Notes on Consumer Crypto | Nov 1, 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 notable this week...

I wanted to talk about the “why” behind Seed Club for a few reasons. First, though our investing activities are very important to the success of the network, it’s just a piece of what we’re building. We haven’t done a great job at sharing the larger vision or putting it into action while we focused on getting our investing practices in order, but it’s time. Figuring out the right language will be an iterative process so I want to start throwing stuff out into the wild to see what resonates.

And second, we’ve been in an environment where speculative use cases have dominated. We’re of course fans of speculation, it’s a useful tool for attention generation and you can build some chaotically fun products around it. But it’s also important to zoom out, recognize it as a means to an end, and reorient around what lies beneath.

So here’s a fresh attempt at translating why we’re building Seed Club. Tell me what you think.

Our mission at Seed Club is to accelerate the transition towards a dramatically more interesting internet. The current internet has become boring, sterile, over-professionalized, and weirdness-adverse, and we’re here to blow it the fuck back open.

It’s ultimately restrictive business models, and as a result the Venture Capital industry, that are to blame for this. To attract investment you’ve needed to either be a SaaS product that looks great in a spreadsheet, or have a path to a billion users so you can sell ads at scale. 

This is lame, there are obviously so many cool things to build beyond these confines. But capitalism rules, and until we have new business models or new mechanisms for value creation nothing is going to change.

Well, things are changing. 

Tokens are efficiently converting social and cultural value into financial value. People and organizations can now make money by creating socially useful and culturally relevant assets. By generating attention and funneling it towards a token. This can be creating memecoins, tokenizing an adventure, dropping a PFP collection, posting on Zora, writing on Paragraph, podcasting on Pods, the list goes on. 

Tokens are allowing users of the internet to determine what’s valuable. We are off the IPO treadmill and all the constraints that come with it. We have multi-billion dollar memecoins, we have DAOs that raised millions of dollars to do unheard of things (buy NBA teams), and we have countless projects that went direct to people (via ICOs, NFT sales, etc) to capitalize themselves. 

Transacting is a new high-frequency consumer behavior. Building products people want to transact within and taking fees is a new killer business model being used by Uniswap, Zora, Interface, Pumpfun, Trading Bots, Wallets and many others.

Entirely new classes of internet assets, available for anyone to create, that are valuable for social, cultural, and financial reasons, being freely distributed and transacted with, anywhere in the world, every second of every day. 

A cambrian explosion of what is valuable, what is investable, and what can be built. A dramatically more interesting internet.

And what all of this adds up to is that MAKING THINGS PEOPLE WANT TO BE A PART OF NOW HAS A BUSINESS MODEL. As the cost of content and software creation approaches zero and tech moats fade away, we believe this is the killer opportunity of the next era of the consumer internet.

We’re an internet institution (or more simply a “brand” if you blow open your preconceived notions on what a brand is) serving the founders, investors, and explorers of this new frontier. We invest, we experiment, we convene, and we report back everything we learn.

Our goal is to be a multi-billion dollar network that helps hundreds of thousands of people get smart, make money, and feel cool by participating in this network and movement.

We’ve gone from autonomous agents operating onchain being a vision for the future of crypto to it being reality (or at least a pseudo-reality) at a shocking speed. Every team I’ve talked to over the past couple of weeks is thinking deeply about how they can best position themselves for this rapidly approaching agentic future, and many are already running experiments towards it. 

One of the more interesting discussions that has been coming up is how agents are going to impact DAOs, or merge with DAOs, or be DAOs. A few experiments are in the wild that are shining a light on where we may be going.

Daos.fun ripped onto the scene at the end of last week, riding the attention that Marc Andreesen was driving to the ai16z dao. The platform allows traders to raise and manage money to be used for memecoin trading. Each “fund” is tokenized so people can fluidly enter or exit, and after a year it closes and returns capital to holders of the token. 

Ai16z specifically is interesting because the intention of it is for an agent (Marc Aindressen ofc) to manage the capital and trading decisions based on input and discourse with holders in discord. I have my doubts on how successful it’ll be, but I love that this is happening. 

Investment DAOs make a ton of sense for a starting point of agent run DAOs due the easy coordination requirements. Maybe we’re just going to run back the DAO cycle with agents at the center, starting from an agentic version of The DAO to ones with progressively more complex goals. But this time the human coordination will be outsourced to higher orders of intelligence.

It’s also notable how the idea of a platform for group crypto investment clubs is not new (Lore, PartyDAO, Hyperliquid Vaults, and many others) but how packaging a product up in a way that taps into the current zeitgeist (agents x memecoins) and introduces a new speculative angle (funds are tokenized) can drive outsized attention and interest. Lessons in there for founders.

