TL;DR:
Memecoins derive value from attention, similar to online ads.
Memecoins simplify value creation by tokenizing attention and making it tradable.
Mempires are emerging as new consumer brands driven by community alignment and tokenization.
Brands as participatory networks enable consumers to contribute and earn ownership through tokens.
The financialization of community-owned brands creates new speculative investment opportunities.
We’re in the middle of memecoin spring in cryptoland. For cryptonative speculators it’s all fun. For people outside looking in, many question how memes can be valuable.
On the surface, it may all look a little crazy, but look deeper and there are some interesting mechanics at play; Hints of what the future of consumer brands may look like, and how it’s uniquely enabled by the features of blockchain networks, but also how it’s a natural progression of a long-running trajectory.
How can Memecoins Have Value?
This is a key question that stops many in their tracks. The simple answer is that memecoins have value because attention is valuable. Attention is the primary (and often only) fuel for memecoins.
Attention is, by default, an intangible asset. It’s difficult to measure, and difficult to trade for hard cash. But, it’s still valuable. For instance, entertainment IP captures and aggregates attention. It’s the magic that enables Disney to reactivate a built-in audience when they release the next Moana movie later this year.
Even if intangible assets are difficult to measure, companies still try. As per September 2023 filings, Disney carried $11B of intangible assets on its balance sheet, for instance.
Viewed from a different angle we can also observe that what gives memecoins value are the same as what gives online ads value. Ads, like memecoins, use attention as fuel. And we construct a financial derivative for it (ad unit) to capture tangible value (money) from the intangible value (attention).
Memecoins just peels off all the intermediary layers and presents tangible attention in its purest form: tokenized and tradable in liquid markets.
The Mempires
Memecoins as a category is expanding and splitting into substrates. From the pure memecoins with no utility (like Dogecoin, the OG) to community coins (sometimes referred to as “scenecoins”) like Degen and Higher.
We’re on a path leading us to find out how the next generation of consumer brands will be different from traditional ones. These, new brands are the mempires.
Brands, products and attention are all intertwined concepts. Brands require attention to sell products. Consumers buy products to signal (capture others attention) alignment to a brand and its community, principles and value.
The mempires rise through simplification and reducing friction. The brand comes first, the community alignment (via tokens) comes next. Product is merely a by-product produced by the community as an act of contributing to the proliferation of the brand.
Higher and Degen are two examples of mempires rising from within the Farcaster ecosystem. Farcaster is a decentralized social network organized in channels (similar to Reddit). Both Degen and Higher started out as channels in Farcaster. Both use community tokens to align the community and to reward contributions.
When the mempire reaches critical mass, it becomes an attractive platform for builders and creators within that community to leverage as distribution. This activity furthers the reach of the brand itself.
The Solana memecoin Bonk is a good example. The token was originally airdropped to Solana ecosystem participants as a “cheer you up” gift during cryptowinter. It’s later emerged as a premier attention token. From there, a team leveraged the brand attention to launch a Telegram trading bot. The Bonk bot. The product is currently at a $80M annual revenue run rate. Some of the fees are used to buy back and burn Bonk tokens, which injects value back into the mempire.
Bonk and the trading bot is a niche, speculation-centric example, but there’s no reason someone couldn’t do the same with merchandise or some other type of product.
These are early days, but the blueprint is being written right here and now.
Brands as Participatory Networks
What’s described above is the same pattern and motion as we’ve discussed in previous essays focused on the entertainment industry specifically. The same concepts apply broadly to the way consumers will seek to align with brands and their values. Through active participation.
Something magical happens when a brand turns into a participatory network. Instead of buying products to become a part of it, you permisionlessly align yourself, and start contributing. Maybe you earn tokens that makes you an owner in the mempire, maybe you invest because you believe in it.
Financialization is a Feature
A marketplace of community-owned, consumer brands that run on tokenized attention unlocks a new type of speculative investment as well. A brand in the marketplace, that is valued on attention, creates a meta-product for speculative investors.
Just like Wall Street analysts crunch numbers to produce cashflow models (historical) and invest, speculators can invest and trade in the attention of consumer brands (real time).
We’re already seeing this happen in the form of intense cultural collisions like the Gamestop stock rally that was recently reignited simply through a few memes posted on X.
The mempires can and should embrace the speculative crowd, and find ways to capture value from the speculative activities, through fees for instance. Fees that can be funnelled back into the brand as grants and rewards for community contributions.
These new brands, the mempires, doesn’t look much like their previous generation counterparts. But the combination of real-time value and information flow online, and removal of intermediaries is going to make them extremely effective.
Instead of buying ads to sell products, you align via tokens.
Instead of buying a product to align with a brand, you just join in start contributing.
This is going to happen. Actually, it’s already happening.
I'm BRG. I write about the intersection of crypto, consumer and entertainment. I have many years of operating experience as CEO of a web2 SaaS. I'm currently looking for interesting projects to work with in advisory and consultancy capacities. Reach out on Farcaster if you want to discuss a project you're working on.
