The latest controversy surrounding LIBRA, a memecoin that briefly surged before crashing 95%, has reignited debates about the future of meme-based tokens.
On February 14, Argentine President Javier Milei unexpectedly promoted LIBRA on his social media, causing a massive price spike. However, the excitement was short-lived. The token’s value plummeted, erasing $4.5 billion in market capitalization and leaving many traders with staggering losses. Allegations of insider trading and fraud soon followed, though Milei denied any involvement in the project’s creation, claiming he was simply sharing information. The scandal has triggered legal complaints and even impeachment discussions, raising serious concerns about the memecoin space.
Are Memecoin Launches Fundamentally Flawed?
The LIBRA collapse has fueled criticism that memecoin launches are inherently unfair and heavily favor insiders over retail investors. Nic Carter, co-founder of Castle Island Ventures, described memecoins as “cooked,” arguing that the LIBRA event exposed widespread corruption and manipulation. Many believe this scandal could make traders more cautious about investing in memecoins, at least in the short term. Some VCs, like Dan Matuszewski of CMS Holdings, believe legal action is inevitable. He remarked, “I think someone’s going to jail over this. The political blowback is huge.” If regulators crack down, new legal risks could emerge for the memecoin market.
Memecoins have always been speculative, but now they are even more difficult for regular traders to profit from. Jed Breed, founder of Breed VC, noted that memecoins have become an “insiders’ game.” Contract addresses leak early, bots enter instantly, and retail investors often buy in too late. “It’s nearly impossible to launch them fairly now,” Breed said, pointing out that many memecoins now pump and dump within minutes. Lex Sokolin of Generative Ventures agrees but sees this as a failure of the market structure rather than memecoins themselves. He believes that strong community-driven projects, like Dogecoin, will persist despite manipulation issues in newer tokens.
Will Memecoins Survive?
Despite growing skepticism, many VCs don’t believe memecoins will disappear entirely. Steve Lee, managing partner at Neoclassic Capital, argues that LIBRA’s collapse is actually a “healthy correction” for the space. “This will filter out weak projects and unsustainable hype-driven schemes,” he explained. Rather than killing memecoins, he expects the sector to evolve, either through better verification processes or stronger community engagement. Breed sees memecoins as a form of financial speculation rather than utility-driven assets. “People want their 1000x gains, and memecoins provide that chance,” he said, suggesting that as long as traders seek high-risk opportunities, memecoins will remain relevant.
Solana’s Role In The Memecoin Market
As one of the biggest ecosystems for memecoins, Solana has taken center stage in this discussion. Matuszewski doesn’t believe Solana itself is at fault but warns that reduced memecoin activity could lead traders to hold less SOL, potentially affecting its price. Sokolin is more critical, stating that Solana’s rapid growth strategy has led to fake trading volumes, artificial TVL (Total Value Locked), and bot-driven hype cycles. “Solana’s technology is strong, but the culture of ‘growth at all costs’ is a problem,” he explained, suggesting that Solana needs to address these concerns to maintain credibility.
The broader memecoin sector has struggled in 2025, following a massive bull run last year. The GMCI Meme Index, which tracks top memecoins, is down over 40% year-to-date. Solana-based memecoins have performed even worse, with the GMCI Solana Memes Index falling over 61% YTD. Trader sentiment is shifting, and memecoins are finding it harder to sustain momentum.
The LIBRA scandal has been a wake-up call, but it doesn’t mean the end for memecoins. If new launch models emerge that prioritize fairness and transparency, memecoins could adapt and thrive. Sokolin believes the industry needs to become more thoughtful about financial products and move away from casino-style speculation. For now, as long as traders are chasing exponential gains, memecoins will always find a way to existbut the rules of the game may be changing.
