{"id":16270,"date":"2024-08-21T12:38:36","date_gmt":"2024-08-21T09:38:36","guid":{"rendered":"https:\/\/forklog.com\/en\/messari-labels-meme-coins-as-the-most-extractive-crypto-phenomenon\/"},"modified":"2024-08-21T12:38:36","modified_gmt":"2024-08-21T09:38:36","slug":"messari-labels-meme-coins-as-the-most-extractive-crypto-phenomenon","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/messari-labels-meme-coins-as-the-most-extractive-crypto-phenomenon\/","title":{"rendered":"Messari Labels Meme Coins as the Most Extractive Crypto Phenomenon"},"content":{"rendered":"

Meme tokens have been dubbed the “most extractive crypto phenomenon” in terms of value destruction since the ICO boom. This view was expressed by Messari data engineer Mike Kremer in a newsletter, reports Cointelegraph<\/a>.<\/p>\n

The expert noted that speculative assets and bubbles have historically been part of the ecosystem, but the hype around the latest trendy fad always “left behind some residual value.”<\/p>\n

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“During the ‘DeFi summer,’ projects like Uniswap Labs launched protocols that brought real benefits to the crypto economy. When the speculation boom subsided, these tokens still had underlying value because they were tied to functioning, value-generating services,” Kremer believes.<\/p>\n<\/blockquote>\n

\"imagemem\"
Comparison of the outcomes of ‘DeFi summer’ and ‘meme coin mania’ according to Kremer. Data: Cointelegraph.<\/figcaption><\/figure>\n

According to him, meme coins exhibit “a much more destructive dynamic.”<\/p>\n

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“Here, insiders or cartels create tokens like supercumrocket69, hype them up, and lure retail investors into betting on these ‘revolutionary’ new assets,” Kremer wrote. <\/p>\n<\/blockquote>\n

He added that after the price surge, developers “dump” their tokens, leaving users with devalued, worthless coins.<\/p>\n

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“The entire process is a zero-sum game where value is not just redistributed but destroyed,” Kremer concluded.<\/p>\n<\/blockquote>\n

Investor Disappointment Grows as Volumes Decline<\/h2>\n

The COO of the NFT project Unfungible, known as Kermit, provided statistics showing that 60% of meme coin investors lost their money.<\/p>\n

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Here’s a pie chart of pump fun traders:<\/p>\n

\u2022 60% lost money.<\/p>\n

\u2022 4.7% made no money.<\/p>\n

\u2022 24% made less than $100.<\/p>\n

\u2022 11.2% made more than $100.<\/p>\n

\u2022 3% made more than $1,000.<\/p>\n

\u2022 0.5% made more than $10,000.<\/p>\n

\u2022 People who have made more than $10K can barely even be seen on this\u2026 https:\/\/t.co\/NETZsiDFGv<\/a> pic.twitter.com\/jUVSG0ZWnL<\/a><\/p>\n

\u2014 Kermit ? (@crypto__kermit) August 18, 2024<\/a><\/p><\/blockquote>\n