Author: David Hoffman, Bankless; Compiled by: Bai Shui, Golden Finance

Meme coins have triggered intense discussions.

Some see them as depraved distractions—an inefficient, zero-sum game at the expense of others. Others see it as a grassroots reaction against top-down elite and venture capital influence.

We all know this debate - the industry has had this conversation countless times. However, like many aspects of cryptocurrency, Meme’s arc is dynamic and adaptive rather than inert.

We have reason to be optimistic about the future of Meme currency.

The term meme coin has been overused and overbroad. Not all tokens labeled as memecoins fit the stereotype of empty, lazy gimmicks. Some coins start out as meme coins but later evolve into something more, but due to inertia, people still end up labeling them as meme coins.

Platforms like Pump.fun have enabled token creation, increasing the number of tokens, and democratizing it. Of course, with a low barrier to entry, most of these tokens are created with ease - a funny name, a quirky picture - intended to entertain and nothing else. Yet amid the noise, some memes gained substance and drove value in unexpected ways.

Pump.fun, Clanker, and Token Launchpad make it easy to create liquid tokens. Permissionlessness and accessibility are core value propositions of our industry.

More convenient

The direction of development in the crypto industry has been to increase the accessibility of tokens for ordinary individuals.

The history of cryptocurrencies is one of increasing accessibility to token creation. Every bull run brings new mechanisms:

2013: People learn that it’s not difficult to fork Bitcoin’s codebase and create a new blockchain.

2017: Ethereum introduces ERC-20 tokens without launching a full blockchain.

2021: NFTs and minting unlock an alternative token standard and distribution mechanism, turning quirky images into speculative assets.

2024: Pump.fun combines token minting and AMM liquidity, all packaged into a simple interface.

This model goes beyond tokens. Why are there so many L2s? Because Optimism’s OP stack reduces the cost of creating rollups. Conduit goes one step further by creating a front-end created by L2.

The latest innovation in token creation is Clanker, an LLM Warpcast account that Warpcast users can simply tokenize with a ticker and imageClanker, Clanker will automatically mint tokens and launch the Uniswap V3 pool, skipping the front-end entirely.

Beyond Meme Coins

Critics often confuse token launchpads like Pump.fun or Clanker with the tokens they produce. While many of the tokens appearing on these platforms are classic meme coins, the launchpads themselves are neutral tools.

For example:

GOAT is the token associated with the first AI agent, from Pump.fun. GOAT is now a valid investment for those who want exposure to truth terminal IP. Is there cash flow? No. Is there a direct correlation between GOAT and Truth Terminal? No, the relationship is tenuous and indirect. Will the price of the token increase as the Truth Terminal brand scales? I don't know, it's not investment advice, but it could be, that's why people buy GOAT.

ANON is launched on Clanker, providing easy access to ZK anonymous Farcaster accounts. If you have enough ANON tokens, you can tweet anonymously from Anon Farcaster and Twitter accounts. This is practicality.

We should learn to distinguish between tokens and launchpads. Pump.fun is not a meme coin launchpad. It is a token launchpad. A good launchpad will only make meme coin issuance easier.

New Creation Mechanism

Let’s discuss the benefits of Token Launchpad. We can moralize the products they produce in the future.

In 2023 and 2024, cryptocurrencies will be plagued by high FDV, low-float token allocations.

Points + High FDV The low-float dollar was created by an unfortunate combination of factors, primarily an excess of risk capital and the harshest regulatory environment ever for cryptocurrencies.

As a result of this fusion, points and airdrop dollars emerged and were used by sophisticated, extractive airdrop witch recipients, which created toxic and perverse incentives, fake metrics, And little actual value is assigned to target stakeholders.

Meme coins are the polar opposite of token distribution mechanisms.

You can be the 7th person to buy a token with a market cap under $1 million and a token supply with 100% liquidity.

This token generation mechanism has its advantages!

On day one, the entire supply of the token is on the market. That's good. This eliminates different classes of investors locking up tokens. Everyone can get the same valuation. Everyone is an investor at the same level.

