MEMECOINS’ POPULARITY BOOSTS DEX VALUE, SAYS KAIN WARWICK 

The widespread appeal of memecoins is a significant asset for decentralized exchanges (DEXs) as it draws a diverse group of traders who may not typically engage with decentralized finance (DeFi), according to Synthetix founder Kain Warwick.

Warwick believes that while some criticize memecoins as purely speculative assets without intrinsic utility, speculation itself is beneficial. Speaking to Cointelegraph at MemeGlobal Sydney, he expressed that trading these tokens helps increase DEX volume, prompting these platforms to enhance their tools and services.

“Even if investments are made into speculative assets lacking utility, they generate economic activity around them, fostering infrastructure development, which is ultimately beneficial,” Warwick explained.

Recent data reflects a surge in memecoin trading, largely conducted on DEXs thanks to tools like pump.fun that facilitate easy and inexpensive token launches. Most of these tokens are ephemeral, rarely surviving long enough to secure listings on centralized exchanges.

March saw DEX trading volumes hit nearly $268 billion, the highest in over two years and just shy of the $292 billion peak of November 2021, according to DefiLlama. Although there was a 26.8% decrease in April, the $196 billion traded still marks it as one of the most active months.

During the ETHGlobal Pragma Sydney event on May 2, Warwick discussed how memecoins, along with nonfungible tokens (NFTs) and GameFi, connect more with human emotions and cultural narratives, making them more engaging to the general public than traditional DeFi projects.

Warwick emphasized the everyday relevance of finance, although he noted it’s a topic that doesn’t constantly captivate people. In contrast, he pointed out that entertainment mediums like games, movies, and music are areas where the public shows genuine interest and passion.

“Memes represent perhaps the simplest link between the financialization and tokenization of various aspects, and broader cultural trends,” he added. Memecoins, in Warwick’s view, serve as an engaging entry point into DeFi and crypto, appealing through their straightforward, relatable concepts without the complexities of yields or cash flows, simplifying the decision to merely whether one finds the concept appealing enough to buy into.

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