Memecoins are officially ‘cooked’ after Libragate, says crypto VC

From cointelegraph by Tom Mitchelhill

Nic Carter, a partner at Castle Island Ventures, says the time for memecoins is “unquestionably over” following the recent $4 billion LIBRA scandal involving Argentine President Javier Milei. 

“Memecoins are cooked,” the crypto entrepreneur  wrote  in a Feb. 19  post  to X, arguing that the  Libragate scandal  has revealed the true depths of the “corrupt memecoin” sector.

Carter said memecoins had been largely successful because they could be sold as a fairer “alternative to high FDV VC-backed coins.” 

While the premise of memecoins may have been no more than gambling, they were at least organically launched, and any retail participant could invest with the expectation that the “casino was fair,” said Carter.

However, recent memecoin launches, including LIBRA and memecoin launches from US President Donald Trump, viral influencer Haliey Welch, and other celebrities — have since been exposed as a series of wildly “unfair and botted launches,” he said.

“The casino didn’t take a slight edge — it was more like 90/10 in favor of the house.”

Other industry pundits disagree, arguing the real utility of memecoins is still in development.

Backpack founder backs memecoins as “stress test” for mass adoption

Speaking to Cointelegraph, Backpack founder  Armani Ferrante took a more positive approach to the speculative asset, saying that the real utility of memecoins lies in their ability to “stress test” the future of the financial system.

“Crypto itself is purpose-built technology for transaction processing in the context of finance, but finance itself is meaningless technology unless you have real-world goods and services that are being tracked on the ledger,” said Ferrante.

“That’s really what memecoins are. They’re an enormous stress test and proof-of-concept for real-world finance coming on-chain.”

Ferrante said the next major innovations in technology — whether that be finance or consumer goods — often start out “looking a lot like a toy.”

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“Memecoins are the toy, and sooner rather than later, we’ll find ourselves with what we are all hoping and dreaming about — which is all the world’s value, moving onchain, on these trust minimized, global systems that we all believe is the future of finance.”

Coinbase CEO says industry should stay “open-minded”

Coinbase  CEO Brian Armstrong  has also come out in support of memecoins, saying that market participants should remain “open-minded” about the future of memecoins.

“Just like the early days of the internet with animated gifs, new technologies often look like a toy but evolve into something much more powerful over time,” he said.

“We should be open-minded about where memecoins are going, even if some are silly, offensive, or even fraudulent today. Memecoins are a canary in the coal mine that everything will be tokenized and brought onchain.”

Pump.fun losing steam

While industry opinions about the future of memecoins differ radically, the numbers already show a cooling appetite for the crypto sub-class.

In the last month, the number of new tokens launched on Solana-based memecoin deployer Pump.fun has dropped 59%,  according  to data from Adam_Tehc on Dune Analytics.  

On Jan. 23, a record of 71,735 tokens were launched on the Pump.fun, but by Feb. 19, that number had dwindled to just 28,898.

The number of new tokens deployed on Pump.fun has fallen 59% in the last month. Source:  Dune Analytics