Not every meme coin is cut from the same cloth. To be considered for acquisition by the Avalanche Foundation, creators must adhere to a set of guidelines.
The organization backing the Avalanche blockchain unveiled an “eligibility framework” on Tuesday, outlining parameters for its ambitious plan to acquire meme coins, the playful yet highly volatile cryptocurrencies often associated with canine imagery.
While these tokens have gained immense popularity, providing substantial returns despite their perceived lack of intrinsic value, they have also been a breeding ground for scams designed to benefit their creators. These creators can swiftly and inexpensively generate these tokens on permissionless blockchains, enabling widespread trading.
Regardless of one’s stance on meme coins, the Avalanche Foundation has already initiated purchases using funds from its $100 million “Culture Catalyst” fund, dedicated to supporting cultural initiatives. The foundation, however, has not disclosed details about which tokens it acquired, the allocated capital for meme coins, or its approach to managing these positions.
The foundation, expressing a commitment to creativity and community engagement in the blockchain space, broadly categorizes meme coins, NFTs, and similar community-created tokens as ‘community coins,’ as stated in a release shared with CoinDesk.
According to the three-page rule set shared with CoinDesk, meme coins seeking attention from the Avalanche Foundation must be independent from their creators and exclusive to the Avalanche blockchain. This excludes tokens with team-specific allocations or copies on other blockchains, and creators must relinquish ownership of the mint contract.
Furthermore, the foundation disapproves of tokens held in large quantities by whales, those lacking scrutiny from security firms, or those launching without whitelists.
Although the rules are flexible, meeting them doesn’t guarantee acquisition. However, there are specific minimum requirements established as of January 2024:
- At least 2,000 holders, with the top 100 owning less than 60% of the supply
- Over $200,000 in liquidity from a minimum of 50 providers
- A market cap of at least $1 million
- Daily average trading volume of at least $100,000 over two weeks
Additionally, meme coins must have been in existence for a minimum of one month “to allow the community time to become acquainted with and understand the coin,” according to the provided framework.
