Changpeng Zhao Criticizes Meme Coins, Urges Projects to Prioritize Utility

Changpeng Zhao, the former CEO of Binance, has expressed concern over the growing popularity of meme coins, urging blockchain developers to focus on creating projects with real-world utility rather than jumping on the hype-driven trend. In a post on X (formerly Twitter) on November 26, Zhao commented that meme coins have become “a little weird” and emphasized that the blockchain space should prioritize “real applications” that provide practical value.

Zhao’s critique highlights the ongoing debate surrounding the meme coin phenomenon, particularly its lack of utility and long-term value. Meme coins, like Dogecoin and Shiba Inu, are typically driven by viral marketing and social media attention rather than technological innovation or tangible applications. While these coins can generate short-term profits for investors, they often lose their value quickly once the initial excitement fades, leaving many holders with significant losses. Zhao’s call for utility-driven projects is a reminder that blockchain technology has the potential to offer more than just speculative investments.

The timing of Zhao’s comments is significant, coming amidst a controversy surrounding the Solana-based meme coin deployer Pump.fun. The platform’s livestream feature, designed to increase engagement, was reportedly exploited in disturbing ways, including threats of self-harm and inappropriate content. One incident involved a user threatening to hang themselves if their token failed to reach a specific market cap. This situation escalated when the individual shared a video claiming to have acted on the threat, adding to the growing concerns about the impact of meme coins on the crypto community.

Further studies, such as one by CoinWire, underscore the volatility of meme coins. The research found that tokens promoted through social media platforms like X tend to lose 90% or more of their value within three months, fueling skepticism about the long-term viability of these assets. This trend has raised alarm among industry professionals and regulators, as it diverts attention from more serious projects that offer real value and innovation, potentially undermining trust in the broader cryptocurrency sector.

Other key figures in the crypto industry have also criticized meme coins for their lack of utility. Brad Garlinghouse, CEO of Ripple, has argued that tokens like Dogecoin don’t offer meaningful real-world use cases. Similarly, Vitalik Buterin, co-founder of Ethereum, has pointed out that celebrity-endorsed meme coins fail to provide societal value and are contributing to the trend of excessive financialization in the crypto space. In a June post on X, Buterin emphasized that financialization should only be pursued if it brings real value to society, citing industries such as healthcare and open-source software as examples where blockchain technology can have a lasting impact.

The focus on utility-driven projects is viewed as essential for the long-term sustainability and success of the blockchain industry. Projects such as Axie Infinity, which allows players to earn income through gaming, and Fetch.ai, which enables machine-to-machine interactions for AI-driven solutions, demonstrate how blockchain technology can address real-world challenges and disrupt traditional industries.

Despite the growing criticism of meme coins, the market for these assets remains substantial. According to data from CoinGecko, the total market capitalization of meme coins has surpassed $120.27 billion, outpacing sectors like GameFi ($24.1 billion) and AI-focused tokens ($39 billion). While meme coins continue to attract significant attention and investment, the broader crypto ecosystem seems increasingly focused on initiatives that drive meaningful innovation and practical applications for blockchain technology.