Unchained - The Chopping Block: Navigating the New Era of Crypto Social Media with Farcaster's Insights! - Ep. 608

Episode Date: February 15, 2024

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and special guest Dan Romero, co-founder of Farcaster, engage in a riveting discussion on decentralized social media and the burgeoning meme coin trend within the cryptocurrency ecosystem. This episode offers an in-depth analysis of Farcaster's innovative mechanisms for user engagement and its significant role in shaping the future of social interactions in the crypto domain. We delve into the mechanics behind meme coins, examining their influence on community dynamics, market behavior, and the broader implications for digital asset valuation. Our conversation navigates through the intricacies of decentralized platforms like Farcaster, probing into their potential to disrupt conventional social media models and foster a new era of user-centric, blockchain-enabled online communities. Join us for a comprehensive exploration of these pivotal developments, enriched with Dan Romero's firsthand insights, as we dissect the evolving landscape of social media in the crypto age and the captivating allure of meme coins, all aimed at providing a deeper understanding of their impact on the global cryptocurrency market. Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Pandora, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show Highlights 🔹 Decentralized Social Media Evolution: Exploring the growth and challenges of platforms like Farcaster in the decentralized web landscape. 🔹 User Empowerment in Crypto: Analyzing how crypto-native features on platforms empower users through economic incentives and community building. 🔹 The Rise of Social Tokens: Delving into the emergence of social tokens and their role in fostering online communities and creator economies. 🔹 Interactive Crypto Features: Investigating innovative features like Farcaster's frames and their impact on user engagement and content sharing. 🔹 Sustainable Tokenomics: Discussing the sustainability of token models in social platforms and the potential for long-term value creation. 🔹 Behavioral Economics in Crypto: Understanding the psychological factors driving the speculative nature of meme coins and their market dynamics. 🔹 Decentralization vs. Centralization: Debating the balance between decentralized ethos and the need for centralized governance in crypto platforms. 🔹 The Future of Online Identity: Discussing the evolution of online identities in the context of decentralized platforms and blockchain technology. 🔹 Celebrity and Crypto Synergies: Speculating on the future of celebrity involvement in crypto through personalized tokens and endorsements. 🔹 Cross-Platform Crypto Integration: Exploring the possibilities and challenges of integrating crypto-native features across various social and digital platforms. 🔹 Ethical Considerations in Crypto: Delving into the ethical implications of rapid token creation, distribution strategies, and their impact on unsuspecting users. Hosts ⭐️Haseeb Qureshi, Managing partner at Dragonfly  ⭐️Tom Schmidt, General Partner at Dragonfly  ⭐️Tarun Chitra, Managing Partner at Robot Ventures Guest ⭐️ Dan Romero, Farcaster Co-Founder Disclosures Links Eugene Wei’s “Status as a Service (StaaS)”: https://www.eugenewei.com/blog/2019/2/19/status-as-a-service  Vitalik Buterin’s forum post on DAICOs: https://ethresear.ch/t/explanation-of-daicos/465/1  Learn more about your ad choices. Visit megaphone.fm/adchoices

You know, everyone talks about this idea that like own your data and like get paid for your data. The reality is your data is probably not worth anything. But there is a version of the world where you as a person with an audience can actually choose to amplify things and then actually participate in the upside in a programmatic way. Not a dividend. It's a tale of two quond. Now, your losses are on someone else's malice. Generally speaking, air drops are kind of pointless anyways.

Unnamed to trading firms who are very involved. I like to eat is the ultimate pump. D5 protocols are the antidotes. to this problem. Hello, everybody. Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insider's perspective

on the crypto topics of the day. So quick intros, first you got Tom, the Defy Maven and Master of Memes. Hello, everyone. Next, we've got Tarun, the Gigabrain, and Grand Puba at Gauntlet. Aloha. And joining us today,

we've got Dan, the Duke of Decentralized Dialogue at Farcaster. Thanks for having me. How long did that one take you, Hasid? I thought that was pretty good. Thank you. And then I'm the Steve the head hype man at Dragonfly.

We are early stage investors in crypto, but I want to caveat that nothing we say here is investment advice, legal advice, or even life advice. Please see Chopin Block. At XYZ for more disclosures. So, man of the hour, Dan, it's great to have you on the show.

We just spent the last episode gushing about how much you have been kicking ass with Farcaster. And we thought it made sense to get you on the show personally to have you tell the world and tell us the story of Farcaster, I know that you've been grinding on this project for a long time, and it's now suddenly had its moment of being,

sort of shining the crypto spotlight directly on what you're building. How does it feel? I know that you've been kind of toiling in the doldrums of crypto on decentralized social. Talk to us about what that's like. Yeah, so let's start off with the caveat is we're not out of the woods quite yet. I mean, we've had a lot of growth in the last two weeks, about 10x, which is always good to have fall out of the sky. But there's a lot of work left to do, especially if we want to compare ourselves to what we should be comparing is Web 2.

Right. So, like, if you take any Web 2 social network, Farcaster is still kind of a blip relative to the size and scale. That said, I think we're really excited because we're finally in a place where I think we're in the conversation, as you kind of point out, in that it was kind of this size. show before, whereas now I think people are starting to pay attention to Farcaster within the crypto-native world, right? Like, you have all the crypto-native companies have reached out one way or another. They want to get their brand account set up. And so definitely an inflection point in the sense that I think people are aware of what we're doing. And I think it's on us now to kind of like figure out, okay, how do we cross the chasm to the kind of next 10x and the next 10x after that?

I think if we get to something on the order of, you know, we're about 50,000 daily active users of the protocol today. I think if we can get to something like 5 million, then it starts to become, I think, real from a kind of like Lindy, it's probably not going to go away anytime soon. And obviously, if you get to something like 50 million people using the protocol. And again, it can be across a bunch of different apps. Then I think you start to have a conversation that maybe it is becoming more mainstream. And I think a good proxy for that is like Coinbase has about 100 million people who have an account. with KYC.

So if you can kind of get to some level of their total user base, obviously they don't have 50 million people using the app every day. You probably are starting to crack in the mainstream. And then obviously, if you can get 50 million people to be using the protocol every day, then it's actually something that normal people are clearly using. I don't think there are 50 million crypto natives that are using any app or any chain right now. So I wrote a tweet a little while back, looking back at the stats for Front Tech, which people might remember was the viral social,

the social fi application that took off, I think it was like last summer, maybe late summer. And it basically went from kind of peak virality to then totally falling off a cliff within about four months. And in response to posting that chart, Vitalik actually responded something that he said,

I'm registering a prediction, FARCaster and Lens will not be deserted in four months or in one year. it seems like now there's increasing convergence that what Frentec was doing with respect to connecting money and speculation with social was the wrong avenue or maybe is just you're likely to result in this kind of bubble speculative behavior. How do you think about that? And what did you take away from seeing what happened with Frentek last year? So yeah, let me start off with, I feel like people tend to try to create beef between Frentek and Farkaster because I think generally there's just not

that much going on in consumer crypto. So naturally, like, hey, let's try to generate drama. I'm not saying that you were trying to do that. No issue with Front Tech. Like, I actually think they had some very clever things that they did, especially around taking advantage of the PWA changes that Apple kind of released last year. And they were kind of first out of the gate on that. And I think cemented something that I... PWA being progressive way about it. And I think something that I just like hammer home with crypto founders, especially in the consumer space, is that it. if you're not building on mobile, you don't matter.

85% of usage of FARCaster is mobile. If you look at Twitter, they've released Minutes usage. Elon tweeted this, I think a couple months ago. 88% of usage of Twitter is mobile. I think like Instagram, obviously, it's like 90, 95%. So the fact that you had a mobile app that they kind of built, clearly they know what they're doing in terms of like building for consumer crypto.

