Notes on Consumer Crypto | July 5, 2024

Happy 5th of July to those who celebrate. Here's what I found interesting in consumer crypto this week...

Well it was a horrible week for people who spend their time staring at prices. And price drives narrative, narrative drives sentiment, and sentiment wreaks havoc on the timeline, so it’s been a bit of a mess in the crypto town square.

But things are soo good. The future of finance, social, entertainment, brand, journalism, and existence is being built here, and we have great early indicators of this being the cycle where we have products that truly break out. 

In June, Polymarket did $110M+ in volume, Zora had 350k+ transacting users, and Pump had a $2M+ revenue day. Three products across distinct consumer categories doing numbers we’ve been dreaming about for years. 

Gotta zoom out.

I liked Jesse Walden’s tweet this week highlighting what he’s excited about looking forward, so here’s a quick braindump on what I’m paying attention to. 

Things unlocked by global, permissionless, peer to peer liquidity:

• new forms / categories of prediction markets

• peer to peer sports betting

• payments / stablecoins

Things unlocked by scaled and trusted network coordination:

• Socially-ambitious DePIN / tokenized marketplaces

• Novel use cases of open social graphs / headless marketplaces

• Social DAOs make a comeback
  

Things unlocked by digital ownership:

• better social contexts around creating and collecting art, media, content

• PFPs come back

• crypto games
  

Things unlocked by the ability of tokens to create, store, and use attention / cultural value:

• products using memecoins as social primitives

• more scenecoins

• full-stack brands (social + products + tokens)

• platforms for ephemeral games/entertainment

There’s so much opportunity within each of these categories for teams that build great consumer experiences that effectively emphasize these fundamental unlocks. 

I’ve been playing around with the new Zora mobile app and it’s smooth as hell. You can buy mints with a credit card, double tap to mint, and scroll a feed of creative content as comfortably as you scroll instagram.

Consumer crypto’s mobile era has clearly arrived, and the days of building desktop-first are behind us. 

The thing it’s got me thinking about is what the onboarding arc onto the product will look like for people. It’s so well done that there are really no user experience barriers to anybody using the product, but still a huge cognitive barrier. How does someone not embedded into the crypto social scene get to the point where they care enough to pay $3 to collect something?

I also feel like there’s a missing lower intent action that could be beneficial to have alongside collecting. Likes are the easy answer, but would of course be way more interesting if it was being able to tip $enjoy outside of just mint comments.

Polymarket had a record June with $111M volume and 30k active traders.

It’s been very cool to watch the growing adoption of Polymarket during the election cycle, and its growing importance as a source of truth in this messed up media landscape. The markets there are going to be absolute main characters over the next few months. 

We’ve been watching Polymarket for a long time, and the big question has always been whether it would be able to attract enough liquidity for people to be able to play with meaningful size so it can be actually useful as sources of truth, for hedging, etc.

Well that has been answered, at least for something with as much attention and financial interest as US Elections. Though beyond the US Elections, the Euro Cup winner, first cat coin to $1B, and UK election winners have $3.5M, $2.5M, and $2.4M of open interest respectively which is decent.

We’re also starting to see some exciting vertical-specific prediction market products emerge so definitely a category to keep an eye on. The unlock of global, permissionless, peer to peer markets are going to take us to new and interesting places.

Grass is a cool product that lets you earn tokens by offering up your unused internet bandwidth for website scraping, which is used to build data sets for AI training. Participating is as simple as installing a browser extension.

This week they announced the release of a public data set of 600 million reddit posts and comments scraped from 2 million nodes worldwide. 

DePIN is a shitty category name for this stuff, but it’s pretty obvious that tokenized marketplaces are going to be wildly disruptive. “Data DAOs” like this is one example that’ll touch everything from health data, to mapping data, to noise pollution data, to car data. 

The big open question is how valuable the data actually is on a unit basis and if that’s enough of an incentive to maintain the necessary level of data capture, but I think winners will create games and consumer products alongside this business model to make it compelling beyond the pure economics.

It’ll also be very interesting when they start breaking into consumer marketplaces like ride sharing, food delivery, homesharing, etc, and I think these “easier” data marketplace experiments will be pretty informative for the building of these. 

We’ve been talking about our fat token thesis, which is really just the idea that tokens are incredible attention generators and having a token that captures the hearts and minds of a group of people creates a ton of opportunity to serve them in expansive ways.

I’ve talked about Notcoin a bunch, and they’ve started running this exact playbook. They used the simple clicker game and promise of a token to attract of ton of usage and attention, then successfully launched the token into that attention base, and since have been building out more ways to serve their community of TON believers.

They started with a TON quests platform, and then this week they announced a Telegram gaming accelerator. 

Hamster Kombat is on a similar path, but leveraging the game and token attention into a media company. They boast 239 million signups (which I deeply question but it’s besides the point), and are funneling this usage into youtube subscribers. They were able to become the first youtube channel ever to gain 10 million subscribers in one week, and are sitting at 32 million subscribers right now.

So anyways, tokens are powerful as hell, use them.