Notes on Consumer Crypto | Jan 20, 2024

The tale of 3 L2s, weird DePIN, crypto's three body problem, and some Seed Club updates.


I write this newsletter every week as I explore the world of consumer crypto alongside building Seed Club, supporting consumer crypto founders, and preparing for the weekly Friday rundown show Internet Explorers I do with Jess and Peacenode.

Here are the things I found interesting this week…


The big news this week was us teasing that applications for the next cohort of our Consumer Crypto Accelerator are going to open imminently, likely early next week. 

We’ll drop a more thoughtful post (and a fresh site 👀) alongside it, but wanted to give everyone a heads up as we’re actively talking to interested founders.

It’s wild how much has changed since we kicked off our previous cohort mid last year, and our conviction on the importance of consumer crypto to this ecosystem and the internet broadly has only grown. We continue to be all in on the weird, novel, socially-ambitious projects that are redefining what crypto infrastructure can be used for. 

We’ve also crystallized what makes a great consumer crypto project in our eyes, and it’s one that has onchain distribution, an onchain business model, and is strongly memetic (build something people want to be a part of).

SC07 will bring 10ish teams together that are incredible examples of this to build alongside each other for 3 months. It’s hard to overstate the power of being in community with other founders that are also insane enough to be building in consumer crypto, and how much faster you can learn when you’re directly exposed to the successes, failures, and insights of other teams.

If you’re interested I’d love to chat. DM me on any of the 300 channels.


We also now have a Seed Club channel in farcaster. 

I used to think Farcaster was just a decentralized twitter, but no longer do. It’s clearly a completely new thing that is really starting to come into its own. 

We’re finally seeing the power of a permissionless social protocol that has a real, authentic, high-value community using it. Not only has it developed a feature set and culture that’s clearly distinct from twitter (it’s fun cross posting and seeing the variance in what does well on each), but there’s a blossoming ecosystem of useful products being built on top and integrating with it (bountycaster, launchcaster, unlonely, paragraph, interface, could go for days).

It feels like it has hit a tipping point and is going to have a massive year. We’re really excited to experiment with it more and integrate into some upcoming stuff we’re working on. Come say hi.

The Tale of Three L2s

The L2 ecosystem has been fascinating to watch, and will continue to be this year. It’s now reasonably cheap and technically easy to launch new ones, and is only getting cheaper and easier, so we’re seeing an explosion in experiments around them. 

Three of them hit my radar this week that highlight the varying levels of success they’re having. 

Public Goods Network

Public Goods Network, a Gitcoin-incubated L2, announced they’re shutting down this week. It had a great mission, to build a network of public goods supporter and use sequencer fees to fund public goods, but ultimately they weren’t able to attract the attention that attracts the liquidity that attracts the developers that attract the transactions to make it sustainable. 

This is unfortunate, but it’s pretty clear that launching an L2 without existing large amounts of aggregated transactions or a willingness to lean into speculation is doomed to fail. Those are just necessary preconditions of course and don’t promise long term success, but they’re very necessary. 

We’ve been talking to RaaS providers to better understand the economics of L2s and it looks like you roughly need 10k transactions per month for it to be economically viable today (not including adjacent operational costs). That’s not a ton, 300 per day, but with so many L2 options and airdrops everywhere it’s getting harder and harder to be able to rely on third parties to bootstrap these networks.


Very relatedly, Cobie dropped a little Blast rant this week highlighting why it was so successful at attracting deposits. He talks about how with L2s becoming increasingly commodified, chain abstraction tooling getting better, and everyone being financially motivated, people are going to park their money wherever they think they can earn the most. So it’s no surprise at all that with the success of Blur, the native yield narrative, and the points system they have more TVL than Base, even with all the (warranted) fud.

So you can be overly ideological and toil away in obscurity, or you can do what you need to do to attract attention, accepting that much of it will be low value but also that some of it will not be.


Then we have Base who dropped their 2024 mission at the end of last week, and it’s ambitious as hell. The entire thing is worth reading, but here are a few of their goals for the year that stood out to me:

  • Bring 10+ coinbase-built products onchain

  • Drive down fees to <$0.01 on the backs of EIP4844

  • Build world class on and off ramps for many markets

They have a huge aggregated attention and user base of crypto curious people who largely haven’t onboarded yet, so the impact of these on the number of people actively engaging onchain could be massive. They’re pros and our ecosystem is lucky to have them.


