Behind the meme coin feud among big players: A cryptocurrency market where no one is willing to take over

Author: flowie, ChainCatcher

Editor: Marco, ChainCatcher

Doge took 4 years to break through a market value of $1 billion, while BOME only took 3 days. It seems that more retail investors prefer to engage with "meme coins" rather than VC-backed projects.

However, as memes become increasingly popular among retail investors, VCs seem to be less pleased.

Top VC a16z has been vocal in criticizing meme coins, first pointing fingers at the SEC on their official website, accusing crypto policies of allowing memes to flourish while failing to protect genuine blockchain innovation.

a16z Crypto CTO Lazarrin later complained on X platform, "Memecoins undermine the long-term vision that keeps many people in the crypto space, and they are not technically appealing; they are unattractive for builders."

Compound VC managing partner Michael Dempsey also criticized that "meme coins have caused a significant loss of genuine builders."

VCs have shifted the blame for undermining crypto innovation onto meme coins, which quickly sparked dissatisfaction within the crypto community.

Solana co-founder Raj stepped up to defend meme coins, sarcastically responding to the claim that "meme coins have caused a significant loss of genuine builders" by saying that if these so-called genuine builders are so fragile that they fear meme coins, they will never succeed.

Retail investors, in turn, questioned the value coins promoted by VCs. A heated debate about the value of memes has turned into a complaint session about VC coins/value coins.

A Reverse Education for the Community Regarding VCs

VCs, who love to educate users, are being educated by users.

First of all, meme coins do not bear the blame for undermining crypto innovation. @MarinadeFinance sarcastically pointed out that people often look for excuses, but no one or nothing can stop you from building something truly innovative.

And @XBEBEeth added that no one hates these genuine builders; they just dislike the "builders" who deceive users with flashy narratives.

Instead of criticizing meme coins for lacking value, it would be better to reflect on whether the innovations promoted by VCs are genuine innovations. @mfer7166 believes that pseudo-innovation should be criticized more. The issue is not with memes, but rather that there are no epic narratives in this cycle.

The reluctance to only speculate on memes speaks volumes about the helplessness of retail investors.

AI+Crypto, DEPIN, RWA, modularization, Bitcoin Layer 2… VCs are becoming increasingly adept at concocting some vague yet impressive narratives, hoping to have project teams layer these concepts and then sell them to retail investors in the secondary market, expecting them to buy into these long-term visions.

Once upon a time, retail investors were not immune to this, hoping for large-scale applications of new narratives, and even if they couldn't feast on the projects backed by VCs, they could at least sip some soup.

But times have changed. Retail investors are starting to realize that the technological innovations touted by VCs seem to be mere hype, with no actual progress in application. In terms of speculation, following VCs not only leaves them empty-handed but could also lead to significant losses.

The recently mentioned "no one is taking the bait" bull market theory resonated with many. However, @connectfarm1 bluntly stated that there is no such thing as not taking the bait; not taking the bait means you can't afford it.

Currently, so-called value coins have seen their market cap rise, but their prices generally do not increase. Retail investors are being tossed around by high market caps, overvaluations, low circulation, and ongoing unlocks of value coins.

Some newly listed value coins on exchanges have generally lost their wealth-generating effect. WLD was valued at $3 billion before its launch, and on the first day, its FDV reached $28 billion, equivalent to OpenAI's valuation at the time. How much growth potential can such a high market cap leave for the secondary market? New coins like Bitcoin Layer 2 leader Merl have also seen a continuous decline after launch.

Moreover, there are too many new concepts, and the sectors are moving too quickly to understand. @EasonJiang's experience is that holding a value coin has been like a roller coaster ride, returning to "where the dream began," with profits significantly retracing or even being trapped, as attention has shifted to other sectors.

Retail investors seem to be struggling with bottom-fishing and chasing highs. Ethereum Layer 2 leader and value coin representative ARB dropped from $2 to $1. Retail investors want to bottom-fish, but VCs are unlocking large amounts, and the coins in VCs' hands have doubled, potentially leading to being buried in losses.

In a market where crypto has yet to achieve large-scale application, 90% of the current market consists of speculators. Although memes have no intrinsic value, compared to value coins, retail investors are closer to opportunities for hundredfold or thousandfold gains.

@BTCdayu voiced the sentiments of many retail investors, stating, "Meme coins are simple, they release better, and basically everyone is directly gambling in a relatively fair environment. Their greatest value is actually 'buy me, I might rise 100x.'"

Although the fairness of memes needs to be put in quotes, compared to the blatant intentions of VC coins and value coins, retail investors have a higher tolerance for memes.

Memes are merely a game between players, with life and death decided in a few days. Most users gamble small amounts for big returns, and even if the majority incur losses, they do so cleanly without enduring years of psychological manipulation.

Of course, not all VCs are rejecting memes. Some VCs are savvy enough to join in rather than fight against them.

Mechanism Capital has already begun accumulating meme coins. Its co-founder Andrew Kang stated on his social media that Mechanism Capital has completed its first batch of positions for 2024, targeting meme tokens and NFTs themed around Trump.

DWF Ventures has publicly expressed interest in investing in projects with large-scale community participation in the future.

