many such cases: connecting the memecoins with Li Jin

April 23, 2024

Check the full episode on Youtube:

SUMMARY

Meme coins are a complex and emerging trend in investing, with potential for both positive and negative impacts, and they reflect underlying political philosophy and views on internet culture.

• 00:00 📈 Lee discusses the interconnectedness of meme coins and the potential for them to go beyond just launching a token, seeking to uncover new insights in a truth-seeking debate.

  • Lee discusses the confusion around meme coins and the unexpected topics that were brought up in the podcast.

  • The speaker discusses the interconnectedness of meme coins and the forecaster ecosystem, sharing their personal experience of being an early user on workcast and rediscovering it as a primary social network.

  • Interested in the forecaster ecosystem, Variant hosted a hackathon and is investing in the space, with a meme coin hackathon coming up.

  • Excited about the potential of meme coins to go beyond just launching a token and be used for building social and community infrastructure, dexes, and liquidity.

  • The speaker discusses the bull and bear cases for memecoins and seeks to engage in a truth-seeking debate to uncover new insights.

• 05:50 🚀 Meme coins are part of a social trend in investing, with a narrative of "little guy versus big hedge fund" and diverse segments in the market.

  • Meme coins are part of a broader trend of retail investors treating investing as a team sport, with a social and community-driven aspect to discovering and investing in assets.

  • The GameStop phenomenon, captured in a Netflix documentary, had a clear and interesting narrative that stunned the world.

  • The narrative of memecoins is centered around a "little guy versus big hedge fund" story with a mysterious internet leader, creating a sense of unity and victory.

  • Most memecoins in crypto feel like a game where everyone is out for themselves, with Pump. Fun being the epitome of this.

  • Meme coins remove all pretense and narrative, boiling down to token price on a bonding curve that moons and crashes quickly, but the universe of meme coins is now so large and diverse that they cannot be treated as one category.

  • The speaker discusses the different segments of the meme coin market and how certain tokens with enduring memes or product associations have more durable value.

• 13:18 📈 Valuing meme coins is difficult due to their emerging nature, but they may become utility tokens and have various value drivers, including meme association, utility value, and integration into other applications.

  • Valuing meme coins and attention assets is difficult due to their emerging nature and the various factors that need to be considered, such as community, attention, and trending.

  • Meme coins like Doge may become utility tokens and be included in a basket of tokens for exposure to the asset class, but their trajectory is uncertain.

  • The speaker discusses the value drivers of meme coins and how they can become the canonical asset for specific events, as well as the introduction of utility and multiple ways of using meme coins in products.

  • The value of meme coins like DJ comes from meme association, utility value, and integration into other applications as a form of payment.

  • The value of memecoins goes beyond just piggybacking off of a meme and includes scarcity value, monetary policy, utility, partnerships, and creative ways to sustain value and prevalence, all ultimately aimed at increasing demand and attention for the underlying token.

  • DGen is a meme coin that differs from historical meme coins and has evolved into a utility token, blurring the line between meme and utility coins.

• 20:56 📈 Meme coins can have positive and negative impacts on platforms, with extrinsic incentives leading to spam and low-quality content, creating a PVP economic model, but some have road maps leading to revenue generation and value creation, while others are essentially lottery tickets with a chance of going to zero.

  • Meme coins can have both positive and negative impacts on platforms, with some users benefiting from them while others may be hurt by their presence.

  • Extrinsic incentives can lead to spam and low-quality content, so products need to be designed to mitigate these downsides, as seen in the case of memecoins and social networks.

  • Meme coins rely solely on buyers for income, creating a PVP economic model, unless a charismatic leader with a vision and execution steps in to change the game.

  • Meme coins are often seen as a zero sum game, but some have road maps leading to revenue generation and value creation, similar to the dynamics of stock trading.

  • Users and traders are aware that memecoins are essentially lottery tickets with a chance of going to zero, which is more transparent than other crypto projects that make false promises.

  • The speaker finds the purest form of meme coins in crypto to be fascinating, crazy, funny, and elegant.

• 33:11 📈 Investing in memecoins is like playing a zero sum game in a casino, with addictive qualities and potential for scams, but transparency and fair rules are needed for progress in the industry.

  • Investing in memecoins is like buying a lottery ticket, and the concern is that when mainstream retail investors enter, the magic is lost and people start selling and dumping.

  • Meme coins are like playing games in a casino, where people are aware of the zero sum game and are happy with the outcome because it is entertaining and fun.