I think the thing that I've always kind of tried to figure out is social networks are built off of status and Eugene Way has a famous essay on the status as a service, which I think is like a good articulation of these points. And I think one challenging thing about status is it's something that's earned and you cannot buy status, right? Humans are really good at knowing about people who have tried to like buy their status. They come off as inauthentic or fake. And I think proof of work is actually something that humans value implicitly, especially in kind of social networks. And I think generally, like if you think about like social networks, what kind of itches do they scratch for consumers? Like why do people use them?

A, they tend to use them from a leisure standpoint, right? They're not using them professionally for work. I mean, obviously Twitter kind of blends that. Obviously, LinkedIn is a lot more. But generally, why do people use social networks? They're spending time, like passing time, and they're using it for either entertainment. or frankly, they're trying to meet other people, right? So the dating apps are kind of a certain type of social network.

And so if you don't actually solve for one of those two things, it's very difficult to create sustained long-term usage as a social network. And again, I think it less to do with Frentech as much as just when you're building consumer products, you have to kind of tap into latent consumer behaviors that they didn't even know what they wanted, right? like consumer preferences, they're going to tell you one thing, and then they're actually going to do a completely different thing. The consumer is very aspirational.

And I think you have to, and it's not like we have some crazy insight, but I think like ultimately sustained social networks are fundamentally built around something that is a deep, like, kind of need for a human, and their willingness to kind of keep coming back to the app every single day. So, wait, also, I want to name and shame a little bit. I think, I think neither Haseeb nor Tom have a farcaster account.

That's not true. I have a very low account. I'm like 103. So actually, you're okay, okay. I don't even know if you have a farcaster account. Yeah, Tom, Tom came in like a kind of like a, you know, bad out of hell in early 2021 when I was onboarding people,

dropped a few memes and then disappeared, which I mean is basically the story for everybody. So I hold nothing against anybody on that. Yeah, no, I legit do not have a farcegastry account. So I will take that. I was, so I was, I did say on the last show that I'm like basically a boomer and I try to avoid.

Like I'm, I am terrified that farcaster will actually take off like another 100 X and then I have to get on. But I am, I am very much like late majority when it comes to consumer. I, uh, what is that early majority? Late majority.

Whatever. I'm like right at the 50% mark, basically. Once everyone else is on, I'm like, oh, fuck, I got it.

I got to go. I was the same thing with Clubhouse. Um, everybody was like, oh, clubhouse. working out and it peaked and went down, right? Yeah, yeah, yeah, exactly.

But I did eventually get on right when the second half of people were getting on board to Clubhouse. And I was very angry about it. But the interesting thing about Clubhouse is people rotated their Clubhouse following into other social networks. Like Clubhouse crash and then they moved their followings into Twitter, which I thought was, that was an interesting piece of social media history. I don't know if you've seen such a big, like, almost everyone moved, you know, as the platform crashed type of thing. Well, there's a little inside baseball there, by the way, is that Twitter, the only reason

Twitter was able to launch spaces is that they had an internal team that, you know, this was an era when Twitter wasn't innovating at all from a product standpoint, right? It's like pre-Elon, they're moving in a glacial pace. They just happened to have a team that had been redoing some like WebRTC stuff related to Periscope. And so when Clubhouse kind of had its moment, it's like they had a brand new shiny core of being able. WebRTC is the protocol that actually allows you to do the audio.

And so they were able to just kind of quickly relative to Twitter speed at that point launch spaces. Any version of the world where they hadn't worked on that, I actually think Twitter would have never launched it and then basically Clubhouse probably would have gotten to some place where clearly it was the place to do audio. And I think

they got a COVID bump, but I think what was challenging is Twitter's copy in the same way that frankly Instagram stories and SnapChat, who who originated the story's concept, like when you have more distribution and you're able to copy a core feature, it gets really difficult as a standalone app to actually build it off of that kind of like one breakthrough feature. My impression, though, of the downfall of, I mean, this is a little bit of a tangent, but my impression of the downfall of kind of what is it, real time audio, social audio,

whatever was that it was just a COVID thing, right? Like even Twitter spaces relative to what pandemic is just like much, much lower engagement today. Yeah. It was just a pandemic behavior. Yeah, I think that there's probably some, you know, kind of blending of what we're doing right now. We're using like a podcast recording studio. You know, you have a couple of these that exist.

And the idea that kind of almost like you could do a live podcast that then easily turns into the content, I think most of the kind of broadcast platforms are audio only. There's no video and it doesn't make it easy. So I think at some point, someone will figure it out. And then it'll kind of be this super fans get the live show, right? Maybe a little unedited, a little bit more fun. And then you can consume all of that content async. And I think that Clubhouse wasn't able to kind of figure that off fast enough before

kind of losing people's interests. So Clubhouse does illustrate a broader point, actually, that I think you mentioned Eugene Way, his status as a service blog post, which for anybody who's interested in social, I highly recommend reading that post. It's kind of a masterpiece. It's actually like a decade old now, right? More than that. Yeah, it's pretty crazy. It's really old.

No, I think 2016. Well, I think it's eight years. Yeah. That's a lot. You know what I mean? It's pretty. It's pretty Ethereum being on the map. Yeah, I like, I remember, I remember like being a different person when I read that that post. Right. Okay. Fair enough. Fair enough. Well, so the, the point that I want to make is that one of the things that Eugene points out is that generally speaking, when a new social media platform is able to, to really take on a life of its own and potentially supplant the previous generation is when there's a modality shift. So, you know, you go from short-form text to long-form text or long-form text

to images, images to video, to short-form video. There's generally some kind of shift. And Clubhouse was an example of that, right? There was this modality shift of, okay, we're doing real-time, these, you know, audio shows, essentially. And that allowed new social networks to form a new kind of status competition for people who are very good at that, who weren't necessarily good at podcasts or weren't necessarily good at, you know, TikTok or whatever. How do you think of that in the context of what you're doing with Farcaster, which seems to be pretty directly laden over what Twitter is doing? Yeah. So that's why I spent three years in the wilderness and not having kind of anyone pay attention for the most part, because what we were doing is building table stakes for, you know, in

2024, you kind of have to have the mobile app at a certain level of polish. You need the kind of base level features, likes, retweet equivalents. All that kind of stuff needs to kind of be there. And then we were kind of searching for what is our social primitive, right? Like what is the thing that is uniquely differentiated about Farcaster relative to Twitter? Otherwise, people just say it's a Twitter clone. And going back to the reason people churn, and like this is obvious in retrospect, but I go on board all these people in 2021. I have a pretty sophisticated network both within Silicon Valley in Crypto. So if you look at the initial thousand people on the network, like, there's some pretty heavy hitters there. And everyone left, right? Why? They have massive audiences

on Twitter. Like Tom. They spent a decade building those audiences. Like, why would you, why would you go from having 100,000 or 200,000 people on Twitter who follow you, get the dopamine of all those likes to going to this new network? I mean, maybe other than the, you know, ideologically pure person like Vitalik, who's like, yeah, five million followers of Twitter, doesn't matter I'm going to use this really small social network because it's Ethereum line. Like, I think ultimately people are just rational and they're not going to go spend time on that. And so, especially in a world where it's basically just like Twitter but way smaller. So two things.

One from that, Eugene, that was a way I say talks about most new social networks have a new social new ability that get minted. Are they basically the people who are like emigrate from the other one because they're like the losers of the algorithm or they're too far behind. And they show up to the new one and kind of like showing up to a new country. and then they build the new elite there because they were early and then they benefit from the growth of the network which I think we've seen with with Farkasters.

