VanEck Portfolio Manager Advocates for Memecoin Strategies in Crypto Projects

Pranav Kanade, a portfolio manager at VanEck, recently emphasized that cryptocurrency projects should adopt key characteristics seen in successful memecoins to enhance their growth and transparency. His insights emerged following a viral discussion during the Token2049 panel featuring Murad Mahmudov, who has transitioned from a Bitcoin maximalist to focusing on memecoins. The panel presented the concept of a potential "memecoin supercycle," capturing significant attention within the crypto community.

Key Traits of Memecoins

Kanade pointed out that memecoins possess four essential traits that crypto projects should consider emulating. One of the standout features is their simplicity, which aligns well with retail investors. He remarked:

“Many teams over-engineer their tokens, failing to recognize that Time + capital + attention = scarcity.”

With over 600,000 tokens launched in 2023 alone, competition for these valuable resources has intensified. Kanade urged crypto projects to streamline their token designs, clearly articulate their vision, and demonstrate how executing that vision benefits token holders.

Addressing Token Supply Concerns

Another critical point Kanade raised was the need to reconsider the allocation of "locked" tokens to early investors. This model has become a major concern for traders who are wary of potential sell-offs when these tokens are eventually unlocked.

Projects with substantial locked token allocations often face growth challenges as early adopters unload their holdings to secure profits. Many tokens launched prior to 2024 have employed a "low float" model, characterized by a high fully diluted valuation. In contrast, memecoins typically utilize a "high float" model, wherein their entire circulating supply is unlocked from the outset, resulting in a low fully diluted valuation. This approach was highlighted by Mahmudov during the panel as a compelling argument in favor of memecoins.

Kanade recommended that new projects consider adopting the "high float" model while allowing for a minimal allocation of tokens to remain locked for early investors.

Embracing Hyper-Transparency

In addition to revising token supply models, Kanade advocated for a "hyper-transparency" approach. This would entail disclosing the cost basis of token purchases by venture capital funds, information that is often difficult to access and typically not made public. By adopting greater transparency, projects can build trust with their communities and foster more informed investment decisions.

Conclusion

Pranav Kanade’s insights underscore the potential benefits of simplifying token designs and adopting models that prioritize transparency and accessibility. As the crypto landscape becomes increasingly competitive, the lessons drawn from successful memecoins could provide valuable strategies for projects looking to capture market attention and foster growth. By rethinking token supply strategies and embracing transparency, crypto teams may enhance their chances of success in this dynamic environment.