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Notes on Consumer Crypto | Feb 2, 2024

Unlonely, Farcaster Frames, Metalabel, Crypto x AI, Catalog Radio, and more.

Oh hello fellow consumer crypto travellers. I had a chaotic week of talking to founders interested in SC07, trying to stay alive in Crypto: The Game, and keeping up with the insane levels of experimentation that's happening out there.

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

Unlonely

We kicked off Internet Explorers this week with Brian, founder of Unlonely and one of the more chaotic personalities in crypto. 

What they’re building sits at the intersection of a bunch of themes we’re interested in; live streaming, memecoins, ephemeral experiences, social context building. They’re not just building a live streaming platform, they’re building a world and social playground with live streaming as the medium. Though certainly a shitpost, this tweet by him yesterday sums up their approach well lol. 

As does the announcement of the second season of their show Love on Leverage. Everyday during valentines week they’re bringing two people onto the show for a live date and the audience votes for how compatible of a match they are by buying and selling their platform $VIBES token. If the price drops into the red zone the date is over, if the price pumps into the green zone they get sent on an IRL date.

I tweeted this week about the importance of consumer crypto projects creating contexts that users want to transact within because business models (transaction fees, protocol rewards, mints) and user behaviors (collecting, predicting, speculating) all stem from there. Live experiences are going to be a powerful tool for creating them.

Frames

The Farcaster team launched Frames last week, which essentially allows anyone to embed simple apps into casts, and look at what happened to their DAUs. Unique daily casters 4xed overnight.

Most of the early frames have been pretty basic (polls, newsletter subscribing, NFT minting) but they’re getting more interesting by the day as experimentation compounds and teams with existing products figure out how to leverage them. Over 5,000 frames are getting casted per day right now.

You can check this article out for a good description of how they work, because I want to focus on why they matter.

Crypto broadly, and decentralized social specifically, only wins if it’s able to power differentiated products and experiences that are better than what currently exists. For a while Farcaster was just a feature light decentralized twitter. The idea was cool, but the product wasn’t yet.

The introduction of channels, along with a bunch of other improvements, was the first time Farcaster/Warpcast felt meaningfully new to me. And Frames is a massive jump in that direction.

Though the concept isn’t new, it existing in a world with interoperable identity, data, money, and assets is very new. And that changes everything as it completely removes the need to click through to another site, login/signup, enter payment details, etc. You can do all of this seamlessly in the context of the feed without Farcaster’s involvement whatsoever.

And we’re already seeing how well frames convert compared to kicking-off to other sites. I tripled my subscribers to this newsletter by casting a frame where people could subscribe directly from. An Invest in Music collect frame (powered by pods) drove many multiples of mints compared to what they typically get. Daylight had 1500 people check for airdrops driving 500 new signups.

This is massive for Farcaster, and all this developer activity is going to help entrench it as the leading decentralized social protocol. It provides builders an incredible attention base and social context for their products to exist within, and I’m sure it’ll be a wedge many founder use to incubate eventual category defining products.

We brought Jacopo onto the show this week who has built a few of the most interacted with frames to dig more into the builders perspective, and packy’s piece is the best reading I’ve found on it. Check both out if you want to go deeper.

Metalabel

We also had Yancey on the show, Metalabel founder and previous co-founder of Kickstarter, to talk about their upcoming release. They describe it as a new space for releasing, selling, and exhibiting creative work, or “Bandcamp for Everything” as he said on the show. 

Metalabel came through our fourth cohort and in the year+ since have released over 10 drops that were each a contained experiment towards that vision. They knew the way that people came together to create and release work needed to be re-imagined, but weren’t exactly clear how.

Well they’ve finally arrived at something they’re really excited about, and Yancey said something along the lines of “it’s crazy how obvious it seems now”. They’re releasing it in a few weeks and I can't to see what they’ve cooked up.

Crypto x AI

I talked last week about Fred Wilson’s piece on minting as the native business model for AI. This week had more Crypto x AI news as Jacob and Vitalik added to the exploration of their intersection, Claire Silver did a sick generative AI drop, and we had some fun bot controversy in Crypto: The Game.

Vitalik

Vitalik goes big picture and explores four categories of AI applications in crypto; AI as a player in a human game (ex. Botto), AI as an interface to a game (ex. Dialect), AI as the rules of the game (ex. AI-powered governance), AI as the objective of the game (DAOs or blockchains built with the purpose of constructing an AI).

It’s worth reading. He’s clearly excited and optimistic about a bunch of potential AI applications, but also concerned about the safety of systems that fully trust and rely on them.

One idea he mentioned that I really liked is the idea of AI participation in prediction markets, specifically as a solution to “info defense” (tell true information from false information). Blockchain scaling is finally allowing micro-markets to emerge, and AIs participating in micro-prediction markets across a variety of things we want truth discovery on is a very cool idea. 

Jacob

Jacob talked about how crypto is as much a new IP system as it is a new financial system, and potentially presents the solution for the incompatibility of the current internet business models with AI. 