There's a lot of new faces who have actually big followings of Farkaster because they had kind of done the compounding early enough. And I think the second thing, and then this goes back to the social primitive, is Frames. Fames basically was the first thing that we launched that I think kind of people could crystallize around saying,

oh, that is interesting and different. And it fundamentally is social, right? It's taking a link, which obviously in a previous, era, Twitter was very good about sharing links. I remember the era of Twitter where it's like, that's where I'd go to find interesting links on the internet. And now we're in an era of Twitter saying,

if you put a link in the first tweet, we're going to nerve you in the Alco. So you kind of take the link, but then you say, because that's what a frame is, ultimately, is just a link. And we said, what can we add on top of it that makes it both interactive and then I think more crypto-native? And so

very quickly, you had all of this experimentation and kind of creativity coming from developers. And that I think was the kind of catalyst to kind of start pulling people in from an attention standpoint to say, wow, there's actually a bunch of cool things that I can go do on this. And like if I kind of like I'm into NFTs or I'm into meme coins or whatever, there's a frame for that. And I think that is the area that now I think we're doubling down on because it's saying, okay, this is actually something that a social network where you have a strong guarantee that every user under the hood has a Ethereum wallet. Right. Like so in order to use the network, you have going to cryptographic key pair underneath. And so there's just a lot of creative freedom that developers can do. And I think that that's, you know, it took us three years.

But I think we found something that, okay, let's try to double down on this and see how far we can grow it. So if you look at Twitter today, anybody who posts on Twitter with, you know, and if you touch crypto in any way, you, the first thing you know is that it is overrun with bots, with scams with, you know, anytime you post anything, there's just like 15 blocked comments below the fold that are, you know, telling you to do some giveaway or whatever. And right now, well, so as a not active user of Farcaster, I have to ask, how do you think about moderation and how do you think about, you know, the inevitable influx of scammers and, you know, these kinds of

these kinds of elements of crypto, given that you were running such a crypto native community? Yeah, so a couple different things. So the first is in order to sign up for Farcaster, and at this point, the protocol is actually permissionless. So you don't need to use. use our app Warpcast, which is kind of the reference app. Anyone could, if you, you want to build your own client and directly interact with the smart contract, you're able to do that. But everyone has to pay $5. So you actually have to pay in order to create an account.

So right there. $5 to whom? To the protocol. Like there's a smart contract. There's a treasury contract. It's just accumulating. And so that gate by itself, okay. So every time you want to create a spam account, it's going to cost you $5.

And then the second layer comes in where, you know, our app Warpcast, we are pretty aggressive about labeling accounts of spammy. And what's interesting about that is it actually is unaffected. Your account is unaffected at the protocol. But in terms of the attention of all the people on Warpcast, in the same way that, you know, Gmail can label any email it wants spammy, right? And ultimately, if you want the attention of a user of Gmail, you need to actually kind of follow their rules. that is that is the kind of second layer of okay wait so if I go and I try to start spamming people I'm going to get my account labeled as spam by the kind of Warpcast team automated manual right now then I'm out $5 because I get no distribution now you could get to a world where people get sophisticated on this but I actually think just by having cost and then the ability to lose distribution that is a natural kind of regulating force on people's behavior I think the third thing is And part of this is just we are much smaller and we need to kind of make this work from a quality standpoint is we can pull in a bunch of other signals because there's an on-chain element, right? So most of the people who are signing up for Farcaster actually connect in Ethereum address.

We're about to add Salana addresses. So we can actually use that as kind of this public ability to kind of look at address, kind of analyze it and say, okay, does this address look like it's spammy or not? And then you have all these additional signals that we can actually use. that make it very hard for a programmatic botnet to kind of show up. And I think that if we nail quality early on and we make that a focus, just because we have no other alternative, then as we scale, that actually becomes a distinguishing feature of the network. Like, I'm convinced that actually Twitter could go solve their spam problem.

I think that they're probably doing it in too automated of a way versus actually being more scrappy, which is frankly, like having read the Elon biography and nothing but respect for Elon Musk, like I think he's an American hero. I'm surprised that someone hasn't like really gotten in there and fixed it. Like it actually feels like the crypto spam has gotten back to the level that it was at. It got like better for a little bit. But like anytime I tweet now, I like I get all this crypto spam. And I think part of it is just like people trying to do everything automated allows the spammers to get through versus actually just getting in their manual. Like one basic

thing is like, why am I able to not just kind of like have one click ability to label things as spam as like a 15 plus year user of Twitter, 100,000 followers? And, you know, like, if basically I'm marketing to spam, you should probably trust me at this point. That, like, I don't, you know, there's a bunch of like low-hanging fruit that I'm surprised that they haven't done. So going back to this Gmail analogy, I thought that was an interesting one to contrast with. So right now, so we established Farcaster, it's totally decentralized. It's a protocol that anybody can build a client for. And it's kind of what many people have imagined

that maybe someday Twitter might do is open the graph or open the algorithm itself so that anybody can see a tweet. Obviously they haven't done this, you know, this is not something that we see from the normal social media companies. But that said, Warpcast is by far the dominant client for Farkaster, you know, almost everybody who says, oh, sign up for Farkaster, they're pointing me toward Warpcast.

And so in some sense, It actually is a lot like Gmail. You know, Gmail obviously is one of the most dominant email clients. Gmail also exerts this kind of gravitational force over email. Email is technically permissionless. You could run your own email server if you wanted to. But it's kind of not a great idea in 2024 to run your own email server because the way that Gmail labels you is ultimately going to determine whether or not you can

really interact with the rest of the network, right? Because in some sense, like, yes, you are right. running SMTP and like that's the protocol. But in another sense, like actually know if Gmail decides that your spam, you're just never gonna get to anybody's inbox with your shitty little mail server. And so in some sense, is it not also true

that if Warpcast is like where 95% or 98% of all the FARCAS, I don't know what the number is, but if it's like the vast majority of all the FARCaster users, then can we not also say it? Well, it's almost like Gmail. Well, you guys, WarpCast itself is exerting such a gravitational force over the network that like your moderation effectively is the moderation for

Farcaster of the protocol. Yeah. So I'd say a couple things there. One, that's entirely true at this point. So anyone who's tried to like, I mean, obviously I'm one pitching it. So it's like I'm not trying to shirk away from that. It is extremely centralized in the sense that from a tension standpoint, which is the actual thing that you have to think about on a social network, right?

It's like the people using it, but it's like where are they spending their time? Warpcast has a disproportionate impact, right? I label someone to spammy effectively, they disappear. There are two things that immediately come to mind, though, is one, just like Ethereum or Bitcoin, I can take my forecaster account and simultaneously use two different clients. You cannot do that with Gmail, right? Gmail, you're actually tied to the domain associated with Gmail. You could forward your email to another thing, but ultimately, it's not like I can run

on two different, like the backend service. You can use email clients, but the way actually, think about email is like the server that actually receives and hosts your email is the kind of centralizing point. So I think that's like one important thing is like there's seamless ability to kind of migrate in the same way that I can take a mnemonic from, you know, metamask and move it to Coinbase wallet and simultaneously use those. Like that freedom to move is very easy and I think that's really important. And so in doing so, you allow exit in a world where Warpcast starts to get too aggressive, right? And I think the second thing, and this is actually the part where,

and it doesn't really work most of the time in crypto, so I want to acknowledge that, but part of it is this like, you have to trust us, like in the sense that like the goal is to build a protocol. Like we want the protocol. Like Verne and I had a lot of success at Coinbase. Didn't necessarily have to go do any startup we wanted. But like ultimately when we started on this is saying like, wouldn't it be cool if we could get to a protocol that had a billion plus people using it that looked more like Ethereum or Bitcoin? And I think where we've done a decent job is we delivered on the core part of the protocol last year, we got it to 100% permissionless. You can sign up.

You don't have to use a single warpcast API. We have this kind of system of servers that sit above the blockchain called hubs. That's where all the social content is. Completely open source, permissionless. You can go write your own implementation if you want. And that system works right now, right? There are like 500 hubs running around the world. They're not even incentivized.

