Notes on Consumer Crypto | Dec 6, 2024

Welcome to my weekly consumer crypto braindump of things I'm thinking about and have bumped into during my internet travels.

Here's what I found worth talking about this week...

Bitcoin hitting $100k is a historical moment we all need to take a moment to celebrate. Not only because it’s an attention-grabbing proof point for the legitimacy of the internet-native asset class and markets we’re all here building, but because it’s a proof point for the power of collective will and belief. Hyperstition is real. An idea can become reality simply because enough people decide it should. And now a weird digital thing, with no inherent intrinsic value, is the 7th most valuable asset on earth. 

What began as a fringe experiment has solidified itself in enough people’s minds to turn it into a core piece of the world’s economy. Bitcoin wasn't destined for this, it could have easily remained a little toy of cypherpunks if not for the deep desire from its early adopters for it to be much more. 

Their relentless energy kicked off a feedback cycle of belief and demand. Belief drove demand, which validated belief, which drove more demand, which validated the next layer of belief, and the cycle continued until eventually the world’s largest nations decided it’s a thing they need as a federal reserve asset. 

This should be so motivating to crypto entrepreneurs everywhere. The ability to use crypto assets and networks as tools to turn visions for the future into collective belief and participation into financial capital has been proven on the largest scale. A store of value asset was a natural starting point, but these new superpowers are now being used towards increasingly audacious goals.

Network states, decentralized ai, public goods funding, desci, depin, the list goes on. Power has shifted away from incumbent gatekeepers towards the people of the internet. We decide what matters, we accrue the resources to fund it, and we change the world.

So here’s to the memecoin that started it all.

It’s that time of year again where people start sharing their predictions for the year ahead. A16z dropped theirs this week so I figured I’d pull out some of the most interesting ones and share some of the things that are top of mind for me as we round out 2024.

Unsurprisingly they shared a bunch of AI and agent related topics. It’s insane that $GOAT was only 7 weeks ago and how much has happened in the category since. We now have a bunch of agent launchpads (virtuals, creator.bid, vvaifu, ai16z), agent influencers / creatives (TT, Zerebro, Bully, Luna), traders (Lola, Flower, aixbt, nftxbt), and many other products, protocols, and tokenized agents running at the seemingly endless opportunities to use ai to redefine and augment our digital existence. 

If all this has emerged in just the last two months, where the hell are we going to be this time next year?

The A16z team highlighted tooling for verifiably autonomous (not human-controlled) agents as well as proof of personhood mechanisms for digital identity and content authenticity verification as areas they’re excited by here.

They also shared a handful of predictions pointing towards more breakout killer consumer crypto products on the backs of an increased focus on UX, improving dev tooling and chain abstraction, and better product discovery through things like the Worldcoin App and Solana phone (really?). 

But honestly, they were mostly kinda standard. So let me share a few that are top of mind and hopefully more interesting:

• All relevant brands will have swarms of agentic influencers trained on their lore, spreading their narratives, and engaging their community.

• We’ll have a new social DAO cycle centered around autonomous (agent-managed) governance. Not sure it’ll truly work yet, but people are going to try.

• We’ll see a breakout consumer product that is used primarily by agents, where humans are guiders / observers / speculators. It will spit out a ton of tokens.

• We see a huge influx of AI and web2 talent starting to build in crypto due to growing stablecoin adoption, increased regulatory clarity, and easy to use tooling and infrastructure. 

• Consumer projects will get way more comfortable launching tokens, we’ll have an explosion of mechanism exploration, and we’ll collectively gain a way better understanding of how to capture value from speculation, reward long term believers, and economically align crypto businesses and their communities. 

• Pure memecoins will struggle to compete for staying power with the growing attention-generation and value-accrual capabilities of sentient coins and consumer product tokens.

• NFTs will re-emerge as a welcomed respite from the memecoin trenches. Canonical PFPs and art will do well, but it’ll mostly be new launches that capture attention.

I feel like I'm missing a bunch so will probably tweet an updated version out next week.

We live in an increasingly episodic timeline where accelerating content and software creation speeds are ensuring there’s a new more shiny thing every new second of every new day. 

Participating in the rise of a new story line, especially when tokens are involved, is exciting as hell. It’s social, it’s speculative, it’s entertaining. You feel cool, you feel smart, you’re making money. It’s addictive.

