Analyst: Once Trading Volume Recedes, the Incentive Mechanism of 'Coin-Equity' Concept Meme Coins May Fail

PANews, September 9 news, DeFi researcher Ignas stated that the current "coin-equity" concept Meme coin narrative essentially relies on trading volume and fee revenue. Once trading volume shrinks, dividends and buyback funds will decrease accordingly, weakening holding incentives and potentially triggering a sell-off.

Ignas pointed out that Coinbase's trading volume in the fourth quarter of 2021 was $547 billion, which dropped to $145 billion a year later, a decline of about 74%; while Meme coin trading volume could drop by 95% in the future. Uniswap's trading volume has also been slowly declining.

Ignas further stated that the dividends, buybacks, burns, or liquidity incentives of projects such as ZCAT, STONK, PONS, INDEX, SHROOM, and CASHCAT are all linked to transaction fee revenue. All these projects are exposed to the risk of declining user trading interest, and simply extrapolating annual yields based on current fee levels is not reasonable.