Hearken to this text!
Donald Trump’s memecoin launch on the eve of his inauguration was nothing in need of 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 trade? Or extra a evident reminder of its speculative underbelly?
Crypto is successful — there’s little doubt about that anymore. Even a laypersons’ fast take a look at the present worth of Bitcoin would solidify this. However a more durable query lies forward: what sort of crypto imaginative and prescient with the most important cultural influence 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 totally different? And maybe most significantly, the place will DeFi slot in? With $TRUMP, BTC, SOL and ETH seemingly at inflection factors (extra under), we anticipate to see DeFi enjoying a much more foundational function 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 worth skyrocketed from $7 to $75, earlier than stabilizing at $38. It grew to become the twenty first most precious cryptocurrency in a single day. By comparability, Melania’s memecoin, regardless of its sturdy 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 succeed in their present dimension however $TRUMP reached this in simply hours, which leads many to marvel if that is just the start of tokens straight tied to public figures.
Critics have labeled $TRUMP a logo of monetary nihilism — a “get-rich-quick” scheme that undermines the credibility of crypto. Some extra neutrally argue that $TRUMP represents the duality of crypto: it’s each a device for empowerment and a magnet for greed. Whereas some have fun $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 function in broader financial techniques. As Noah Smith argues, memecoins like $TRUMP and $MELANIA embody the “slush fund” side of crypto: belongings that enable people to bypass TradFi’s constraints whereas concurrently fueling hypothesis. Whether or not this can be a bug or a function, you’d should ask the Trumps. However we don’t suppose that is the post-modern future that cypherpunks and decentralization zealots signed up for.
Bitcoin is in an awesome spot, notably with the pardon and launch of Silk Street founder Ross Ulbricht, a transfer celebrated throughout the Bitcoin group. 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 thought, questioning whether or not this might open the door for presidency co-option of Bitcoin’s inherently decentralized ethos. And that it could be foolish for the U.S. authorities to prioritize a rival to the greenback.
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 worth driver. However Bitcoin as soon as aimed increased. Hyperbitcoinization — a time period describing the world working on Bitcoin as its main foreign money — 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 reasonably than a revolutionary societal foreign money.
Hyperbitcoinization, by definition, seeks a world the place Bitcoin replaces fiat totally. However to attain this, Bitcoin should provide extra than simply worth stability and ease of entry, and its cultural and societal ambitions have largely taken a backseat. Whether or not it could actually 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 unfavourable, 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 getting into “wartime mode” (or simply coincidentally altering his profile pic, Milady). Plus, an enormous new ETH analysis put up on native rollups was simply posted by Justin Drake.
Ethereum nonetheless holds onto its ambition of constructing resilient, decentralized techniques. Nevertheless, its greatest hurdle is the shortage of efficient decentralized coordination. Whereas Ethereum has been a foundational layer for DeFi, its incapability to foster thriving DAOs has hindered its progress. This hole in decentralized governance could possibly be what’s lacking from Ethereum’s equation. DAOs, as a framework for decentralized decision-making, might unlock Ethereum’s subsequent section of progress. (Facet writer observe: this is the reason I’ve spent the previous couple of years targeted on the DAO area, and now on Powerhouse).
DeFi stays Ethereum’s most profitable utility thus far. Platforms that enable customers to generate yield, commerce belongings, and work together with permissionless monetary techniques underscore its utility. Nevertheless, Ethereum’s fragmented liquidity throughout Layer 2 options and an absence of cohesive governance danger its future dominance. The community should transfer past its present state and create a unified, scalable imaginative and prescient for decentralized purposes. Simply right now, Vitalik dropped one other banger: Scaling Ethereum L1 and L2s in 2025 and past.
Solana’s function because the blockchain for meme cash and high-performance purposes continues to develop. Whereas it’s true that working a Solana node requires important compute energy — which has raised issues about potential authorities coercion — the community has demonstrated its worth by way of memecoin buying and selling. $TRUMP’s launch showcased Solana’s capacity to collect huge quantities of liquidity on a single chain, though it did battle to take care of uptime throughout the frenzy.
