The Avalanche Foundation, a nonprofit organization overseeing the development of the Avalanche Network, has announced its commitment to allocate $100 million from its non-fungible token (NFT) incubator fund towards the purchase of memecoins. This strategic move is part of the foundation’s “Culture Catalyst” initiative, which aims to support and foster promising NFT projects on the Avalanche Network.
The primary objective of this initiative is to develop a curated collection of memecoins that are based on the Avalanche Network. The foundation recognizes the cultural and entertainment value associated with memecoins, which goes beyond their utility. According to the Avalanche Foundation, memecoins represent a collective spirit and shared interests among diverse crypto communities.
Selection Criteria for Memecoins
While the foundation is committed to purchasing memecoins, not all tokens will be eligible for inclusion in their collection. The Avalanche Foundation has set stringent selection criteria, which include factors such as the number of holders, liquidity thresholds, project maturity, principles of a fair launch, and overall social sentiment.
One memecoin that has recently gained significant attention within the Avalanche community is Coqinu (COQ), a rooster-themed token. Despite its lack of intrinsic value and absence of a team or roadmap on its official website, COQ experienced an astonishing surge of over 1.47 million percent between its inception on December 8 and its all-time high on December 20, according to DexScreener data.
The Marketwide Frenzy for Memecoins
Avalanche’s announcement comes at a time when memecoins are experiencing a widespread frenzy across various blockchain networks that support smart contracts. Traders have capitalized on these trends, with notable success stories of individuals turning relatively small investments into significant profits. For instance, one trader turned a $450 investment into over $1.5 million in realized profit by acquiring and selling a portion of Coqinu. This frenzy has prompted the Avalanche Foundation to actively engage in the memecoin space by acquiring select tokens.
The resurgent market for NFTs has also contributed to the foundation’s initiative. October witnessed a substantial 32% growth in NFT trading volume compared to the previous month. Data released by crypto data firm DappRadar revealed that NFT trading volume reached $405 million in October, the highest since August, marking a significant shift from the downward trend experienced earlier in the year. This resurgence offers renewed hope to projects facing challenges and showcases the potential for growth in the NFT sector.
