Memecoins "Officially Cooked" After LIBRA Scandal, Says Crypto VC Nic Carter

The recent $4 billion LIBRA token scandal has caused a seismic shift in the cryptocurrency world, with Castle Island Ventures partner Nic Carter declaring that the era of memecoins is "unquestionably over." In a February 19 post on X, Carter argued that the scandal, tied to Argentine President Javier Milei, has exposed the deeply flawed and corrupt nature of the memecoin sector, marking the end of what many considered a more "organic" alternative to traditional, VC-backed cryptocurrencies.

The Rise and Fall of Memecoins

Memecoins initially gained traction by offering a seemingly fairer and more accessible option for retail investors, often marketed as an alternative to high market cap, VC-backed tokens. These tokens were largely seen as speculative ventures, but they were launched with a level of transparency that gave retail participants the impression they were entering a fair "casino."

However, Carter pointed out that the landscape has changed drastically in recent months. The launch of tokens like LIBRA, along with other celebrity-backed memecoins from figures like U.S. President Donald Trump and viral influencer Hailey Welch, has revealed that these launches were far from the organic grassroots movements they were once believed to be. Instead, they were often "unfair and botted," he said.

"The casino didn’t take a slight edge — it was more like 90/10 in favor of the house," Carter wrote, suggesting that the rigged nature of these projects has completely undermined the original appeal of memecoins.

Alternative Viewpoints: Memecoins as a Stress Test for On-Chain Finance

While Carter's assessment is dire, not everyone in the industry shares his views. Some, like Backpack founder Armani Ferrante, see value in the memecoin sector as a "stress test" for the future of decentralized finance (DeFi). In an interview with Cointelegraph, Ferrante explained that while crypto is fundamentally designed for financial transactions, the real-world utility of these systems hinges on having tangible goods and services tracked on the blockchain.

"Memecoins are an enormous stress test and proof-of-concept for real-world finance coming on-chain," Ferrante said, adding that what may currently appear as "toys" in the form of memecoins could eventually evolve into powerful systems for managing global value.

Ferrante compared the current state of memecoins to the early stages of technology, where innovations often begin as seemingly trivial ideas before eventually becoming transformative. According to him, memecoins are just the beginning of a broader shift towards a fully tokenized, on-chain financial system.

Coinbase CEO: "Stay Open-Minded" About Memecoins' Future

Coinbase CEO Brian Armstrong also took a more optimistic stance on memecoins, urging industry participants to remain "open-minded" about their potential. Drawing parallels to the early days of the internet, Armstrong noted that technologies that initially seem trivial or even frivolous can often evolve into something much more significant.

"Just like the early days of the internet with animated gifs, new technologies often look like a toy but evolve into something much more powerful over time," Armstrong said. "We should be open-minded about where memecoins are going, even if some are silly, offensive, or even fraudulent today."

Armstrong believes that memecoins are a "canary in the coal mine," signaling that tokenization and on-chain assets will play a major role in the future of finance.

Cooling Demand: A Slower Pace for Memecoin Launches

Despite the optimistic rhetoric from some figures in the industry, data suggests that interest in memecoins may already be waning. According to analytics from Adam_Tehc on Dune Analytics, the number of new tokens launched on Solana-based memecoin platform Pump.fun has dropped by 59% in just one month. On January 23, a record 71,735 tokens were launched, but by February 19, that number had dwindled to just 28,898 tokens.

This significant decline in new memecoin launches highlights a cooling appetite for these speculative assets, even as industry leaders debate their future potential.

Conclusion: The Future of Memecoins

The debate surrounding the future of memecoins is far from settled. While figures like Nic Carter view the recent scandals as clear evidence of the end of the memecoin era, others like Armani Ferrante and Brian Armstrong remain optimistic, seeing memecoins as a necessary part of the evolving landscape of decentralized finance.

Despite the mixed opinions, one thing is clear: the memecoin market is in flux. As regulatory scrutiny intensifies and public confidence erodes following high-profile scandals, the path forward for memecoins may be uncertain, but their role in the broader crypto ecosystem is likely to continue evolving. Whether they’ll evolve into something more substantial or remain a speculative playground for retail investors remains to be seen.