The Obvious Series: Shitcoins

There are two parts to The Obvious Series:

1. Simple explanations for newer entrants

2. Abstract wtf are we doing here reflections

A crypto currency open to market speculation.

Sometimes referred to as memecoins, shitcoins can be conceptualized as:

1. knockoff coins compared to name brand coins like BTC and ETH

2. market-cap-roulette tokens

3. community/protocol stock

At the introductory level, shitcoins are high risk, high speculation ‘assets’. Anyone can create one and make it available on a decentralized exchange. Because of this, many are scams, honeypots (buyable but not sellable), and wallet drainers. This is why we call them shit.

They exist because:

1. the industry is built on no permission necessary

2. sometimes people get insanely rich off of them

At the more intermediate levels of crypto, you find the conversation on whether all coins are shitcoins. Even the ‘tried and true’ protocol-coins may be no different than $DOGE or $SHIB.

At first it may seem nonsensical, but upon further consideration, you start to see quite a bit of overlap. When comparing $UNI and $DOGE what is really all that differentiating at the coin level?

Clearly the Uniswap project is quite different than the Doge project. There is a team working at Uniswap Labs, a founder on twitter you can talk to, etc. But when examining the coins, what is there beyond speculation, market signaling, and potential profit shares?

Some will say votes in a DAO, which isn’t wrong. However, when you dive deeper into how Uniswap is set up, you see that many of the core infra decisions are made in-house. The DAO almost serves as a community conference center.

This is not a condemning observation either. It makes sense that a protocol, trying to survive numerous bear markets, not leave its future in the hands of degenerate gamblers. What we are uncovering, however, is that the $UNI coin provides much of the same mechanism as shitcoins.

I’m of the opinion that this is not a ‘bad’ thing. In fact, I feel it’s a necessary feature of what we are trying to build here onchain; something we will call meme markets.

Remove your personal preference on where liquidity should flow and let’s examine the above image. What do these two coins represent?

Doge represents:

• comedy

• counter culture

• memes

• a fuck you to the system

Uniswap represents:

• decentralized finance

• free market economy

• self custody

• peer to peer economics

If you were to ballpark what share of people, out of 100, care more about Doge’s ideas or Uniswap’s ideas… it’s a no brainer why it has more than double the market cap. This is a crucial element of crypto; the Financialization

of meme markets.

Not much different than owing $TLSA stock as way to gain exposure to the companies ideas and potential profit, ‘shitcoins’ are the crypto equivalent. They run much faster, are inhibited to a way lesser degree, and anyone onchain can create one.

Shitcoins are a feature of crypto, not a bug.