The four major uses of memecoin: evading securities laws, political speculation, charitable financing, and AI enlightenment

Words: Max Parasol

Compiler: Tom, Mars Finance

Meme coins are not useless: they bypass securities laws, don't make venture capitalists profit, and are also very interesting.

Memes are the essence of cryptocurrency: social trends, ironic humor, and the temptation of absurd profits, all wrapped up in a token that serves no real purpose. They may not be suitable for Warren Buffett, but they are perfect for a large number of ordinary people seeking fun, community, and an escape from their marginalized environment in a lottery-like manner.

"Memes are leading indicators," says Danny Yang, founder of OnChainMonkey, referring to insane returns relative to other metrics. The meme coin gamizes the investment process, with investors flocking to follow the invisible trends from the election results, or to join the latest issue within ten minutes of the arrest of the UnitedHealthcare CEO shooting suspect. This is very similar to the style of 4Chan.

Building communities, social connections, and enjoying fun are all part of the appeal of the Dogecoin. "Humans are social creatures, memes are about people finding entertainment in the same thing," Yang said.

The meme itself is irrelevant. This is a social game that requires a large number of players to judge the meme by how many people might want to participate in the game.

But besides the foolish fun and the opportunity to make money, what is the real use case of useless meme coins?

PNUT was suppressed, but became more powerful as a meme coin. （Elon Musk，X）

Scenario 1: Circumventing the U.S. securities laws

First of all, let's clarify - the uselessness of meme coins is a special use case in itself. They bypass the U.S. securities regulations that suppressed the ICO boom. In addition, meme coins in particular will not be covered by the Australian Securities and Investments Commission's proposed expanded crypto powers. Why is this so? Because they don't do anything.

"Actually, it's safer to issue a meme coin with no use case today than to issue a useful token," writes Chris Dixon, managing partner of a16z Crypto.

U.S. securities law focuses on the Howey Test to determine what constitutes an investment contract. Meme coins represent only a concept and do not promise any return from the efforts of others, and are therefore not subject to this test. This regulatory friendliness has allowed meme coins to spread like wildfire during the crypto war era (2022–2024).

The meme coin is the biggest cryptocurrency narrative of 2024, accounting for 14.3% of CoinGecko's market share in the second quarter. Now, with Donald Trump becoming the President-elect, it is expected that the new Chairman of the U.S. Securities and Exchange Commission (SEC), Paul Atkins, may allow 'real' projects to raise funds again through a 'safe harbor' proposal similar to Hester Peirce's in 2020. Will they gradually disappear?

Use case 2: Political speculation

In a world where people use technology to create social bonds with their past experiences, Meme Coin allows holders to participate in and capture the spirit of the political era. Meme Coin has been created to support and oppose candidates in the US presidential election.

Meme Coin is for everyone, even Gary Gensler. (X)

Argentina's liberal president, Javier Milei, also has a meme coin dedicated to his reforms. The social utility of allowing people to express their political views in monetary terms can be seen as parallel to the word-giving efforts that run in major election campaigns.

However, social participation or utility should be better understood as capturing the 'spirit of the times', Daniel Drescher, Vice President of Business Development at Sal'Ad Labs, believes. He told Magazine in an interview that President Trump's new friend and future head of the Department of Government Efficiency (DOGE), Elon Musk, is a typical example.

How does Dogecoin become the gold standard in this uncertain Web3 field? They have perhaps the strongest influencer or key opinion leader in history - the richest and undefeated person in the world, Elon Musk. He is the inspiration for Iron Man. For fans of Ayn Rand, he is the god-like John Galt who created an engine powerful enough to light up the whole world.

Drescher is more inclined to see Meme Coin as a 'brand coin'. Typically, they require a key opinion leader or a cult figure to promote the coin. Successful Meme Coins have 'fanatical followers who live and die for it. This is what gets them out of bed every morning.'

The analogy of the spirit of the times struck a chord. For example, when then-presidential candidate Joe Biden stumbled on the stairs, Kamala Harris's meme surged, and she was subsequently removed by the Democratic Party as their nominee.

Political meme coins are popular. (CoinMarketCap)

Use case 3: Charity Trojan

Meme Coin can serve as a Trojan horse for more meaningful projects in terms of financing, such as fundraising for charity, launching casinos like Iggy Azalea's Motherland, or launching exchanges like ShibaSwap.

As Ethereum founder Vitalik Buterin, who is known for donating memecoins to charity, wrote:

"Of all the coins I've seen, what's more interesting is that the majority of those token supplies (or some ongoing fee mechanisms) are dedicated to some kind of charity."

"It feels like there's an unoccupied opportunity here to try to create something more positive and lasting."

The meme coin NEIRO from the Neiro Foundation is attempting to become the next Dogecoin by combining utility and speculation for a rise in value.

The question is, who is the Trojan horse? Is it for charity or speculative rise?

The Meme Coin is named Neiro, which is a rescued Shiba Inu adopted by Atsuko Sato, the owner of the original 'Doge' Kabosu.

