Author: Huo Huo
According to a report released by CEX Bybit in June, institutional investors' holdings of spot Memecoins increased from $62.5 million to $204.8 million between February and March this year, and peaked in April with total holdings of $293.7 million. The most popular Memecoins include DOGE, SHIB, PEPE, and BONK. After the market sentiment deteriorated and Memecoins were sold off, the total holdings fell to $139 million, but this holding increase was also 125% higher than the beginning of the year.
It can be said that since this year, Memecoin has increasingly become an important focus of institutional investors. And unlike the short-lived Memecoin craze in the past, Memecoin has become an important narrative and hot spot in this round of market cycle.
Since the second half of 2024, some VCs have also announced that they will invest in Memecoin infrastructure. Memecoin has changed from being opposed by VCs to being gradually accepted by VCs. So how did these venture capital institutions get involved in Memecoin?
a16z
A16z, full name Andreessen Horowitz, is a well-known American venture capital firm founded by Marc Andreessen and Ben Horowitz in 2009 and headquartered in Silicon Valley. It invested in Facebook, Twitter, Instagram and Airbnb in the early stage, and continued to make efforts in the fields of Web3 and blockchain. It has invested in Coinbase and gained a lot. It has also established multiple crypto funds and become one of the important investors in the crypto industry.
However, as a mainstream venture capital institution, a16z's initial attitude towards Memecoin, which has seized the market, was not very friendly. From February to April this year, the Memecoin market skyrocketed, whether it was the average weekly increase of 6 times for 20 popular Memecoins such as PEPE, or the rapid listing of CEX such as WIF and BOME, which seized the market share of VC Token.
Eddy Lazzarin, chief technology officer of a16z Crypto, harshly criticized Memecoin in a tweet on April 25, 2024, saying it undermined the "long-term vision" of cryptocurrency, tainted the "public, regulators, and entrepreneurs" view of the industry, and acted as a casino for "a relatively small number of people."
A16Z's managing partner and chief technology officer Chris Dixon also published an article to disparage Memecoin, saying that Memecoin is simply a casino.
However, a16z has recently changed its critical attitude towards Memecoin in the first half of the year and has frequently participated in MemeCoin.
First, a16z co-founder Andreessen Horowitz rewarded $50,000 in BTC to the robot account Truth Terminal on X, which gave birth to the recently popular goat coin GOAT, pushing GOAT from an unknown project to a shocking historical high market value of $850 million. Truth Terminal became the first AI millionaire and also promoted the development of AI+Meme.
Source: Marc Andreessen
Then on the morning of October 28, Marc posted two posts about AI16Z, which quickly attracted attention to AI16Z. This "AI16Z Fund" was created by the Twitter account "Marc 'AI' Andreessen", which launched the fund on daos.fun. The fund manages about 420 SOL of raised funds through AI dialogue, invests exclusively in Memecoin, and simulates Marc Andreessen's personality.
Before October 27, the fund's market value was around $4 million. However, after Marc retweeted a cartoon picture of a T-shirt with ai16z graphics, AI16Z's market value soared more than 20 times in just 12 hours, reaching a high of nearly $100 million.
Although some sources have linked it to the well-known venture capital firm a16z, believing that the fund may have received support from the company, Andreessen Horowitz has not officially confirmed its relationship with the project. Therefore, it is unclear whether the token is truly supported by a16z or just borrowed a similar name to attract attention. However, it is clear that a16z no longer denigrates Memecoin as it did before.
DWF Labs
Founded in 2022, DWF Labs is a new generation of Web3 investor and market maker that has invested in several well-known projects, including dYdX, SushiSwap, Injective Protocol, Astar Network, and Morpheus Network.
According to relevant information, DWF Labs has invested in multiple Memecoins and started early. In 2023, it invested in the pet Shiba Inu "Floki" (FLOKI) several times and invested another $12 million in 2024. These funds supported multiple development projects of FLOKI, such as FlokiFi (decentralized finance), Floki University, the educational platform of the Floki Inu ecosystem, and its metaverse game Valhalla. This series of investments not only drove up the price of FLOKI, but also helped it successfully log in to many important trading platforms.
