TL;DR
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Memecoins generate a ton of trading fees, which fund web3 development by proxy (similar to how Beanie Baby sales funded early eBay, which funded PayPal, which funded many of today’s largest tech companies).
Full Story
This feels like a nothing burger at first, but it could hold a whole bunch of weight on a larger time frame.
Let’s start here:
If you don’t know what pump.fun is, lettuce catch you up…
Pump.fun is a Solana-based memecoin generator that allows anyone to create (you guessed it) their own memecoin, in a few clicks.
As of yesterday, they now have a competitor called ‘Moonshot.’
Which is the same as pump.fun in many ways:
Users can create memecoins quickly and easily
If/when the token reaches a market cap of 500 SOL (~$68k), it’s made available for trading on the Raydium exchange
When this happens, a bunch of the supply is burned, making it scarcer and (in theory) more valuable
…so what’s the difference?
Moonshot’s supply burn is 15-20% (compared to Pump’s fixed 17%) and also pushes the idea that they’re more transparent, with ‘plans’ for frequent, verifiable audits of its system.
As we said at the top — feels like nothing burger.
BUT!
Memecoins on Solana make up for 92% of trading volume on Solana-based decentralized exchanges, and since its launch on Monday, Moonshot has already added another 7,000 memecoins to the mix.
Sure, memecoins are inherently stupid, and largely useless — but the fees these trades generate supports a whooole lot of growth on Solana/the broader web3 ecosystem.
And when we look to history, we can’t help but acknowledge that equally as stupid catalysts have spawned chain reactions of tech innovation in the past.
E.g. Beanie Babies.
The sale of Beanie Babies were responsible for a large chunk of eBay’s early revenue → eBay was a major source of revenue for PayPal → the sale of PayPal helped to fund Tesla, SpaceX, Facebook, YouTube, LinkedIn, Yelp, Square, Palantir, and a bunch of other companies…
So yeah, memecoins are like digital Beanie Babies.
But that ain’t necessarily a bad thing!
