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5 REAL USE CASES FOR USELESS MEMECOINS


MEMECOINS AREN'T USELESS: THEY GET AROUND SECURITIES LAWS, THEY DON'T ENRICH
VCS, AND THEY'RE HEAPS OF FUN TOO.

by Max Parasol 9 min December 18, 2024

Share Share Share Share

Memes are crypto distilled to its essence: social trends, wry humor and the lure
of ridiculous profits all wrapped up in a token that doesn’t do anything. It’s
not for Warren Buffett, but it is for a huge range of ordinary people looking
for fun, community and a lottery ticket out of the backwater they live in.

“The meme is the alpha,” says Danny Yang, founder of OnChainMonkey, referring to
the insane returns against other metrics. Memecoins gamify the investment
process as investors swoop in to follow intangible trends from election results
or jump on the latest coin minted 10 minutes after the UnitedHealthcare CEO
shooting suspect was arrested. Very 4Chan-esque. 

Building communities, social bonds and having fun are all part of the attraction
of memecoins. “Humans are social creatures, and memes are about people who find
entertainment in the same thing,” Yang says.

> “The meme itself is irrelevant. It’s a social game that needs lots of players
> who judge the meme by how many people might want to play that game.”

But apart from good dumb fun and the chance to make money, what are the real use
cases for useless memecoins?

PNUT was struck down but became more powerful as a memecoin. (Elon Musk, X)


USE CASE 1: BYPASSING US SECURITIES LAWS

First and foremost, let’s clear something up — the uselessness of memecoins is
itself a particular use case. They get around the US securities regulations that
squashed the ICO boom. In addition, memecoins specifically aren’t captured by
the Australian Securities and Investment Commission’s proposed expanded crypto
powers. How could they be? They don’t do anything.

“It’s actually safer to release a memecoin today with no use case, than it is to
launch a token that’s useful,” wrote a16z Crypto managing partner Chris Dixon. 

US securities law focuses on the Howey test to determine what constitutes an
investment contract. Memecoins, which don’t represent anything more than an idea
and do not promise any returns derived from the efforts of others, are not
captured by the test. This regulatory friendliness has seen memecoins propagate
like wildfires during the Great War on Crypto (2022–2024).

Memecoins were the biggest crypto narrative of 2024, accounting for 14.3% of the
market share on CoinGecko in Q2. Will they fade out now that Donald Trump is the
incoming president and presumptive new SEC boss Paul Atkins may allow “real”
projects to raise money again via something like Hester Peirce’s 2020 “safe
harbor” proposal?





2. SPECULATING ON POLITICS

In a world where people use technology to create the social bonds they used to
experience in person, memecoins allow holders to participate in and capture the
political zeitgeist. Memecoins have been created in support of and opposition to
both candidates in the US presidential election. 

Memecoins are for everyone, even Gary Gensler. (X)

Argentina’s libertarian president, Javier Milei, also has a memecoin dedicated
to his reforms. The social utility of allowing people to express their political
views monetarily could be seen as a parallel to text-to-donate efforts run by
major campaigns.

However, social engagement or utility should be better understood as capturing
the “zeitgeist,” argues Daniel Drescher, vice president of business development
at Sal’Ad Labs, an influencer-for-hire agency. He tells Magazine that Trump’s
new best friend and future Department of Government Efficiency (DOGE) boss, Elon
Musk, is a prime example.  

“How did Dogecoin become the gold standard in this uncertain realm of Web3? They
have perhaps the most powerful influencer or KOL of all time — the undefeated
richest man in the world, Elon Musk. He is the inspiration for Iron Man. He is,
for Ayn Rand lovers, the godlike John Galt who invented a motor to give enough
power to illuminate the entire world.”

Drescher prefers to think of memecoins as “brandcoins.” Often, they need a key
opinion leader or a personality cult to power that coin. Successful memecoins
all have “ardent followers who live and die by it. It makes them get up in the
morning.”

The zeitgeist analogy resonates. For example, Kamala Harris memes surged when
then-presidential candidate Joe Biden tripped on a staircase, and was soon after
removed by the Democratic party as its nominee. 

Political memecoins poll well. (CoinMarketCap)


3. CHARITABLE TROJAN HORSES FOR DOGE RESCUES

Memecoins can be Trojan horses for financing more meaningful projects, such as
raising money for charity, launching a casino like Iggy Azalea’s Motherland, or
launching an exchange like ShibaSwap.

As Ethereum creator Vitalik Buterin — a man well known for donating memecoins to
charity — wrote:

“Among the more interesting of the coins that I’ve seen are coins where a large
portion of the token supply (or some ongoing fee mechanism) is dedicated to some
kind of charity.”


> “It feels like there is an unclaimed opportunity here to try to create
> something more positive-sum and long-lasting.”

The Neiro Foundation’s memecoin, NEIRO, is trying to become the next Dogecoin by
blending utility and speculative upside.

The question is, which is the Trojan horse? The charitable utility or the
speculative upside?

The memecoin is named after Neiro, a rescued Shiba Inu adopted by Atsuko Sato —
the owner of the original “Doge,” Kabosu.

Doge vs. Neiro. (X)

The Neiro Foundation is a collective effort to fund Shiba Inu dog rescues and
wellbeing efforts globally, providing essential resources and financial support
to dog shelters and charities that improve the lives of Shiba Inus. The dog
breed is prone to several prevalent health issues, including hip dysplasia, eye
conditions like glaucoma and cataracts, as well as progressive retinal atrophy.

