Memecoins Hangover: Retail On-Ramp vs Rampant Rip-Off

Transcript

Welcome everybody to Block Fighters 2025. I'm really happy to be here. I'm Jimmy Ragoa, also known as JRock. I'm here with Christina Franopan and Nicolola Baka. Uh it's my first year here MCing with those two great friends these battles. So for people who were not here for the first two years, the concept of block fighters, it's that it's going to be fast-paced 15minute battles between two debaters talking about a spicy topic trying to go back and forth launching ADAX. There will be no real fightings, but it will be way less boring than all the other talks. So bring your friends up there.

Um I will be moderating some of the first debates. We'll talk about Mimmecoin, the FM foundations, scalings, battle of the VMs, Stratfi, custody. It's going to be fastpaced and great. Bring all your friends here. Um, you will be able to vote live during the battle. Just scan one of the QR codes and we will open the vote during the battle. At the end, we'll check the results and there will be a big winner for each battle. It's going to be fun. It's great to be here with you and I think we can start with the first battle even if there's going to be some improvisation with one of the fighters.

Let's start. Thank you, Nicola. Thank you Christina. Ladies and gentlemen, are you ready? So, our first battle is going to be about memecoins. The title of the battle is memecoins hangover. Are they a retail rampant or are they a rampant ripoff? So, let's start with the first battle and bring on our two fighters.

Pick up pick up a mic. I don't bite without consent. I should have said pick up the mic. Josh, please. You ready? So, you might be wondering, does this guy look like David Offman? No, it's he's a brave member of the audience who's replacing David Offman who's not here, but he might come at any moment and just bump your fist and come on the ring just to throw something at Paul. So, let me do a quick intro. On my left, we have the global EY

blockchain leader. He's been shielding Ethereum to big companies before you were even born. is a legend and he's gonna be opposing memecoins. That's his position. Wait, I think we agreed that to give George the the you want you want to oppose memecoins, right? Um I'm sort of fine either way. Okay. A lot of negative things to say about them. Uh okay. So So you can oppose meme coins and I'll be pro meme coin. That'll be quite We're switching position. Paul Broady is pro memecoins. And we have George that I just met five seconds ago, so I'm not going to do the intro, but I'm sure he's a great guy. and he'll be opposing memecoins because that's the easier position. So, let's start. We titled the fight memecoins and go over because we

had a fight last year during the start of the peak of the bull run of memecoins and now it's one year later and I want to ask you both uh what changed your mind in the last year? Did the new meme coins change anything in your position? Did you try out some? Do you own some? So what's your opinion about the last year in memecoins and what did it change in your view? So I'm going to take the pro memecoin position and the reason I'm going to do that is because it's more than just what's happened in the last year. If if you were to look back over the last few years, the truth is that the blockchain industry, we have been we've had our ups, we've had our downs, right? And boy, we are very good at the downs. And

uh we just spent prior to November of last year, four years, particularly in the US market in basically the deep freeze. Uh and in the deep freeze, it was really difficult for business to thrive. Exchanges struggled, entities struggled, companies struggled to raise money. And so the value proposition of memecoins, frankly speaking, is they kept us they kept our mouth above water, right? They generated trading fees. They kept the business going. They paid for a lot of really essential activity. There's a lot of companies that would never have paid for proper audits and attestations and security reviews if they didn't have the revenue coming from memecoins. So do I love everything about memecoins? Absolutely not. Do I believe that they played an absolutely essential

role in keeping the business going at an exceptionally dark time in the history of the industry? I do. And so, uh, all things being equal, I think one of the the starting things you have to recognize is that, um, meme coins played an essential role and they did so even when you can they did so especially when you consider that they were not ideal but the conditions created didn't give the industry a lot of other choices. What do you think, George? So, I always like the idea of companies being something that a society should want to exist. And if your company is surviving solely off memecoins, you do not deserve to exist. Um, if you look at the inefficiency from the money where they that they're taking off people, which

effectively they are scams, the like the cost of running that's just being wasted both in terms of electrical infrastructure costs and I mean it's we're in the middle of a heat wave. I feel like arguing about some climate stuff is here there. um like yes they've let people continue their businesses and I'm sure those businesses are important to people but we need something that's actually benefiting some some end goal that's doing some good and I don't think memecoins can ever do that so did memecoins brought some new users to the space at least memecoins absolutely brought some new users to the space now I don't want to exaggerate right if if gambling made people if gambling was this thing that you could use to onboard people into the financial system Las Vegas would be the home of the world's

