Meme Coins Reflect Crypto Market Maturation, Says Drift Protocol’s Cindy Leow

Meme coins represent a maturing crypto market, enabling users to rally behind narratives and launch tokens from scratch, according to Cindy Leow, co-founder of Drift Protocol, a Solana (CRYPTO: SOL)-based decentralized exchange (DEX).

In an interview with Benzinga, Leow highlighted the sustained relevance of meme coins, noting their role in showcasing the ability to create and trade tokens organically, despite recent market slowdowns.

She emphasized that meme coin cycles within broader market cycles signal a growing sophistication in decentralized finance.

Leow discussed Drift’s significant growth, with on-chain perpetual futures (perps) volume increasing fivefold in the past three weeks, driven by improved user experience (UX) and liquidity.

She noted that past hurdles to on-chain perps adoption, such as onboarding and UX issues, have largely been resolved, making trading on DEXs comparable to centralized exchanges (CEXs).

“The experience of trading on-chain is a lot better now than even a couple of months ago,” Leow said, underscoring Drift’s advancements in matching CEX performance.

A key factor in Drift’s success is its commitment to Solana’s Layer 1 (L1) blockchain, which Leow praised for its trustless and verifiable nature, ensuring funds remain secure and accessible.

“Censorship resistance is one of the biggest things,” she said, emphasizing the reliability of L1s over CEXs, which can be shut down abruptly.

Drift’s Just-In-Time (JIT) liquidity model, an intent-based protocol, enhances trading efficiency by allowing market makers to fill orders directly, bypassing gas costs and improving matching speed.

Leow also addressed the role of meme coins in driving perps volume on DEXs, describing them as a sustainable trend.

“There will always be room for meme coins because it shows that people have an ability to rally behind a narrative,” she said.

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However, she acknowledged a recent dip in meme coin performance, attributing it to market maturation rather than a decline in interest.

On real-world hedging, Leow argued that on-chain derivatives are already facilitating significant hedging activity.

Drift’s cross-margin system allows users to leverage assets like SOL or USDC (CRYPTO: USDC) as collateral to hedge positions, such as shorting SOL perps to maintain neutral exposure.

She predicted growth in basis trading as more hedgers enter DeFi.

Regarding competition, Leow favored generalized L1s like Solana over app-specific chains like dYdX (CRYPTO: DYDX) on Cosmos (CRYPTO: ATOM), citing Solana’s upcoming Block Assembly Marketplace (BAM) for enabling app-chain customizability within an L1.

She also noted challenges in expanding on-chain options trading due to its over-the-counter (OTC) nature but suggested intent-based protocols could drive future success.

Drift’s focus on cross-collateralization, allowing any token as collateral, has boosted its total value locked (TVL) and trading volume, particularly in bull markets.

Unlike competitors like Zeta Markets, which pivoted away from Solana, Leow said Drift’s dedication to the ecosystem has ensured its longevity.

She emphasized filtering for organic retail flow to maintain quality volume, avoiding toxic flows from excessive incentives.

Leow predicted that perps liquidity will consolidate around a few superchains with established infrastructure and liquidity, dismissing fragmented multi-chain models.

“People will consolidate towards the chain that already has dollars, that has backers,” she said.

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