So it's like people are just running them on their own. And so I think that is like a good first step in a good faith effort to say like, hey, this is something that we actually care about. But ultimately until we get to a world where Warpcast doesn't have 95, 98%, whatever the market share we have right now, I would completely agree with you is that it is a network that technically is decentralized but practically centralized from a, if the government comes in and forces me to do something, you don't have that level of censorship resistance for most people. Whereas a world where, and this is actually why we're so focused, though, on making Warpcast great, is our belief is that at least with social protocols, people don't use protocols. They use apps, right?

And so no one actually cares for the most part. There are very few people who are very ideological and they're very special. They don't actually use an app because it's decentralized. They use the app because it's either entertaining or they meet other people and or potentially hook up with other people. Those are the fundamental drivers of using a social app. And so our point of view, and I have a blog post about this, but it's a product-led protocol development. And it's if Warpcast can drive the growth of Barcaster to something on the order of 5 million daily active users or 50 million daily active users, I can promise you, assuming that that

core protocol remains, you know, actually decentralized and permissionless, you'll have venture back companies that come in and say, wait a second, I can build a better product than these guys and start to peel away market share. In the same way, that MetaMask was basically the only game in town for an Ethereum wallet for a while, right? I mean, we can RIP missed, but like ultimately, you know, you could argue that, oh, well, MetaMask can have a disproportionate impact on the network. Ultimately, the free market came in and said, well, you know, hell, I'm going to go build. You know, so you have Guamace wallet.

You have Rainbow, you have Rabby. Like, so because the actual underlying network actually does work like that, people, you know, are going to compete away that advantage. And so are, RIP, my ether wallet. I was about to say, I was like, there are a couple, there are a couple little, there are a couple little, you know, jam. I mean, talk about that security, UX. you used to paste a seed phrase into a website. I know, I know.

I'm not saying it was a good one. I'm just saying it was. I don't know that MetaMask is a great example of an edge getting competed away, unfortunately. It's like insanely sticky their dominance in market share. Right, but I would say is I think that there's a healthy wallet market in the sense that if you're in the market for a new wallet today. Sure. Sure. I don't think MetaMask has the dominant, you know, they probably have a lot of brand awareness,

but obviously, Coinbase has 100 million customers that they can push Coinbase wallet to. And yeah, I think it's hard, right? Like, because I could take the ideological approach of like, oh, we need three clients going on. And I think when I started working on Farcaster, I was naive in the thinking, you know, the original name for the product was our project was RSS Plus. So I come from a world of like RSS readers. I still use one. I'm weird nerd like that. And I think I was on the impression that, oh, once we get kind of like the core set up,

we're going to have like a multiple sets of clients. I think where I was wrong on that, and this is pattern matching back to the days of like the early Twitter ecosystem when Twitter didn't even have a mobile app and you had like Tweety and tweet bot and all these different kind of third party independent is it's 2024 and a consumer's expectation of what a social app and the performance of a social app and a mobile app rather than a web app. And so you have all this kind of like table stakes stuff. that for like an indie developer to actually go build and like have a significant number of retained daily active users,

I think that that's really hard. And I think where we are is if we can get the the total number of daily active users, the protocol from 50,000 to 500, $5 million, $50 million, then you're actually going to have it be a big enough market that you can actually get a kind of like real venture back team. And this is not to denigrate any of the independent developers. It's just like in terms of like building an experience that that is going to actually, take significant amount of market share from people who actually want to be using the product every day. And I think frames is

actually an update on my incorrect prior, is I assumed the growth would happen as a result of people building other clients. I think that's still too hard for most people. Whereas frames allow independent developers within a very short period of time, right? Like if you're a decent developer, you can have a frame up and running in an hour

or two and actually have it launched in the feed. No App Store approval. No, like, you know, have to go get a Duns number to get like your app store, like all these kind of things that block developers and the important thing is you have distribution, right? So you can go viral with a frame really fast, whereas imagine trying to launch a website that does anything crypto today, outside of like kind of having some big venture backing and like a big PR campaign, good luck getting your, your link in a Twitter feed to go to go viral, right? Whereas on a, you know, launching a frame,

which is almost like a gateway to your app, right? Like you can use a frame and a click on a frame is authenticated with the EDDSA signature for a Farcaster user. So kind of like the underpinning identity component, but you can actually click into an app and have it basically be one-click onboarding into an app. So almost like sign in with Google or Apple. And so I think that was a change in our perspective as saying, oh, there is a lot of developer demand. It's just today, relative to the size of Farcaster,

it's not building alternative clients. It's tapping into this distribution on this growing social network where everyone is crypto-native. And part of it is Warpcast has said, yeah, we're not going to nerve links. We think this is good. Like it's good for growth of the protocol. And so that's, I think, kind of where we are. So actually, coming to the frame kind of inspiration, you know, as far as I understand, it does share a lot of similarities with the Facebook sort of early day. API maybe 2013, is that I want to say?

2014. Yeah. But it was like this graph API, right? That was like the key. And so, you know, I guess in that case, it didn't succeed because, you know, it was a fight between the platform and the app developers in some ways. How do you see that evolving here in a place where like you can't really stop the app developers, which is the point of the network?

But also that such that like, you know, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, it, It has some... With moderation, he can, right? I mean, that was the thing that we just... Sure, sure, sure. But like... Warpcast having the effect of monopoly. But let's suppose that we're in some world where there is a way for warpcasts...

Let's say there are alternative clients. And maybe it's like Ethereum, there's only six. You know, there's not 500. The number of clients isn't scale with the number of users, but it's at least it's greater than two or something. Well, Ethereum and Solano, let's say. Those are only really two that have credibly multiple clients. And so, you know, how do you kind of view, and so let's say moderation becomes hard in this, you know, at least three, three clients, you know, it's like BFT. They all can't agree on moderation. So like at least one of them will accept your thing.

Which, by the way, would be an amazing outcome in the sense that there's no monopoly. There's no oligopoly, right? SMTP is essentially an oligopoly. Like Amazon and Gmail, they share their blockless, right? And yeah, so let's say we got to that point. And so, you know, yes, you could censor, but you'd have to get all the different clients to collude. So, you know, in that world, how do you view frames evolving right now? If you, like, took the history of, like, how developers tried to make all this stuff in the early days of kind of the social network growth and then kind of got stopped, how would you, you know, how do you see that evolving? and like where do you where do you want that to go and where do what's your like best on by estimate of where it goes yeah so i mean kind of hard to predict frames are you know two and half weeks old for sure for sure but this is a podcast we're allowed to speculate we're allowed to

yeah so let's let's just kind of take facebook for example so it's 2007 2008 it's a desktop platform with that that kind of facebook launches we you actually brought up open graph is the standard so open graph is the reason that sometimes when you paste a link into a messaging app or Twitter, there's an image that shows up versus other links don't. If you go Google OpenGraph today, it's a literally like a single page website that Facebook still hosts. So it's like the equivalent of the tailbone of like Web 2. It's like, yeah, Open Graph exists, but Facebook doesn't care about Open Graph for the most part. And the reason Facebook, you know, and kind of piece this together through people who are kind of living through

Facebook at that era, but basically it didn't make the transition of mobile. One, because the mobile platforms at the time just didn't have the performance, right? Like, you know, Netflix streams video games now through the Netflix app. Like, you know, they can do it in the cloud. But at the time, like, you know, building a Farmville within the limitations of an iPhone was just not going to work. You know, the whole Steve Jobs flash thing. So there was like basically no way to translate this to mobile.

