Cardano founder Charles Hoskinson slams memecoins, likening them to fleeting celebrity fame

Hoskinson pointed out that although memecoins can grow quickly, they begin to lose value if they do not support a strong ecosystem.

Cardano founder Charles Hoskinson has slammed memecoins, saying that 99% of them will fail as they do not support a strong ecosystem and are being used by insiders to inflate the token value.

In an interview with the Wolf of All Streets, Hoskinson said that memecoins are like fleeting celebrity fame, which burns out quickly. Although they can grow quickly, they begin to lose value if they do not support a strong ecosystem. People must get engaged and utilize the currency for it to last any period. Without this ongoing engagement, people will quickly lose interest, demand drops, and so will value.

“This is why 99% of memecoins will fail, because they are just paper and someone has to build community and real engagement for it to have legs. If you cannot get critical mass or real engagement, people will move on.”

Another issue is how memecoins currently distribute the coins. The insider is juggling the token value and selling it for a large profit. It sounds like inside people are making short-term profits, and developers have no motivation to continue to grow and support their currency once it takes place and they make their returns.

“Insiders are making money by juggling the token value up and selling it for a huge profit. It’s like a pyramid scheme or a multi-level marketing program. That’s not going to last forever. People get tired of it, they move on to the next thing, and then it begins to lose value.”

Comparing the situation to "moving water from one side of the bathtub to the other," he suggested that capital invested in memecoins ultimately ends up in the hands of project founders rather than fostering technological advancement or network growth.

"There's a drain at the bottom of the tub. You're not adding liquidity—you're losing it over time,"

Despite his criticisms, Hoskinson did not dismiss memecoins entirely. However, he emphasized that real value in the crypto space would come from innovations such as Bitcoin DeFi, tokenized real-world assets, and algorithmic stablecoins. These developments, unlike viral tokens with no clear roadmap, offer tangible benefits and long-term growth potential.

"Insiders are juggling the token value and selling it for a huge profit. It’s like a pyramid scheme or a multi-level marketing program. That’s not going to last forever. People get tired of it, they move on to the next thing, and then it begins to lose value.”

His comments come as Cathie Wood, CEO of ARK Invest, expressed her skepticism towards memecoins, expecting most to eventually end up "worthless."

However, she noted that memecoins gained traction due to the universal integration of blockchain and AI technology, making it easy for almost anyone to create and deploy thousands of tokens.

"Our funds are staying away from memecoins," Wood said, urging investors to be aware of the risks involved.

"Millions of new tokens are being created and have no value, and nothing has given global regulators the authority to call them securities. If I have one message to people buying memecoins: buyer beware."

According to Dune Analytics data, there has been a steep decline in memecoin activity, with an average of 71,000 memecoin transactions per day on January 23, compared to 9,000 by April 1.

The combined market cap of Solana's biggest memecoins has also dropped by more than 85% from a yearly high of $81.83 billion.

Some of Solana's biggest memecoins, including Official Trump (TRUMP), Bonk (BONK), Fartcoin (FARTCOIN), Dogwifhat (WIF), and Pengu (PENGU), have taken tremendous losses as investor confidence wanes.

As memecoin skepticism mounts, leading industry figures are highlighting the importance of investing in cryptos that represent sustainable value and real-world utility.

This trend has implications for the broader crypto market, as outflows from memecoins could negatively impact the recovery of major coins like Bitcoin and Ethereum.