Avalanche Foundation Sets Guidelines for Meme Coin Acquisitions

• Avalanche Foundation Begins Buying Meme Coins
• Meme Coin Selection Process
• Avalanche Foundation's Investment in Meme Coins
• Eligibility Rules for Meme Coins
• Minimum Criteria for Meme Coins

Avalanche Foundation Begins Buying Meme Coins

The Avalanche Foundation, an organization dedicated to supporting the Avalanche blockchain, has begun purchasing meme coins, a class of highly volatile cryptocurrencies typically associated with humorous or ironic themes. Meme coins, despite their seemingly frivolous nature, have become a significant industry, boasting staggering returns despite their often-questionable intrinsic value.

Meme Coin Selection Process

The Avalanche Foundation has introduced an eligibility framework laying out specific criteria for purchasing meme coins. This move comes amidst concerns about the proliferation of fraudulent projects in the space. Many of these meme coins are launched rapidly and inexpensively on permissionless blockchains, making them accessible for trade to anyone. While this democratization of cryptocurrency trading can be viewed positively, it also creates opportunities for unscrupulous individuals to launch scam coins to enrich themselves.

Avalanche Foundation's Investment in Meme Coins

The Foundation has reported that it has already begun acquiring meme coins with funds from its $100 million Culture Catalyst initiative. However, the specifics of these acquisitions, including which coins have been bought and the amount of capital allocated for such purchases, remain undisclosed. The Foundation's stance on meme coins encapsulates a broader appreciation for creativity, culture, and camaraderie within the blockchain space, viewing them as a form of 'community coin' along with NFTs and other tokens.

Eligibility Rules for Meme Coins

To be considered for purchase, meme coins must be independent of their creators and native to the Avalanche blockchain, as stated in the Foundation's eligibility rules. This implies that coins with allocations reserved for their team or clones on other blockchains are not eligible. In addition, the Foundation discourages tokens stockpiled by large-scale investors ('whales') and those which have not been vetted by security companies.

Minimum Criteria for Meme Coins

While the rules are flexible and meeting them does not guarantee purchase by the Foundation, as of January 2024, meme coins must meet the following minimum criteria:

• At least 2,000 holders, with the top 100 holding less than 60% of the supply
• Liquidity of over $200,000 provided by at least 50 providers
• A minimum market capitalization of $1 million
• Average daily trading volume of at least $100,000 over a two-week period

Finally, the meme coin must have existed for no less than a month to give the community enough time to familiarize themselves with the coin.

Edited by Jonathan Stoker