Facebook goes public in 2012. And there's a very famous, like the company just completely burn the boats in terms of like just focus on mobile. And it turns out they have this insane business model of app install ads, specifically games. And, you know, who cares about the platform? So kind of rugged all those developers, Zenga being. the kind of like most prominent, you know,

as a public company that was basically built up Facebook games. I think where we are is slightly different in the sense that, one, frames are simpler than Facebook apps were, right? There were pretty sophisticated Facebook apps in games. It frames, it's just literally an image with four buttons. And I think the

magic of what makes frames great is that it can kind of enable these crypto economic actions in a very seamless way because the data itself on the network is completely permissional. So when I click on a button that says like mint right now, what's actually happening is the developer is getting kind of like my FID,

the kind of ID number that Tom has the lowest one in this group. But my FID is three. So then basically the developer is like, okay, yours is lower. Wait, who's one and two? Wait, what? Farcaster, the account, Farcaster, and then, you know, ruined it more of the work in the early days. So we got three, too. Okay, got it. Got it.

But I think so you kind of like basically are able to just programmatically say, okay, for FID3, give me their connected Ethereum address. When we launch a Solana, you could just like grab that and then just shoot an NFT to that address. And so that can all instantly happen with one button click. And so that is something that is not the same as like playing a game like Farmville where you're sitting there clicking like harvesting carrots or whatever. And it is like kind of like you're interacting with this thing ephemarily in a feed and then you're continuing to go.

But that is actually an interesting thing in the sense that that attracts a very specific type of user in the sense of like, okay, like you have now all of a sudden all these people are like, I can get free stuff, I can get free NFTs, I can get free meme coins or whatever. So that side of users, if you were to kind of try to rug frames, assuming we can continue to grow the protocol, right? So just to be clear, I have no intention of rugging frames. But in a world where you say, Dan disappears and Warpcast is run by like kind of Dilbert Minion people.

The other clients in the network are going to compete away those users very quickly because it'll say, hey, you want to get your distribution with frames, which benefits, whether it's a developer or creator, use this client. So you're going to have a massive group of users that are going to go switch over to that pretty quickly. I think that the second thing is where I think Warpcast and other clients are going to quickly start to kind of like figure out is like, frames. basically turn into this like Web3

crypto native ad format. And that's not like we're going to go have ads tomorrow, but I think it becomes this kind of like clear thing where if you think about like what a Facebook ad is for install a game, in this case, it's the launching point for

something that happens on chain. And whether that's a swap or a mint or some verb that someone hasn't come up with yet. And I would imagine that that will be something that instead of like, I don't want these to exist. It's like, no, actually, this is like good. Like, I want as many people to build these, like, kind of like interactive links, essentially, because that benefits the platform,

both from a usage standpoint, as well as a potential future monetization standpoint. And so that I'm not misquoted, like, we're not adding ads with frames anytime soon, but I would imagine you can build something that is user aligned and, and basically be able to, basically, if there's an economic action happening as a result of you clicking a button. Someone will be willing to pay the person that originates that action. In the same way that an Amazon referral link, like huge, huge business for a lot of like kind of bloggers back in the early 2010s, but basically if you link to any book on Amazon from your blog, you got an 8% commission if someone ordered that book. I don't think anyone found that offensive because obviously if I didn't want to recommend a book, I'm not going to, but if I do,

like, I get a cut. And so I actually think that there's going to just be natural ways of being kind of user align while also being able to make money that I think naturally people want to continue to support frames, whether it's the Warpcast client or another client. So I have a question for you. You know, in, you know, the Web 2 mantra is, you know, you're the product. You know, if you're not paying, you're the product, right? Basically, sorry, I'm buturing the original statement, but you know, like... But the interesting thing, I think at least, you know, when we look at

certain things in frames like the D-Gen AirDrop. It's not clear who the product or the user is in the case of like, you could argue that D-Gen used a frame as a form of advertising, but then the user is getting paid to like engage with the ad, right? Like indirectly. And I think that to me is the most interesting part about having the ability to control these economic relationships. You could also that's in a way true for AirDrop farmers generally,

is that it's not clear what the product is, right? Like, is the user the product, or is the product the air drop they're getting? But the thing here is that it's almost like a loot box. It's more like a loot box in a frame than it is like an airdrop farm. Like I'm looking, you know, like I feel like it has a completely different UX to the end user, right?

The end user is just like, ha, ha, I click this link. It's funny. Oh, wow, I got theirdroped, right? Versus like the intention,

you know, it's like passively getting air dropped randomly. Um, and I think like that's an interesting, to me that's, That seems to be one of the more interesting, like, user modalities that have happened in the last few weeks. And I have to wonder, like, how much of that is a function of what the early farcaster user base is composed of right now? Like, like, as you mentioned, Dan, the initial user base was like these kind of high-powered crypto, you know, big dick types who are generally have much more high a network than the average.

Haseeb. Haseeb. Are you insulting Tom here? that's obviously why he had to get off platform. Check that. No, no. What I, yeah. No, what I mean is that the, like the average Arpoo for Twitter is what, like less than $10, something like that? I have to imagine for. Yeah, I guess because they monetize terribly.

But Facebook in the U.S. is $200 per user. Yeah, Facebook is crazy. But everyone else. So I would, I would. Right. So I'd have to imagine that. like the early cohort of Farcaster users, probably the Arpoo, if you are monetized,

you know, if you're thinking about it as like, wait, wait, wait, wait, usually Haseeb is the one correcting people on acronym uses, but ARPU means average revenue per user, so that any listener. Yes, okay, there you go. Very nice. Okay.

So I have to imagine the early user base at Farcaster's probably much higher than that if they were being fully monetized on an equivalent basis to Facebook. And that might be why they're a very attractive user base for air drops and, you know, this kind of thing. Like, hey, mint my NFT, do my this thing. Because on average, I'm just going to be hitting a lot of really high value users. If you do scale to the 500,000, the 5 million, the 50 million, then it's kind of like, okay, how many random Twitter users do I actually want to give myirdrop to?

Maybe zero, right? Maybe just on average. But you're missing the point. You're missing the point that like air drop farming in general is usually a very active activity. Like I go into it being like, I want to do this, right? But the frame thing is interesting because it's like passive. People are just scrolling and randomly clicking a link and maybe get an air drop. Right.

I guess what I'm implying is that, yes. So the question is like, okay, if you are launching some meme coin, all right, you want to decide how to get your meme coin to get net buyers. Okay. And the assumption is that, okay, if I air drop this to a random person on Farcaster, the calculus for them must be that this air drop is going to result in a net buy. Right. If I give this person free DGent token or whatever tokens, I'm guessing they're going to be a net buyer. And if I eardrop to a random person on Twitter, my guess is that they're a net seller. They're going to say, oh, here's a great air drop. Great. Well, let me sell this thing. I think that's too specific. Therefore I think. Can I can I? So two, two things. And this is already starting to happen.

So let let me step back though on the. So naturally with any new primitive people are using it for all these different things. So one, there is very much an air drop meme coin and NFT. oriented, you know, click a button and get something, right? A ton of growth has happened as a result of that. That said, there were a bunch of other developers who are kind of like building other applications. And I think, you know, for example, FARCON was selling tickets through, you know, are the conference, the community run conference for Farcaster. And so someone sold Girl Scout cookies. And so someone actually today launched some Shopify integration with this. So basically, you're, you're kind of

offering a primitive where basically you can do an economic action in the feed. And it's using a blockchain. And so that is going to be a whole canvas. I think where the kind of like meme coin and NFT collectible stuff, free stuff, I think people are getting actually much more sophisticated even within the last two weeks where now they're actually taking that FID and they're actually looking up your effectively page rank on the network. So we have this like active badge concept where it's like you have to have X number of followers and you have to have a ratio of like post to engagement. And so now you can actually, and I'm calling it social proof of work, but I could just, I get really specific on saying, okay, I only want

people who are, you know, influencers or people who have a certain level of clout. I don't know if you guys remember this company in Silicon Valley, not BitCloud, but clout. There's actually a whole element of that where not only can you take the social proof of work that you have from the network, right? So you're ship posting, you're doing whatever you do every day, and now you're getting benefit, okay? There's a second component, though, where if you connect your on-chain address, all of the public activity could actually be incorporated. It's like I only want Pudgy Penguins. So now you're siving down even further who is worthy of your air drop, right?

