What else could memecoins be?

Ten years ago, two weeks before the Ethereum project was publicly announced, I published  this post on Bitcoin magazine  arguing that issuing coins could be a new way to fund important public projects. The thinking went: society needs ways to fund valuable large-scale projects, markets and institutions (both corporations and governments) are the main techniques that we have today, and both work in some cases and fail in others. Issuing new coins seems like a third class of large-scale funding technology, and it seems different enough from both markets and institutions that it would succeed and fail in different places - and so it could fill in some important gaps.

People who care about cancer research could hold, accept and trade AntiCancerCoin; people who care about saving the environment would hold and use ClimateCoin, and so forth. The coins that people choose to use would determine what causes get funded.

Today in 2024, a major topic of discussion in "the crypto space" appears to be memecoins. We have seen memecoins before, starting from Dogecoin back in 2015, and "dog coins" were a major topic during the 2020-21 season. This time, they are heating up again, but in a way that is making many people feel uneasy, because there isn't anything particularly new and interesting about the memecoins. In fact, often quite the opposite: apparently a  bunch of Solana memecoins have recently been openly super-racist . And even the non-racist memecoins often seem to just go up and down in price and contribute nothing of value in their wake.

And people are upset:

Even long-time Ethereum philosopher Polynya is  very very unhappy :

One answer to this conundrum is to shake our heads and virtue-signal about how much we are utterly abhorred by and stand against this stupidity. And to some extent, this is the correct thing to do. But at the same time, we can also ask another question: if people value having fun, and financialized games seem to at least sometimes provide that, then could there be a more positive-sum version of this whole concept?

Charity coins

Among the more interesting of the coins that I've seen are coins where a large portion of the token supply (or some ongoing fee mechanism) is dedicated to some kind of charity. One and a half years ago, there was a (no longer active) coin called "GiveWell Inu" that donated proceeds to GiveWell. For the past two years, there has been a coin called "Fable of the Dragon Tyrant" which supported cultural projects related to anti-aging research, in addition to other causes. Unfortunately, both of these are far from perfect: GiveWell Inu seems to no longer be maintained, and the other one has some highly annoying core community members that constantly badger me for attention, which currently makes me unenthusiastic about mentioning them more than once. More successfully, after I was gifted half the supply of the Dogelon Mars token, and immediately re-gifted it to the  Methuselah Foundation , the two Methuselah Foundation and the Dogelon Mars community seemed to develop a positive-sum relationship with each other, retroactively converting $ELON into a charity coin.

It feels like there is an unclaimed opportunity here to try to create something more positive-sum and long-lasting. But ultimately, I think even that would create something fundamentally limited, and we can do better.

Robin Hood games

In principle, people participate in memecoins because (i) the value might go up, (ii) they feel democratic and open for anyone to participate, and (iii) they are fun. We can siphon off a large percent of a memecoin's supply to support public goods that people value, but that does nothing for the participants directly, and indeed comes at the expense of (i), and if done poorly at the expense of (ii) too. Can we do something that instead improves on both for the average user?

The answer for (iii) is simple: don't just make a coin, make a game. But make an actually meaningful and fun game. Don't think Candy Crush on the blockchain; think World of Warcraft on the blockchain.

An  "Ethereum Researcher" in World of Warcraft . If you kill one, you get 15 silver 61 copper, and a 0.16% chance of getting some "Ethereum Relay Data". Do not attempt in real life.

Now, what about the Robin Hood part? When I go around low-income Southeast Asian countries, one claim that I often hear is how some people or their family members were poor before, but then got medium-rich off of the play-to-earn feature in  Axie Infinity  in 2021. Of course, Axie Infinity's situation in 2022  was somewhat less favorable . But even still, I get the impression that if you take the game's play-to-earn properties into account, on average, the net financial gains were negative for high-income users but might (emphasis on might!) have been positive for low-income users. This seems like a nice property to have: if you have to be financially brutal on someone, be brutal on those who can handle it, but have a safety net to keep lower-income users protected and even try to make them come out better off than they came in.

Regardless of how well Axie Infinity in particular accomplished this, it feels intuitive that (i) if the goal is to satisfy people's desire to have fun, we should be making not simple copy-paste coins but rather more complicated and interesting games, and (ii) games that leave lower-income players in particular economically better off are more likely to leave their communities better than they came in. Charity coins and games could even be combined: one of the features of the game could be a mechanism where players who succeed at some task can participate in voting on which charities the issued funds are distributed to.

That said, making a genuinely fun game is a challenge - see  some negative takes  on how well Axie did at being fun, and  this positive take  on how they have improved since then. The team that I personally have the most confidence in to make fun crypto games is  0xPARC , because they have already succeeded twice (!!) at making crypto games (first  Dark Forest , then  FrogCrypto ) where players were willing to play entirely for fun, rather than out of a desire to make money. Ideally, the goal is to make a co-created environment that leaves all players happy: money is zero sum, but fun can be positive sum.

Conclusions

One of my personal moral rules is "if there is a class of people or groups you dislike, be willing to praise at least a few of them that do the best job of satisfying your values". If you dislike governments because they violate people's freedoms, perhaps you may find space in your heart to say something good about the Swiss one. If you dislike social media platforms for being extractive and encouraging toxic behavior, but you think Reddit is 2x less bad, say nice things about Reddit. The opposite approach - to shout "yes, all X are part of the problem" - feels good in the moment, but it alienates people and pushes them further toward their own bubble where they will insulate themselves entirely from any moral appeals you might have in the future.

I think of the "degen" parts of the crypto space in the same way. I have zero enthusiasm for coins named after totalitarian political movements, scams, rugpulls or anything that feels exciting in month N but leaves everyone upset in month N+1. At the same time, I value people's desire to have fun, and I would rather the crypto space somehow swim with this current rather than against it. And so I want to see higher quality fun projects that contribute positively to the ecosystem and the world around them (and not just by "bringing in users") get more mindshare. At the least, more good memecoins than bad ones, ideally those that support public goods instead of just enriching insiders and creators. But also ideally, making games rather than coins, and making projects that people enjoy participating in.