Hearken to this text!
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 intently behind. This spectacle dominated headlines, sparking debates throughout the crypto ecosystem. Is that this a pivotal second that legitimizes the business? Or extra a obtrusive reminder of its speculative underbelly?
Crypto is profitable — there’s little doubt about that anymore. Even a laypersons’ fast have a look at the present price of Bitcoin would solidify this. However a tougher query lies forward: what sort of crypto imaginative and prescient with the biggest cultural affect will emerge? Will it’s outlined by the monetary nihilism of $TRUMP, Bitcoin’s digital gold, Ethereum’s decentralized ethos, Solana’s international permissionless NASDAQ imaginative and prescient, or one thing altogether completely different? And maybe most significantly, the place will DeFi slot in? With $TRUMP, BTC, SOL and ETH seemingly at inflection factors (extra under), we count on to see DeFi enjoying a much more foundational position 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 price skyrocketed from $7 to $75, earlier than stabilizing at $38. It turned the twenty first most precious cryptocurrency in a single day. By comparability, Melania’s memecoin, regardless of its robust debut, struggled to take care of 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 achieve their present dimension however $TRUMP reached this in simply hours, which leads many to marvel if that is just the start of tokens directly 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 more 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 position in broader financial techniques. As Noah Smith argues, memecoins like $TRUMP and $MELANIA embody the “slush fund” facet of crypto: property that permit people to bypass TradFi’s constraints whereas concurrently fueling hypothesis. Whether or not it is a bug or a characteristic, you’d must ask the Trumps. However we don’t assume that is the post-modern future that cypherpunks and decentralization zealots signed up for.
Bitcoin is in an important spot, significantly with the pardon and release of Silk Road founder Ross Ulbricht, a move celebrated across the Bitcoin community. 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, outstanding Bitcoin fanatics have raised issues on the reserve concept, questioning whether or not this might open the door for presidency co-option of Bitcoin’s inherently decentralized ethos. And that it would be silly for the U.S. government to prioritize a rival to the dollar.
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 prone to function a long-term price driver. However Bitcoin as soon as aimed larger. Hyperbitcoinization — a time period describing the world operating on Bitcoin as its main forex — was the last word aim. Are we nonetheless on that path? At this level, it appears unlikely. Bitcoin’s trajectory is extra akin to a broadly accessible inflation hedge slightly than a revolutionary societal forex.
Hyperbitcoinization, by definition, seeks a world the place Bitcoin replaces fiat completely. However to realize this, Bitcoin should supply extra than simply price stability and ease of entry, and its cultural and societal ambitions have largely taken a backseat. Whether or not it might reclaim that aspirational imaginative and prescient is an open query. However for now, Bitcoin stays a extremely purposeful, if considerably static, cryptocurrency.
Issues are much less rosy for Ethereum. Costs are falling, and sentiment throughout the group is more and more damaging, as evidenced by the rising development of customers abandoning their ‘.eth’ handles. Criticism of Ethereum’s management, which has been accused of being overly educational and disconnected from real-world purposes, has grown louder. The highest canines are solely now starting to acknowledge the necessity for change, with Vitalik Buterin coming into “wartime mode” (or simply coincidentally altering his profile pic, Milady). Plus, an enormous new ETH research post on native rollups was simply posted by Justin Drake.
Ethereum nonetheless holds onto its ambition of constructing resilient, decentralized techniques. Nonetheless, its largest hurdle is the shortage of efficient decentralized coordination. Whereas Ethereum has been a foundational layer for DeFi, its lack of ability to foster thriving DAOs has hindered its progress. This hole in decentralized governance may very well be what’s lacking from Ethereum’s equation. DAOs, as a framework for decentralized decision-making, might unlock Ethereum’s subsequent part of progress. (Facet creator word: this is the reason I’ve spent the previous few years centered on the DAO area, and now on Powerhouse).
DeFi stays Ethereum’s most profitable utility up to now. Platforms that permit customers to generate yield, commerce property, and work together with permissionless monetary techniques underscore its utility. Nonetheless, 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 purposes. Simply right this moment, Vitalik dropped one other banger: Scaling Ethereum L1 and L2s in 2025 and beyond.
