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BULLPEN ROUNDUP: Sustainability of Celebrity Memecoins | The Rise of Ton | L1 vs L2 Culture Clash

By Unlayered

Published on 2024-06-20

Explore the impact of celebrity memecoins, TON's growing influence, and the ongoing L1 vs L2 debate in this insightful roundtable discussion with crypto experts.

The notes below are AI generated and may not be 100% accurate. Watch the video to be sure!

The Phenomenon of Celebrity Memecoins

The cryptocurrency space has recently witnessed a surge in celebrity-backed memecoins, sparking intense debate within the community. This trend has brought both excitement and controversy, with some viewing it as a positive development for adoption and others expressing concerns about potential risks.

Zen Llama, one of the hosts, offered a balanced perspective on the matter: "I don't think it's like anyone's place to call anything like from or right. Generally, I think it pretty much on the celebrity themselves to do it right." This sentiment highlights the complexity of the issue, acknowledging that the responsibility ultimately lies with the celebrities involved.

The discussion touched on the potential benefits of celebrity memecoins, particularly in terms of bringing new users into the cryptocurrency ecosystem. Sal, another host, pointed out: "If you just boil it down to that, that's kind of what they do. I think it's interesting that we celebrated, you know, musicians and celebrities and et cetera, oftentimes jumping into NFTs."

The Evolution of Celebrity Involvement in Crypto

Comparing the current memecoin trend to previous celebrity involvement in NFTs, the hosts noted a shift in public perception. While celebrity NFT projects were generally well-received, memecoins have faced more scrutiny. This change in attitude may be attributed to the perceived lack of utility in memecoins compared to NFTs.

However, the hosts argued that memecoins could potentially offer more value than initially apparent. Sal explained: "Oftentimes what celebrities are actually trying to do is the exact thesis of NFTs back in the day. And in my view, where being coins are going, which is a vehicle to allow users, fans to do things with the celebrity, not otherwise possible or not easily done on traditional financial rails."

Challenges and Criticisms

Despite the potential benefits, celebrity memecoins have faced significant criticism from various figures in the cryptocurrency space. The hosts discussed comments from prominent individuals like Hayden Adams and Vitalik Buterin, who have expressed skepticism about the trend.

Dave, the third host, observed: "It does feel the longer that people stay in the space, the sort of more negative they become, you know, happen with the Bitcoin Maxis and now we're sort of seeing almost ETH boomer maxis who just sort of hating on anything, anything new that comes along."

This observation highlights a broader trend in the cryptocurrency community, where established players often resist new developments, particularly when they don't directly benefit from them.

The Need for Guardrails and Innovation

One of the main concerns raised during the discussion was the lack of adequate safeguards in the current memecoin ecosystem. Dave pointed out: "We just as an industry, not very good at creating guardrails at creating apps, which which stopped the person who's creating it from just stealing the money."

The hosts discussed potential solutions to this problem, such as implementing lock-up periods for tokens or creating new token standards that better align incentives between creators and users. Sal suggested: "We have the power. I do think the form factor will change a little bit. I don't think it's just going to be people launching these things. I agree. I think there'll be new token standards, but perhaps taking advantage of what you can do with existing token standards."

The Potential for Utility in Memecoins

While many critics argue that memecoins lack utility, the hosts explored potential use cases that could add value to these tokens. Dave proposed: "It would be great to introduce a BIM or utility to these meme coins, I think for sure, because for the longest time it's been hard to actually add utility to crypto because war is about regulation. But it feels like if the utility is access to a celebrity or access to be able to buy tickets early, it doesn't feel that that's anywhere near sort of security level because you have those things in web2 anyway."

This perspective suggests that celebrity memecoins could evolve beyond simple speculative assets into tokens with genuine utility for fans and supporters.

The Dearth of Applications in the Current Cycle

The conversation shifted to the broader cryptocurrency ecosystem, with the hosts expressing disappointment in the lack of new applications during the current market cycle. Dave noted: "I think it has been a pretty disappointing cycle so far with just the dearth of apps."

Sal explained that this shortage of applications might be due to the focus on infrastructure during the previous bear market: "Literally VCs didn't allocate to apps at all a year ago. We even had podcast episodes where the ratio we heard was six to one in for the apps."

