#281: Memecoins are Here to Stay

🤔 And how I break them down into various categories

I know, this is you right now.

I don’t blame you, I’m almost cringing thinking about all of you cringing at the topic. After all, I just did a piece on WIF a couple weeks ago, breaking down the significance of the meme and its meteoric rise.

However, if we want to understand where the hell this space is headed we need to dig through the proverbial bottom of the barrel. And for many of us (at least from a reputational standpoint), memecoins are near that bottom.

I’d like to think I sifted the crap out for you so you get the gold nuggets, not the brown ones 💩

And as always:

• I hold some of these memecoins

• They may will go down in value, most of them at least

• The goal is to inform because this shit is not going away. In fact, they’re only getting started and it’ll only get more interesting, creative, and weird from here on out.

• Bonus: You might think they’re dumb, but there are millions of people out there who find memecoins entertaining, interesting, and financially alluring

If you don’t want to read this which is equivalent to eating a 5-pound Chipotle burrito, you can watch/listen to me blabber like a maniac about memecoins with Web3 Academy here.

Jay from Web3 Academy judging me, the memecoin maniac

The tokenization of everything

Crypto is entering mainstream financial appeal with a stamp of approval thanks to investment firms like Blackrock pushing the Bitcoin ETF narrative forward.

The most notable line in the interview with Larry Fink, CEO of Blackrock, is at 2:41:

We believe the next step going forward is the tokenization of financial assets.

This makes sense as DeFi has exploded over the past several years. If the future of financial assets is tokenization, what about cultural assets?

We see this tokenization already happening with art (both digital and physical), collectibles, fashion, music, and gaming. All of these are components of culture.

Memes are culture as well, as I referenced Encyclopedia Britannica in my inaugural piece on memes a year and a half ago. In fact, the label under the term is literally ‘cultural concept’.

Source

Influential institutions push the narrative of financial asset tokenization. The masses push the narrative of cultural asset tokenization, and that includes memes.

I typically have my ‘putting it all together’ charts at the end of my pieces, but at the risk of losing you all halfway through, I’ll share it first.

These subcategories I’ve created aren’t mutually exclusive nor comprehensive. This is a sample of the different types of memecoins I’ve stumbled upon over the past couple of weeks while simultaneously trying to make sense of madness. It’s possible for a memecoin to fit into multiple categories, just like how all squares are rectangles but not all rectangles are squares.

Memecoins

This is the broad-sweeping term that we all know and love hate with the usual cast of characters like Doge, Pepe, Wif, etc. Not much to add here about what a memecoin is as I’ve covered some deep dives on Pepe and Wif.

Fun fact: The largest memecoin of them all, DOGE, is on the path to entering the TradFi space with the help of Coinbase 👀.

As Andrew Kang says, the most entertaining outcome is the most likely.

Culturecoins

To understand this memecoin category better, it’s helpful to understand the context and rough definition of the term culture. From Google:

$DEGEN

Degen is a memecoin that originated from the degen channel on Farcaster as a way for users to reward each other for good content on the platform.

As the Farcaster adopted the behaviors of rewarding DEGEN to each other and products started adopting the token as a form of value exchange, the token and meme itself grew.

$ENJOY

Enjoy is the first memecoin on the Zora network. It’s certainly a meme, but it’s more of a concept if anything. There’s no main character, no template, no wrong way to use the meme. The only requirement is to use the word enjoy/enjoyooor or logo.

Is it weird to the layperson? Certainly. But the concept of enjoying something is not and can easily proliferate. The weirdness is a feature, not a bug.

Companycoins

This category is more comprehendable yet raises questions about copyrights and legality (where the business side of my mind naturally goes). These memecoins vampire attack the brand awareness of the company and products it’s based on, helping them to hack the cold start problem while having the creative flexibility to create memes on top of the brand.

$BPS

Base Pro Shops (BPS) is inspired by the outdoor retail chain, Bass Pro shops, while simultaneously giving a nod to Base, the layer 2 chain it’s on.

How do you proliferate the BPS meme? Create memes around fishing of course! And there’s no shortage of those. There’s even an editor tool to add the Base Pro Shops cap to your PFP, simple but effective 🐟

$RDDT

Reddit IPO’ed today, up 48% on the listing price. Meanwhile, a Reddit memecoin saw strong returns in the days leading up to the event.

Pomp summarizes this phenomenon well (worth a quick read), concluding his take with a mic drop line:

Two systems. One event. Everyone speculating.

The publicly listed RDDT x memecoin RDDT will not be the last instance of this type of duality.

$ZYN

Although I’ve called this category companycoins, there are ‘productcoins’ such as ZYN, based on the popular oral nicotine brand. Zyn users have their own subculture of inside jokes, language, and behaviors. If you use the product it’s easy to feel compelled to buy the memecoin.

Weird for us, funny to them

Is ZYN too edgy for you? Maybe Stanley Cup Coin is better suited for you.

