Notes on Consumer Crypto | Jan 27, 2024

Artizen, Crypto: The Game, $DEGEN, Why Mint?, Non Fungible Plants, and more.

yoooo!!

I write this newsletter every week as I explore the world of consumer crypto alongside building Seed Club, supporting consumer crypto founders, and preparing for the weekly Friday rundown show Internet Explorers I do with Jess and Peacenode.

A reminder that we opened up applications for SC07: Consumer Crypto this week and you can learn more here. It's already very obvious it's going to be a banger.

Alright, here are the things I found interesting this week…

Artizen

Artizen, who came through SC05, is a project focused on funding breakthroughs in human creativity. They have a novel funding mechanism where projects release artifacts (as NFTs) that capture the essence of their mission, and people can buy these artifacts to support and own a piece of the journey. 

Participation is organized into seasonal competitions where projects have a month to sell as many artifacts as possible and Artizen matches funding and awards other prizes to top submissions. Collectors of artifacts then get to participate in the curation of projects for the next season and other community initiatives. 

Their 3rd season is about to close and projects have raised over 110 ETH to develop a new technique for sustainable 3D printing shoes, provide residencies and free studio time for Detroit musicians, preserve the art of an artist with Down Syndrome by converting it into a generative algorithm, and much more.

We had Rene, the founder of Artizen, on Internet Explorers (watch our chat with Rene here) this week to talk about how things are going and his plans for the future. He’s been furiously experimenting for the past couple of years to figure out the right model for funding weird acts of creativity, and thinks he finally has, so had a lot of useful learnings to share.

Crypto: The Game

We also had Dylan join the show this week (watch our chat with Dylan here) who’s imminently launching Crypto: The Game.

Crypto: The Game is basically a mass multiplayer internet survivor where people buy into the game and vote each other off until one person remains and wins the entire pot. There are tribes, chat rooms, immunity challenges (arcade games, scavenger hunts, etc), and a bunch of twists that’ll reveal themselves as the game progresses. 

He’s targeting 1,000 participants so it could get wild, and I’m pretty excited to see what strategies people end up using. Do you vote off the influencer because they’re deemed a threat, or do you keep them around in case clout is useful for an immunity challenge? Do the PFPs people use influence how long they last?

This is just the first season and Dylan teased some cool crypto mechanics he’s exploring for future seasons. And if this becomes something the ecosystem rallies around we could see live streams, prediction markets, game-related memecoins and who knows what else running alongside it.

I’m excited about this as another instance of the ephemeral product thesis. I’ve been going on about this for 6 months, but let me reshare it.

Today’s internet is fundamentally episodic and there’s an endless stream of shiny objects yanking our attention around. It’s much easier to make something novel go viral than it is to build something that perpetually retains attention. This is creating a really interesting opportunity to design products and companies around viral ephemeral experiences and monetize them with crypto business models (transaction fees, protocol rewards, mints). The World’s Largest and Crypto: The Game are good examples. Friend.tech is also, though they’re trying hard not to be ephemeral.

Crypto: The Game launches on Monday and I’ll definitely be playing. See you in the arena.

$DEGEN

$DEGEN is a memecoin that has absolutely taken over Farcaster recently. Its success is providing a really interesting memecoin case study and is hinting at a future where they’re more deeply integrated into social product experiences.

A couple of months ago memecoin experiments starting flying out of the /degen channel, surely motivated by the ongoing memecoin mania happening on Solana. 

$POINTS was first, which was an okay meme and had a cool origin story, but suffered from some dev shenanigans and being on mainnet, and just ultimately didn’t get the community formation it needed. 

$WOWOW, $YOYO, $FARTS, and probably some others I missed then followed a similar path. Each had interesting new launch/distribution mechanics, but none were able to sustain any real level of interest.

And then $DEGEN came along. The initial distribution was based on /degen channel activity like posts, likes, $degen mentions, and other channel actions. It both rewarded people who had already been participating in the channel, and incentivized new people to contribute. 

The entire community seemingly rallied behind it and it quickly became the schelling point for a channel that already dominated farcaster activity and was a meaningful social context for many. I tweeted this week about the importance of creating contexts people want to transact within for consumer crypto builders, and this is a great example of one.

The builders of Farcaster have since jumped in to run countless experiments on top of it and have started using it as a de facto rewards system for their products.

We had Wake on the show to get the inside perspective on what’s happening and dig into what’s making it so successful. It’s worth listening to.