savviest investors. It's not right. Uh so let's not overstate let's not overstate the value proposition of memecoins, but it did it brought millions of people on chain and it did it in a way that was really important because the truth is like and and this is a fair critique of Ethereum and really every other blockchain ecosystem. User experience sucks, right? And so um a really famous venture capitalist in Silicon Valley once said, you know, if you wanna if you want to really supercharge your business, don't think about sort of really uh creating a useful solution or helping people solve problems. Go directly to the seven deadly sins, right? And so if you want people to overcome all of the uh grit, challenges, problems in the user

experience, and onboard into crypto, uh gambling is probably a relatively good choice, right? And the truth is, if gambling is allowed in the real world, if online gambling is allowed, if we're allowed to have DraftKings and Las Vegas and online betting, then why not meme coins? Like fundamentally, it is it is a question of personal freedom. But I think the the attraction of gambling in this space absolutely brought millions of people on and it got them to overcome a lot of significant user interface inertia. So to be clear, the argument here is it's like gambling but less regulated and more open to to the public. And you're I just don't feel like I need to say anything here. Who is this ringer?

Who's the ringer that we just picked up off the street? But so are you glad that most of the new users coming from memecoins gambling are not going to the Ethereum ecosystem, but another ecosystem? Well, yeah. I mean, if you're putting out um a mouse trap, you're going to catch mice. If you're putting out these sort of meme coins, you're going to attract the users that are attracted to memecoins. If we're looking for legitimate developers, what they're going to be looking for is, you know, legitimate technology, legitimate development. And if you Google any cryptocurrency thing, all you're going to see is stuff infested with pictures.

We had that before. Let's be clear. Like, you know, FTX was telling everybody that they were a legitimate exchange, right? So it's not like uh the prohibition on memecoins or an aversion to memecoins improve the quality of our ecosystem. Uh and you know it's a great anecdote that you give but the reality is is that if you look at the big exchanges that have that that have shield to some degree memecoins when the opportunity to enter into like legitimate useful transactions came into this market environment they pivoted back to doing that. So I think it is on the one hand I think it's easy to be like super cynical about uh um uh u memecoins but the reality is is they kept the industry afloat and they don't

seem to have destroyed the overall direction and integrity of the industry now that the gates have opened up again we've got this flood of uh uh stable coins and useful applications. So I don't think the diversion was so damaging that we didn't recover. Do you think there could be a better model of memecoins that could bring something to the space? I mean, once it's a better model, it's not a memecoin anymore. I like I can see that there's a certain amount of validity in the fact that like the people who knew what they were doing weren't sufficiently distracted by memecoins. Um, I don't think that's the same as an argument for them actively benefiting, which is is what you're saying. Um I think if you look at the actual

statistics of how meme coins are traded um close to 0% effectively like an an actual rounding error are actually done on chain. Most of them are just done through traditional exchanges. Um so it becomes closer to what is effectively day trading on um day trading on opinions which I guess is also normal stock trading. I know that too. But um yeah, I I think the to an extent I almost see memecoins as completely side effects to like what we'd see is decentralized technology. It's similar, but it's not trying to do the same objectives. It's not really the same people and the the money for people who are joining and leaving. I mean, it

doesn't distract us because we're not involved. Who here has a memecoin? We got some meme coiners here. Right. So, now that the regulatory environment is more open, do you think that it's the end of memecoins? It's not the end of memecoins, but I do think it is going to be memecoins are going to be a smaller part of the overall ecosystem. They they had their place. They had their moment, but they're not completely done. And the reason they're not completely done is that fundamentally meme coins are gambling, right? How many of you have visited pumpf fun lately? Not lately. I I so I went yesterday in preparation for this uh uh little discussion and I I'll be honest with you like some of this stuff is entertaining, right? If you could package this up in

like a Tik Tok type of model, right, you could have a constant stream of absolutely insane people pumping their coins um you know all the time. So I think as entertainment, right, in the same way that gambling is never going to be done, meme coins are never going to be done, right? And I think you can can look at places like Las Vegas and you can make the argument again that they're not the best cities, but what would be in Las Vegas without Las Vegas? I'm pretty sure nothing based on what the rest of Nevada looks like. What about you, Josh? What do you think the meme coins will be in one year? No, that I I think you're right that we're never going to get rid of them. Um, I think at the end of the day, like you say, people always do enjoy gambling.