$AABL

This one is a play on Apple’s stock ticker AAPL, and IMO is the most interesting. AABL initially caught my eye because of its creative meme approach rooted in the company’s products and lore, while having a distinct and consistent creative approach that made its memes stand out.

As I followed the fledgling memecoin over the past week or so, I noticed that the people behind AABL are doing more than posting memes:

• Partnered with SolCard to create the ‘Abble Card’, whatever that is. SolCard is an online payment platform that allows you to make online purchases at over 150 million merchants using Solana. Perhaps they’re integrating AABL as well? Sounds crazy, but something’s brewing.

• Partnered with Sphere Labs to enable AABL as a payment method for 75+ protocols and services on Solana

• Suggested a partnership with SolMail, a communication protocol for Solana wallet addresses

AABL seems to be more of a meme product that is integrating with the Solana ecosystem. This is something only the most mature memecoins have done, specifically DOGE (Tesla accepting it at some point beyond merch, Dallas Mavs still accepts it).

Personacoins

Although we prefer animals as memecoins, people (or more specifically their personas) are becoming memecoins as well. They’re already represented in meme culture everywhere so it was only a matter of time.

Modhaus, Idol 3.0, iAM

Starting with a more productive version of personacoins, we’re seeing this concept adopted in Asia. Tiger Research came out with a report on how tokens were being used as a way to capture fandom in the entertainment industry:

• Modhaus: Fans earn the utility token COMO by purchasing NFTs of their favorite artists and engagement. COMO is used for governance around the Kpop group’s operations

• Idol 3.0: Fans purchase NIDT and use the token to participate in the idol group selection process

• iAM: Fans use the BNK and GE4 tokens for governance and to purchase merch

These examples of tokenization provide more value than memecoins from the get-go and provide inspiration of how memecoins could be used.

In the governance process, fans use the token so their voices are heard.

Having a single token makes it simpler to manage, but what if there was a token for each individual? Where could that make sense?

Reality TV and game shows 😏

Shows could have their own governance token that incorporates a voting mechanism like American Idol (call or text to vote) and each contestant/character could have their own personacoin. Did Pauly D do something ridiculous on the latest episode of Jersey Shore? That would be reflected on the personacoin’s price or something similar (maybe ‘shares’?). Price spikes in a personacoin could be deterministically attributed to a viral moment for the respective character. This is how the sum of the parts (individual characters) could become greater than the whole (the show).

Asia has already proven that this business model works and how fandom can be captured and quantified beyond established methods. IMO it’s only a matter of time before TV show communities like Bachelor Nation get their own token, whether it’s a meme or something more functional.

$BODEN (politicalcoins)

There’s a loooooot more than just Boden, so I’ll just leave it at that.

As November 5th (US Presidential election) draws nearer, the spotlight on the political landscape will grow and chances are these coins will too.

$NICK

NFTNick deserves a whole separate piece, but I’m going to have dinner at 10pm at this rate and I don’t want that.

TLDR:

• NFTNick is the co-founder of the Nifty Portal media brand and the Bodoggos NFT collection

• This photo went viral and broke into other social platforms as a mainstream meme

• He coined the term ‘choose rich’ in this video, pretending that he owned the penthouse the video was shot in. The intentional lie was called out by many, most notably Coffeezilla, a Youtuber who uncovers scams

• Nick leaned into the fake rich persona, to the point where he was community-noted due to the ridiculous claims, and intentionally leaned into it over, and over, and over, and over again.

• Nick pushed the ‘Choose Rich Nick’ memeified persona to the point where he was featured on Barstool Sports, had articles written about him, and had his infamous photo featured on a game show.

As all of this happened, someone created a memecoin based off Nick and it went viral just like he did.

Performativecoins

This category seems to be relatively new and is harder to pinpoint because it’s difficult to determine how much of it is real and how much of it is fake. Hence, the term performative. By causing a scene or doing something ridiculous, the memecoin gets more attention, ultimately driving more interest in purchasing the token.

One recent memecoin trend was raising a presale (example here, I don’t recommend doing it). An account tells people to send crypto to a wallet address for a limited time only or a certain capped amount, and they eventually launch a token. There have been a handful of standout successes and a mountain of failures for those who sent crypto for presales.

$SLERF

SLERF raised $10 million in SOL that was meant to be the presale funding for the memecoin and the creator accidentally burned it all. Yes, that actually happened.

Was it scripted or at least part of a plan to get more awareness? Some people believe it was. What matters at the end of the day $10 million was actually burned, crazy.

Despite the crazy start, SLERF has been successful in its short 4-day life so far, at a $337 million market cap. It’s effortless to think that this will go to 0, but the genesis story of SLERF is probably the strongest narrative a memecoin could want.

As a happier wrinkle to the SLERF story, crypto exchanges that listed SLERF are donating their trading fees to SLERF presale users who were impacted. This part feels unscripted. Either way, crazy.

