Notes on Consumer Crypto | June 16, 2024

Things have been crazy getting teams and ourselves ready for demo day next week so the newsletter is arriving a little late, but we got her done.

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

We kicked off the show this week with Mr Smoovie Williams from Sanko. I’ve been intrigued by Sanko for a while, and actually talked about it way back on an early episode of Internet Explorers. 

I think my interest in it largely comes from being mesmerized by the individual pieces of it coupled with an inability to understand what the hell it actually is as a whole. It’s a chaotic conglomeration of NFT project, social network, gaming platform, a token, and now chain with the recent launch of their L3.

There were two core things I really wanted to get into with Smoovie that have been top of mind for me recently. 

One is the idea of being less precious with project tokens, launching them early, and treating them as iterative products. They launched $DMT early on in the lifecycle of the project and well before they had their own chain.

Second, though very related to the first, is the idea of starting with culture instead of starting with tech. I’m pretty convinced that many of the dominant ecosystems of tomorrow will first start with tokens that aggregate scenes, then build applications that uniquely serve and extend their scene, then build a network giving their scene a home and making it easier for others to build for it. Sanko is running this playbook beautifully, and was curious to dig into how intentional it was.

This was one of my favorite chats we’ve had with a guest on Internet Explorers, I highly recommend you listen.

Layer3 announced a $15M Series A raise this week, bringing their total funding to $21M. They’ve been on a journey over the past couple of years evolving from a DAO bounty platform into the attention and token distribution network they are today.

As Regan laid out in his thread they’re a top 5 product across Arbitrum, Optimism, and Base which is impressive. It speaks to the demand for better opportunity discovery on the consumer side, and of course the eternal need for distribution and usage on the product side.

I imagine a common path people will take on the journey towards being comfortable with crypto will be getting pulled in by a killer crypto product that serves a core need or desire they have, and then get intrigued by what’s happening and want to see what else is out there. Trying to infiltrate crypto twitter is obviously the wrong solution to this.

So it’s cool to see the discovery / distribution marketplace ecosystem getting built out with Layer3, Galxe, Boost, Daylight, Launchcaster, etc. They’re all taking different approaches and have unique capabilities depending on your goals or what type of usage / transaction you’re trying to promote.

I also think this tweet by Mary highlights an important point re: Layer3 and Galxe. Much of the usage of these platforms is bots, but also the core customers of these platforms are protocols and networks that are focused on attracting liquidity and driving transaction volume. So this works.

But how effective will they be at attracting the necessary real and high quality users that more social and culturally motivated products will need? Not very me thinks, and there are probably opportunities for products more focused here. 

Zapper introduced the Zapper Protocol this week, aimed at incentivizing the interpretation and contextualization of onchain information. It’ll be powered by their $ZAP token which will reward contributors to this interpretation layer and be used as payment for data access to it. 

This is cool. We’ve long seen onchain activity as social media, and the more legibility the average person has into what’s happening the more interesting content and context they’ll be able to create around it.

Interface has been pulling on this thread for a while and keeps getting better at the scaled social feed implementation of this, but we’ve also been wanting to see more pure play media properties focused on storytelling around onchain activity. Basically what Dan is asking for here.

Who’s doing this?

We had worm emoji on the show a couple weeks back when he was first launching rug.fun, and this week they launched their V2. In case you haven’t been paying attention, it’s a token launchpad and game where tokens essentially compete for liquidity as a mechanism to aggregate attention and build social consensus around a few memes instead of it remaining dispersed across a bunch. I think digging into what they’ve changed is informative for builders looking to build games or social products around memecoins (a big opportunity).

The first major change they made is deploying uniswap liquidity pools for all tokens as soon as they meet a presale threshold instead of waiting to the end of the game and only deploying the winning tokens. So tokens are tradable and have volatile prices way earlier.

The other major change they made was in how the rugged liquidity from the 2nd - 9th place coins gets allocated. Previously they went directly to deploying and providing liquidity for the 1st and 10th tokens, but now since the tokens are already liquid it goes to buying and burning them. I love buying and burning. 

And to spice it up a little bit only 20% of the liquidity immediately gets used and the rest gets deployed based on a “bump” button that anyone can pay a little bit to push.

I really like these changes. You get more liquid tokens and in-game price volatility, and the winning reward of buying and burning is way more attractive and speculative than additional liquidity. It’s a pretty obvious improvement to the game.

Their bigger challenge though is that the memes generally aren’t good on the platform and are just copy cat tokens for memes that have already broken out and have social consensus elsewhere. They need to figure out how to be the first place devs with great meme ideas go to launch their tokens and not just a pure short term ephemeral betting game.

Carlos just keeps shipping stuff. His latest drop is far terminal, which lets farcaster channel owners easily launch tokens for their channels in a few clicks. It’s done $1.5M in the first 24 hours of being out in the wild which is solid.

I actually casted about this idea 4 months ago and had been pitching builders interested in memecoins on it for a while so I’m very glad to see it out there. It’s a great starting point for a product. I think integrating some of ideas I mentioned in the cast around built in tipping infrastructure and channel growth stats could be a cool next step, and then a client that treats channel tokens (and tokens generally) as first party citizens could be a killer.

It’s worth checking out.

Have a great Sundayyyyy