Who is actually definitely going to be a net buyer? Yes. So imagine if you said, I want to overlap. Everyone has a Pudgy Penguin and the buyers. Yeah. For meme coins, what else would they be thinking about? But I think you want to establish the early lovers of the thing before you just start being like, hey, you want to think about the price.

Like Dogecoin came from the love of the dog first. before it kind of grew. Like, I think you're not sympathetic to people who are in this world. That's what I've learned from this. I think a lot of the new generation of meme coins that just move much faster than that. I don't think it's about love of the dog. I think it's about, you know, being early in a cycle or like a sort of mini wave. So maybe let me paint it like a version where, you know, because I think there's such

a negative association where there are drops in meme coins of just like, it's like free money, it's kind of sybilled or things like that. you can imagine a world where whether it's like an EAS on chain credential or some proof that I could basically target the entire network and say I want anyone who has an open source

commit on a GitHub repo and that now my aptos or sui or whatever L1 blockchain wants to get people to build on their thing is saying here you go as a developer you can click this button in a frame and immediately shows up in your wallet okay

and so I think that's starts to get much more interesting because, A, all the data is permissionless, and B, you can target based on a social graph. And so, again, all totally opt in, right? Or maybe you just say, hey, I'm going to look at the network and I'm just going to air drop to these people. So you don't even need the frame. I love that you describe the Celesteiairdropped, by the way, the air drop to get there are a number of them. Yeah, a number of them have worked that way. Well, they were the first one, and then everyone copied after. Right. But the point is here is I don't need to even touch a button on your site, someone can basically just say, hey, this has been airdrop to your account if you want

to claim it or whatever. And so I think that will be a whole area of experimentation. And then I think the second thing is, you could imagine the, there just becomes like very ongoing economic relationships. So like, I can provably look to see if you've been following me the whole time, right? So if you're following my account, maybe I'm giving, you know, as a company, I'm giving some benefit to the people who are broadcast. my message or things like that.

And so, you know, everyone talks about this idea that like own your data and like get paid for your data. The reality is Ben Thompson has done an amazing job profiling this. Like, your data is probably not worth anything. But there is a version of the world where you as a person with an audience can actually choose to amplify things and then actually participate in the upside in a programmatic way. I don't know if that's going to be something that people are that excited about, but like, I think it's just going to be a surface area that people are going to play around with.

Right? And I think the reality is like on Twitter now with the creator rewards. Is anyone like being like, oh, I mean, maybe some people are making life changing money because they have these huge accounts. But like the reality is it's like Twitter is like Twitter is paying me $600 a month to use Twitter. Like I'm more incentivized to use it. And so I think that just being able to do that in a way that is not centralized and just like allow anyone the creative freedom of saying like, hey, if you're doing X actions in a way that is beneficial to my brand and or my account as a kind of audience. you know, I think you're going to just get interesting use cases. And then I think that the other important thing is, so if you're listening to this podcast and you're going, oh, this sounds awful. Like, Farcasters is going to be loaded with ads and it's just

going to be all meme coins and scams. But you're getting the beauty of the system. The beauty of the system is you can go use a client that is like Zen mode. It like doesn't use any of the dopamine tactics of social media. And it's just like you just see, you know, the great takes from Vitalik and Tarun and like all these kind of like gigabrain. you know, philosopher types, and you don't have to see any of the DGen content. And that system can coexist. And I think that is what I'm most excited about is you get to a world where you have the freedom to choose as an end user.

How do you want to play this game? And, and you know, that's all well and good. That's all well and good. But we are a crypto podcast. And so the DGEN, we're here for the DGIN stuff. I want to, I want to shift a little bit because I really like that you brought up this like whole meme coin thing. And I, I kind of want to.

delve a little bit and kind of get people's perspectives, maybe a little bit, a layer above Farcaster, of what you think about right now the meta around meme coins, because it seems like, so obviously in large part that's driving a lot of the engagement around Farcaster, it's driving a lot of the engagement on everything, to be honest. Like a lot of the activity on Solana is trading meme coins. What are your guys feelings about where this meme coin just, I don't know what the best metaphor for it for it. It seems like kind of a, like a, what's the, what's that physics thing that, that rotates really fast and, uh, perpetual. No, centrifuge, centrifuge. Centrophage. Like this,

this sort of meme coin centrifuge that we seem to be playing. Um, yeah, what are you, Tom, what's your, what's your, what's your take on what's happening in the meme coin world? Wait, I don't understand the centrifuge analogy or we're separating the, the meme coins from the bit from the good coin. No, okay, maybe. All right. Ferris wheel. I don't know. All right. Fast moving Ferris. Spelled F-E-R-R-U-S, of course.

Yes. Amazing. Amazing. Nailed it. I, I mean, it just feels very like, like, mask off. I think that's been a little of the market for the past, you know, year or two has been, you know, I think like, like NFTs, for example, initially it was like, okay, it's going to be about art.

And for a long time, it was about sort of artists selling art. And there was PIPs. And people are like, no, we just. love, you know, this lion or whatever. And then, and then Blur came along was like, no, actually, you just want to trade the fucking tokens back and forth. And really, you do that really, really, really, really, really well. And that was kind of what Blur was doing. I feel like meme coins are almost sort of like the next evolution of that. I'm like, you don't actually even care about the picture of the lion that you're trading. You just want to trade like the concept. And that's what

meme coins are doing is like, you know, imagine like 2021 10K PFP launches, but like, just distilled down to like the pure essence. And that's what you're getting out of the central. is this meme coin essence. A day meme coin. Tarun, what's your take? By Tom. Like the meme coin essence. Your fragrance coming out soon.

Very much. My take is actually maybe, yeah, maybe more. The optimistic take is that the meme coins, I like this idea of meme coins that are conditional. And I think that's where the farcaster meme coins seem very different than like the Solana meme coins. The Salon of meme coins are like, aha, Drake wore a funny hat with a name on it. And so we're going to make a meme coin that is the same name and trade it. It's like marketed towards D-Gen gamblers.

The one where it's like I'm using this thing and like randomly get loot boxes feels like almost more like just like Roblox or something. It's like social Roblox where you're like converting the dopamine hit from like. likes into dopamine hit from like random I get something, which to me seems extremely different from like the absolute like Solana DGen meme coin. And so I kind of think of them as two separate types of things. One is like almost like a game that you get random rewards in. And the other one is like you're really going in and the game is like who you suckered in your group chat to buy last. You know, like that which is a very different ethos, I think.

That's what. To me, that's why I think like the ironically named Dgen coin on on basis, like a funny example of this. But I, yeah, I think like there could be a world where meme coins become this kind of like incentivize action thing. And yeah, like kind of like I was saying, like I don't know what the where the boundary is between the two worlds. Dan, what's your take? Where do you think meme coins are going as a concept? Yeah. So just to be clear, I'm not involved in any of the meme coins.

and I'm back from my Coinbase days. I just don't touch. I own Bitcoin and Ethan, and that's it. Like, I'm as bit in coin stock, right? That's it. I think one interesting thing to build on what you said, Turin, is I think it fundamentally comes down to it's people self-organizing over the internet over kind of some shared thing. And, you know, at least the ones that exist on Farcaster, D-Gen being kind of like the most prominent.

There were actually a few that happened in December points and a few other ones. But the thing that I think is stuck with DGEN is that they've created a memetic culture around it in the same way that Doge and I'm less familiar with some of the Solano ones. But one interesting behavior is they built a tip bot. So like basically people will reply. Like I have a bunch of followers of forecaster. I'll say something. And then I get all these like people replying to me with like DGen like 420 DGen or like 69 DGN.