Despite this, there are still insiders and cabals creating via LaunchpadTokens may be destroyed when tokens are issued. Additionally, the principal-agent problem between token creators and token purchasers has not yet been resolved. Fully liquid token issuance does not solve fundamental human problems. Human beings are imperfect and prone to corruption.

In any case, the ability to launch a token with 100% of the supply on the market and instant AMM liquidity is a novel and valuable mechanism with strong advantages that we should not abandon mechanism, although it is easily abused.

We should add this to the tool belt of token creation mechanisms, alongside ICOs and NFT mints, as an efficient way to launch and distribute tokens.

All tokens start as Meme

I encourage people to consider the potential of using platforms like Pump.fun or Clanker to create tokens for your project.

Imagine a founder has a promising idea for a product or service. They believe it has value and plan to work long-term to realize its potential. To support their project, they decided to launch a token, either to decentralize governance, manage system risk, collect fees, or for any other possible reason.

The founder could:

Raise money from VCs

Conduct an ICO

Launch a token on a token launch board Coin

All of these are valid options, and every founder should consider the merits of each.

Let us consider the last one in detail. Let’s say the founder also launches the token early in the project’s life cycle. Maybe because they can, they make the token before building any other part of the project. If this is such a setup, then the token is a Meme. The founder has an idea, maybe a document, of the plan. They share it with other people, trying to introduce the meme into other people's brains, but nonetheless, it's still a meme.

Take the recent Clanker token $NATIVE as an example. This Derek requested a token for his Farcaster project, apparently to build a new type of Farcaster client.

Maybe the story ends here! Maybe Derek had no intention of building Native, he just requested a Clanker token with a 1 tweet long story about potentially building Native. Maybe Derek has been working on Native for over a year. Who knows! Of course I don't know. Derek needs to prove it to the market. However, despite this, the token is fully liquid and potential buyers can make their own decisions based on the information at their disposal.

There is definitely a big principal-agent problem here. Founders can talk about their projects, as a means of convincing people to buy the tokens they created, which they could then dump, which was probably the plan all along.

After writing the above, Derek tweeted that he had locked up the token supply for one year! The guy minted his own tokens, bought his own supply (cheaply), and then chose to tie himself to the mast. Legitimate projects with legitimate efforts can emerge from token launchpads, even if they also mostly launch worthless meme coins!

This is what we saw with many ICOs in 2017, plus the industry as a whole has woken up to the idea of ​​VC psychological warfare creating stories around worthless projects. Regardless of the token creation mechanism, the principal-agent problem exists. It's just different groups of people doing psychoanalysis.

Nevertheless, the Pump.fun and Clanker tokens started as memes and now represent valid efforts to build something truly revolutionary. Again reference to ANON and GOAT. People just call these meme coins based on their creation mechanism, but they are not meme coins!

Improving Memecoin Mechanics

When using a token launchpad, there are several ways to improve the principal-agent gap between token developers and token buyers.

What if, instead of owning a portion of the tokens as an upside risk mechanism, developers had rights to transaction fee income?

This is the mechanism that Flayer is building using its incoming token launchpad, Flaunch. They are building a Uniswap V4 Hook to add some additional functionality and mechanics to their token launchpad.

1. Transaction fee management

Tokens launched on Flaunch distribute income between developers and the community. Like Pump.fun, Flaunch charges a percentage of all transaction fees that go through its platform. Unlike Pump.fun, Flaunch returns these transaction fees directly to the token developers and token holders (the community).

Token developers control the distribution of revenue between developers and the community. This is a parameter set when the token is launched and can be anywhere between 100% community, 0% developers, and 20% community, 80% developers. The community must receive at least 20%.

The fees collected by the token community can be used to purchase tokens and add them to LP. As the trading volume increases, the price and liquidity of the token will also increase. They call it the "progressive buying wall," and it's a great narrative. The fees developers collect can be used to fund their Lambo, or can be reinvested into the project to fund development and growth.

