thank you this was a refreshingly optimistic week

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...

We kicked off Internet Explorers this week with @T_H_Crypto, co-founder of Kizzy. Kizzy is a social media betting product, launching soon on Monad, that allows anyone to wager on the social media performance of influencers / creators / celebrities. You can bet on follower growth, post virality, and a bunch more. 

The generalized platform opportunity for memecoin launchpads and prediction markets are well understood at this point with the success of Polymarket and Pump.fun, but I’ve been surprised at how few people have been exploring more vertical-specific and social products on top of these primitives. 

I’ve used the example of a social product for sports fans where fans are competing to have the highest market cap team coins, launching sports-related memecoins, etc. Fees could go to shared pools that fans use to fund viewing parties or tailgates. This could be one way memecoins evolve from being pure attention speculation games to cultural assets with real communities.

Kizzy is one of the few projects I’ve seen actually running at this opportunity. They’re building on top of prediction market primitives to allow people to bet on influencers and social media in the way that people bet on athletes and sports. They’ve recognized that influencers are a new source of fandom, and just as sports betting has extended the surface area where people can express their sports fandom, they can do the same for social media. 

Consumer products need to be habit forming and prediction markets historically have suffered from a lack of repeatability (as kyle wrote well about a few months ago). Kizzy does not suffer from that problem. The world has become an always on reality tv show with an effectively infinite number of constantly unraveling storylines that puts the repeatability of sports betting to shame.

Kizzy coupling the permissionless, global liquidity properties of prediction markets with the expansiveness of social media will be crazy to watch.

We dove into where the insight for Kizzy came from, why they’re building on Monad, how they’re bringing the product to market, and much more. You can watch our chat here.

We announced yesterday that we’re acquiring Build from Backdrop. It’s essentially an AI-powered hackathon product that has helped 10k+ builders launch 1k+ products over the past year they’ve been running it, and have raving reviews from participants. So we also had Joey (founder of Backdrop) join the show this week to dig into the success they saw with the product and why they decided to pivot away from it, as well as tease some of our plans for how we’re going to integrate it into our network.

This acquisition was a no-brainer for us as expanding the support systems we offer consumer crypto builders (and beyond) has been something we’ve wanted to do for a while.

Our accelerator model is necessarily high touch and highly curated, but just because something isn’t investable doesn’t mean it isn’t valuable and shouldn’t be built. And just because we can’t find conviction in a team or an idea doesn’t mean they won’t be successful. And we have so many talented people in our network that can be incredibly useful to early stage teams if we’re able to get out of the way and make it easier for them to connect.

But we’re a small team already doing too much, and the overhead in designing the program, building the software, marketing it, etc was a lot to add to the stack. Acquiring Build gives us a massive head start and will allow us to have something in market early next year (DM me if you want to be a part of it).

We’re focused on building a network that brings together the founders, investors, and explorers at the edges of the internet to help our collective visions become reality and allow anyone to participate in the value creation of innovation. This is a big step towards us unlocking that in earnest.

Matti from Zee Prime shared a post this week outlining a critique of memecoin narratives and exploring what a more productive and positive-sum future for them could look like. The core of his critique is around how they’re grounded in the idea that people shouldn’t have to do any work or create real value to make it, and how this incentivizes investors, founders, and people to not even try and just launch “obviously valueless tokens”.

But he also recognizes how powerful of a tool the tokenization of culture is and wonders how they can transition away from their current anti-capitalist narratives into “positive-sum CultureFi games” that harness them towards more productive means. He suggests launching “culturecoins with a mission”, but doesn’t go much further into suggesting the mechanisms that will actually allow them to be put to productive use.

There are parts of this I agree with and part of this I don’t. First I think the memecoin narratives are fair and warranted, and will ultimately be productive for the space (vance said it better). There are a ton of quality consumer founders out there with very backable aspirations for real world impact that continue getting passed over by VCs in favor of the continuation of their dumb new chain games. They’ll continue doing this until there isn’t a bid in sight for new chain tokens and they need to look elsewhere for their precious returns. The faster this can happen the better.

But then we’ll obviously need the pendulum to swing back, and that’s when consumer tokens, scenecoins, culture coins, whatever you want to call them will start to shine. They’ll be tokens backed by real ambition, a mission to make progress towards, and integrated into products that provide value outside of number go up.

The core question at the heart of our exploration at Seed Club is how do you harness our newfound ability to convert cultural and social capital into financial capital in productive and sustainable ways? How do you use the attention and cultural aggregation powers of memecoins to actually serve people in more expansive ways than just number go up?

We’re slowly moving closer to an answer, and my current guess is that it looks something like this. The mechanism remains the biggest open question, but I think programmatically buying and burning tokens using protocol revenue is a good starting point. I’m also excited by mechanisms that create value for long term holders from speculative token activity (like what baseline.markets is building).