As soon as something no longer feels new and early though people inevitably leave to chase that feeling again. This creates a really hard dynamic for founders with long term ambitions.

But it also creates immense opportunity if you’re able to position yourself accordingly, be the place where these new emerging storylines are unraveling, and surf the waves of the hype cycles into compounding value. 

Blockchains are the canonical examples of this. Regardless of what the new meta is, Ethereum and Solana are going to capture value from it. Wallets, DEXs, Trading Bots, Launchpads, Social Networks are also perfectly positioned. 

Looking at Zora vs Opensea is a useful example. As NFT volume dried up Opensea just sat there hoping it would come back. Whereas Jacob continuously reinvented Zora to always make sure they were sitting on top of the current meta as they shifted from 1/1s to editions to memecoins.

In crypto you want to either be in the business of issuing new tokens, or be a context that people want to transact within. And in either case you need to be adaptable as an organization to stay relevant regardless of what genre of digital assets is currently hot.

Peace made a sick graphic for the more visually inclined among us. 

I had a number of conversations with founders this week that frustrated me with pre-launch chains. Convincing founders they should launch on them based on promises of support, community, distribution, or money when mainnet timelines are still up in the air is shitty behaviour.

Putting founders in a position where their product is launchable but are toiling their thumbs waiting for your tech to be ready is quite literally the opposite of what they need. They need to get in market as quickly as possible, kick off rapid feedback loops through real usage, and start owning the category they’re building in.

With today’s competitive dynamics, a single month could be the difference between being a category leader and having to scrap for attention among a crowded group of fast followers. 

And in most cases we’re talking about much longer. Most of these ecosystems have raised hundreds of millions of dollars and will launch at multi-billion dollar FDVs so need to come out of the gate perfectly or risk kicking off a death spiral of FUD that’s hard to recover from. The 2 month timelines to mainnet they’re giving you will likely end up being much longer.

I’m a big fan of many of these ecosystems, but it’s important for founders to not idolize and feel beholden to them. You should absolutely deploy on them when they go live if they have meaningful distribution into a demographic you want to serve, but they’re not going to make or break your product. Only not having a deep sense of urgency and rapidly executing will do that. 

So just launch.

I’m not going to spend much time here because I’m sure you’re all very aware of how well the Hyperliquid TGE went, and I wrote about why it’s important a couple of weeks ago. You can also just read this if you need to catch up.

But I do think one thing that’s been under discussed, and the core reason it’s doing so well, is the deep belief they’ve instilled in their community through their actions. See “$100k BTC” above. 

This is not just a product that people like using or just a new L1 people think will pump during this bull cycle. It obviously is those things, but more importantly they’re a leader in a movement towards a future that rejects the rent-seeking of traditional gatekeepers and commits to creating financial opportunity for people. 

Everything they’ve done, from not taking VC money to not doing CEX listings to launching the token at a $0.00001 starting price to minimize tax burdens, tells you they’re going to do whatever they can to do right by their community.

Of course it can still not work out, but if you want to be a part of the adventure towards a more transparent and fair financial system and are going to place your bets somewhere, their actions are proving to people that this is a great place to do it.

It’s a beautiful symbiosis of mission and vision and execution. It’s such a welcome respite in a world filled with short term actors and broken promises.

The new playbook has been written, and people like it. There’s no going back.

Worldcoin is running one of the craziest acquisition and distribution strategies for a chain I’ve seen. 

1. They have an increasingly resonant mission to build a network only for verified humans. 

2. They have a crazy eye-scanning orb that people want to experience that onboards them, and they’re going hard on activations around the world.

3. Once you’re scanned you earn tokens, but they’re only claimable in the app so everyone downloads it.

4. The tokens are claimable monthly which forces usage and retention.

5. They push you to stake to earn yield after claiming, which you might as well do while you’re waiting for all your tokens. This sets up more app opens as the number is constantly going up and that’s always fun to see.

6. They then launched a chain that builders need to deploy on to tap into the distribution of the App. 

7. The numbers are big so builders are deploying and making the app more useful.

8. And the flywheel is off to the races.

We’ll see how it works out long term once the incentives dry up, but they’re doing the right things to give themselves a chance. They’re aggressively attracting people to their network, they’re incentivizing them to solve the cold start problem, and they’re leveraging this attention to attract builders to come create sustainable value through their app and chain. 

It takes shit like this to stand out in today’s world. Time to get weirder.