Jeff Zirlin, co-founder of Ronin and Axie Infinity, recently criticized what he calls the ‘inductive fallacy’ in the ongoing debate between memecoins and altcoins. He argued that comparing the success of these tokens based on revenue alone overlooks the regulatory uncertainty that still hinders the potential growth of altcoins, particularly those related to DeFi protocols.
Zirlin pointed out that regulatory clarity is crucial for the development of altcoins and that current market conditions may not accurately reflect their future potential. He highlighted the case of Uniswap, a decentralized exchange (DEX) that has shown significant growth in trading volume over the past few years.
According to Zirlin, Uniswap’s trading volume has increased from $6.42 billion in 2021 to a projected $383.01 billion in 2024. He also mentioned that if Uniswap activated its fee switch mechanism, the DEX could generate significant revenue that could be used for a token buyback and burn, potentially impacting the circulating supply of UNI tokens on major exchanges.
Zirlin emphasized the importance of utility in driving the value of tokens, citing the example of Axie Infinity, a play-to-earn platform that generated over $1 billion in revenue. He explained how the utility of the AXS token in the Axie ‘breeding’ process led to a supply shortage and a significant price increase for the token.
In his critique of the revenue comparison between memecoins and altcoins, Zirlin highlighted the need to consider past events like the Axie rally and the potential future growth of altcoins such as Uniswap. He emphasized the importance of predicting market trends and future developments rather than solely focusing on current revenue numbers.
Overall, Zirlin’s comments shed light on the complexities of the cryptocurrency market and the importance of considering various factors beyond revenue when evaluating the success and potential of different tokens. As the market continues to evolve and regulatory clarity improves, the landscape for altcoins and memecoins may see significant shifts in the future.