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Notes on Consumer Crypto | Mar 1, 2024

Perl, $Enjoy, decentralized social, Blast, software companies as lifestyle brands, and more.

Ayooo happy march and happy EthDenver to those who celebrate. I do not, so hello from the jungle of Costa Rica.

We just finished a whirlwind two weeks of over 50 interviews for SC07. My brain is mush from drinking from the firehose of the consumer crypto collective consciousness, but god I'm excited by the conversations we had. This industry is in a very good place.

Alright, here's what I found interesting this week...

Perl & Fantasy Social

We kicked off internet explorers this week with Alex from Perl. Perl is a Farcaster prediction market where you bet on daily social metric lines like a user getting over/under a certain number of likes, or a user getting more recasts than another user.

I wanted to bring Alex on to dive deeper into Perl for a couple of reasons. 

First, I’m very excited by the new wave of prediction market experimentation that we’re seeing right now. Being able to have liquid global markets to bet on anything with a defined outcome opens up a massive design space. Naturally we started with very explicit implementations of this, like Polymarket, but I expect the true breakout products to be more consumer friendly, vertical specific, social, and certainly not positioned as prediction markets. Perl is an example of this running at something you may call Fantasy Social.

Second, he’s put on a masterclass of leveraging Farcaster to bring a product to market. For months the entire product experience was facilitated through Warpcast. You would one-click place your bets in a frame and the next day could one-click claim your winnings in a subsequent frame. 

The simplicity and low overhead of this not only allowed them to easily test core mechanics and experiment quickly, but it also meant each prediction had baked-in distribution. They would also often boost that distribution with $DEGEN giveaways for quotecasts. This resulted in upwards of 30k people participating everyday, something that would have been incredibly hard to achieve this quickly in a standalone product. 

They recently launched their webapp on the backs of this success which acts as a great complimentary experience to the in-feed predictions. I imagine the majority of predictions will continue to be placed within Warpcast, but it’ll be a powerful top of funnel and a great hook to get people back into the app.

It was great digging into all of this with him, it’s well worth a listen.

$Enjoy

If you’re here you probably already know, but we’re launching a memecoin. It’s called $enjoy, and it’s the first memecoin native to Zora Network. 

We’ve actually been talking about doing this for a while, but with a Uniswap proposal passing to launch an official deployment on the network the time was finally right. And we’ve only had 50 SC07 interviews over the week and a half so had a ton of spare time.

We’ve been captivated by memecoin’s natural ability to attract attention, seed community, signal belief, and coordinate contribution towards a shared purpose. When done well they’re able to be social networks, digital fashion items, cultural prediction markets, ownership assets, and tickets to a wild adventure all hyper compressed into a single product.

The strong culture and ecosystem that already exists around Zora felt like a ripe scene to launch a token into, both to reward the people that have been contributing so much time and effort to it and attract a bunch of new participants. 

$Bonk had a monumental impact on the resurgence of Solana, $Degen attracted a tidal wave of new users to Farcaster, and we hope this can have a similar impact to Zora Network.

We announced it and launched the socials (warpcast, /enjoy, twitter) a few days ago, and it’s been sick to see the immediate energy around it and the onslaught of memes that have been flowing.

We really want to make sure this thing is set up for success so we’re taking our time to be thoughtful about the tokenomics, airdrop distribution, LPing, etc. We’re very close though and will be sharing more details about our plans for it alongside airdrop 1 claiming opening up early next week.

Decentralized Social

Decentralized social continues cooking. This week Farcaster announced that transactions are coming to frames and Solana address verifications are live, and Lens announced they’ve finally gone permissionless allowing anyone to join.

Transactions coming to frames is especially exciting and will blow open the design space of what’s possible within them. You’ll be able to ape a memecoin shared by your friend, use a DeFi protocol, send peer to peer payments, buy a shirt, bet on a game/prediction market, etc all from directly within the feed. 

