DWF Labs Launches $20M Fund Dedicated to Memecoins

Crypto trading firm DWF Labs has launched a $20 million fund dedicated to memecoins, tapping into a sector that has seen outsize gains

Crypto trading firm DWF Labs has launched a $20 million fund dedicated to memecoins, tapping into a sector that has seen outsize gains since Donald Trump’s victory in the US presidential election.

Trump has aggressively courted the industry this year, and his win on November 5 was a boon for tokens, sending Bitcoin’s price to new highs and the overall value of the crypto market up 40%.

Amid the frothy environment, memecoins have outperformed. The market value of all memecoins has more than doubled since the eve of the election, according to data from CoinMarketCap.

DWF’s memecoin fund will invest in and offer strategic guidance to “memecoin projects that exhibit strong community engagement, unique value propositions, and the potential to achieve global recognition,” the company said on its website.

It’s the latest sign that professional investors are starting to embrace memecoins, despite the attendant controversy and risk.

Unlike most other crypto tokens, which are ostensibly tied to something of value, memecoins are defiantly useless, trading on nothing but hype.

The Solana blockchain, with fast transaction times and relatively low fees, has become a hub of memecoin trading this year. Tens of thousands of memecoins are created each day on Pump.Fun, a Solana-based tool that removes technical barriers to developing the tokens.

Memecoins are often named after a trending internet phenomenon like P’Nut, the pet squirrel recently euthanised by officials in New York state, and Pepe the Frog, a cartoon that has become one of the world’s most recognizable memes.

In the world of crypto, memecoins are especially volatile, and many are outright scams. But retail investors lured by the possibility of huge gains are looking past those risks.

Earlier this month, an anonymous trader who invested $17 in a token named after P’Nut cashed out for about $3 million two weeks later.

“When opportunities to make decent returns or income are taken away, as we’ve recently seen with the majority of utility tokens, people are more likely to look for a ‘big win’ and take a high risk for the potential of a high reward,” Peter Kris, CEO of cross-chain decentralised exchange Gasp, previously told DL News.

“Stories of investors turning $1,000 into $1 million on the latest dog coin fuel this sentiment and solidify memecoins’ growth.”

Analysts are now eyeing the advent of a “memecoin supercycle.”

“Since late September, retail activity has predominantly centred on memecoins,” said 10x Research, digital asset analysis platform, in a recent report.

GMCI, an index provider, offers the GMCI meme index that contains the biggest memecoins by market value including Dogecoin, Shiba Inu, and Pepe. Revolut also offers traders a meme token collection.

“We’re seeing structured products start to take shape [and] as the market matures, expect more investment from VCs and even more institutional-backed products to emerge,” a spokesperson for Ponke, a memecoin on Solana, told DL News.

DWF said it is already accepting applications from memecoin projects.

“Memecoins are a powerful cultural force within the crypto landscape, often uniting communities around shared humour and creativity,” DWF founder Andrei Grachev said in a statement. “The Meme Fund is our way of supporting this vibrant sector and enabling developers and communities to turn their ideas into impactful projects.”

Aleks Gilbert is a DeFi correspondent based in New York. Have a tip? Contact him at aleks@dlnews.com.