Memecoin Trading Can Boost Decentralized Exchanges, says Synthetix Founder Kain Warwick
Summary:
Synthetix founder, Kain Warwick, argues that Memecoin trading is advantageous for decentralized exchanges and can attract unconventional DeFi traders. Warwick rebuffs the criticism that Memecoins have no intrinsic value, stating they indirectly increase trading volumes, leading to better tools and infrastructure. According to DefiLlama's data, March's trading volumes hit a near two-and-a-half-year peak, despite a 26.8% drop in April. Memecoins, NFTs, and GameFi connect more with human emotions and culture and are thus more appealing to the average person compared to traditional DeFi, Warwick believes.
The founder of Synthetix, Kain Warwick, believes that trading in cryptocurrency tokens that are based on internet memes (Memecoins) can be an enormous boon for decentralized exchanges (DEXs). These exchanges could draw in an influx of unconventional DeFi traders. Warwick, in a conversation with Cointelegraph at MemeGlobal Sydney, puts forth an argument that these memecoins are not just a speculative vehicle, rather they can have their own intrinsic value.
Warwick, who is making preparations to unveil his on-chain portal, Infinex, in the coming weeks, expanded upon his viewpoint. He stated that Memecoin transactions can indirectly lead to increased volume in decentralized exchanges, compelling them to enhance and refine their tools. He went on to propose that even if investments are made into a purely speculative tool with no apparent utility, it can still contribute to the formation of a trading ecosystem, with funds cascading into the underlying infrastructure.
Memecoin trading has witnessed a dramatic increase over the previous two months. The majority of this trading occurs on DEXs because tools like pump.fun make it effortless and affordable for tokens to be launched. However, the lifespan of most of these tokens is short-lived, not standing the test of time to get a listing on a centralized exchange.
According to data from DefiLlama, the trading volumes in decentralized exchanges in March reached a near two-and-a-half-year peak of $267.9 billion. This figure is just shy of the record of $292 billion set in November 2021 during the apex of the previous market cycle. DefiLlama's data indicates that trading volumes in April amounted to $196 billion, marking a 26.8% decline from March's high but still recording the seventh strongest month in terms of volumes.
At the ETHGlobal Pragma Sydney event that was held on May 2, Warwick stated that memecoins, nonfungible tokens (NFTs) and GameFi are more connected with human emotions and cultural ideas. In his opinion, these are more appealing and relatable for the average person compared to traditional DeFi.
Warwick pointed out that even though finance is a universal concern, it is not something that occupies people's thoughts regularly. On the other hand, he asserted that things like gaming, movies, and music are everyday interests that the average individual is fervently invested in.
Warwick expressed his belief that memecoins serve as an attractive proposition to pique people's interest in DeFi and cryptocurrency. In conclusion, Warwick lauds the straightforward nature of memecoins, emphasizing their role in drawing in users' interest.
Felix Ng reported additional details.
Published At
5/3/2024 7:44:48 AM
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