The quality of a meme coin's distribution is what determines if it has staying power or not, Giotto De Filippi, the co-founder of NFT Juice has said. De Filippi, an activist for Polkadot's crypto token DOT, suggested that only a few meme coins owe their success to a "very good distribution" which he said takes years to build.
Many Meme Coins 'Pumped Artificially'
However, De Filippi opined that many of the meme coins "seem more like pump and dumps" with dogecoin (DOGE) being one of the few exceptions. He also identified Shiba Inu, PEPE, and BONK as meme coins that may have been "pumped artificially."
Meanwhile, in his written answers sent to Bitcoin.com News, De Filippi described meme coins as some form of liquid art or collectible. De Filippi argued that bitcoin, which is the largest crypto asset and most popular, fits the description of what he calls a "liquid collectible."
When asked how investors can avoid falling prey to meme coin scammers, the DOT activist warned prospective holders to be on the lookout for meme coins with concentrated distribution. Such distribution, he argued, is a red flag which should force them to think before deciding to invest.
Below are Giotto De Filippi's answers to questions sent to him via Telegram.
Bitcoin.com News (BCN): What are meme coins what would say distinguishes them from other crypto tokens?
Giotto De Filippi (GDF): I would say many coins are basically a liquid collectible. It's a form of art, it's a collectible, but it's liquid. So instead of being like a statue, it's kind of a liquid statue or whatever. Or instead of a painting, it's like a liquid painting. But really bitcoin (BTC) is a meme coin. It's like bitcoin doesn't do anything.
So the value of a meme coin is in its distribution and people who like it, I mean in the end, bitcoin is a liquid collectible. Bitcoin holders are bitcoin collectors. They collect bitcoin, they collect something liquid – or gold are gold collectors. Gold has no interest value. Bitcoin has no interest value. Bitcoin is a meme coin. And what makes the difference is the quality of distribution and the branding, which is done through marketing or history like bitcoin.
So it's a liquid collectible and what separates one from another is the quality of the distribution.
BCN: Whether it's DOGE, Shiba Inu, PEPE or more recently BONK, interest in meme coins has grown rapidly in the last few years. In your opinion, are they just a fad or something that would stay relevant in the long run?
GDF: It depends on the quality of the distribution. Dogecoin has probably a very good distribution because it developed over many, many years. So, dogecoin has some sustained power. The other ones seem more like pumps and dumps, but that's just my opinion. In DED, we want to also have a very good quality of distribution. We want to be more like Doge rather than Shiba, Pepe, or Bonk because it seems more like they have been pumped artificially. But again, I cannot prove it. That's just my opinion.
BCN: Meme coins are seen by some as speculative investments that hold little to no intrinsic value. Besides the possibility of outsized returns or losses, can you talk about the psychology of why some crypto users get hooked to meme coins?
GDF: Bitcoin holds no interesting value. Art holds no interesting value. They are collectibles and liquid collectibles, and people buy them for many reasons. Maybe because they like it, or because they think it's funny, or because they think the price will go up. I mean for a million possible reasons, everyone has a different reason for doing something.
BCN: The Polkadot community members have created the first meme coin of the Polkadot network, the DED coin. Can you talk about what DED is and why the community created a meme token movement around Polkadot being dead?
GDF: There is no why. It's more about the community. I encourage them in the sense that if someone comes up with a good concept, I will vote yes for the marketing proposal. But everything happened organically. There is no "why" when something happens organically, it just happened.
BCN: How is DED different from the hundreds of other meme coins out there and what do you think sets it apart from similar coins?
GDF: What sets it apart is the fairness of the distribution. The fact that it has a very fair distribution means it won't lead to dumping and that we could raise the money without having to compromise. So we can raise the money from the treasury without having to compromise on the distribution. The others, they cannot do that.
BCN: Recently, the Avalanche Foundation said that it would buy meme coins as part of a culture drive that recognizes the distinct niches of the cryptocurrency market. In what ways do memes recognize and encourage culture?
GDF: I'm not sure. I mean culture can mean a lot of things. I guess DED is a joke about how Polkadot is dead and it kind of proves that it's false. So it's kind of part of the DOT culture.
BCN: According to Coinmarketcap data, there are over a thousand coins listed in the meme coin section. A large number of them are worthless. What are the most common red flags that traders should look for before putting their money into meme coins?
GDF: The main red flag is the distribution. If the distribution is poor, it's very concentrated. It's probably a scam.
Do you agree with Giotto De Filippi's views on meme coins? Let us know what you think in the comments section below.
Source: Bitcoin.com
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