When there’s no effective attribution or value capture mechanisms for IP, the incentive is to lock it down so you can paywall it, adwall it, or license it. This fundamentally devalues it by reducing the attention, remixing, and ultimately cultural significance it can have. 

But in a world where attribution and value capture is programatically onchain, the incentive becomes to distribute the IP far and wide. This is not only core to how IP actually becomes valuable, but it’s also what AI wants as it can be freely accessed and used by the system.

In hindsight it's going to be completely obvious that this was always the way it should have been.

His stuff is always worth reading and he provided a bunch of examples showing how Zora is becoming the onchain home for AI media and content, but we won’t pump his bags too much here.

Claire Silver

I got pulled into AI generative art a while ago with Life in West America, but it has largely fallen off my radar recently. Claire Silver selling out her drop and making 500 ETH put it back on. It’s a pretty sick looking collection

Crypto: The Game

Crypto: The Game kicked off this week (it’s fun as hell) and just before entries closed Anish added 200 bots to the game. This violated the ToS of the game so the bots were booted, but it created an interesting dialog around bots participating in games meant for humans.

I get both sides of the argument. A big part of the enjoyment of this game has been meeting and collaborating with new people, especially since we all have this base level of connectedness being in crypto. Having half of them replaced with bots would be less fun.

On the other side, I kinda would have liked to see how they did. My guess is they’d get voted out pretty quickly because fuck the bots and I don’t imagine they’d be great at the immunity challenges. But it would have been interesting to watch.

I think the way to do it would have been to have a bot tribe compete against the human tribes which would have added a fun dynamic without hurting the social experience. But this is only season 1 so let’s see what Dylan does next.

Catalog Radio

Catalog released Catalog Radio this week which is a curated 24-hour radio playing exclusively onchain music. Listeners can chat and support artists in context by “cosigning” music they love for a couple bucks.

I love this as an example of a project experimenting with creating experiences users want to transact within. To this day the most I’ve ever wanted to buy an NFT for non-financial reasons was during the Songcamp Chaos event. I was hanging out in discord with a bunch of people I knew, listening to music that was the output of a project I cared about, and wanted to mint to remember the moment, participate in the social experience around it, and support the creative work of the artists. It was a no brainer.

This could be a more persistent and productized version of that experience. The success of Catalog is ultimately dependent on people wanting to transact around music. The market of people who want to listen to and discover great music is way larger than people who explicitly want to go buy music NFTs. But once you’re in there and enjoying it and supporting an artist you just connected with is only a click away, who knows…

Andrew Chen on Incentives

Andrew Chen wrote a good post on his experience with incentive programs from his time at Uber. The TLDR is one we all know, that incentive programs attract a different type of marginal user than organic sign ups and ultimately perform worse. Incentive programs won’t solve lacking retention or engagement blah blah blah.

What I’m interested in though, is how this changes when user ownership is possible. Of course there was no loyalty to Uber because who cares about a centralized commoditized ridesharing product. If I can save $5 using a Lyft incentive for the identical experience of course I will. 

But what if I was earning Uber tokens for my ongoing usage and I was confident that they were going to win the ridesharing market? What if Uber tokens had been pumping and Lyft tokens had been flat? Or even better, what if they were all built on the same protocol that I had ownership in?

I don’t know the answers of course and we’re early in mechanism discovery, but we’re playing in a new world that has new rules and new user behaviors. We can build products that treat people as owners, give them ways to participate, and take them on adventures they want to be a part of. Loyalty looks very different from this perspective.

Friend.Tech // Whales Market

The Friend.Tech points distribution ended this week and the numbers they’ve done are crazy.

First of all, isn’t crypto great. $27M in revenue while still being miles away from PMF lol. 

Second, it reminded me to check in on a product I saw a few weeks ago that was creating a marketplace for points. I think I saw it when it first launched so it had basically no volume, but they’ve since done over $300k in friend.tech points sales.

It’s a pretty cool product. Basically there's an escrow contract that the buyer’s funds and points holder’s collateral goes into, and once the airdrop is done and the tokens are transferred to the contract the trade is settled. If the points holder doesn’t deposit the tokens they lose their collateral.

I’ve been wondering when we’d have airdrop farming as a service products, and this feels one step away.

Solana Hunger Games

I don’t really know much about this product but Solana Hunger Games captured my attention, as did the accompanying crypto word vomit of “an on-chain game merging augmented reality and social-fi in a hunt for glory and SOL”.

It genuinely looks cool though, and I love the two personas of IRL hunter actually playing the game in the host city and virtual sponsors who can participate from the internet and win alongside people.

I talked about a similar potential dynamic last week with Crypto: The Game if prediction markets, player memecoins, etc start popping up on top of it. We’ve talked to a few teams that are exploring bringing this dynamic into the AAA gaming and esports worlds as well.

Crypto uniquely enables permissionless markets to form around anything, and I love projects that are exploring integrating them directly into a cohesive product experience.

That's it, see you on the internet. 🫡

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