  • Meme coins have addictive qualities that make people feel like they have a fair chance of winning, but when they realize they don't, it hinders progress in the industry.

  • People should be able to spend their money how they want, but there is a danger when products misrepresent themselves and create an information imbalance.

  • Projects should be transparent about their intentions and roadmaps, and the ecosystem should strive for fair and known rules for participants, similar to the need for transparency in NFT projects.

  • Exploring new memecoins can be entertaining and exciting, but there is also a risk of scams and setbacks.

• 39:25 📈 The speaker discusses concerns and potential success of meme coins, as well as the interest in creating meme coin-centric apps within the farcaster ecosystem to solve UX issues and support specific community currencies.

  • The speaker discusses concerns about the labeling and potential information asymmetry of "scene coins" and questions the goals and intentions behind them.

  • The speaker discusses the potential success and co-opting of meme coins, as well as the interest in applications and projects that give meme coins utility and the potential for positive sum outcomes for crypto projects.

  • The speaker discusses the potential for meme coin clients to solve UX issues and create a dgen-centric client within the farcaster ecosystem.

  • The idea is to create an app where users can select a specific meme coin and have the app tailored to that coin, similar to how the MLB app is tailored to a specific team.

  • The proliferation of different community tokens will make it difficult for warp cast to support all of them, so having token-centric clients that are more verticalized for specific community currencies and their utility makes sense.

  • Every channel on Forecaster needs its own economy and medium of exchange, similar to how different countries have their own currencies.

• 49:14 📈 Community currencies may consolidate in the digital world, but the complexity of managing multiple loyalty programs may lead to a preference for consolidation, while meme coins are like casinos designed to keep users invested and playing.

  • Community currencies have a long history and many have ceased to exist due to the complexity of managing separate systems, but cross chain and cross currency payments offer an exciting solution.

  • In the digital world, there may be consolidation into a few major community currencies, with the mental overhead of managing multiple loyalty programs leading to a preference for consolidation.

  • The trend towards consolidation with state currencies is due to legal tender laws, but in the crypto world, the user experience burden and cost of holding different currencies goes to zero, leading to more exploration and variance in the future.

  • The volatility and growth potential of memecoins detract from their potential as a payment mechanism, leading to reluctance to spend them, and some users keep them as "play money" while holding other assets in a safer place.

  • The introduction of meme coins and the limitations on selling them create a new trading behavior and drive price action.

  • Meme coins are like casinos, designed to keep you invested and playing, with the odds in favor of the creators.

• 57:32 📈 Memecoins are fascinating and reflect underlying political philosophy and views on internet culture, making them endlessly fascinating for debate and discussion.

INSIGHTS

Memecoin value and market dynamics

• 🚀 Memecoins transcend just launching a coin, with applications ranging from building social and discovery experiences to community infrastructure.

• 🌕 "It takes it removes all the pretense. All the pretext all the narrative and it just gets you to like the core of the thing which is a token price on a bonding curve that moons and crashes and it happens super fast."

• 🚀 Memecoins associated with a longstanding internet meme that is already very popular, like Doge, seem to have more durable value and potentially across market cycles, raising the question of what exactly fuels their longevity.

• 📈 The value of meme coins is determined by factors such as the initial community, attention commanded, and trending status, making it a complex and unpredictable investment.

• 🔄 Some meme coins, like Deen, have introduced utility and multiple use cases, moving beyond just being a replication of other meme coins in the market.

• 🚀 The ultimate goal for memecoins is to increase demand and attention for the underlying token, with scarcity value being a key driver.

• 🔄 Li Jin argues that meme coins with road maps leading to revenue generation and value creation may not be a zero sum game, challenging the traditional perception of meme coin trading.

• 🎰 Meme coins have the Holy Trinity of addictive apps: quick repeatability, economic opportunities, and variable rewards, sucking people in a powerful way.

• 🎢 "It's entertaining there's all kinds of new stuff that could emerge from that if anything I feel like that's what's needed to see what's out on this Frontier."

• 📈 The price volatility of meme coins introduces something new to trading behavior that drives a lot of price action.

• 🎲 The tactics used by casinos to keep people playing can be compared to the strategies used to keep people invested in meme coins.

Ethical considerations and consumer protection in memecoin trading

• 🤔 There is a danger when products profess to be something they're not, creating an information asymmetry between the buyer and the producer.

• 🚀 She emphasizes the need for meme coin launch pads to enforce fair launch rules and information symmetry to protect consumers from misleading intentions.