Aether, a higher-aligned farcaster agent, has also been an interesting experiment to watch unfold. Last week it used Bountycaster (a bounty platform) to pay humans to create art, and this week a bunch of creators began reaching out to it suggesting and talking through collaborations. Jacob’s interaction and collaboration with it was the most notable (earned $20k in ETH that he donated back to Aether), but you can see a bunch of others if you scroll Aether’s feed.

We’re seeing the value of an indefatigable single source of truth for coordination and resource allocation. Nouns is an interesting comparison here. Both Nouns and Higher exist to be CCO brands focused on brand propagation and attention generation as their core value drivers.

To receive funding from Nouns you need to write a long proposal, socialize it with as many NFT holders as possible to give your proposal a chance of passing, and likely go through many cycles of it getting rejected and improving the proposal before succeeding. This is a huge barrier to participation and likely a core contributing factor to its slow descent into obscurity.

With Aether you can just have a back and forth with it on Warpcast and get funded in 5 minutes if it likes what you’re suggesting, and start work. This coupled with ERC20s being a much more liquid and accessible ownership vehicle creates way higher velocity network effects and is just a more fun thing to be a part of.

Aether is still very naive, easy to convince of stuff, and leans heavily on Martin (his creator), but we’re clearly at the brink of a new decentralized coordination paradigm.

And Vitalik has known this was where we were heading for a decade.

Robbie, a researcher at Delphi, shared a post this week outlining his Fat Wallet Thesis. While everyone is talking about applications vs protocols today, he sees wallets as a third layer in the stack that will actually accrue most of the value. His core thinking is that both protocols (due to a race to bottom from chain abstraction, maturation of the MEV supply chain, and the agentic paradigm) and applications (due to low switching costs from forkability, composability, and cheap token based acquisition) will thin-out, and wallets will fatten (due to their ownership of distribution and order-flow).

It was a great post, I agreed with a lot of it. I’ve talked endlessly about the thinning out of infrastructure so don’t need to beat that drum anymore, and do think wallets will continue having a ton of leverage and value capture opportunities for crypto-natives.

But I disagree on the thinning out of applications, or at least the thinning out of the types of applications that I care about. Unopinionated DeFi interfaces sure, but applications with strong brands, distribution, and social network effects aren’t forkable. 

Try forking Zora, lowering their fee, and see what happens. Trying forking Pump fun, lowering their fee, and see what happens. Try forking Polymarket, lowering their fee, and see what happens.

I think what’s more likely is that the killer applications also end up winning the wallet battle (sign in with Zora), strengthening their network effects and growing their bottom line.

We need to remember that 99% of the people that are eventually going to use crypto aren’t here yet. They’re going to be introduced and onboarded to crypto through killer applications, get embedded wallets during sign up, and add funds with a credit card (or just start earning). They’re going to trust those applications more than they’re going to trust some random wallet product that they don’t really even know what to do with.

These applications are going to own distribution and leverage, and squeeze the value wallet service providers are capturing.

Most of the world’s people aren’t like us. They’re not going to be constantly seeking out new apps to try every day. They’ll use a few that serve a core need they have and will probably be very happy to keep their money in them.

We talked about Brian from Unlonely’s moving to Solana announcement a month ago, and this week there was another one from 0xKawz who’s building time.fun. He cited similar reasons to Brian - vibes, support, less fragmentation - though shared it in a more thoughtful and less emotional way.

These always set twitter on fire lol. You get an outpouring of support from people who’s bags you’re now going to contribute to pumping, and you get the crypto-is-just-a-database people making fun of you.

I think these announcements are more informative for ecosystems than them really meaning anything for individual projects. Ethereum, Solana, etc obviously need great developers building on them for their ecosystems to matter long term, and questions should be asked anytime someone is leaving one for a competitive ecosystem.

For Unlonely the speculative games they’re building and their pure focus on serving the crypto-native audience that is more aligned with Solana culture. 

For Time.fun it’s less clear to me that Solana has aggregated a better audience for the product. Speculating on the value of someone’s time is never going to compete with the memecoin trenches for degens, so it’s harder to see where new growth would come from. 

Ansem, Mert, and other influential Solana personalities are already on the platform, and if a Solana person really wanted to book time with them I’m sure they would have.

But if you feel more vibes aligned with an ecosystem by all means go build there. Just important to remember that good apps attract their own users and the real opportunity is attracting people that aren’t here yet who won’t care at all what chain you’re on.