TL; DR
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Memecoins generate a ton of trading fees, which fund web3 development via 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 no-brainer at first, but it could carry a whole lot of weight over a larger time frame.
Let’s start here:
If you don’t know what pump.fun is, turn to…
Pump.fun is a Solana-based memecoin generator that allows anyone to create (you guessed it) their own memecoin in just a few clicks.
As of yesterday they now have a competitor called ‘Moonshot.’
That is in many ways the same as pump.fun:
Users can create memecoins quickly and easily
If/when the token reaches a market cap of 500 SOL (~$68k), it will be made available for trading on the Raydium exchange
When this happens, a large portion of the supply is burned, making it scarcer and (in theory) more valuable
…so what’s the difference?
Moonshot’s stock burn rate is 15-20% (compared to Pump’s steady 17%) and also pushes the idea that they are more transparent, with ‘plans’ for frequent, verifiable audits of the system.
As we said at the top: it feels like nothing burger.
BUT!
Memecoins on Solana represent 92% of trading volume on Solana-based decentralized exchanges, and since launching 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 transactions generate support a lot of growth on Solana/the broader web3 ecosystem.
And when we look at history, we cannot help but recognize that stupid catalysts have spawned chain reactions of technological innovation in the past.
For example Beanie Babies.
Sales of Beanie Babies were responsible for much of eBay’s early revenue → eBay was a major source of revenue for PayPal → PayPal sales helped fund Tesla, SpaceX, Facebook, YouTube, LinkedIn, Yelp, Square , Palantir and a lot of other companies…
So yeah, memecoins are like digital Beanie Babies.
But that’s not necessarily a bad thing!