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Donald Trump’s memecoin launch on the eve of his inauguration was nothing wanting sensational. Inside days, $TRUMP soared to an $14 billion market cap, with Melania Trump’s $1.6 billion memecoin following carefully behind. This spectacle dominated headlines, sparking debates throughout the crypto ecosystem. Is that this a pivotal second that legitimizes the business? Or extra a evident reminder of its speculative underbelly?
Crypto is successful — there’s little doubt about that anymore. Even a laypersons’ fast take a look at the present worth of Bitcoin would solidify this. However a tougher query lies forward: what sort of crypto imaginative and prescient with the most important cultural affect will emerge? Will or not it’s outlined by the monetary nihilism of $TRUMP, Bitcoin’s digital gold, Ethereum’s decentralized ethos, Solana’s world permissionless NASDAQ imaginative and prescient, or one thing altogether totally different? And maybe most significantly, the place will DeFi slot in? With $TRUMP, BTC, SOL and ETH seemingly at inflection factors (extra under), we anticipate to see DeFi enjoying a much more foundational function come the following presidential inauguration in 2029.
The launch of $TRUMP was a masterclass in leveraging consideration and liquidity. Inside 24 hours, the token’s worth skyrocketed from $7 to $75, earlier than stabilizing at $38. It turned the twenty first most dear cryptocurrency in a single day. By comparability, Melania’s memecoin, regardless of its sturdy debut, struggled to keep up momentum. Collectively, the Trump tokens epitomize the unpredictable nature of memecoin economics.
$TRUMP was unprecedented in scale. Earlier memecoins like DOGE and PEPE took years to succeed in their present measurement however $TRUMP reached this in simply hours, which leads many to marvel if that is just the start of tokens immediately tied to public figures.
Critics have labeled $TRUMP an emblem of economic nihilism — a “get-rich-quick” scheme that undermines the credibility of crypto. Some extra neutrally argue that $TRUMP represents the duality of crypto: it’s each a instrument for empowerment and a magnet for greed. Whereas some rejoice $TRUMP as proof of crypto’s mainstream success, others warn that it units a harmful precedent, trivializing the area as a playground for hypothesis.
This spectacle has additionally reignited debates about the way forward for tokenization and its function in broader financial methods. As Noah Smith argues, memecoins like $TRUMP and $MELANIA embody the “slush fund” side of crypto: property that enable people to bypass TradFi’s constraints whereas concurrently fueling hypothesis. Whether or not this can be a bug or a function, you’d need to ask the Trumps. However we don’t suppose that is the post-modern future that cypherpunks and decentralization zealots signed up for.
Bitcoin is in a fantastic spot, notably with the pardon and launch of Silk Highway founder Ross Ulbricht, a transfer celebrated throughout the Bitcoin neighborhood. However the place can it go from right here? There’s the oft-touted Bitcoin Reserve, an concept that appears clearly bullish on the floor. Regardless of this, distinguished Bitcoin fanatics have raised issues on the reserve thought, questioning whether or not this might open the door for presidency co-option of Bitcoin’s inherently decentralized ethos. And that it will be foolish for the U.S. authorities to prioritize a rival to the greenback.
This then begs the query: is Bitcoin chasing one other stage of adoption? As digital gold, it’s already had institutional buy-in, which is more likely to function a long-term worth driver. However Bitcoin as soon as aimed greater. Hyperbitcoinization — a time period describing the world operating on Bitcoin as its major forex — was the final word aim. Are we nonetheless on that path? At this level, it appears unlikely. Bitcoin’s trajectory is extra akin to a extensively accessible inflation hedge slightly than a revolutionary societal forex.
Hyperbitcoinization, by definition, seeks a world the place Bitcoin replaces fiat fully. However to attain this, Bitcoin should provide extra than simply worth stability and ease of entry, and its cultural and societal ambitions have largely taken a backseat. Whether or not it may reclaim that aspirational imaginative and prescient is an open query. However for now, Bitcoin stays a extremely practical, if considerably static, cryptocurrency.
Issues are much less rosy for Ethereum. Costs are falling, and sentiment inside the neighborhood is more and more detrimental, as evidenced by the rising pattern of customers abandoning their ‘.eth’ handles. Criticism of Ethereum’s management, which has been accused of being overly educational and disconnected from real-world functions, has grown louder. The highest canines are solely now starting to acknowledge the necessity for change, with Vitalik Buterin getting into “wartime mode” (or simply coincidentally altering his profile pic, Milady). Plus, an enormous new ETH analysis put up on native rollups was simply posted by Justin Drake.
Ethereum nonetheless holds onto its ambition of constructing resilient, decentralized methods. Nevertheless, its greatest hurdle is the dearth of efficient decentralized coordination. Whereas Ethereum has been a foundational layer for DeFi, its incapability to foster thriving DAOs has hindered its progress. This hole in decentralized governance might be what’s lacking from Ethereum’s equation. DAOs, as a framework for decentralized decision-making, might unlock Ethereum’s subsequent section of progress. (Aspect writer word: because of this I’ve spent the previous few years targeted on the DAO area, and now on Powerhouse).
DeFi stays Ethereum’s most profitable utility so far. Platforms that enable customers to generate yield, commerce property, and work together with permissionless monetary methods underscore its utility. Nevertheless, Ethereum’s fragmented liquidity throughout Layer 2 options and an absence of cohesive governance threat its future dominance. The community should transfer past its present state and create a unified, scalable imaginative and prescient for decentralized functions. Simply right now, Vitalik dropped one other banger: Scaling Ethereum L1 and L2s in 2025 and past.