$SMOLE

In a similar fashion, SMOLE has a whoopsie type of history as well, except this memecoin raised $30 million in the presale phase. Fortunately, $30 million was not burned.

Instead, the memecoin founder seemed to lean into the role of a bumbling idiot, hoping to get some viral screenshots as a form of organic marketing.

As memecoins continue to take over mindshare of the space and new entrants, the best way to view this is as a genre of entertainment and I will go back to reality TV as a point of comparison. Some of these shows are scripted or the producers craft situations that result in dramatic moments. Performativecoins do the same. It’s not all scripted and in reality can’t be (otherwise it would probably be outright fraud), but some elements can staged or presented in a certain way to elicit a specific reaction.

Strong reactions = more attention = higher chance of memecoin succeeding.

In some cases like SLERF and SMOLE, the value of the memecoin is the entertainment (scripted or not) as much as the allure of the potential financial gains.

Making the insanity sane

As I promised at the beginning, the nuggets aren’t all brown! There are some interesting insights as it pertains to creative approaches to growth.

Growth Hacking

It seems that there is an emerging playbook of growth hacks inspired by memecoins, some of which I’ve already pointed out (Nick hacking community notes to get more engagement, Performativecoins, presales although this is an ill-advised practice).

Another one is community growth hacking. Some examples:

• WIF raising $650k to go up on the Las Vegas Sphere for a week

• The Runestone (branded as a memecoin on Bitcoin) community putting their Runestones on a digital billboard in Times Square

  • Based on the replies it seems crypto ads are considered illegal, although I think there are ways to creatively hack around it. (eg: if it were WIF, take pictures of real people or pets wearing the actual WIF beanie, for Runestone replace the eyes with Runestones, replace shirt logos with Runestone, or 3D print a physical Runestone and hold it)

• The Pudgy Penguins community took inspiration from Runestones and got on the same billboard. I wonder why it worked for Pudgy Penguins and not Runestones 🤔

These concepts aren’t new as DAOs have raised ridiculous amounts of money to do crazy things like purchase the Constitution. This is a different flavor of it and a creative one.

Can brands partner with memecoin communities?

Of course they can and I’ve already listed examples of them above for crypto-native partnerships:

• AABL partnering with SolCard

• AABL partnering with Sphere Labs

• SLERF partnering with HTX, Bitget, and LBank to refund presalers that lost money

• Winnie from Blocktower Capital highlights how DEGEN has been used to bootstrap growth, engagement, and liquidity for various projects

We’ve already seen early signs of this in web2, particularly with DOGE — Tesla/Elon and the Dallas Mavericks thanks to Mark Cuban.

For the seasoned TPan readers, you may recall an interesting segment I covered in August 2023 about MOG and Pit Viper sunglasses. This fun anecdote in MOG lore serves as a blueprint for how web2 brands can interact with memecoin communities.

Bass Pro Shops I’m looking at you to do a collab with Base Pro Shops if that community proves itself worthy by growing 10x. If it gets to that point, there might be some creative activations you could pull off while actually impacting the company’s bottom line.

Apple and Abble? That one is unfortunately never going to happen haha.

This concept reminds me of the idea I had around user acquisition on Reddit when they were exploring the concept of tokenizing their communities.

For potential partners, the allure is user acquisition. By accepting a Reddit community’s token as a form of value exchange, these partners have access to communities that are millions of members strong. Assuming the largest communities launch Community Points:

• What if Ticketmaster launched a promotion for a free ticket to a comedy show (max value of $20) to r/funny (51 million members) and Jokes (26 million members)?

• What if Twitch launched a promotion for a free month’s subscription to any gaming streamer to r/gaming (38 million members)?

• What if Chewy launched a promotion for a $50 promo code to r/aww (Animals and Pets subreddit, 34 million members)?

The possibilities are not only endless, but become more clear as a marketing and user acquisition strategy. Because you’re accepting Community Point tokens as a form of value exchange (not a random promo code you can find online), you’re targeting users that are engaged in that topic and are providing valuable content to that topic’s community. These are the types of users you want if your job is to make number go up.

Unfortunately targeting Reddit users via community points/tokens isn’t even a hypothetical strategy anymore, but you know what is for a company like Chewy?

Targeting DOGE holders (not as good as targeting r/aww, but it would work I promise).

The economy in the attention economy has arrived

As social media has been woven into the fabric of our lives, we’ve never quite been able to measure the cultural moments that shape it. Yes we have metrics like views, clicks, time spent on page, but in many ways that hasn’t been translated for the end user. On the other hand, this has been commoditized for the platforms and companies via ads.

Culture and the attention towards it (along with all the other good, bad, and in-between stuff) is now being captured in the form of a token and it’s being valued. The token and its corresponding valuation can be a tool, a data point, a distraction, or all the above.

The world of memecoins is only going to get more interesting and wacky but one things for sure: They’re here to stay.

It’s past 10pm, and I still need to eat dinner. See you next week!