Vitalik Buterin believes political tokens can drive bribery.
Experts flag the liquidity imbalance around these memecoins.
TRUMP and MELANIA serve as the best example to showcase this faulty wealth distribution.
Ethereum co-founder Vitalik Buterin believes the advent of political tokens may be a medium to populate bribery. He voiced this opinion during a wider discussion on the trajectory of the cryptocurrency sector following Donald Trump’s inauguration.
According to Buterin, the bone of contention is usually the short-term and long-term value, drawing comparisons between “hyperaddictive cellphone games” and chess.
Vitalik Buterin: Political Tokens and High Risks
The Ethereum founder pointed out that there has been a transition to a new order in the last year. Many top players celebrate the token creation concept, no matter its utility. He believes this situation necessitates having certain conversations, especially those that have to do with high-risk investments.
The risk of politician coins comes from the fact that they are such a perfect bribery vehicle. If a politician issues a coin, you do not even need to send *them* any coins to give them money. Instead, you just buy and hold the coin, and this increases the value of their holdings… https://t.co/8Zkd7KcpuA
— vitalik.eth (@VitalikButerin) January 23, 2025
The risk of politician coins comes from the fact that they are such a perfect bribery vehicle. If a politician issues a coin, you do not even need to send *them* any coins to give them money. Instead, you just buy and hold the coin, and this increases the value of their holdings…
— vitalik.eth (@VitalikButerin)
Buterin noted that these discussions should be “about the difference between sugar-high short-term fun that is unwise to recommend to newbies, and long-term fulfillment and wealth-building. It is not about ‘fun is bad,’ it is about the equivalent of modern hyperaddictive cellphone games, versus chess or World of Warcraft.”
Furthermore, he explained how large-scale political coins go beyond being a source of fun. Mistakes made by voluntary participants mainly cause harm; hence, “they are vehicles for unlimited political bribery, including from foreign nation states,” Buterin explained.
Trump-Linked Tokens Raise Distribution Concerns
The claims from Vitalik Buterin are noteworthy because Donald Trump’s family launched two memecoins in honor of the President and his wife, Melania Trump.
The memecoins gained massive attention, although this comes with a few concerns. Blockchain analytics firm Chainalysis noticed that entities that hold up to $10 million or more in these tokens control as much as 94% of the combined token supply.
On the other hand, smaller investors with holdings ranging from $1 million to $10 million account for just 2.1% of total supply. Then there are wallets holding between $100,000 and $1 million, representing 1.7%. Chainalysis further stated that TRUMP and MELANIA holders owning less than $100 accounts only control 2.2% of the supply, highlighting a sharp imbalance in token distribution.
Analysts are largely concerned about the heavy concentration of wealth among a few wallets, citing the impact on price stability.
When the market comprises a significant percentage of whales, it usually leads to sharp price fluctuations. Unfortunately, this makes the tokens prone to volatility. In the long run, smaller investors are left to an uneven playing field where they begin to struggle to influence market movements.
Binance Launch MELANIA Perpetual Contract
While the crypto industry is still grappling with these memecoins, the leading cryptocurrency exchange, Binance, has a perpetual contract tied to MELANIA.
MELANIA/USDT, as it appears on the exchange, comes with a leverage of up to 25x. This makes it possible for users to amplify their trading activities, but with underlying risks.
Binance stated that the funding rate of MELANIA/USDT perpetual contracts has been placed to be +2.00% and -2.00%, while the contract will be settled in USDT with a tick size of 0.001.