Solana’s position because the blockchain for meme cash and high-performance purposes continues to broaden. Whereas it’s true that operating a Solana node requires vital compute energy — which has raised concerns about potential government coercion — the community has demonstrated its worth by memecoin buying and selling. $TRUMP’s launch showcased Solana’s ability to gather massive amounts of liquidity on a single chain, though it did wrestle to take care of uptime through the frenzy.
The realm the place Solana is most ahead is in token launches. Ethereum was once clogged for NFT mints, however this obtained 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 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 recent crypto czar David Sacks and is making major strides in its MEV supply chain and building high-performant DeFi systems, it’s noticeably behind in RWAs. Plus, it’s not clear that its advantages over Ethereum will carry over to a more 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 coming into a brand new part with Trump in workplace, and maybe extra importantly, a extra pleasant Capitol Hill. The establishment of the SEC’s new Crypto Task Force, 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 a substitute, the Activity Power seeks to attract clear traces, present real looking paths to compliance, and foster innovation inside authorized bounds. In the meantime, Trump’s Strengthening American Leadership in Digital Financial Technology Executive Order units an total tone that’s breeding optimism throughout crypto.
Stablecoins are prone to be what takes up a lot of the oxygen in Congress in 2025. There can be new rulemaking on the SEC and an abandonment of the regulation-by-enforcement strategy, however laws is the one approach to make lasting change. Crypto did extremely well in the 2024 House and Senate races, so not solely will there be extra crypto allies, a Republican majority, however Democrats can be itching to showcase their average credentials and commonsense stablecoin laws is a good alternative to do this. Broader modifications to securities regulation by congress could also be exhausting to return 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 calls for tokenized bonds and stocks just this week.
We gained’t make any price predictions for $TRUMP however we do assume the cultural impact can be longstanding. Not as a result of everybody could have a meme coin however as a result of will probably be the ‘aha moment’ for many digital asset investors round tokenization’s energy to remodel conventional property into liquid, tradeable digital tokens. From equity-like buildings to loyalty rewards, tokenization bridges gaps between possession and utility in methods conventional techniques by no means might. This extends past monetary property: assume artwork, actual property, or memberships.
It’s not simply new property, however how tokens can act as each quasi-equity and purposeful instruments for engagement with customers/fairness holders. Who is aware of what perks Trump will supply to $TRUMP holders, however the mannequin may very well be replicated by others. In fact, 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 basically modifications how individuals work together with property, fostering transparency, lowering limitations to entry, and creating liquidity the place beforehand none existed. It’s not only a know-how, it’s a brand new mind-set about possession and worth. In fact, this implies there can 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 can be outlined by speculative property, or a return to its roots of decentralization and striving to create extra environment friendly techniques and real-world utility.
The highway 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, provides a path ahead and a foot within the door for decentralization.
To us, a world of techniques, networks and establishments with out centralized management continues to be the last word finish recreation for crypto. And meaning it’s not nearly extra environment friendly know-how. It’s a few change in tradition. At all times has been. And we simply don’t imagine the $TRUMP memecoin represents such a change. Slightly, the cultural shift continues to be about decentralization because it strikes from the driving technological idea in crypto over the past 15 years to an important political idea of the twenty first century.
-
Circle acquires Hashnote and USYC Link
-
Erik Voorhees takes down Jack Mallers a notch or two Link
-
1kx, ParaFi and Framework lose enchantment in authorized battle in opposition to Curve founder Link
-
Crypto committee chairs for the 119th Congress Link
-
Block Analitica’s Sphere dashboard provides aggregated DeFi borrow charges Link
-
Liquity v2 launches on Ethereum Link
-
Uniswap plans launch v4 this week and launch subsequent week Link
-
Recording from Columbia CryptoEconomics Working Session Link
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 touch!
*It’s surprisingly exhausting to get the AI picture mills to do issues with Trump within the immediate…
Dose of DeFi is written by Chris Powers, with assist from Denis Suslov and Financial Content 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 supposed as funding recommendation.
