According to Synthetix founder Kain Warwick, trading memecoin can be extremely beneficial for decentralized exchanges (DEXs) because it can draw flows from a large number of non-traditional DeFi traders.
"He went on to say that he wasn't quite convinced by memecoin detractors' claims that the assets weren't producing any value," says Warwick.
Infinex, Warwick's "on-chain gateway" platform, will be live this month. He clarified that "DEXs have to respond and build better tools because you get DEX volume out of memecoin trading."
"I think it's good that the ecosystem around the investment forms, money flows through, and the investment flows into infrastructure, even if it's in a purely speculative instrument with no utility."
Trading in Memecoin has increased over the past two months. Since token production platforms like pump.fun make it simple and inexpensive to create new tokens, most trading occurs on DEXs; nevertheless, most tokens are transient and don't last long enough to be listed on a centralized exchange.
According to DefiLlama, monthly DEX volumes for March hit a nearly 2.5-year high of $267.9 billion, which is just less than the record of $292 billion set in November 2021 during the height of the previous market cycle.
DEX volumes in April were $196 billion, down 26.8% from March but still the seventh-highest month overall.
Warwick stated that 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" during his speech at the ETHGlobal Pragma Sydney event on May 2.
He went on, "Financial engineering is not that interesting." "It's just not that many people that find it particularly fascinating."
Despite the fact that money is "impactful to everyone," according to Warwick, "the average person doesn't care" about it.
However, Warwick felt that the average person is "passionate about and really cares about" games, movies, and music.
"I believe that the most basic link between financialization and tokenization of everything and culture is probably memes."
Memecoins, he continued, are "quite useful" as a "hook to get people interested" in cryptocurrency and DeFi.
"The simplicity of it has an elegant quality," stated Warwick. "There's no cash flow, return, income, or anything else. It's only a matter of whether or not this is a dumb cool idea that I want to own.That concludes it."
May 2024, Cryptoniteuae