What is the use of memecoins? A social symbol, says the founder of Avalanche

Love them or hate them, memecoins are all the rage in 2024. Despite the inherent risks of adding a new coin, Avalanche founder Emin Gün Sirer believes they are bringing value and new users to the cryptocurrency ecosystem.

Speaking exclusively to Cointelegraph's Ezra Regera at Token2049 in Dubai, Gun Sr weighed the pros and cons of the rise of memecoins across multiple blockchain protocols. From Bitcoin, Ethereum, Solana to Avalanche, memecoins have created fortunes and ruined portfolios in recent months.

“They're great for the space because it gets people in, excited, engaged and focused on what the technology can do,” Gunn Sirer said.

Ava Labs CEO Many critics argue that memecoins will not bring any value to the ecosystem, just as the rise of blockchain tokens has had its detractors. Gunn Sr. said their value is not related to generating wealth, but to attracting newcomers to the space.

“Being very conservative financially and having been in this position for a long time, I spent a little time criticizing Dogecoin and Shiba Inu. But after a while they realized that memecoins serve a purpose, and that purpose is not obvious to startups,” said Gunn Sr.

The former Cornell University professor sees memecoins as a great opportunity for young and risk-averse crypto enthusiasts to demonstrate their ability to bet on real projects.

“What is that purpose? Its purpose is a social symbol. Similarly, some people say they've made a lot of money trading Bored Up Yacht Club using NFT as their profile picture, and I can buy this, Gunn Sirer explained.

The CEO of Ava Labs said that most memecoin traders do not hold tokens for a long time, and the nature of the sudden trend is based on the ability to constantly adjust the price movement between different memecoins.

“They don't see it as an investment in that fashion. They see it as a transitional phase. It's like riding a bike. It is a dynamic balance. You have to constantly make corrections.

Gunn Sr. admits that luck plays a role as traders jump from coin to coin. “You have to be at the forefront of this community movement. You have to guess correctly. It's not easy to do, and not everyone can do it,” he said.

This is why memecoins have “such a premium” with people who understand these memes and are already working on projects. Gunn Sirer says Avalanche has attracted a rich memecoin culture to its protocol.

Founder Avalanche Foundation says it was one of the first players in the cryptocurrency ecosystem to back memecoins and wants to see the community grow publicly. He cited an influx of users to Avalanche as a direct result of memecoins.

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