Memecoins aren’t going away, people love them (I’m people), but I deeply share Matti’s interest in figuring out how to use them in new ways. They’re bundlers of culture and distribution, and consumer projects that figure out how to tap into, harness, and serve their cultures will be able to do wild things.

Arthur Hayes wrote a post this week highlighting the ridiculousness of the CEX listing game, how generally ineffective they have been at driving token value, and advising against teams listing before they have a token in market trading on DEXs and signs of PMF. He shared that listing on Binance can cost up to 16% of your token supply and a $5 million purchase of BNB.

We don’t need to spend too much time here as I’ve talked about this more than enough, so let’s just be very clear…

You can write off any project playing low float high FDV games and getting CEX listings on day one. It’s so obviously the wrong thing to do for your community and believer-base that you can safely assume they are not in this for the long-term, and are just trying to extract as much short-term value for themselves and their investors as possible.

Price discovery is going to happen regardless of how a token gets launched. You can either launch it in a way that allows your community to capture the value as your project becomes successful, or in a way where only the team and investors get meaningful upside. The path a project chooses tells you everything you need to know.

Scroll for example, can be completely ignored.

Uniswap announced Unichain, their new Superchain L2 “designed for DeFi”  yesterday. The chain is focused on offering fast confirmation times, improving cross-chain interoperability, and providing utility for $UNI stakers in the form of sequencer revenue kickbacks.

The natural reaction to this is of course “ffs another L2”, but this is notable because it’s an application with clear PMF launching a chain with new functionality specific to their use case that will also be useful to the broader ecosystem they participate in. It’s the consumer crypto opportunity I’ve been talking about playing out.

By doing this they’ll be able to improve their user experience, capture more of the value chain, position themselves at the center of an ecosystem, more directly reward token holders, and generally just extend the surface area of their brand and network.

The surprising thing to me is how long it took them to do this. They’ve let Base have a year and a half of capturing mindshare and solidifying their network effects and let Velodrome leverage their first mover advantage into a strong position (4x the TVL and 2x the volume as Uniswap on base) in L2 DEX land.

Maybe there are some tech innovations here that justified them taking this long, that’s out of my wheelhouse, but more likely it’s just the big company thing. The Uniswap wallet took them forever to get out and as a result they launched into a heavily crowded wallet market, and this feels similar. 

Also the tradeoffs (and here) of them launching a general purpose chain are interesting to consider. I know everybody hugs each other when they join the “Superchain Alliance”, but Uniswap and Base are now directly competitive. It’s in Base’s best interest for Velodrome to win, and as the leading L2 that puts Uniswap in a bit of an awkward position. No more mr nice dex?

I'm excited for them to get this in market and watch how these dynamics play out.

It’s been 65 days now since Zora updated their protocol to have liquid secondary markets and although there have been a few mints that have popped off and had meaningful secondary volume, it’s generally flown under the radar of the degenerate speculator crowd. But with the recent Dexscreener integration and a new pump-like product, it feels like people are finally starting to take notice.

ArtRun just launched yesterday into a decent amount of attention. They coined the name artcoins which I can’t help but like, and it may give the Zora protocol the interface it needed to attract enough degenerate activity to kick off a fun speculative arena. A bunch of the early top market cap tokens are way up since ArtRun launched yesterday.

They were also smart in how they brought this to market. They created their own $RUN mint, pushed people to collect it in the interface (which they’re doing because it’s “free”), and sent people tokens that retweeted their announcement post. This got them trending across the onchain distribution ecosystem which drives more attention, more mints, more fomo. It’s a 24 hr uncapped token presale disguised as a collectible. There’s a few hours left in the mint and they’ve already made ~100 ETH from the protocol fees.

I’m glad someone is building this. The goal of liquid secondary markets is to give people more incentive / make it an easier decision to collect, and having companion interfaces to Zora’s core art-focused client that are targeting more speculative collector personas could unlock a new level of collecting activity.

Ultimately the reason to lean into free open edition mints as an artist / creator is to grow your audience and attention base, and speculation is a very useful tool in that pursuit.

There was some good commentary on the consumer crypto opportunity this week so just bubbling up some worthwhile things to check out:

1. David Phelps on the Fat App Thesis. The Fat Protocol thesis is dying as we come to the end of the infrastructure cycle, interoperability breaks down liquidity moats, and power laws mean the killer apps will hold all power over blockspace providers.

2. Ryan Watkins on the Age of Applications. Apps are on the verge of flipping their underlying infrastructure in revenue yet infrastructure on average still trades at 300x higher multiples. Infrastructure multiples will inevitably compress and application multiples will inevitably rise. So where do you want to place your bets?

3. Toly discusses that apps will capture 90% of value in the transaction value chain.

4. Justin Gainsley showing how Walmart could double their net income by switching entirely to stablecoins.

5. A meme for all the VCs who pretend to have conviction in consumer crypto.

6. Ansem on memecoins as decentralized content studios.

7. Austin’s weekly consumer crypto product reviews, this week featuring Receipts.

Thanks for reading, tell your friends ❤