Key Aspects of Memecoins: Insights from VanEck Portfolio Manager Pranav Kanade
VanEck portfolio manager Pranav Kanade has recently highlighted four key aspects of memecoins that all teams building in the crypto space should take note of. Kanade’s comments came in response to a Token2049 panel discussion by Murad Mahmudov, where the concept of a “memecoin supercycle” was proposed, sparking viral interest within the crypto community.
One of the key aspects Kanade pointed out is the clear product-market fit that memecoins have with retail investors, attributing this to their simplicity. He emphasized the importance of simplicity in token design, noting that many projects tend to over-engineer their tokens, overlooking the fact that time, capital, and attention are scarce resources in the competitive crypto landscape.
Highlighting the staggering number of tokens launched in 2023, Kanade stressed the need for projects to streamline their token design, have a clear product vision, and demonstrate how executing that vision can bring wealth to token holders.
In addition to simplicity, Kanade also addressed token supply concerns, particularly the issue of locked tokens allocated to early investors. He noted that projects with a large number of locked tokens often face challenges with growth as these tokens are unlocked and early adopters sell off their holdings. In contrast, memecoins typically have their entire circulating supply unlocked from the start, following a “high float” supply model with a lower fully diluted valuation.
Kanade recommended that projects reconsider their token supply approach and consider adopting a “high float” model, with only a small portion of tokens locked for early adopters. He also advocated for greater transparency in token purchases by VC funds, a practice that is often not disclosed to the public.
Overall, Kanade’s insights shed light on the key factors that have contributed to the success of memecoins and offer valuable lessons for teams looking to navigate the evolving crypto landscape.