We had a very interesting team research meeting last week centered on intellectualizing memecoins. We could very well be overthinking this framework, and in reality, memecoins exist as a 24/7 global casino, but it's an interesting exercise nevertheless. 

We were debating the extent to which memecoins actually represent something - a cultural artifact, a real-time event, a digital meme, etc. While some of us concluded that memecoins serve as a way for people to hold stake in an artifact they align themselves with, Joel brought up an interesting analogy that I agree with - memecoins are the first successful crypto-native on-chain video game.

The core components of any game are goals, rules, challenges, and interactivity. Memecoins can then act as a 24/7 global game played on a multitude of platforms (exchanges and wallets) with these same principles. The goal for any player is to maximize their portfolio balance, and the value of their portfolio provides real-time updates of their performance. The rules of the game are simple: maximize your portfolio by trading a variety of available assets at profitable positions. Traders can develop interesting chart-reading strategies by combining off-chain social and on-chain price movement indicators. The challenges are the volatility of an asset’s performance and the timing of a profitable trade. As for interactivity, the blend of social influence and momentum-driven investing is arguably the most interactive way to engage with such a game.

The reason I agree with this framework more so than the counter is because I loosely believe that memecoins don’t represent something inherently valuable. The conversion rate of people that believe or align themselves with something to those that place financial stake in that thing seems very low. Most memecoins are manifestations of digital memes or real-world events, and a certain set of people may care deeply about these artifacts. However, I believe a majority don’t care enough to place financial value in a representative and volatile token simply to align themselves with that artifact.

While it will remain an interesting space to track and certainly one that isn’t going away, I think it's important not to overvalue a phenomenon that may just be an entertaining, speculative, and successful game that happens to be crypto-native.