Meme Coins Are Causing 'Damage' to Crypto, Says Andreessen Horowitz Exec

A top executive at venture capital firm Andreessen Horowitz (a16z) has compared meme coins to a “risky casino,” suggesting that they’re bad for the long-term outlook of cryptocurrencies.

"At best, it looks like a risky casino. Or a series of false promises masking a casino," Andreessen Horowitz CTO Eddy Lazzarin said on Twitter (aka X), adding that their popularity impacts adoption, regulation, laws, and builder behavior.

"I see the damage every day," he added. "You should too."

Lazzarin’s comments follow multiple waves of meme coin mania. Tokens like Dogwifhat (WIF), Bonk (BONK), and Book of Meme (BOME) have all seen staggering returns in recent months.

That’s resulted in some hedge funds looking to enter the world of meme coins—including Stratos, which counts among its limited partners a16z co-founder Marc Andreessen. The hedge fund launched a liquid fund holding Solana-based meme coin WIF, which tripled in value to deliver the fund a healthy 137% return.

Despite this mainstream attention, Lazzarin argued that meme coins distract from the real goal of cryptocurrencies, focusing on meme-based marketing to boost their value rather than technical innovation or real utility.

“Besides undermining the long-term vision of crypto that has kept so many of us in the space, meme coins aren't very technically interesting.” Lazzarin posted on Twitter. He added that, “I'm here to build new networks to power a fundamentally more powerful internet. It's just not the same size.”

Why Most Meme Coins Die Young

Meme coins are great. They’re fun and they onboard a ton of new users into the space—and every once in a while, they break through the on-chain noise and become new pillars of community for people to rally around, like Shiba Inu (SHIB), BONK, or Dogecoin (DOGE). They’re a great tool for onboarding and an even better tool for gambling. They also represent a problem that crypto has faced since the advent of Ethereum’s ERC-20 tokens, and arguably even before then. As long as there are gamblers will...

He argued that meme coins alter how crypto is perceived. With most meme coins dying young, Lazzarin suggests these joke-y tokens may give regulators the last laugh, encouraging them to pass harsher rulings.

However, other VCs in the crypto space disagreed. Jesse Walden, founder of crypto-based VC firm Variant, suggested that as meme coins “do not promise anything but volatility and entertainment,” they aren’t doing as much damage as is being made out.

“There are people simultaneously calling them unsophisticated entertainment and also a go-to-market strategy, the future of work, and a fountain of freedom,” Lazzarin explained in response. “It’s not good.”

 Runes

Bitcoin Runes Transactions Are Taking Over the Network—And Dominating BRC-20

Bitcoin Runes are dominating Bitcoin blockchain activity, with over 81% of transactions on Tuesday being Rune etchings, according to a Dune report. Regular Bitcoin transactions represented 19% of the transactions, meanwhile, with BRC-20 tokens and Ordinals coming in a distance third and fourth at 0.2% and 0.1%, respectively. BREAKING: Runes accounted for 72.7% of all Bitcoin transactions in the past 24 hours — Ord.io (@ord_io) April 24, 2024 According to the Dune dashboard, 750,428 Runes tran...

Despite his outburst, the a16z exec said that he is “optimistic that real products/protocols will develop in the end.” But this was his warning that the industry needs to wake up to the negative effects of meme coins.

“We shouldn't pretend that the casino doesn't set us back.” Lazzarin finished. “Deterring great founders and giving ammo to politicized regulators has a profound effect."

Edited by Andrew Hayward