In "Memcoins Killed Retail - Thanks for playing," Mike Kremer critiques the impact of memecoin mania on the crypto market, likening it to the ICO boom but with more destructive consequences. Unlike DeFi Summer, where tokens had underlying value tied to utility, memecoins are purely speculative. Insiders create and hype these coins, only to dump them once prices inflate, leaving retail investors with worthless assets. This trend drains capital from genuine projects, leaving the crypto ecosystem worse off and retail investors significantly impacted.
I could not agree more!
The original article has no direct links (email only), but here is the copy of the source.
The memecoin mania has likely been the most extractive crypto phenomenon since the ICO boom. Unlike past cycles, where tokens were often backed by genuine projects with tangible value, the rise of memecoins marks a shift towards a far more destructive dynamic. To understand this, let's compare the flow of value during DeFi Summer with what we see today.
During DeFi Summer, projects like Uniswap Labs launched protocols that provided real utility to the crypto economy. • Users who engaged with these platforms were often rewarded with tokens—tokens that represented a share in the value created by the protocol. When the speculative frenzy subsided, there was still underlying value in these tokens because they were tied to functioning, valuable services. Contrast this with the memecoin trend. • Here, insiders or cartels create tokens like supercumrocket69, hype them up, and lure retail investors into bidding on these "revolutionary" new assets. Once the price inflates, insiders dump their holdings, effectively extracting wealth from retail participants and leaving behind tokens with no real value or utility. The entire process is a zero-sum game where value is not just redistributed but destroyed. • Despite implementing distribution mechanisms aimed at favoring retail investors—FRIEND was airdropped entirely to its community, and ORE is mined using a fair, CPU-based algorithm—both tokens have massively depreciated in price.
• This suggests that retail buyers, drained by the relentless value extraction of memecoins, no longer have the capital to support the market caps of these more genuine projects. Meanwhile, memecoins are sustained by dubious market activity and retail naivety at best. The sad truth is that while speculative bubbles have always been part of the crypto landscape, they previously left behind some residual value in the form of legitimate projects. The memecoin bubble, however, is purely speculative and is draining value from the ecosystem, leaving retail investors worse off than before. Show Less
16
