Increasing Scrutiny of Memecoins
The stratospheric rise of memecoins has put increasing pressure on cryptocurrency exchanges to carefully vet projects before listing them. According to Binance CMO Rachel Conlan, exchanges have to protect users by weeding out dubious tokens. Speaking at Aus Crypto Con 2024, Conlan explained the robust due diligence process at Binance, where a project’s founders, roadmap, and community engagement are scrutinized in depth.
Nothing is Certain
On the question of what memecoins are listed, he reiterated that there is no formula that can assure their success. Instead, a team of researchers weighs different factors in before making decisions.
“Community feedback and input, as well as trends and insights, are definitely important,” said Conlan.
She added that hype does not always bring a token on board, but rather innovation and a real use case. In other words, the utility gap must be addressed.
One of the major criticisms of memecoins is that they lack inherent utility. Conlan acknowledged this but pointed out that there are a growing number of memecoins that are incorporating practical applications into their ecosystems.
“We all need memecoins with utility because we need that use case,” she said.
She added that utility is important not only for sustaining a project over time but also for retaining investor confidence and relevance in the wider market.
Engaging the Community
With the cryptocurrency community poised to grow exponentially over the next 18 to 24 months, Conlan underscored the importance of community engagement. She stressed that while many projects might begin as novelty endeavors, sustained community involvement hinges on delivering meaningful value.
“It is born and frivolous at the beginning, but if you want to keep the community involved, it is critical,” Conlan said.
Community-driven innovation, according to them, is key to this vision for building trust within the crypto ecosystem.
A Call for Innovation
Conlan’s utility-centric comments are supported by those of Binance’s ex-CEO Changpeng “CZ” Zhao. He recently took to social media to express dissatisfaction with the current trajectory of the memecoin space, saying that its developers should shift focus to more practical blockchain use cases instead of fleeting trends.
Scams and rug pulls continue despite the successful stories that occur in the memecoin market. A recent example, in which a Solana-based trader turned a $160 investment into millions, aptly represented both the potential risks and rewards in the space.
Due diligence, utility, and community: these are ways Binance is trying to lead the industry toward sustained growth with meaningful innovation.