DWF Ventures stated that meme coins will become a new go-to-market (GTM) strategy for many ecosystems and projects, believing that meme coins will serve as effective marketing strategies in the following verticals: infrastructure ecosystems, consumer and gaming, and new projects with meme coin backgrounds.

Variant co-founder Li Jin has started hosting meme marathons, writing, "Born too late to explore the Earth; born too early to explore the universe; born just in time to host a meme hackathon."

Meme May Bear the Burden of Mass Adoption

Seemingly worthless memes may be taking on the responsibility of mass adoption.

@mdudas rebutted a16z CTO, stating, "Meme coins have attracted many users, causing chains like Base, Blast, and Solana to become active."

In fact, compared to some VCs' disdain for memes, meme coins have become a top priority for activating public chain ecosystems.

After Solana founder Anatoly personally promoted Silly Dragon last year, Solana has continued to reap the benefits of memes. The explosive popularity of a BOME coin has made Solana's active address count rank first. In just 3 days after BOME's launch, the number of active wallet addresses on Solana increased from 1.24 million to 2.42 million, a staggering 95% increase.

Additionally, network fees and revenue on the Solana chain have also seen significant growth as a result.

The public chain, which was questioned for having no users, at least has users because of memes. Solana's tremendous success with memes has also caught the attention of other public chains, prompting them to follow suit.

The creators of Base stated that meme coins will be key to bringing millions of users to the Base network. A new proposal from the Arbitrum community aims to establish a Memecoin fund.

Some public chains have even started issuing meme coins.

On March 17, Aptos launched its official meme coin $LME.

On March 18, Bitcoin Layer 2 public chain Ligo announced the launch of meme coin SOLIGO on Solana.

Other public chains are hosting meme innovation competitions to encourage meme innovation on their chains.

BNB Chain recently officially announced the launch of the "Meme Innovation Battle," competing for a prize pool of up to $1 million. TON has also announced the launch of the meme coin and community token cultural center Memelandia, rewarding the top meme coins and community tokens on TON.

The TON Foundation has also airdropped over $200,000 in TON to active meme coin traders within its ecosystem.

Fantom has begun working on establishing meme framework standards. Recently, Fantom Foundation co-founder Andre Cronje tweeted that he is busy conducting due diligence on memecoins to create a framework for launching, supporting, and nurturing community-safe meme coins on Fantom.

Ethereum co-founder Vitalik Buterin previously mentioned when discussing memes that he hopes to see higher quality interesting projects that contribute positively to the ecosystem and the surrounding world (not just "attracting users").

In reality, while meme coins serve as traffic drivers for many public chains, some meme coins are also starting to take action.

Shib, dubbed the "Dogecoin killer," announced the launch of its Layer 2 solution Shibarium Beta version early last year, aimed at reducing the load on blockchain networks and improving user experience for metaverse and gaming applications.

With Memes Leading the Charge, Will There Still Be a Season for Altcoins?

Meme coins and value coins are not entirely opposed. For most retail investors, both are tracks they want to participate in.

In a typical bull market, there are three stages: Bitcoin rises; after Bitcoin, Ethereum rises, driving hot altcoins to soar together. Finally, the crypto market enters a comprehensive upward phase, and meme coins start to rise.

However, in this cycle, the order of sector rotation seems to have been rearranged, with meme coins taking the lead and becoming the main storyline of this cycle.

After the explosion of memes, whether a season dominated by value coins will still arrive is a question of great concern for retail investors.

Recently, Shen Yu expressed in an interview that the altcoin season may not come. "Because the players in the current market are different from those before. Just from the miner's side, after the Bitcoin spot ETF was approved on January 10, they have been hedging risks for several months in anticipation of the Bitcoin halving risk."

Shen Yu mentioned that the characteristic of this cycle is that funds are mainly flowing into Bitcoin through channels like ETFs. As for when these funds will flow into other cryptocurrencies, it remains to be seen.

Crypto trader Thiccy also expressed pessimism about whether an altcoin season will come. Thiccy stated that due to the increasing number of projects issuing tokens, the growth rate of FDV has outpaced circulation, increasing by about 70% since the beginning of the year. "Now, 3-5 'high-quality' tokens are added to the market every week, and everyone seems happy. But ask yourself, who will buy all these tokens? Unless institutions or retail investors flood in, this will just be an everlasting PvP."

Crypto KOL @BTCdayu believes that the altcoin season has already passed. "Currently, altcoins, especially various L2s and new narratives, have a total scale that has already reached the peak of the last bull market."

However, some investors believe that the altcoin season will not be absent. In a market that generally looks down on value coins, crypto researcher @0xNing0x believes it is the best time to accumulate. "I am quietly buying top assets in sectors like modular public chains, RollAPP, AI agents, ZK hardware acceleration, RWA, Bitcoin Layer 2, etc., actively serving as the exit liquidity for the market."

@0xNing0x's logic is that the golden rule of investing has always been "what others abandon, I take; what others take, I abandon." When the proportion of meme coins in everyone's investment portfolio increases, the truly high-risk-reward Alpha opportunities will emerge in the value coin sector.