Your Idea of a Memecoin Community Is Wrong

Memecoins have taken the crypto world by storm, but not for the reasons you think. According to CoinGecko, memecoins accounted for 14.3% of all transaction volume in Q2 of 2024, making them the biggest narrative in crypto. However, despite their meteoric rise, the way we understand memecoin communities needs a serious rethink.

As Murad Mahmudov noted at Token2049, memecoins have captured a unique market position because they are fully unlocked; no VCs, no lock-up periods, and often, no tangible revenue. These factors, Mahmudov argues, turn the tokenized meme into the real product — in essence, the value of memecoins lies within community, mission, and meaning.

But here’s where we challenge the narrative. We believe that memecoins started as fun, collective expressions or insider jokes, but their staying power isn’t rooted in the “community” as most people define it. Instead, memecoins have evolved into something more fluid and fleeting — a new type of liquidity vehicle.

Having a front-row seat to the evolution of the crypto space has made one thing clear to us: memecoins are no longer just speculative playthings. Yes, speculators thrive on them, and platforms like Ape.pro — which facilitates Solana memecoin trading — have brought significant UX innovation to this speculative frenzy.

What’s more, memecoins aren’t simply driven by community-building in the way traditional asset classes are. Instead, they operate within a cocktail of entertainment, pop culture, and financial speculation. This heady mix has created a distinct market segment that draws substantial trading volume. But something besides community keeps memecoins afloat — their liquidity.

We’re not totally dismissing the narrative that memecoins succeed because they create communities – in part, that’s true. People gravitate toward memecoins to express themselves or align with certain viewpoints, as Michael Selig from Willkie Farr & Gallagher LLP recently pointed out. Memecoins have been tied to political movements, like the U.S. presidential election or Argentina’s libertarian president Javier Milei.

But here’s the catch: the community isn’t stable, nor is it the central value proposition.

Memecoins, in reality, create a form of liquid community — one that exists as long as the meme and liquidity flow. Think of it as “tradeable social utility.” The moment attention shifts, so does the community. This is not a static group of loyal holders, but a fluid network of traders who are drawn in by the social and financial momentum of the moment.

Memecoins represent an attention economy in the sense that their real value lies in their ability to generate liquidity in an ecosystem. What this means is that cultural and financial trends change as users shift their attention. In short, memecoins will endure because they harness the enduring power of cultural communication that evolves with the tech.

A recent incident highlights just how transient and attention-driven memecoin markets can be. Crypto enthusiasts manipulated an experimental AI bot into promoting a memecoin, leading to a staggering 16,000% price increase in one week. This event perfectly illustrates the volatile nature of memecoins and how quickly liquidity and attention can drive up value without any underlying stability.

To capture and sustain this attention, cross-chain liquidity is key. FLOKI, for example, started on Ethereum and then added Binance Smart Chain to reach new users. As memecoin projects expand beyond their original chains, they increase accessibility across ecosystems, making it easier for users to follow the next big trend regardless of blockchain.

For traders, this flexibility means that they are no longer bound to a single blockchain’s limitations. Instead, memecoins and their communities will become fluid across multiple chains, with users choosing the environment that offers the best transaction speeds, lower fees, or broader appeal.

From an infrastructure standpoint, what we’ve seen is that memecoin communities are as fluid as the technology that allows them to be. The faster and more frictionless the tech becomes, the more easily memecoin holders can move their assets — and their attention — across different ecosystems.

This is why we believe memecoins will endure. Memecoins provide “tradeable social utility”— a way to signal belonging, express a viewpoint, or capitalize on the next big meme. In the end, memecoins are more than the communities they create. Their true value lies in the liquid nature of these tokens — fluid, fleeting, and always on the move, and it’s this liquidity that will keep memecoins relevant. That too, is evolving with the tech.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.