SlumDOGE Millionaire gained public recognition after he turned $180,000 into
over $3 million in DOGE, captured in the documentary This Not Financial Advice.
He’s now the face of the coin and says, “While the rising popularity of
memecoins has drawn plenty of skepticism, many critics overlook the fact that
some of these memecoins have clear, positive mandates.”  

> “Beyond the viral humor, certain memecoins support charitable initiatives, and
> as a result, receive fervent community backing. The best memecoins are
> underpinned by strong narratives that resonate with a growing breed of
> socially conscious Web3 users, while demonstrating the huge potential for DeFi
> to drive philanthropy.”


4. FUNDING THE LAUNCH OF AI AGENTS

AI agents have the potential to be incredibly useful. Think of an AI agent that
can automatically rebalance your crypto portfolio so that profits are
automatically moved into quality coins like Bitcoin, Ether and SOL so you don’t
end up holding a bag of 90% shitcoins. 

Sometimes it’s hard to tell the difference between bots and humans. (X)

It seems likely that one day, AI agents might actually lead to autonomous DAOs.
But for now, they are highly focused on the memecoin robo-trading end of the
spectrum. Bots such as Truth Terminal engage with users on platforms like X,
creating artificial hype and shilling for community participation and purchasing
memecoins.

Look at Fartcoin, the AI-inspired memecoin that has surged to a $900 million
market cap through the immutable comedy law that “hot air rises.” It’s fast
catching up to another Truth Terminal shilled memecoin, GOAT.

The whole idea of autonomous AI agents launching memecoins is itself a bit of a
meme, as many of the “AI agents” are just humans in disguise, and GOAT is
human-made. However, the growing number of genuine agents highlights the
potential. 

Calanthia Mei, co-founder of Masa, says there’s a huge distinction between
“intelligent AI agent memecoins and dumb memecoins.” Mei, who was previously a
founding member of PayPal’s venture capital arm, talks about “memecoin
sentience” — by which she means the crossover between AI and memecoins, where AI
agents perform tasks, such as making a transaction. 

“Beyond making money, the side effect of memecoins is to make tech cool. They
shine a spotlight on technologies that only a small group of people cared
about.”

Memecoins are helping fund and launch agents on Virtuals Protocol, where AI
agents can be programmed to interact with tokenomic designs. It also allows for
no-code AI agent building, tokenization and deployment, along with more
sophisticated designs. 

Read also
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Can you trust crypto exchanges after the collapse of FTX?

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Crypto Crimes Rated: From the Twitter Hackers to Not Your Keyser, Not Your Coins

Mei’s company, Masa, is a “decentralized network of data miners” that provides
real-time data for powering contextually aware AI agents utilizing
retrieval-augmented generation (RAG) and relying on “emotional intelligence”
based on pre-planned prompts. The agents can learn new things and gain new
memories in real time, she tells Magazine.

So, in this context, these RAG-powered AI agents are equipped with dynamic data
retrieval, emotional intelligence and memory capabilities, making them
contextually aware and adaptive in real time.

Mei is convinced AI agents are an unstoppable use case for trading. (X)

Mei is certain that memes will accelerate the experimental nexus between AI and
crypto. Since the GOAT story emerged, she has received “three times more inbound
inquiries in the past few weeks for developing AI agents.”

> “Think about it — creating intelligent AI agent memecoins that roam on Crypto
> Twitter, the home of crypto market sentiment. It’s an almost unstoppable
> investment thesis.”


5. LAUNCHING TOKENS FAIRLY AND WITHOUT RETAIL GETTING SCREWED BY VCS

Retail crypto investors have been getting royally screwed by VCs for years.
These investors get in early and snap up large amounts of the token supply for a
fraction of the eventual market price. This results in ludicrously high fully
diluted valuations, and retail investors lose out as the VCs dump tokens. It’s
no wonder that users burned by unfair tokenomics turned to memecoins, which can
be — though often aren’t — launched fairly. 

“For some projects,” Masa’s Mei says, “memecoins provide much-needed financial
resources to develop their tech, escaping frosty VC markets and Web3 echo
chambers.”

During Murad Mahmudov’s viral Supercycle talk at Token2049, he argued that fully
unlocked memecoins mean the tokenized meme is the actual product. There are no
VCs and no lock-up periods. Not being able to value the asset, as it has no
revenue, becomes an advantage.

Ultimately, memecoins are useful for a new type of funding vehicle, says Zhen Yu
Yong, CEO of Web3Auth, a white-label wallet company that has built wallets for
Trust Wallet, numerous Fortune 500 companies and has 20 million monthly users of
its tech.

> “Sure, most memecoins fail. But now, you can launch a tokenized project
> without a market maker that has a chance to succeed, without VCs and back room
> equity deals.”

This absence of VCs backing most memecoins is clearly part of the retail appeal.
Degens who missed out on Bitcoin in 2010, or ETH or any of the other major
coins, can get rich instantly without VCs in on the pre-pre-seed round screwing
it up. It’s an ideological investment thesis— a degen’s dream.

In short, memecoins are like a cartoon version of an ICO without the pretense
that someone might try to build and launch a product down the track.

The most accurate meme created during the ICO era. (LinkedIn)
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DOGEmemecoinsUnited States
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MAX PARASOL

Max Parasol has worked as a crypto and AI researcher at the RMIT Blockchain
Innovation Hub, as a lawyer, in private equity and was part of an early-stage
crypto start up that was overly ambitious.
Follow the author @maxparasol
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