The Avalanche Foundation on Thursday announced plans to purchase meme coins, a sign of the token category’s growing presence in the crypto-asset landscape.
Meme coins are tokens that refer to comedic comments or jokes shared on social media. “[Beyond] mere utility assets, they represent the collective spirit and shared interests of diverse crypto communities,” Avalanche stated in the announcement on X, formerly Twitter. The nonprofit foundation said it will make the purchases through its Culture Catalyst initiative, a $100 million creator program that Avalanche rolled out in March 2022.
“The Avalanche Foundation intends to start using Culture Catalyst to recognize and encourage the culture and fun symbolized by meme coins by purchasing select Avalanche-based meme coins to create a collection,” the post continued. Meme coins will broaden the Culture Catalyst portfolio “to embrace a more complete spectrum of possibilities” that already includes non-fungible tokens (NFTs) and real-world assets (RWAs), the foundation added.
Avalanche said it will select meme coins based on several factors, including the number of holders, liquidity thresholds, project maturity and overall social sentiment. The foundation will also seek meme coins that are “fairly launched,” meaning tokens that are introduced and distributed transparently and equitably so people have the same chance of acquiring them at inception. This typically means they are not available through a token presale, pre-mine, or venture-capital fundraising.
Shifting Perceptions of Meme Coins
The announcement underscores the growing interest in meme coins, which started as a fringe part of the crypto ecosystem with the creation of Dogecoin and are often associated with rug pulls, scams and pump-and-dump schemes.
The popularity of DOGE, SHIB on Ethereum and BONK on Solana has shifted public opinion, however. Now, “institutions are looking for ways to justify meme coins going into their portfolios,” said a crypto researcher who asked to remain anonymous because they did not have permission to speak to the press. “The industry is learning that having a stated utility isn’t as necessary as once thought.”
Avalanche is a blockchain platform with a total of $895 million in value locked in its smart contracts, per on-chain data firm DefiLlama. Its native token AVAX has been among the top performers in 2023, increasing 275% in the past year to a price of $40.24 at press time, data from CoinGecko shows. COQ, Avalanche’s top meme coin by trading volume, began trading in December and has already swelled to a market capitalization of $118 million.
Unchained sent a Telegram message to a representative of Ava Labs, builder of the Avalanche blockchain, but did not receive a response by press time.