Memecoins are ‘objectively’ the most successful crypto product: Analyst
Zora’s announcement that its token is for “fun only” sparked a debate about the need for such tokens
whitehoune/Shutterstock modified by Blockworks
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Let’s talk about tokens.
It’s been a fairly big debate on CT (sorry, Elon, CX just doesn’t have the same ring to it). But let me back up for those of you who have managed to spare yourselves from the takes across social media: Basically, in light of ZORA, folks are debating the overall appetite for tokens.
“$ZORA is for fun only and does not entitle its holders to any governance rights or a claim on any equity ownership in Zora or its products,” Zora said on its website.
We’ve talked a few times now about the rise of fundamentals in crypto, and tokens like ZORA kind of go directly against that thesis because there are no fundamentals. And that’s the debate that I’ve been stuck on.
Ryan Connor of Blockworks Research thinks that crypto should focus on tokens that are backed by fundamentals. Connor has long been a believer in the rise of fundamentals.
On the other hand, folks say that tokens like ZORA are bullish because they introduce a new type to experiment with.
However, is ZORA really any different than a memecoin? While Zora promotes itself as being for “fun only,” it’s not as fun as a memecoin per se, given that those who buy the token are funding the treasury without getting anything in return.
In fact, one of the best critiques of ZORA I’ve seen came from Triton’s Kevin Mills, who noted that the issue isn’t that the token is for fun, but rather the fact that the money goes to serve the project and investors.
“Tokens are controversial,” Connor noted. “Especially in the context of memecoins, which I think have been objectively the most successful product in the history of crypto.”
He added that crypto projects have to ask themselves: where does a token make sense?
“You have a lot of data collected in crypto where you should mostly know where tokens make sense. In the context of scarcity and assets that have value, tokens make a lot of sense. In the context of governance, tokens make a lot of sense in the context of the memecoin game,” he added.
But the difference between a memecoin for fun and a token like ZORA is that folks understand the game of “chicken” that they’re playing when jumping into a memecoin that could quickly wipe out in a matter of minutes.
“However, in the context of project tokens, it was a very early 2024 thing where a project could launch a memecoin, and people would jump in,” Connor said. “The market is increasingly punishing projects that have done that, and in light of the market exhaustion over a low float, high FDV … my bet is ZORA, if it is just a memecoin, I don’t expect it to do too well.”
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