Why Mint?

Minting, and onchain media generally, has been in this search for meaning for years. It has clear signs of fit in a few narrow use cases, like digital art, but whether it’s going to expand into a ubiquitous consumer behavior remains to be seen.  

I love the ideological and higher order reasons to do it on the creator side that Zora professes. It being vital to a pure internet not dominated by platforms and ads, it revealing economic demand and the value of attention, provenance for ideas and IP, etc.

But it’s going to take more to get most people over the line on the collector side, and we’re still largely missing the meaningful social contexts we need for that to happen. It’s not a technical challenge, it’s a social challenge. We need to get more imaginative and intentional in creating these.

Once we do have these social contexts there will be many reasons people mint. Supporting a creator, liking the art, saving the media, status signalling, getting access to something that’s using it as a key, the list goes on. Just as people like content on today’s social platforms for a variety of reasons.

Fred Wilson dropped a post this week that suggests another angle that I hadn’t really considered; building your personal owned data set that you can train ai models on. If using personal agents becomes a core part of our lives, and having a frequently updated data set on what you’re interested in makes them better, then collecting content to feed them could be a powerful driver of this behavior.    

It got me daydreaming about a product that bundles personal AI agents with onchain media discovery….

The usefulness of onchain data will expand well beyond minting though, which is ultimately just one form of transaction. As networks realize how useful this data is for network legibility, rewarding activity, distribution, participant profiles, ai applications, etc they’re going to start integrating transactions into all of their activities. And again, if these networks can build meaningful social contexts that people want to transact with, “why mint?” will have some obvious answers.

Why Points?

Graeme (Stack founder) and Katie (Archetype) dropped a post this week exploring the benefits of onchain point systems, which Graeme is building a solution for with Stack

They started off talking about how gamification dominated web2 consumer in the 2010s as mobile took off and there proved to be huge opportunities in making mundane activities fun. Foursquare, Waze, Duolingo, etc.

They all fundamentally used point systems to tighten feedback loops (practice Spanish and number goes up is infinitely faster than practice Spanish become fluent), guide usage towards core product benefits, and build habits.

And “blockchains are natural infrastructure for point systems because they’re designed as a universal ledger of entities with rails that can programmatically distribute value to these entities based on certain actions.”

Tokens of course have historically been used for this and have been critical to incentivizing usage of blockchains and protocols, but the high costs of onchain transactions made them only really useful to reward financial actions and as a result attracted mercenary capital. We all know this story.

But as transaction costs become negligible and new classes of non-financial actions start to come onchain, the design space for crypto points systems is broadening. The article explorers the tradeoffs between tokens, offchain points, and onchain points for this new world. 

It’s worth reading, but they net out that onchain points introduce the benefits of auditability and composability of tokens, while maintaining the flexibility to adjust properties (supply, usages, distribution) which is so beneficial to early stage products.

Points systems aren’t going anywhere, they work and have been around for decades, so it’s great to see people pushing on new models and building infrastructure to bring them onchain.

Non-Fungible Plants

Now this is a crazy one. Grow Your Own Cloud is a project that came through SC04 and is focused on storing data in plants with the audacious goal of being able to turn server farms into carbon absorbing data forests. Wild.

This week they announced an NFT drop they’re doing called Non Fungible Plants. You can probably guess where this is headed, and yes they’re storing an NFT in plant DNA.

How it works is they’re taking the addresses of all collectors of an edition they’re dropping, creating an artwork with them, and storing the data of the artwork in a real plant. 

Check out the site to learn more, it’ll be a fun thing to be a part of.

Pump.fun

We’ve been talking to a bunch of teams since announcing our upcoming accelerator cohort and one category that is bustling with experimentation is memecoins. Builders are recognizing the signs that these are powerful new social primitives with clear demand, but the current products to create and experience them are severely janky.

Pump.fun is an example I stumbled on this week that got my imagination going. They’ve built a product that makes it seamless and basically free to create a memecoin, and also safer to speculate on freshly launched tokens. They do this by launching tokens on a bonding curve, and once they hit a $69k market cap the liquidity automatically gets deposited into an LP pool on Raydium and the LP token gets burned. 

Simplifying and democratizing creation was core to the defining social products of web2 (instagram, twitter), so you could imagine some powerful products being built around this core idea. If the ease of creating a viral memecoin can approach the ease of creating a viral meme things are going to get weird.

I’m obsessed with this category.

That's it for this week, see you on the internet friends.

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