Doge versus Neiro. (X)

The Neiro Foundation is a collective effort to fund rescue and well-being efforts for Shiba Inu dogs around the world, providing necessary resources and financial support to dog shelters and charities that improve the lives of Shiba Inu. This dog breed is susceptible to several common health problems, including hip dysplasia, eye diseases such as glaucoma and cataracts, and progressive retinal atrophy.

SlumDOGE Millionaire gained public recognition after converting $180,000 into more than 3 million DOGE, a process documented in the documentary This Not Financial Advice. He is now the face of the coin and said, "Despite the skepticism surrounding the growing popularity of meme coins, many critics have overlooked the fact that some meme coins have a clear, positive mission."

In addition to viral humor, certain meme coins support charitable initiatives and have received rabid community support as a result. The best meme coins all have a strong narrative foundation that resonates with a growing number of socially conscious Web3 users, while demonstrating the immense potential of DeFi to drive philanthropy.

Use case 4: Funding the launch of an AI agent

AI agents have great practical potential. Imagine an AI agent that can automatically rebalance your cryptocurrency investment portfolio, so that profits are automatically transferred to high-quality coins such as Bitcoin, Ethereum, and SOL, thus avoiding holding 90% of junk coins.

Sometimes, it's hard to tell the difference between a robot and a human. （X）

It seems that one day, AI agents may actually guide autonomous DAOs. But for now, they are highly focused on the endpoints of memetic coin trading. Robots like Truth Terminal interact with users on the X platform, creating artificial hype, promoting community engagement, and purchasing memetic coins.

Take a look at Fartcoin, this AI-inspired meme coin has skyrocketed to a market value of 900 million dollars with the 'Hot Air Rises' comedy rule. It is quickly catching up to another meme coin GOAT promoted by Truth Terminal.

The whole concept of launching the Meme Coin by autonomous AI agents is a meme in itself, because many 'AI agents' are just disguised humans, and GOAT is human-made. However, the true growth in the number of agents highlights its potential.

According to Calanthia Mei, co-founder of Masa, "there is a huge difference between a smart AI proxy meme coin and a stupid meme coin." Mei, formerly a founding member of PayPal's venture capital division, spoke about the "perception of meme coins" — she was referring to the intersection of AI and meme coins, with AI agents performing tasks such as making transactions.

Besides making money, the side effect of meme coins is making technology cool. They shine a spotlight on technologies that only a small group of people care about.

MemeCoin is helping to fund and launch agents on the Virtuals Protocol, AI agents that can be programmed to interact with token economic designs. It also allows for no-code AI agent construction, tokenization, deployment, and more complex designs.

Mei's company Masa is a decentralized data mining network that provides real-time data to support the use of retrieval-augmented generation (RAG) and context-aware AI agents that rely on pre-planned prompts for 'emotional intelligence'. These agents can learn new things in real-time and acquire new memories, she told Magazine.

Therefore, in this case, these RAG-based AI agents are equipped with dynamic data retrieval, emotional intelligence, and memory capabilities, making them context-aware and adaptive in real-time.

Mei believes that AI agents are an unstoppable use case for transactions

Mei is sure that the meme will accelerate AI's experimental connection to encryption. Since the GOAT story came along, she has received "three times as many inquiries in the last few weeks as the previous AI agent development."

Think about it – create an intelligent AI proxy meme coin that roams Crypto Twitter, the home of crypto market sentiment. It's almost an unstoppable investment argument.

Use Case 5: Fair Launch of Tokens to Avoid Retail Investors Being Exploited by Venture Capitalists

Retail crypto investors have been victimized by venture capitalists for years. These investors enter early, snapping up a large supply of tokens at a price well below the final market price. This results in ridiculously high valuations after full dilution, with retail investors losing opportunities when venture capitalists dump their tokens. It's no wonder that users who have been burned by unfair tokenomics turn to meme coins, which can – though often don't – launch fairly.

Masa's Mei said, 'For some projects, meme coins have provided much-needed funding needed to develop their technology, escaping the cold venture capital market and Web3 echo chambers.'" 」

In Murad Mahmudov's viral Supercycle speech at Token2049, he believes that fully unlocked memetic coins mean that tokenized memes are actual products. There are no venture capitalists and no lock-up periods. Because the asset cannot be priced as it has no revenue, it becomes an advantage instead.

Ultimately, the meme coin is useful for a new type of funding tool, said Zhen Yu Yong, CEO of Web3Auth, a white-label wallet company that builds wallets for Trust Wallet, numerous Fortune 500 companies, and has 20 million monthly users.

Of course, most meme coins will fail. But now, you can launch a tokenized project without market makers, without the interference of venture capitalists and backroom equity deals, and with the opportunity to succeed.

This lack of venture capitalists backing most meme coins is clearly part of the retail appeal. Those veterans who missed out on Bitcoin in 2010, or Ethereum or any other major coin, can get rich instantly without venture capitalists screwing up in pre-seed rounds. It's an ideological investment argument – a veteran's dream.

In short, the meme coin is like a cartoon version of an ICO without the assumption that someone might try to build and launch a product.

The most accurate memes in the ICO era. （LinkedIn）