Notes on Consumer Crypto | July 19, 2024

Ayyy happy Friday! Welcome to my weekly consumer crypto-focused braindump of things I'm thinking about and have bumped into during my internet travels.

Here's what I found interesting this week...

We kicked off Internet Explorers this week with Mikey, founder of Gallery and now Moshi. 

Gallery has been around for years as a place to showcase your digital art collection and has been the go to option for collectors. The design is super clean, collections look great there, and they have a solid discovery experience. 

But the market for the product didn’t really materialize in the way they expected, so they went back to the drawing board to explore more scalable and broadly accessible products built on onchain media primitives.

Moshi is their first experiment, which is a pretty simple polaroid-inspired app where you can take photos, mint them within artist-designed borders, and share them for collection. They’ve built it using the coinbase smart wallet so it’s worth trying to get a sense of the user experience unlocks it provides.

We had a good chat with Mikey exploring what went wrong at Gallery and what he’s excited about looking forward. Watch it here.

We also had Medha on the show who leads product at Uniswap for their wallets. They just released the Uniswap browser extension this week which introduces a pretty cool sidebar UX and rounds out a stack that gives them end to end control of swapping and transacting experiences. She mentioned that 80% of new wallets used Uniswap on their first day in crypto which gives them so much leverage to serve people in expanding ways.

I'm locked into Arc and it's only available on chrome right now so haven't actually been able to try it yet, but I hear great things.

We got into the details of the product, what took them so long to release an extension, their thinking behind mintable uniswap usernames, and a bunch more. Watch it here.

Syndicate dropped a report outlining the current economics of L3s, which don’t look great right now. They showed that L3s generally struggle to break even unless they either hit huge 50M+/month transaction volumes or keep fees within 3x of L2s.

But the idea that an L3 is competing on fees, scalability, or technical specifications is the wrong way to look at them in my mind. They’re way more interesting for the softer community and cultural motivations of giving scenecoins and other token networks a home and distinct sense of place. As premium chains, not cheap commodity chains.

In many ways I see today’s social token networks (Sanko, Enjoy, etc) as the evolution of the DAOs we had in the previous cycle. They had proved that people want to organize and coordinate online around a shared purpose and belief system, but largely got bogged down in bureaucratic governance processes and a lack of focus and sense of progress.

Scenecoins coupled with social distribution mechanisms are built on similar desires, but are allowing basic participation to be much more accessible, fluid, and permissionless. The lack of organizational overhead and strict membership also allows speculation to run more rampant, which is making these way more entertaining to be a part of than the implementations of the past.

Having a chain could take this to the next level, and give participants a clear and measurable focus: Get more fun, scene-serving stuff built on your chain. It’s like if an informal religion whose belief systems were spreading throughout a city suddenly had a church where believers could show up and meet each other, they could all build on to, and where they could bring new people to show them what their world is all about.

So anyways, I’m getting carried away, but I’m just gonna keep thinking about these chains as more tangible homes for scenes who want them for fun. I’m no technical blockchain expert but trying to compete on cost and scalability at the third level of abstraction when we have cheap and fast L1s seems kinda dumb. So it’s great if we can get to a point where L3s / appchains are easy to run cheaply and profitably, but it’s not really the point.

I haven’t talked much about Berachain, and I’m not going to pretend to understand the ins and outs of its technical design, but I like it a lot.

I like it a lot because they’re innovating at the social layer. They’ve built years of social and cultural infrastructure that they’re now introducing technical infrastructure, their L1, into. They have a highly differentiated memetic brand that has a cult following that builders are excited to tap into.

There are things like Puff Paw’s vape2earn and myriad weird DeFi experiments that you look at are just like “yea that’s a perfect berachain project”. That’s powerful.

On top of this they also have a novel Proof of Liquidity security mechanism that’s promising to enable real value transfer between the chain, protocols, applications, and users. A killer app will not only be able to monetize in the normal ways, but they’ll also earn Berachain tokens recognizing the value they’re creating for the ecosystem.

This is the only way to compete with the immense network effects of Ethereum and Solana today. Touting technical innovations and trying to attract builders in a vacuum of culture and community isn’t going to work.

Builders want users and they want to be cool more than anything else, and Berachain is doing everything they can to provide that.

Anyways, there was a good post this week from knower on the fat bera thesis that triggered this brain dump. It’s worth reading.

Alright so absorb all the chaotic Bera energy, and then look at the Shape L2 “chain for creators” that launched yesterday. I know nothing about the project so this is certainly unfair, but I find it very unexciting.

Another L2 with generic messaging that sounds exactly like things we already have. Gasback isn’t really compelling if you can’t see a path to a chain having a TON of usage. Zora for example is doing 4M transactions a month and makes under 5 ETH in net sequencer revenue if I’m reading this dune dashboard right.

I’m a heavily-opinionated-brand and community maxi. Make me feel something please.

I’ve also been thinking about how Base being a runaway dominant L2 is the best thing that could happen for the Ethereum ecosystem. If there’s a bunch of fragmented attention and liquidity, and a high cognitive load for builders trying to decide what chain to build on, at some point they’re just gong to say fuck it I’m building on Solana.

I love anyone building anything so not trying to be harsh, but was just slapped in the face with this when I saw it after looking at Berachain.

Moonshot, a new “robinhood for memecoins”, launched yesterday that lets you buy memecoins with apple pay in a nice clean app. We’ve seen this pitch a bunch of times, and Ravi has been in market with it for a while with Hype, but I continue to struggle with it.

Logically it makes a ton of sense. Memecoins are clearly these new internet attention assets that are seeing huge demand and aren’t going away, yet the trading experiences around them remains janky. If you can be the first to break into mainstream audiences by making it as easy and accessible as Robinhood you have a winner.

But in practice when I use one it feels so sterile and uncool. All the social and cultural and raw internet value of these things is completely stripped away, and you’re left with just a bunch of assets that might as well be Amazon and Google.

I’m obviously too deep and don’t expect the average person to ever get here, but is it possible that some version of the trenches are a required part of the memecoin trading experience? Or is this just the telegram trading bot for normies where they go to execute trades but all discovery / social happens elsewhere?

Blackbird, the crypto-powered restaurant loyalty product, released Pay with Fly this week. $FLY is their native rewards token that you earn when you check-in at participating restaurants, but until now you could only redeem it for free items or merch (I think). With this release though $FLY is now liquid (albeit at a fixed rate), purchasable, and usable as currency at participating restaurants. 

This isn’t the type of token use case that gets my heart rate up, but it’s cool nonetheless and a very smart playbook Ben is running. They’re not only using their loyalty product, and consumer demand for token rewards, as a wedge into the restaurant vertical SaaS world, but also building a consumer brand and product for restaurant lovers alongside it.

I imagine he sees a world where they can be Toast, Resy, Eater all wrapped up into one ecosystem, hopefully powered by $FLY in some novel way. 

Thanks for reading :)