In addition, $5 million was invested in Milady Meme Coin (LADYS) on June 3, 2024. This funding is intended to support the growth of Milady Meme Coin in the memecoin market, enhance its development capabilities, and promote community participation.
In August 2024, DWF Labs partnered with Floki and BNB Chain to launch Memecoin Simon's Cat exclusively on the BNB Chain. Simon's Cat is a world-famous cat animation series and a very popular cat meme package.
In September 2024, DWF Labs announced a partnership with GraFun to support tokens launched on the GraFun platform, with the goal of supporting Memecoin projects released on the GraFun platform by enhancing liquidity.
Andrey Grachev, managing partner of DWF Labs, expressed great enthusiasm for the collaboration: “Working with GraFun is an exciting opportunity to support the next generation of Memecoin projects on BNB Chain.”
BigGra of GraFun agrees, saying: “Partnering with DWF Labs is a significant milestone for both GraFun and the Memecoin ecosystem. We believe this partnership will bring tremendous value to our community and the wider market.”
Andrei Grachev once wrote on the X platform: "The Memecoin market has become a mature and stable part of the industry. It takes advantage of extreme fear and greed, allowing smart investors and traders to make huge fortunes. DWF Labs institutionalized investment in Memecoin a few years ago, and this remains one of our priorities."
Binance Labs
Binance Labs is a global leading blockchain and crypto investment institution, affiliated with the crypto CEX Binance, founded in 2018. It has invested in many well-known crypto projects, including Coinbase, Polygon, Injective Protocol, Elrond, Terra and 1inch.
As early as 2023, Binance Labs invested in multiple Memecoins, and continued to maintain its enthusiasm for the MemeCoin track in 2024. In January 2024, Binance Labs invested in Memeland's native ecological token MEME. Memeland mainly revolves around NFT and social functions. The project was included in Binance Launchpool in October 2023.
Subsequently, Binance Labs supported and promoted the development of its Whyanelephant project, which is a dancing elephant. Its labels are nonsensical, free and easy, and with great emotional fluctuations, which also represent you and me in the crypto market.
Coinbase Ventures
Founded in 2018 and headquartered in San Francisco, California, Coinbase Ventures is an investment arm of Coinbase, Inc. It mainly invests in early-stage companies in cryptocurrency and blockchain technology. Currently, it has invested in Compound, Chainlink, Dapper Labs, Etherscan, and Ripple.
For Memecoin, Coinbase Ventures also got involved early, supporting Dogecoin as early as 2018. Although the specific investment amount was not disclosed, the project has accumulated a lot of support in the community. In 2021, Coinbase Ventures invested in Shiba Inu, and the parent company Coinbase announced at the end of 2023 that Bonk would be added to its list of tradable assets.
The latest news is that after the GOAT fire, Coinbase CEO Brian Armstrong proposed setting up a crypto wallet for Truth Terminal.
Coinbase Ventures then released a proposal, explaining how the combination of artificial intelligence and blockchain technology will shape the future. Coinbase said in its post: "The future of artificial intelligence can be built on blockchain technology, as crypto assets can help improve the accessibility, transparency and use cases of emerging technologies. The fusion of the efficiency, borderlessness and programmability of cryptocurrency with artificial intelligence has the potential to change the way humans and machines interact with the digital economy."
It can be seen that Coinbase plays an important institutional role in the cryptocurrency market. In addition to launching the popular Layer2 base chain and becoming the custodian of all Bitcoin spot ETFs, it also participated in the layout of the Memecoin track very early.
Crypto Labs
Crypto Labs is a venture capital firm founded in 2018 and headquartered in Singapore. It has invested in a number of well-known crypto projects, including Ripple, Filecoin, Dapper Labs, SushiSwap, Aave and Chainlink.
