Avalanche Foundation’s Strategic Foray into the Meme Coin Market

adminDecember 30, 2023

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The Avalanche Foundation, known for managing the Avalanche network, recently announced a bold new venture. The foundation announced its intention to acquire various meme coins under the “Culture Catalyst” program. The move is seen as an effort to diversify holdings and incorporate a broader range of possibilities into the portfolio.

through informal communication X (formerly Twitter) The foundation announced plans to selectively purchase meme coins that are part of the Avalanche ecosystem. Selection criteria are multifaceted, including aspects such as the longevity of the project, early launch principles, level of liquidity, number of current holders, and general sentiment in the social media community.

Last year, the Avalanche Foundation launched Culture Catalyst, a program aimed at empowering creators, sparking innovation, and driving blockchain adoption. This initiative seeks to better position the Avalanche to cultivate and support a variety of new forms of creativity.
— Avalanche 🔺 (@avax) December 29, 2023

The foundation’s rationale for this investment is interesting. They recognize meme coins as more than just utility assets. For them, this coin symbolizes the shared values and communal spirit of various cryptocurrency groups.

The meme coin phenomenon, typically tokens inspired by internet memes and jokes, has generated considerable interest on social media. Dogecoin, the prototype meme coin, started out as a fun take on the growing number of alternative coins. But its value is subject to the whims of internet culture, with notable influences such as Elon Musk’s tweets causing price fluctuations. Likewise, other tokens themed around current events or public figures have emerged, such as the Floki Inu cryptocurrency, named after Musk’s pet.

Despite their popularity, meme coins are often viewed with skepticism by financial experts. Thomas Kralow, founder of University Grade Trading Education, expressed concern to online publication Decrypt, highlighting the lack of sustainable support for these coins after the initial hype died down. He likened investing in meme coins to gambling, given their unstable nature.

Meme coins to include in the collection

Avalanche has set specific standards for eligibility to manage its meme coin collection. Not all meme coins are successful. Factors such as number of holders, project maturity, liquidity threshold, fair launch principles, and overall social sentiment are important in the selection process.

One particular meme coin that has captured the attention of the Avalanche community is Coqinu (COQ), a rooster-themed token. As DexScreener reports, Coq’s value has seen a huge surge despite acknowledging that it has no intrinsic value or a defined team and roadmap.

The current market frenzy surrounding meme coins is not limited to Avalanche, but is widespread across various blockchain networks that support smart contracts. This trend has resulted in incredible financial gains for some traders. For example, one trader turned a small investment into a lot of money by trading COQ while still holding a significant amount of the token.

At the same time, the non-fungible tokens (NFT) market also showed signs of revival. DappRadar reported a significant increase in trading volume, marking a reversal from the previous downward trend. This resurgence in NFT trading offers a glimmer of hope for a project that has faced challenges all year.