And it's an entirely like an off chain. It's just like a ledger. And there's some air drop. I actually don't even know enough about the mechanics, but basically it's created a whole culture. And then now people will tip DGEN things that people are using Linda G's like Bountycaster, which was like USDC and as like hire developer to do something for you. They now support like paying in DGen.

I think like Zora now allows you to mint in DGEN. So there is like this like kind of like rewards points component to it that because it actually has a social layer deeply integrated in it that I think is, I think it's easy to dismiss because it's just like, oh, this is just a, you know, Ponzi scheme or, you know, some like suckers bet. But, but I think, you know, they're, I'm sure people who are coming in and saying, how can I make money on this? But I think that there's a component where it's actually like people come for the meme coin and stay for the culture. I think that like that channel on Farcaster,

it's its own subreddit effectively. Um, people show up and it's entertainment. It's like, Oh, I get to just like, what is the latest like meta in Digen today? And like, what are we doing like as a group? In the same way that I think Wall Street bets, you know, everyone focuses on the AMC stock price and, you know, GameStop. But the reality is I think it was a community of people. And it feels like, oh, I'm finding like-minded people on the internet. And there's also this component that it's a little bit like it's groundswell bottoms up

against the man in some ways. And so I think that there's like an actual. something actually there as a meta category, but I don't think anyone's quite captured it. Maybe Farcaster has, and we don't even realize it, but I think it's very easy to dismiss because it's easy to look at the, you know, the rugs and the kind of, you know, clear fraud and pump-a-dub cases. But I think in the case of like these community-driven bottoms-up meme coins, I don't know. I think it's easy to overlook them in terms of like there is some interesting human phenomenon

happening. Yeah, I think as you're saying that it occurs to me that meme coin is kind of a superposition of multiple things at the same time. On the one side, it is like you said, a community of, okay, we're all the people who hold Digen or all the people who hold, you know, whiff or whatever. At the same time, it's also an inside joke. So there's something about, there's something that's like intrinsically kind of funny and subversive about like sitting around trading a meme coin or accumulating a meme coin. And then I think the other hand, it's also a lottery ticket. And this is the kind of the financial behavioral part of a meme coin, which is hard to ignore, is that a lot of people, the reason why they buy a meme coin is that they saw what happened on

Reddit or on some Twitter post of some guy who bought, you know, the meme coin of the day. And it went up, you know, 150x. And it's like, oh, my God, this person made life-changing money. And every time you see a new meme coin, the question in the back of your mind is like, maybe this is, maybe this is the one. Maybe this is my, you know, this is my buying Doge early or my buying, you know, this thing or that thing. And this, it is in some sense, it's not that dissimilar as Thomas pointing out to what was happening with NFTs and PFPs in the last cycle. And it seems like that behavior on the NFT side is kind of being replaced more and more with meme coins, where meme coins are creating these communities.

They're not bound by 10,000 people. they don't have an arbitrary entrance price. And so in some sense, if that was the role that NFTs were playing in the last cycle, meme coins are a better way to play that role because they are obviously, you know, they're fungible. You know, you can play for $5. If you're on Solana, you can pay for, play with $1.

And so it's more inclusive in that sense. They're more scalable beyond 10,000 people. You don't have to be, you know, you have to be able to pay $50,000 in order to play this game. It does seem at the same time that there are, like the velocity of meme coins is also what's really unique, right? Like they just, there are new meme coins being launched every single day and the meta shifting. The velocity of memes on the internet is like that, right?

Like, it's not just the coin part. It's like the first part is quite important there, right? It's not like I have to come up with a series of attributes that this collection has represented. Right, that's true. They are more efficient in that way, right? You don't really need to do the pretense of, well, we hired and, artist and we created a universe that these PFPs belong to. Instead, it's just, okay, this one has a new name.

I want to, yeah, distilled me. There you go. Tom's got to make a sense now. But the one thing I want to say is like if you think about these communities around NFTs, historically, they just centered around Discord. And in Discord, you were disconnected from your wallet. And what that meant is you got a fuck ton of scams, right? Discord is just filled with spam of people trying to rug you,

give you fake wallet addresses, whatever, malicious malware type stuff. And I think that interesting thing of like, if the social app is actually directly tied to crypto and your wallet is already there and you can be confident that like when you sign something, you don't have to really think about, oh, like, is this link going to make me sign something malicious? That does change your interaction with the asset in a way. way that I think like the discord being separate from the asset added so much extra friction for

the end user. And actually build on that. So one of the things with frames today, and we're adding on-chain transaction support, so there's got to be a layer of security that we'll add there when we do it. That's like over the next week or so. Most of the way the frames work today is you tap a button and then someone is actually sending you that asset to your address. So there's actually no risk to you.

Right? You didn't have to sign anything. You didn't give any scary permission. it's just kind of it's like okay drop something in your mailbox that's that's that's that's the kind of interaction um the other thing that you know see when you were kind of mentioning um the the kind of last talk about where meme coins sit i just think about the super bowl we just had um you know this this huge cultural event it's like most watch super bowl in history right and Taylor swift and all this kind of like the meta stories about it and the memes um 23 billion dollars are

bet on it like it's just so it was a It's a fundamental human behavior of like, oh, if I put a little bit of money on this, like, it makes it a little bit more interesting for me. And I don't think anyone is kind of, I mean, maybe there are some people, but for the average person, it's, they're putting whatever, $50, $100 on the game. And it just, like, it intensifies the euphoria of having that game, that entertainment be interesting, right? And I think if you think about how sad like a lottery ticket, right? So it's like, I don't even know what the figure of people who spend money on Powerball or lottery tickets in the U.S., right? completely acceptable because the government's getting all that money, by the way. And they say, oh, it's paying teachers.

But the reality is it's taking advantage of the fact that there's a fundamental human interest in, if I put a little bit of money in here, I could make a bunch of money and I didn't have to actually work for it. And so I think that it's easy to judge meme coins, which actually kind of like there's a cultural element, there's a medic element. It's like people actually, you know, potentially making friendships online and saying, oh, those are bad. But this thing that is depressing when you go to the gas station and people are spending, you know, $50 a day buying scratchers. Like, you're moral positioning, right?

I kind of project. That's a big point. I'm not taking a moral stance on any of these things. No, no, no, no. I'm not being a short thing. This is meme points. Yeah. Well, I, you just came up with the greatest KPI for meme coins, which is total volume per

day of meme coins divided by the Super Bowl betting volume. What? Like, I feel like that's a good measure of like, our meme coins making it. Yeah. So here's the point that I actually, I made this a couple of weeks ago in the Empire podcast is that I increasingly think that the meme coin meta is probably not sustainable. And actually, the reason why I make that argument is an analogy to gambling. So if you look at gambling, so if you look at lotteries or if you even look at, you know, the most popular casino game is slots. And slot machine manufacturers, I mean, it's probably, you know, one of the most

lucrative industries. They, an enormous amount of human capital. and research and engineering goes into optimizing slot machines to maximize the amount of money they make from gamblers. And if you're optimizing a slot machine, there's multiple things you're doing at the same time, right? You're doing this variable reward ratio, making loud sounds and wonderful lights when people win. You're not, the important thing is that you're not making people lose too fast.

So you make them lose just enough money that they sit there, they feel like they can win, but mathematically they're losing something like 20 cents for every poll or something like that. There's some really obscene number that you can optimize a slot machine into making a rake on every single pull. And the problem I would argue with meme coins is that because meme coins have such high churn, right, there's like new meme coins being launched every single week. It's not like we're all trading Doge still. Obviously, there are a bunch of people still trading Doge.