On October 9, 2024, PPKING, the Memecoin fair launch platform of the TON public chain, announced the completion of a $2 million seed round of financing, led by Crypto Labs. The project aims to create an efficient, secure and entertaining decentralized financial platform through innovative DeFi mechanisms and deep integration of MEME culture. The new funds will support its Memecoin transactions and liquidity provision.
Pantera Capital
Pantera Capital is a venture capital firm headquartered in California and founded in 2013. Its founder, Dan Morehead, was a trader at Goldman Sachs and has extensive financial experience. It has invested in several well-known crypto projects, including Bitcoin, Ethereum, Chainlink, Dapper Labs, and Polkadot.
Pantera Capital has also long shown a keen interest in the memecoin field, and in 2021 Pantera Capital invested in Shiba Inu.
Paul Veradittakit, a partner at Pantera, emphasized that Memecoin plays an important role in attracting young users to Web3. He sees Memecoin as a "Trojan Horse" for cryptocurrency adoption, leveraging viral popularity to build interactions with DeFi, NFTs, and other decentralized services. By making crypto and blockchain applications more accessible to mainstream audiences, Pantera believes that memecoin has significant value in overcoming the distribution limitations faced by NFTs, potentially enabling split ownership of NFTs through the ERC-404 standard.
In recent months, Pantera executives have mentioned that Memecoin is helping platforms like Solana build a more active user base. Pantera is also actively embracing participation in the MemeCoin track.
OKX Ventures
OKX Ventures is the venture capital arm of the OKX platform. It has invested in many well-known crypto projects, including Solana, Polygon, Tether, SushiSwap and other well-known crypto projects.
OKX Ventures also participated in Memecoin investment activities relatively early. In May 2021, OKX Ventures participated in the investment in SHIB during this wave of enthusiasm. Subsequently, it also participated in the investment in Floki Inu, BabyDogeCoin, etc.
In addition, OKX began to support the listing of various leading Memecoins very early this year. It can be seen that OKX Ventures, which relies on the trading platform, is more sensitive to Memecoin.
other
In general, because it is impossible to issue Memecoin directly for profit, most venture capital institutions cooperate with project launches by investing, and the investments are all hot Memes with backgrounds and stories. Some investment institutions once had a confrontational mentality because they could not participate directly or indirectly at the beginning; in addition, some investment institutions are actively deploying transmitters for various public chains to further promote the spread and vitality of Memecoin.
According to RootData data, according to incomplete statistics, since 2024, there have been more than 10 new Meme Launchpad projects or projects with Meme Launchpad functions, supporting different public chains, with the most Meme Launchpad projects supporting Base and Solana. Behind these, we can also see some venture capital.
summary
Looking back at the game between VC Token and Memecoin, we can see that most governance tokens supported by venture capital have high valuations and low circulation, which makes it difficult for retail investors to make profits. In this context, retail investors are increasingly dissatisfied with VCs manipulating the market, saying that "these VC coins are a feast for capital and a nightmare for retail investors, and they would rather accept local dog plates than VC plates." In response to this, Memecoin, which has strong communication power, low threshold, good people-friendliness and a rapid wealth-making effect, came into being.
Although this phenomenon once led to a confrontation between venture capital and retail investors in the first half of the year. Some venture capital accused Memecoin of disrupting the market, while retail investors in turn accused VCs of doing evil. However, due to the current development trend of Memecoin, VCs have to re-examine the market and adjust their layout and investment direction.
Although some VCs still disdain Meme, it is undeniable that Memecoin has become the top priority for activating the public chain ecosystem. After a number of top CEXs launched Memecoin, it attracted a large number of users, making Base, Blast, Solana and other chains active. As of November 5, 2024, Memecoin's market value is about 61 billion US dollars. In the future, combined with the power of AI, Memecoin may show greater potential and become a real market game changer.
Finally, according to statistics previously released by some KOL social networks, most Meme participants have suffered losses to a certain extent. Extreme market conditions often bring high risks. It is still unknown whether the next step of the Meme craze will continue to push up or follow the footsteps of NFT. Once again, we remind everyone to DYOR before performing any important operations.
