By
Svetlana Soroka
June 29th, 2024
By allocating a portion of the Culture Catalyst fund to selected meme tokens, the Avalanche Foundation aims to diversify its portfolio and support the ecosystem of creativity, culture, and lifestyle facilitated by blockchain technology.
The Avalanche Foundation, a main backer of the Avalanche blockchain, has launched an “eligibility framework” for the purchase of meme coins. Meme coins, known for their amusing character have emerged as a prominent component of the crypto space, with some offering remarkable returns despite their inherent volatility.
The Avalanche Foundation Meme Coin Eligibility Framework
To ensure that meme coins align with the foundation’s vision and standards, a three-page rule set has been established. As highlighted by Coindesk in a recent report, key criteria include the requirement for meme coins to be independent of their creators and native to the Avalanche blockchain. The guidelines prohibit tokens with allocations earmarked for their team, clones on other blockchains, or creator teams that have not renounced ownership of the mint contract.
Moreover, the Foundation discourages tokens hoarded by large holders (whales) and those lacking scrutiny from security companies. Additionally, meme coins must meet specific criteria, including having at least 2,000 holders, with the top 100 owning less than 60% of the total supply. Other requirements include more than $200,000 in liquidity supplied by at least 50 providers, a minimum $1 million market cap, and at least $100,000 in daily average trading volume over two weeks.
Finally, the Foundation noted that it aims to support meme coins that have been in existence for at least a month, allowing the community time to understand and embrace the project. While the rules are flexible, meeting them does not guarantee acquisition by the Avalanche Foundation.
It is worth mentioning that the Avalanche Foundation has already begun buying meme coins using funds from its $100 million “Culture Catalyst” fund. This initiative aligns with the foundation’s broader engagement strategy across the Avalanche blockchain, encompassing Non-Fungible Tokens (NFTs), real-world assets, and undisclosed tokens within the Avalanche ecosystem.
By allocating a portion of the Culture Catalyst fund to selected meme tokens, the Foundation aims to diversify its portfolio and support the ecosystem of creativity, culture, and lifestyle facilitated by blockchain technology. However, the Foundation has failed to disclose inquiries about which tokens it had purchased, how much capital it is allocating to meme coins, or whether it would actively manage its assets.
As the crypto space continues to evolve, initiatives like this can play a crucial role in shaping the responsible adoption of emerging technologies.
Avalanche’s Broader Goals
Beyond the investment in meme coins, the Avalanche Foundation allocated $50 million to develop a more user-friendly, faster, and cost-effective financial system earlier in July. Leveraging Avalanche’s unique technology, the foundation intends to demonstrate how tokenization can enhance various financial processes, including asset issuance and transaction management.
John Wu, President of Ava Labs, emphasized the importance of asset tokenization as a driving force in current and future capital markets. This ideology might also further help position Avalanche in tandem with other top DeFi and NFT protocols in Web3.