Memecoins’ mass appeal makes it valuable to DEXs: Kain Warwick

    2024.05.03 | exchangesranking | 52onlookers

    Memecoin trading can be hugely valuable to decentralized exchanges (DEXs) as it can attract flows from a mass of non-traditional DeFi traders, says Synthetix founder Kain Warwick.

    “There’s an argument that memecoins are pure speculation, in my view speculation is good. It’s valuable,” Warwick told Cointelegraph at MemeGlobal Sydney.

    He added he wasn’t totally sold on memecoin critics’ arguments that the assets aren’t creating utility.

    Warwick — who is set to launch his “on-chain gateway” platform Infinex this month — explained that “out of memecoin trading, you get DEX volume and then DEXs have to respond and build better tools.”

    “Even if the investment is in a purely speculative instrument that has no utility, the ecosystem around it starts to form and that money flows through and the investment flows through into infrastructure, which I think is good.”

    Memecoin trading has surged in the last two months. The bulk of trading happens on DEXs as token creation tools like pump.fun makes them easy and cheap to launch — the majority are short-lived and don’t last long enough to get a centralized exchange listing.

    Monthly DEX volumes for March reached a nearly two-and-a-half-year high of $267.9 billion — just below the $292 billion November 2021 record at the peak of the last market cycle, according to DefiLlama.

    DEX volumes by month since 2021. Source: DefiLlama

    April figures saw $196 billion in DEX volumes — a 26.8% drop from March but still the seventh-strongest month overall.

    Speaking at the May 2 ETHGlobal Pragma Sydney event, Warwick said memecoins, nonfungible tokens (NFTs) and GameFi “tap into more of a human emotion and cultural idea, which is much more interesting and accessible and addressable to the average person than DeFi.”

    “Financial engineering is not that interesting,” he added. “There’s just not that many people that find it deeply interesting.”

    Kain Warwick on stage at MemeGlobal Sydney. Source: Jesse Coghlan/Cointelegraph

    Warwick said that while finance is “impactful to everyone” it’s not something people think about every day — “the average person doesn’t care.”

    Related: Fantom bets on ‘safer memecoins’ with launch of $6.5M dev fund

    Games, movies and music, however, were things Warwick believed the average person is “passionate about and really cares about.”

    “I think memes are maybe the most simplistic connection between financialization and tokenization of everything, and culture.”

    He added memecoins are “quite useful” as a “hook to get people interested” in DeFi and crypto.

    “There is something elegant in the simplicity of it,” Warwick said. “There’s no yield or revenue or cash flow or anything. It’s just: ‘Is this a dumb cool idea that I want to own, or is it not?’ That’s it.”

    Magazine: Meme coins: Betrayal of crypto’s ideals… or its true purpose?

    Additional reporting by Felix Ng.

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