The velocity of meme coins has materially increased. Yeah, but the velocity of meme coins is really materially increased. increased. And my argument is that I think Dogecoin is sustainable. Dogecoin can keep going up and down forever because it's more or less the only rake is being made by Binance and Coinbase, right? Otherwise, there's kind of no loss of free energy, so to speak. But for most meme coins, they are just too extractive because there's a new team launching a new meme coin every single day, right? With NFTs, they were very well understood. Obviously, they were bad actors sometimes with NFTs, but they were relatively well-understood norms about, okay, how much of the NFT mint goes

to the creators and the royalties and this and that, right? Like, there was, there was more or less a well-understood game that limited the amount of energy loss or the amount of rake that was taken by these users. But when somebody launches a new meme coin, it's like, look, my one meme coin took off. I've made like 20 of them. This is the one that took off. So I just got to fucking extract. And when people are paying for the lottery ticket of like, okay, I buy this new Gamecoin, overwhelmingly, I have no idea whether or not this lottery creator is taking out 50% or taking out 30% or taking out 10%. Next time you're in the US, I want you to go to a deli and count the number of different

fucking lottery tickets and then go back to the same deli a month later and count the number that are the same. The state is also earning these like- Yes, but the state is very highly optimized in the same way, right? I mean, lotteries are super highly optimized. to be the maximum amount of extractiveness to maximize revenue. At least here it's because it's a repeat player. Because it's a repeat player.

That's more transparent than the state than the state doing it. The state's version of this is like even crazier to me. Then slot machines? Then meme coins. Like if I view the meme coins for their lottery ticket value, I think the way that states introduce and remove lottery tickets is completely not transparent. They're just like, oh, yeah, sure. We're going to make some new like $100 game.

and okay, actually it didn't perform well, so we're going to get rid of it. And I don't know, the meme coin thing at least seems more, it seems more friendly to people who aren't over 50 for that type of experience. On what basis do you say that? That it's more friendly. I mean, it's obviously more attractive to people who are under 50. They're both aggressively optimizing for extracting a rake, right? I think I think his deep point is the state, you know, is careful a lot to like over

graze the commons, whereas we have, you know, a lot of rents out there. I don't know if that's true either. I think they found the prudal optimal where they commit to extract. Clearly, they have because people still buy lottery tickets. But they also collude, right? Like to do the powerball type of shit where like multiple states are like, how do we increase our rake?

We make a cartel. It's like, I don't know. Like, I can't really, I can't really like fault the meme coin created to this. Like, I think this is a fake moral high horse you're living on. I'm not making a moral argument. I'm making an economic argument is that because meme coins as a whole will end up becoming too extractive, people will move on to a new meta. So it was PFPs, now's meme coins, and they'll pick something else when meme coins start

feeling too extractive. But maybe one thing to think about is does the equilibrium start to happen where you get more and more transparent in terms of talking about the NFT projects to a point where it's, okay, the founding group of the meme effectively says, only taking whatever, 1% or 5%. And the rest is kind of unlocked over time. There's a proof of work component to it. And so you get to actually a market in the same way that, I don't know, like,

think about an IPO, right? Completely different thing. Like basically the bank is able to just take a 15% dilution on like it. So there naturally becomes a point where you say, hey, there is value in creating a memetic thing. TBD on how long it lasts and you can get it. Maybe the actual long, the peridopimal long term is if I can create a meme that lasts as long as Doge, that actually makes me the most money in a world where even though I only am 1%, but as a $10 billion market cap, you know, that actually. I agree with that, but the market is telling us that's not what people are shooting for, right? And this is why I think if you remember Zach XPT, he got a bunch of people mad at him. Normally he's like one of these Twitter heroes because he's constantly unveiling these frauds. A lot of people got mad at him because he was just shitting on. meme coins saying that like look overwhelmingly meme coins are fraud pump it down blah blah blah blah

blah and you know i have to assume that for the average meme coin or sorry i should say the median meme coin that's probably true the best meme coins are genuinely community led kind of you know no rake they're just you know in it for the love of the game it's just a funny meme and it ends up taking off but there are most meme coins are you know they're enterprises right there's people basically trying to make money running their own money lottery maybe this is the point though these socially driven meme coins, which are like, again, they're not like this, like, active thing that like, you know, someone is creating with like a lot of intent of like trying to get a bunch of liquidity and the price go up. Someone that's just adding it in this another

experience might have a totally different equilibrium than the like, you know. Yeah, I think if you if you remember DAICOs, that was like this thing that Vitalik came up with about the diko. I remember those things. That was like so funny. It was so complicated. Yeah, so the idea was that, so, you know, the ICO era, ICOs were literally okay, you know, we just sell a bunch of tokens and whatever we make. We get a bunch of money. The whole idea of a DAIC, which Vitalik postulated, I think no one ever actually did, was that we raise money from retail to buy our token, but we don't actually get the money until we hit certain milestones that, like, the token holders vote on. And so the money technically could never get released if we don't actually hit the milestones. And so you can imagine if we create this norm around beam coin such that the team only gets

their meme coin drop or whatever if this thing becomes like Doge. And it's like, okay, you know what? If you do create a lottery that's as good as that, then okay, you deserve 10%. But you got to, you know, you got to really be enterprising. These social experiences give you a lot of events that you can condition on, right? Which is like other things in crypto, you have to like do a lot more work to get like civil proofness, right? and things like that. At least here, you're like, you have this, yeah, proof, proof that you've, like, kind of done this thing and it's documented and you can use it

as your conditions for distribution. Maybe one other just kind of thought is, so let's just take away the version where you can buy into it at the beginning, and it's strictly proof of work, right? So, and like, it lets use something that is not going to happen in crypto anytime soon, but let's say Taylor Swift basically had a Taylor coin on some cheap chain. and the idea is all the Swifties on Twitter who basically just like, you know, protect her from these deep fake porn things and all that like,

you know, the army of Swifties that are online, right? Are flying back and forth with with Swifti, the coin that basically that you can't buy into or whatever. And then at some point it like actually turns into this economic thing where people care enough about this little token that they're willing to be like, okay, well, I want to be able to use this on Shopify to buy like,

I don't know, whatever merch. And so all of a sudden people are willing to take this because it gets to a point where there's some, you know, exchange rate with dollars. Like, and if no one had to buy in and the idea is like you ended up doing the drop completely based on proof of work, like, I think it's just easy to dismiss because the current meta looks like the Mississippi company to say stocks are bad. We're going to basically get rid of this financial primitive, whereas like obviously you get to the point of, you know, 1930s like you put the SEC in place. Not to say the SEC has made every right decision, but obviously, you know, the joint. stock corporation is an extremely valuable way of organizing humans and capital. I think that there's something there in terms of the idea of social,

memetic value being exchanged. It's very fundamentally human, right? So your solution is that we need to reinvent the SEC is what you're saying. Exactly. Bring Gary Gensler to mean points. I think that's the problem. Yeah. Cool.

Okay. Well, with that, we're actually, we're at time. So we got to wrap. Dan, thank you so much for sharing your thoughts of this. This is awesome. How can people find you on Farcaster? DWR. DWR on Farcaster.

Also on Twitter, right? But for both. Same name, same pirate. Also on Twitter. Also, if you want to find Tom, Tom, you're not active anymore? I guess I'm active again now. I'm just Tommy Schmidt. Also on Twitter.

Tom H. Schwit and Drew with your Forecaster ID? I got the Tom. Oh, King. King. By the Taylor Swift thing might, you know, it's the funniest thing is there's someone from crypto who is at her birthday party. So maybe that like that's the that's the missing link to the Swifty Mink coin. Okay, let's make it happen. When someone figures out the celebrity way to do MemeC compliant, I can promise you every celebrity will have a meme coin.

Yeah, I agree. Okay, I guess that's where the Met is going. Actually going full circle with like NFTs in the early days being about celebs and now Memecoins Is you going to go? Okay. Anyway, everything old is new. All right. That's it.

Thank you, everybody.