The impact of Lens going permissionless will also be cool to watch. Farcaster 10x’d total signups within a few months of doing this, and we’re already seeing a similar impact on Lens signups. That being said, I don't think a breadth of users is what Lens needs in its competition against Farcaster. In fact it needs the opposite, and has to figure out how to be the core social context for some valuable niche audiences. Until it has that it’s just going to continue feeling like a wasteland of low quality content.

Dan was also on Moment of Zen this week doing a deep dive on the past, present, and future of farcaster. I’m only half way through it, but it’s a must listen if you’re interested in the space. My biggest takeaway was the challenges and tradeoffs of protocol development vs product development.

He rightly recognizes that the thing Farcaster users and developers want most is a growing novel feature set and growing distribution. In the short term these are going to come from focusing on Warpcast development, not Farcaster protocol development. But of course there’s a balance here and allowing the centralized product to get too far ahead of the protocol may break trust and hurt the developer ecosystem they’ve spent so much time nurturing. 

He knows that massive opportunity though is for Farcaster to be the underlying social graph of the internet, and for Warpcast to be the core client people experience that through. If Farcaster doesn’t end up being that the Warpcast upside is much more limited.

Blast

Blast went live early morning yesterday and has dominated twitter, the headlines, telegram groups, and everything in between since. You can love their tactics or hate them, but they’ve put on a masterclass in bringing an L2 ecosystem to market.

The two things crypto builders care about most is liquidity and distribution, and Blast has been relentless at attracting both. They leveraged Pacman’s reputation and speculation games to attract over $2B in liquidity from 200k+ users before they even went live, and then leveraged that to attract thousands of builders to launch Blast-native projects or integrate Blast into their existing projects.

A core strategy of the latter was their Big Bang competition, which they’re using to distribute half of the airdrop to early projects. They’ve touted over 3,000 applications, and ultimately selected hundreds of winners. Not only did this attract a ton of builders, but also drives user attention to top projects as people know they have well stocked $Blast bags to distribute.

The list of winners is worth looking through, especially if you’re into AnythingFi. The type of builder and user they’re positioning for is pretty clear, and the future of the L2 ecosystem continues to come into focus:

Blast - Casino Chain
Arbitrum - DeFi Chain
Base - Ideological Builder Chain
Zora - Culture Chain
Starknet - Privacy Chain
Immutable X - Gaming Chain
Polygon - Boomer Corporate Chain (lol, sorry)

Another cool thing Blast is doing to support their ecosystem projects is allowing users to earn blast points for using them, and they’ve built a nice interface to encourage and gamify it.

L2 competition is going to continue to be fierce and builders are going to go wherever they feel they can be most successful. Building for a distinct audience, dominating attention within it, and relentlessly supporting your ecosystem is the only path to success, and Blast is nailing it.

Software Companies as Lifestyle Brands

I liked this tweet by Robleh that modern software companies are becoming lifestyle brands. I’ve talked a bunch about the inverse also being true where, with the emergence of open protocols and increasingly powerful AI, lifestyle brands will have the opportunity to expand the surface area where they serve their communities and step into becoming software providers.

People stopped consuming generic opinionless media a long time ago, and they’ll stop using generic opinionless software.

This is why we so relentlessly talk about the importance of projects being memetic, it’s why our slogan at Seed Club is “build something people want to be a part of”, and it’s ultimately why we think there’s so much opportunity in consumer going forward.

Valuing Tokens

Chris F dropped a good post this week that describes how different of an economic realm we exist in here. 

I constantly see people negatively reacting to the market cap of tokens and comparing them to market caps of traditional companies. This is dumb. In a token economy our existing ideas about market caps need to be completely re-evaluated.

In the traditional finance world the market cap of a company is typically entirely a function of expected future cash flows. A business can only grow their capabilities so fast, and the markets they play in have real world constraints.

That is not true here. In the token world a market cap is a function of attention and belief, and these flow at the speed of information. A $1B market cap for a token launched a month ago that is currently dominating the attention of a bunch of affluent and very online people that consume tokens as products is completely reasonable. In fact it’s probably going to seem incredibly low in hindsight. 

This tweet is beautiful.

That's all she wrote, see ya next week.

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