And despite absolutely everything around that, um, if you want to gamble and actual gamble, congratulations prevent you from doing that. There's ways to to siphon up the the side alleys of like, um, in the same way that a lot of cryptocurrency payments can be used when you have illegal money that needs to be lended. Uh once again wouldn't argue that's a good thing but you know blockchain's ability to circumvent laws and regulations is uh it's a constant struggle I think something that we really sort of need to get into a handle on. So I think if we want to keep memecoins we we actually should tax them and we should treat it like a form of gambling and we should just allow this to exist and it should be taxable and we should treat it what it is which is it

is effectively a form of entertainment uh that has risk and potential for addiction. Um, but I think that uh the millions of people that got on boarded into crypto through memecoins are will eventually find I hope other things to do. Do you think it's been more egalitarian to be rugged by a random dev than rugged by VCs? Sorry, can you say that again? Right now in memecoins mostly you've been you're rugged by the core which just rugging out the liquidity. in other coins, VC coins, you're wrecked by the VCs who've been in in the preede. Is that better in a way? Um, well, I mean, no.

No. I I actually think this is something that plagues absolutely everything, is it? I mean, blockchain has a bad reputation. What decentralized coins have a bad reputation? Outside of this room, if I asked my like dad what he thought of blockchains, he'd he'd probably laugh at me. I think that's true of a lot of us. Um, and I think there's good reason for it as well. Yeah, there's absolutely good reason to. One of the things I firmly believe is that this industry is fantastic at providing material for our critics. Like we are world class at this. Traditionally, we like to do it in the US. We do it at the beginning of November so that you have something embarrassing to talk about with your family over Thanksgiving. Uh, but actually a regulated memecoin industry would be again I think would be useful, right? Regulated memecoin industry is

now just gambling at the end of the day. Like if you go over the Thanksgiving dinner table and you say, "Wow, I lost I lost the uh kids college fund uh uh by being rugged in memecoins, your family members will say, "You're an idiot." Right? But if you have to go to Thanksgiving dinner and say, "I lost the kids college fund because I have a gambling problem." You won't say it. Right? This will actually lead to better family conversations. People will know that what they're doing is gambling. They will treat it legitimately as such. It will actually be a step forward in kind of social peace in the United States, right? Because people will just be too ashamed to admit that they lost their children's college funds gambling on meme coins.

Small intermission for the audience, don't forget to scan the QR code and try to vote for For those of you who just arrived recently, please know that I did bribe the audience beforehand to make sure I won. and know that George bravely replaced David Offman at the last minute so also it deserves some thought but there were no explicit rules against aud bribery and I am willing to pay okay can I get one ey legal department says they have no cash value but you can sell them on openc all right uh let's focus on some categories of memecoins the most famous recently what the were the political memecoins what did they pro what did you think about the Trump meme coins they got the right to go to a dinner and see Trump

for 5 seconds and not even shake hands with him. Was that good enough? I I mean that was that was quite obviously a crime. Like what he was trying to do was crime, I think. And he successfully did crime because the unregulated meanpoint allowed him to legally do crime. And I think that might be a bad thing. But you're not certain, right? And let's be just to be clear though that particular activity took place on a blockchain that shall not be named. But I would like to speak in favor. I think what it provides is commendable transparency in the discourse between ordinary people and our elected leaders.

Could it bring bribery too? I said commendable transparency. Both both George and I work for large corporations that need to be careful about the things that we say. I think commendable transparency is can be interpreted creatively by the people who know what we're talking about. When can we expect the first EY memecoin? Uh it's already it's already available. They're already available. So uh and um you know actually one of our key contributions is we are building privacy technology so that you can have your commendable privacy you can have your commendable transparency in secret which I think is something else that will really enhance the whole like uh uh business relationships between consumers and their elected representatives.

George last word just to convince the audience that they shouldn't get into me guns if they don't have them yet. I mean, I I I suppose the core thing is if you enjoy having your money, uh, then just just do that or at least less volatile gambling, like go somewhere that'll give you a drink with it. That is a great idea. We should open up like a memecoin location with complimentary beverages. I thank you for your your support of the industry, George. Yeah. Yeah. Let's open um our regulation and tax one, right? We'll call it unregulated tax evasion coin.

I feel like that's too obvious. I think we should call it like uh transparency and fairness and taxation coin. Fantastic. Excellent. Excellent. Thanks to our fighters. That was a great debate. You have Yeah, let's pump gloves. That that is the full extent of the violence that you will see in the phys physical violence that you will see in this event. The results are already here. Three votes for David who became George, seven for Paul. So, let me give you Paul is the winner. Thank you.

You for being a good sport. Yeah. Yeah. Pleasure. Really? Thank you. Let me shake your hand. I thought the uh I'll show you the way out. My mom fit this crowd particularly well.