What are memecoins good for? Social signaling, says Avalanche founder

Whether you’re a fan or not, memecoins are currently very popular in 2024. Despite the potential dangers of jumping on the bandwagon of a new coin, Avalanche founder Emin Gün Sirer is convinced that they contribute value and attract new users to the cryptocurrency market.

At Token2049 in Dubai, Ezra Reguerra of CryptoMoon Report had an exclusive conversation with Gün Sirer. During the discussion, Sirer assessed the pros and cons of the surging popularity of memecoins across various blockchain networks, including Bitcoin, Ethereum, Solana, and Avalanche. In the past few months, memecoins have brought significant gains and devastating losses to investors.

“Gün Sirer noted that these technologies are beneficial for the area as they attract and engage people, keeping them focused on the technology’s capabilities.”

The CEO of Ava Labs acknowledged that memecoins have been criticized for lacking value in the ecosystem, much like nonfungible tokens faced skepticism in the past. However, according to Gün Sirer, the worth of memecoins isn’t about amassing wealth but rather drawing newcomers into the space.

What are memecoins good for? Social signaling, says Avalanche founder

“With my financially cautious and lengthy experience background, I’ve spent quite some time criticizing Dogecoin and Shiba Inu. However, I’ve come to understand that memecoins play a role, even if that role isn’t immediately clear to older generations,” Gün Sirer expressed.

A previous professor at Cornell University now views memecoins as a chance for young, daring crypto supporters to demonstrate their ability to pick successful projects by taking risks.

Gün Sirer stated, “Why is that important? It serves the function of social signaling. For instance, displaying a Bored Ape Yacht Club NFT as your profile picture implies, ‘I have successfully made significant profits from trading and can afford this collectible.'”

The CEO of Ava Labs explained that the majority of memecoin investors don’t plan to hold their tokens for extended periods, instead preferring to frequently switch between different memecoins as market trends evolve.

“They don’t see it as an investment in that fashion. They see it as a transitory phase. It’s like riding a bike. It’s a dynamic equilibrium. you have to constantly make corrections.”

Gün Sirer acknowledged that element of chance is involved when traders switch between different cryptocurrencies. “It’s crucial to be an active member of the community. Making accurate predictions is no simple task, and not every person possesses this skill,” he explained.

Memecoins carry a significant value for those who grasp the underlying memes and get involved in projects early, as explained by Gün Sirer. Notably, Avalanche has fostered an active culture for memecoins within its protocol.

The founder expressed his enthusiasm for memecoins and mentioned that the Avalanche Foundation was among the early supporters in the cryptocurrency sphere. He is looking forward to witnessing a thriving community surrounding these quirky digital currencies. He attributed an increase in user activity on Avalanche to the popularity of memecoins.

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2024-04-19 15:27