The realm the place Solana is most forward is in token launches. Ethereum was 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 most effective distribution even when it will get congested.
However can Solana leverage its momentum to develop past memecoins and safe a foothold in DeFi? Whereas Solana is the favourite of latest crypto czar David Sacks and is making main strides in its MEV provide chain and constructing high-performant DeFi techniques, it’s noticeably behind in RWAs. Plus, it’s not clear that its benefits over Ethereum will carry over to a extra 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 getting into a brand new section with Trump in workplace, and maybe extra importantly, a extra pleasant Capitol Hill. The institution of the SEC’s new Crypto Activity Power, led by Commissioner Hester Peirce, marks a major milestone. Tasked with making a complete and clear regulatory framework, the initiative goals to maneuver past the SEC’s reliance on enforcement actions to manage retroactively. As an alternative, the Activity Power seeks to attract clear strains, present practical paths to compliance, and foster innovation inside authorized bounds. In the meantime, Trump’s Strengthening American Management in Digital Monetary Expertise Government Order units an general 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 will likely be new rulemaking on the SEC and an abandonment of the regulation-by-enforcement method, however laws is the one method to make lasting change. Crypto did extraordinarily effectively within the 2024 Home and Senate races, so not solely will there be extra crypto allies, a Republican majority, however Democrats will likely be itching to showcase their average credentials and commonsense stablecoin laws is a good alternative to do this. Broader modifications to securities legislation by congress could also be exhausting to come back 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 requires tokenized bonds and shares simply this week.
We gained’t make any worth predictions for $TRUMP however we do suppose the cultural impact will likely be longstanding. Not as a result of everybody may have a meme coin however as a result of it is going to be the ‘aha second’ for a lot of digital asset buyers round tokenization’s energy to remodel conventional belongings 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 belongings: suppose artwork, actual property, or memberships.
It’s not simply new belongings, 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 provide to $TRUMP holders, however the mannequin could possibly be replicated by others. After all, 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 power to tokenize something essentially modifications how individuals work together with belongings, fostering transparency, decreasing obstacles 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. After all, this implies there will likely 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 trade should grapple with the long-term implications. Extra particularly, on whether or not the way forward for crypto will likely be outlined by speculative belongings, or a return to its roots of decentralization and striving to create extra environment friendly techniques and real-world utility.
The street forward is as a lot about preserving the values that outline the trade as it’s about embracing innovation. Censorship resistant cash, stablecoins, and prediction markets have emerged as simple crypto use instances. DeFi, with its emphasis on transparency and programmability, gives a path ahead and a foot within the door for decentralization.
To us, a world of techniques, networks and establishments with out centralized management remains to be the last word finish sport for crypto. And which means 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. Somewhat, the cultural shift remains 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.
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Circle acquires Hashnote and USYC Hyperlink
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Erik Voorhees takes down Jack Mallers a notch or two Hyperlink
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1kx, ParaFi and Framework lose attraction in authorized battle in opposition to Curve founder Hyperlink
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Crypto committee chairs for the 119th Congress Hyperlink
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Block Analitica’s Sphere dashboard provides aggregated DeFi borrow charges Hyperlink
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Liquity v2 launches on Ethereum Hyperlink
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Uniswap plans launch v4 this week and launch subsequent week Hyperlink
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Recording from Columbia CryptoEconomics Working Session Hyperlink
That’s it! Suggestions appreciated. Simply hit reply. January is chilly and there’s no solar. Boo. I’m in Denver subsequent month in case you’re round, get in contact!
*It’s surprisingly exhausting to get the AI picture turbines to do issues with Trump within the immediate…
Dose of DeFi is written by Chris Powers, with assist from Denis Suslov and Monetary Content material 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 meant as funding recommendation.