Solana’s function because the blockchain for meme cash and high-performance functions continues to broaden. Whereas it’s true that operating a Solana node requires important compute energy — which has raised issues about potential authorities coercion — the community has demonstrated its worth by means of memecoin buying and selling. $TRUMP’s launch showcased Solana’s means to collect large quantities of liquidity on a single chain, though it did wrestle to keep up uptime throughout the frenzy.
The world the place Solana is most forward is in token launches. Ethereum was clogged for NFT mints, however this acquired too costly. Some L2s stepped in however none has been extra profitable than Solana. It’s clear now that if you wish to “drop” a token, Solana has the very best distribution even when it will get congested.
However can Solana leverage its momentum to broaden past memecoins and safe a foothold in DeFi? Whereas Solana is the favourite of latest crypto czar David Sacks and is making main strides in its MEV provide chain and constructing high-performant DeFi methods, it’s noticeably behind in RWAs. Plus, it’s not clear that its benefits over Ethereum will carry over to a extra regulated DeFi world. Relatedly, token gross sales are primed to make a comeback (make ICOs nice once more!). Will that look extra just like the burgeoning RWA market or the memecoin market?
The regulatory atmosphere for crypto is getting into a brand new section with Trump in workplace, and maybe extra importantly, a extra pleasant Capitol Hill. The institution of the SEC’s new Crypto Job Pressure, led by Commissioner Hester Peirce, marks a big milestone. Tasked with making a complete and clear regulatory framework, the initiative goals to maneuver past the SEC’s reliance on enforcement actions to control retroactively. As an alternative, the Job Pressure seeks to attract clear strains, present reasonable paths to compliance, and foster innovation inside authorized bounds. In the meantime, Trump’s Strengthening American Management in Digital Monetary Know-how Government Order units an general tone that’s breeding optimism throughout crypto.
Stablecoins are more likely to be what takes up a lot of the oxygen in Congress in 2025. There will probably be new rulemaking on the SEC and an abandonment of the regulation-by-enforcement method, however laws is the one solution to make lasting change. Crypto did extraordinarily properly within the 2024 Home and Senate races, so not solely will there be extra crypto allies, a Republican majority, however Democrats will probably be itching to showcase their average credentials and commonsense stablecoin laws is a superb alternative to do this. Broader adjustments to securities regulation by congress could also be exhausting to come back by. However stablecoins and a friendlier SEC could also be sufficient to create clearer pathways for token issuance, fostering broader adoption. Certainly, BlackRock CEO, Larry Fink, renewed his requires tokenized bonds and shares simply this week.
We received’t make any worth predictions for $TRUMP however we do suppose the cultural impact will probably be longstanding. Not as a result of everybody could have a meme coin however as a result of it is going to be the ‘aha second’ for a lot of digital asset traders round tokenization’s energy to remodel conventional property into liquid, tradeable digital tokens. From equity-like constructions to loyalty rewards, tokenization bridges gaps between possession and utility in methods conventional methods by no means might. This extends past monetary property: suppose artwork, actual property, or memberships.
It’s not simply new property, however how tokens can act as each quasi-equity and practical instruments for engagement with customers/fairness holders. Who is aware of what perks Trump will provide to $TRUMP holders, however the mannequin might be replicated by others. After all, for this to work, you want liquidity in these tokens, which is the place DeFi must shine.
This isn’t a technical breakthrough; it’s a philosophical shift spurred by the launch of $TRUMP. The flexibility to tokenize something essentially adjustments how folks work together with property, fostering transparency, decreasing boundaries to entry, and creating liquidity the place beforehand none existed. It’s not only a expertise, it’s a brand new mind-set about possession and worth. After all, this implies there will probably be A LOT of shit cash. Be careful.
The $TRUMP phenomenon is a microcosm of crypto’s broader narrative: a mixture of promise, peril, and potential. As memecoins seize headlines, the business should grapple with the long-term implications. Extra particularly, on whether or not the way forward for crypto will probably be outlined by speculative property, or a return to its roots of decentralization and striving to create extra environment friendly methods and real-world utility.
The street forward is as a lot about preserving the values that outline the business as it’s about embracing innovation. Censorship resistant cash, stablecoins, and prediction markets have emerged as plain crypto use circumstances. DeFi, with its emphasis on transparency and programmability, affords a path ahead and a foot within the door for decentralization.
To us, a world of methods, networks and establishments with out centralized management continues to be the final word finish sport for crypto. And meaning it’s not nearly extra environment friendly expertise. It’s a few change in tradition. All the time has been. And we simply don’t imagine the $TRUMP memecoin represents such a change. Quite, the cultural shift continues to be about decentralization because it strikes from the driving technological idea in crypto during the last 15 years to an important political idea of the twenty first century.
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That’s it! Suggestions appreciated. Simply hit reply. January is chilly and there’s no solar. Boo. I’m in Denver subsequent month in the event you’re round, get in contact!
*It’s surprisingly exhausting to get the AI picture turbines to do issues with Trump within the immediate…
Dose of DeFi is written by Chris Powers, with assist from Denis Suslov and Monetary Content material Lab. I spend most of my time contributing to Powerhouse, an ecosystem actor for MakerDAO/Sky. A few of my compensation comes from MKR, so I’m financially incentivized for its success. All content material is for informational functions and isn’t meant as funding recommendation.
