Following last week’s memecoin excitement, driven by the US President’s formal token introduction, the cryptocurrency community is divided regarding the potential ramifications of Donald Trump’s memecoin initiative. Ethereum creator Vitalik Buterin voiced his apprehensions about the prospective adverse effects and “hazards” associated with these tokens.
Political Tokens: Sources Of Entertainment Or Mechanisms For Corruption?
One week prior, US President Donald Trump captured the cryptocurrency market’s attention after unveiling his official token, TRUMP. The memecoin surpassed all benchmarks for newly introduced cryptocurrencies, achieving a trading volume exceeding $10 billion, a peak price of $75, and a market capitalization of $15 billion in under 48 hours.
However, the extraordinary launch sparked worries within the crypto community. Numerous investors showed doubt, which grew as soon as the token’s distribution was disclosed. As stated on the official site, merely 20% of the 1 billion TRUMP tokens produced would be made accessible to the public, while the remaining 80% was designated for the creators.
Consequently, various community participants have expressed their concerns regarding the potential long-term consequences of the TRUMP memecoin. Among those, Ethereum’s co-founder, Vitalik Buterin, took to X to express his viewpoint.
On Thursday, Buterin disclosed his worries regarding “the dangers of political coins,” asserting that now is the moment to initiate dialogue about the industry’s “new paradigm”:
Over the previous year, we have been transitioning into a new paradigm. Presently, the most influential individuals globally are endorsing the concept of anyone creating tokens for any purpose, on any scale. Hence, it is essential to discuss the distinction between short-lived, sugar-fueled enjoyment that is unwise to advocate for newcomers, and enduring satisfaction and wealth accumulation.
For the Ethereum founder, the discussion should focus not on “fun being negative” but rather on “the reality that large-scale political coins cross a further threshold.” He perceives these tokens as lacking in entertainment, with their hazards encapsulated in “errors made by willing participants.”
Instead, tokens affiliated with politicians pose the threat of becoming “instruments for limitless political bribery, including from foreign governments.” Upon further questioning, Buterin elaborated, mentioning that the perils of these cryptocurrencies arise from being an “ideal” instrument for bribery, since there would be no need to transmit any tokens to present monetary support.
He proposed that an individual could acquire and retain the token, which would augment the value of their assets passively. Consequently, this could enable plausible deniability, which represents a risk to democratic processes.
Buterin outlines the potential threats posed by political tokens. Source: Vitalik Buterin on X
Cryptocurrency Community Divided On Political Memecoin
Buterin’s remarks sparked a discussion, with many community members disputing his perspective. One X user argued that the Ethereum founder is “missing the essence,” as bribery exists already and would be “preferable” if it were transparent on-chain.
Another user emphasized that Political tokens could “democratize fundraising and align incentives with communities,” adding, “Innovation shouldn’t be disregarded simply because it disrupts traditional systems.”
Recently, CryptoQuant’s CEO, Ki Young Ju, expressed a similar viewpoint. As noted by Bitcoinist, Ju believes that Trump “initiated the age of memecoins,” asserting that celebrity tokens represent merely one of the various forms that memecoins can embody.
Ju addresses the shift in opinion on memecoins. Ki Young Ju on X
He insisted that consideration should be given on how to maximize their potential, suggesting that President Trump might leverage those supporting his cryptocurrency as a “dynamic community base for collective movements.”
Ju also pointed out that the value of these tokens will be contingent on the actions of the individual associated with them, concluding that the current momentum seems “unstoppable” until 2028.
Total cryptocurrency market capitalization stands at $3.57 trillion in the weekly overview. Source: TOTAL on TradingView
Featured Image from Unsplash.com, Chart from TradingView.com