Dimo, a car analytics product and service provider marketplace, announced an $11.5M Series A this week, which reminded me I haven’t really talked about DePIN here. I don’t even know where the definition for DePIN starts or ends, but I find consumer-focused projects within its broad umbrella interesting for a few reasons. 

First, they can be powerful onboarding tools into crypto. Many of them are things that integrate directly into people’s everyday lives and passively earn them crypto. Having money in a wallet that you need to figure out what to do with is an incredible incentive and early airdrops were critical to many of our journeys into space.

Second, I think the second and third order effects of marketplaces being disintermediated by open protocols could get really weird. Just like we’re starting to see with Farcaster. 

Truthfully I find most of it pretty boring (though incredibly useful), but wanted to highlight a few that got my imagination going.


Teleport is building a rideshare protocol (and the first product using it) that they hope can ultimately compete with Uber (I know it’s a meme). Uber takes massive take rates (up to 40%) yet hasn’t really done anything to improve the service in years. With it being a commoditized product that is well understood, it feels like a good place to start exploring how decentralized networks could compete with web2 marketplace behemoths. 

And if it succeeds at attracting a critical mass of drivers and riders and makes it easy for anyone to plug into the network a bunch of products that aren’t possible today could emerge. Imagine airports offering their own rideshare services and actually being incentivized to make them easy to take, or a rideshare speed dating product being able to build on top of the network, or McDonalds running their own service that comes with big macs included. 

It’s definitely one to watch and the decentralized marketplace floodgates could open if it starts showing signs of success.


Hivemapper is using crowdsourced mapping and imagery to ultimately compete with google maps and streetview. You put a device in your car and earn tokens as you drive, and they have cool features like boosts to incentivize mapping of unmapped areas. 

They’ve managed to map 10% of the world already with 25k contributors, and are apparently able to offer data at a fraction of the cost of google. 

Building games on top of the protocol could get really interesting, both at the mapping level (car-based scavenger hunts) but also at a much more granular street level (something pokemon go like). It’s also obvious that products like Waze should be user-owned, and incentivizing adding data with tokens could improve its usefulness dramatically.

There are many more DePIN projects you can find here if you’re interested.

Crypto’s Three Body Problem

Other Internet dropped a post this week about crypto’s three body problem. They leaned on Lawrence Lessig’s writing to show how the four forces of law, markets, social norms, and environment collectively govern our lives. They also discussed how law critically acts through norms, markets, and environment to maintain reversion to normalcy as needed. For example, if more domestic purchasing of a commodity becomes desired it can institute high taxes on imports and regulate that through markets.

But in crypto we don’t have a unifying arbiter to maintain normalcy or act on collective social desires so norms, markets, and code often end up in conflict. They show how this has spawned new and surprising institutional behaviors.

Curve protocol design for example allowed for bribery to emerge and, even though this is disallowed in legal settings and typically frowned upon socially, institutional norms reoriented around them and it became an accepted part of the ecosystem.

NFT royalties are another example where what was possible in code and what the market ultimately decided (no royalties) was in conflict with was probably socially desirable.

They call this “regression to the code”, and think it’s a harmful and undesirable way for institutions to be regulated because normative behavior is unenforceable.

We do have examples (ZachXBT and Protocol Labs) of self-regulation attempting to introduce stronger social norms and dissuade malicious behavior, but they’re skeptical these will be enough.

They conclude saying that “the very idea of crypto being a “space” that one builds “in” is what most limits its success”. And that “The question is not how to add norms or social agendas to the crypto space, but how to join crypto with a broader institutional ecology”.

This was a great reflection and reality check on the state of protocol design and crypto in general. But it still just feels way too early to conclude that DAOs have failed and we can’t effectively design digital-native organizations that can enforce normative behaviors. We’re barely 5 years into this.

Some governance tweaks could prevent the ENS issue from happening again, if you don’t like bribery on Curve you can use another protocol that disallows it, and if artists really want royalties they can use tools that promote their use within their community. 

I certainly don’t want to leave my social wellbeing in the hands of crypto protocols and will probably always want my physical life to be governed by law, but I also deeply want to maintain the huge increase in optionality and agency that crypto provides in how I spend my time, invest my money, and connect with others.

The existing institutional ecology doesn’t like those properties, so it’s hard to see a path to them happily existing together.

That's it for this week, have a great weekend lads. And hit me up if you're interested in SC07 or have seen a project you think would be a great fit.

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