# On Memecoins from a Skeptic

**Published by:** [Morning Dew](https://paragraph.com/@reidtandy/)
**Published on:** 2025-01-09
**URL:** https://paragraph.com/@reidtandy/on-memecoins-from-a-skeptic

## Content

One of the biggest challenges of working in crypto and around onchain apps is the constant propulsion to find the next new thing. Fads come and go as the swarm of attention moves elsewhere. For a long time, I kept memecoins at arm’s length. I was dismissive — a common reaction to not understanding something. But as we’ve been discussing unique ways we could help writers build relationships with their readers and make money on Paragraph, it's been hard to totally ignore memecoins. Then, I finally got around to watching Murad's presentation on memecoins from TOKEN2049. Murad's insights into why memecoins outperformed in 2024 are super compelling. But what struck me most were his frameworks for understanding why the motivations behind why people were investing in memecoins. We saw these same types of motivations in more “traditional” media, across Hulu, Crunchyroll, HBO, and Substack — those same basic motivations are what drove people to become fans of brands, shows, writers / creators, and so on.What do people care about?One of the key points Murad makes is that retain investors don't care about the software behind blockchains, onchain apps and products, or any crypto project. They mostly care about making money, but also having fun and wanting to be a part of something.I love how Murad breaks these motivations down into specific percentages (e.g., 70% of their motivation is driven by wanting to make money). People’s decisions are driven by a mix of motivations. People make decisions for a mix of reasons. If you're building a product — a SaaS / enterprise product, a consumer app, a newsletter, paintings — one of the most important things to do is develop a deep understanding of why people are buying your product, which is often a mix of various reasons. Hyper-speculation and the desire to make money are undeniably powerful forces in crypto. But as someone building products in this space, I get nervous when financial gain is the only motivator. It feels too zero-sum, like a house of cards waiting to collapse. That's why I found it especially compelling that Murad introduces motivations beyond purely seeking financial gain: fun & community. The utility of memecoinsTaking this a step further, Murad offers several ways memecoins provide utility. This is where things really click for me — these are all the reasons why people fall in love with anime shows or the Crunchyroll brand, writers or pieces of writing on Substack, and IP universes like Game of Thrones, Marvel, or Star Wars. These elements of value helped me understand why people would invest in (buy? participate in?) memecoins. It's a helpful framing for clearly separating out the more software-driven altcoins vs. media- / community-driven memecoins. To be successful, memecoins don't need intrinsic cash flow or revenue share to satisfy investors — they're providing "services", like buying a ticket to a movie. Now, you could easily make the argument that people aren't driven by the desire to make money when they buy tickets to movies, subscriptions to streaming services & Substacks, and so on. Yes, true, but I think introducing the desire for fans to make money could actually lead to some really interesting creative projects, works of art, and new worlds & forms of media. And perhaps just a larger economy for creative work — wouldn't that be cool?Closing ramblingsThis is ultimately why I think that percentage allocation across motivations is important. If people invest in memecoins purely for financial gain, many will lose interest quickly; but if they see memecoins as a way to make friends, express themselves, or support ideas they care about, the memecoin cycle / trend becomes more durable — and far more intriguing. A quick aside: I've been thinking about how memecoins might be part of a broader shift in how younger generations approach "investing". My parents & other boomers were all about buying a house, the 60/40 portfolio split, and were pretty skeptical of businesses that didn't generate nearly-immediate profits. My generation was among the first to deeply embrace growth stocks, cryptocurrencies, and other riskier alternative investments. Now, younger generations seem to be leaning even harder into asymmetric bets. With inflation driving up costs and affordability declining, the difference between a $1,000 and $2,000 net worth feels negligible. But the possibility of turning $1,000 into $100,000? That’s deeply compelling. This is one of Murad's central points in why memecoins have outperformed altcoins: memecoins enable poor HODL’s to get rich, turning them into unpaid evangelists; altcoins only allow a small group of insiders to make money at the expense of "retail" investors. Don't get me wrong — I still think chasing 100x returns investing in memecoins is incredibly risky and, echoing from above, on of my main concerns is that those purely seeking financial gain are building a house of cards. What do you think? Are memecoins here to stay? Where do you see product opportunities, if any, to support the continued growth of memecoins (? What do you think of Fred Wilson's "provocation" below?TikTok turns all videos into memecoins that can be traded on decentralized exchanges all over the world.For anyone skeptical of memecoins, but open-minded, I highly recommend checking out Murad's presentation. It introduced me to a new way of thinking about memecoins and ultimately made me much more optimistic about their durability — maybe it'll do the same for you. Talk soon, Reid

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