According to Kain Warwick, the founder of Synthetix, memecoin trading can be highly beneficial for decentralized exchanges (DEXs) as it attracts a large number of non-traditional decentralized finance (DeFi) traders. Warwick expressed his belief that speculation, which is often associated with memecoins, is valuable and should not be dismissed. He stated that he is not fully convinced by the arguments made by memecoin critics who claim that these assets lack utility.
Warwick, who is preparing to launch his new platform called Infinex, referred to it as an “on-chain gateway” and explained that memecoin trading leads to increased DEX volume, forcing DEXs to develop better tools.
In recent months, memecoin trading has experienced a significant surge. Most of the trading activity takes place on DEXs due to the accessibility and affordability provided by token creation tools like Pump.fun. However, the majority of memecoins have short lifespans and do not last long enough to be listed on centralized exchanges.
In March, DEX volumes reached their highest point in nearly two and a half years, totaling $267.9 billion. Although there was a 26.8% decline in April, with DEX volumes reaching $196 billion, it was still the seventh-strongest month overall, according to DefiLlama.
During the ETHGlobal Pragma Sydney event on May 2, Warwick spoke about the appeal of memecoins, nonfungible tokens (NFTs), and GameFi. He stated that these concepts tap into human emotions and cultural ideas, making them more interesting and accessible to the average person compared to DeFi. Warwick emphasized that financial engineering is not as intriguing to most individuals.
While finance has an impact on everyone’s lives, it is not something that people think about on a daily basis, according to Warwick. He believes that the average person is more passionate and invested in games, movies, and music. Warwick considers memecoins to be useful in attracting people’s interest in DeFi and cryptocurrency, describing them as a “hook.”
Warwick appreciates the simplicity of memecoins, stating that they do not involve complex financial metrics like yield, revenue, or cash flow. Instead, it all comes down to whether the idea behind the memecoin is interesting and appealing to own.
In conclusion, memecoin trading can bring significant benefits to DEXs, attracting non-traditional DeFi traders. Warwick sees value in speculation and disagrees with critics who claim that memecoins lack utility. He believes that memecoins are useful in getting people interested in DeFi and crypto, as they tap into human emotions and cultural ideas. While finance may not be of great interest to the average person, games, movies, and music are. Overall, Warwick finds the simplicity of memecoins appealing.