This is a more consistent mechanism that helps reduce the gap between principals and agents. Through this mechanism, developers canMonetize transaction fee revenue. They no longer need to sell a certain amount of tokens to fund development. This is highly consistent with NumberGoUp, as transaction fee revenue increases accordingly as the token price increases.

2.NFT Ownership

Who the “developer” of the Flaunch token is is determined by the owner of the NFT. Every token released on Flaunch comes with 1/1, which is where the development transaction fee revenue comes from.

This NFT becomes a composable object around which further structures can be built. You can put that NFT into a multisig and have it managed by the team. Alternatively, NFTs could be governed by a vote of DAO tokens, either a previously launched token or a new governance token.

The possibilities only expand from here.

So, has my stance on Memecoin changed?

Recently, I have received some criticism on Twitter for my apparent shift towards meme coins. Indeed, aside from the occasional appreciation of Dogecoin, I have never expressed support for meme coins, and on Bankless I have expressed my preference for productive assets over the inertia of meme coins many times.

I do think Dogecoin may represent the best case scenario for meme coins. Dogecoin is a healthy story of a community coming together under the banner of funny dog ​​pictures and working together to increase Dogecoin’s market cap in the name of good vibes. Additionally, Dogecoin has donated significant amounts to various charities, including clean water projects in Africa, bee conservation efforts, the American Cancer Society, education, animal welfare, homeless support, and of course, my favorite It was to send the Jamaican bobsled team to the Olympics in 2014.

Despite this, there will still be normal, ordinary, inert meme coins. These tokens will continue to draw the ire of many as they make it difficult to convince anyone that they are anything but a speculative PvP internal game and have major agency issues that are difficult to sustain.

My preference for productive assets with a development arc remains the same, but my appreciation for the broader potential of meme coins is even broader.

First, I began to envision a world where meme coins played a much larger role in the internet economy than most people currently imagine.

What if the memecoin economy grows to a size that rivals the traditional stock market? Crypto protocols and markets are designed as a superset of existing financial systems, providing unprecedented flexibility and reach. Meme coins can leverage this foundation and become a massive economic ecosystem in their own right. Just listen to the vernacular of Zoomers and Generation AI and it’s clear: Memes are at the heart of internet culture, and Meme coins will naturally play an important role in internet finance.

Although MemE-coins are currently in a speculative hype cycle similar to ICOs or NFTs, and may face market liquidation, but they will remain a permanent fixture in the cryptocurrency space. The need for early exposure to new and exciting things will never go away. In this sense, I began to accept the long-term potential of Meme coins and changed my perspective.

Secondly, as shown throughout this article, I see more and more opportunities for meme coins to evolve into something greater than the memes they were born from. Through additional mechanisms, these tokens can be transformed into the underlying “currency LEGO” that supports more physical systems. As Meme coins have the potential to evolve into something more sustainable and productive, their palatability to me increases.

Let’s explore memecoins together

We are human beings with agency. I choose to believe that we can harness the power of meme coins that people clearly love and build mechanisms to move meme coins into the light instead of the disgusting direction.

When Pump.fun added live streaming, it started optimizing for attention and virality, and we all know the cost of optimizing for this outcome. When Pump.fun removed its live streaming feature, the platform took a major step away from decadence and toward wellness. With this simple trick, it weakens incentives for deplorable behavior and creates space for more productive outcomes.

I think there are more tricks and mechanisms that can continue to improve the nature of Meme coins. The meme coin industry is huge and here to stay. There are still a lot of resources to be extracted in the meme currency field to create sustainable value.

So, this is a call to startups! Build Meme coin infrastructure to help Meme coins become more valuable. Helps solve the delegation-agency problem that exists in all token creation events.

Clanker and Pump.fun both produce indestructible meme coins. There are no backdoors to these coins – no one can mint more coins, and no one can create a honey trap. These are examples of token infrastructure that helps keep users safe.

There are many more similar mechanisms. Let's find them!