao’s concerns, prominent crypto investor Nagato expressed the need for a “thorough purge” within the memecoin sphere.
Nagato highlighted the disparity between a few memecoins that offer genuine entertainment and the majority that lack any substantial purpose or utility.
Nagato remarked,
“I completely agree. While some top-tier memes bring joy and laughter, the remaining 99% are bizarre and lack substance. A significant cleanup is overdue.”
The Emergence of Memecoins
The rise of memecoins, initiated by DOGE, has expanded across various blockchains, including Ethereum [ETH] and Solana [SOL].
Platforms like Solana’s Pump Fun and Tron’s Sun Pump have streamlined the process of creating memecoins.
Consequently, this surge has propelled Solana’s transaction volumes, with instances of surpassing Ethereum in certain metrics, underscoring the growing impact of memecoins in the cryptocurrency realm.
Recent findings from CoinWire shed light on concerning statistics related to influencer-promoted memecoins, with 76% of endorsements linked to essentially defunct tokens.
Moreover, approximately two-thirds of influencer-backed memecoins lack long-term viability, with 86% witnessing a 90% value erosion within three months.
Only a mere 1% of endorsed tokens manage to provide a tenfold return on investment.
Despite these discouraging figures, memecoins maintain their popularity among a significant faction of the crypto community, as emphasized by memecoin enthusiast Ramonos,
“The world craves simplicity. We prefer to enjoy visual humor and take risks with our investments.”
As of the latest data, the memecoin market capitalization stands at an impressive $123 billion, indicating a 1.8% fluctuation over the past day, according to CoinGecko.