The Shift Towards Application Development

Despite the current lack of applications, the hosts expressed optimism about a potential shift in focus towards app development. Sal predicted: "I think that will change now just because there's way too much info and it's completely undifferentiated, like almost universally undifferentiated, one L2 versus another."

This shift could be driven by developers seeking to build on platforms with established user bases and liquidity, such as Solana. Sal argued: "Developers are very lazy and they want to actually build something useful. So they'll just choose the shortest path, which I think today is Solana. There's users, there's liquidity, there's DEXs, there's everything you need, there's information, there's data, you can get all that wrapped up in a nice API, served to you, put it in your front end."

The Importance of Community and Culture in Blockchain Ecosystems

The discussion then turned to the significance of community and culture in blockchain ecosystems. Zen Llama emphasized: "I honestly think it's probably the most important layer, to be honest. Because at the end of the day, cryptocurrency is social coordination. So, you need the social people wanting to coordinate to make it useful."

This perspective highlights the crucial role that community plays in the success and adoption of blockchain platforms. The hosts compared the cultural aspects of different ecosystems, noting the strong sense of community in Solana and emerging platforms like Monad.

L1 vs L2 Culture Clash

A significant portion of the conversation focused on the cultural differences between Layer 1 (L1) and Layer 2 (L2) blockchain ecosystems. The hosts observed that L1 platforms tend to foster stronger communities and cultural identities compared to L2 solutions.

Zen Llama noted: "I do actually think like eventually fragmentation will be solved. I think it's just going to take so long that they're going to miss the boat." This comment highlights the potential risks faced by Ethereum and its L2 ecosystem in terms of losing market share to more cohesive L1 platforms.

The Rise of TON and High-Distribution Blockchains

The hosts discussed the rapid growth of TON (Telegram Open Network) and its potential impact on the cryptocurrency landscape. Dave shared his experience: "I was using Tom for the very first time this week and it's genuinely incredible. You're just on telegram and you create a wallet within telegram app and it all happened within, I don't know, 30 seconds or something and then straight away you're playing these sort of mini games on telegram."

This ease of use and integration with an existing messaging platform has led to TON's rapid adoption, with the hosts noting that it has already achieved a significant market cap relative to Solana.

The Potential Threat of Big Tech Entering the Blockchain Space

The discussion touched on the potential for large technology companies to enter the blockchain space and quickly gain significant market share. Zen Llama expressed concern: "I mean, I've always been worried about this. If Apple launches a blockchain, goodbye. It's a game over. Everyone has an Apple phone in their pocket."

This scenario highlights the potential disruption that could occur if major tech companies leverage their existing user bases to launch blockchain platforms.

The Future of Stablecoins and Value Accrual

The hosts explored the future of stablecoins and value accrual in different blockchain ecosystems. They noted the significant growth of USDT on TON and discussed the potential for Solana to capture more value through fees and MEV (Miner Extractable Value).

Dave argued: "I think that Solana, for me, it's just playing out exactly as I expected. Lots and lots of, you know, very high number of very low value transactions. And probably majority of the value will come in MEV. Even though people don't like that, but it's just how these blockchains work."

The Debate on Economic Security

The hosts delved into the recent debate between Ethereum proponents and critics regarding the concept of "economic security." They discussed the arguments made by Justin Drake and Anatoly Yakovenko, with the consensus being that the concept of economic security is not well-defined and may not be as crucial as some claim.

Sal expressed skepticism: "I still don't to this day understand what economic security means. If someone could define it in very clear terms, that would be great. But if you can, that's usually a sign of whatever it is you're describing isn't real."

The Long-Term Vision for Ethereum and Its Challenges

While discussing the future of Ethereum, the hosts acknowledged the potential of its long-term vision but questioned whether the market would wait for its implementation. Zen Llama shared insights from conversations with Ethereum developers: "In the end state of ETH being like this stateless zk root. It is everything we would want in the blockchain. And I'm like, you're right. But the path to get there is so long that I'm not sure that the market is going to wait around for it."

This perspective highlights the tension between Ethereum's ambitious goals and the immediate needs of the market.

The Role of Hardware Advancements in Blockchain Scaling

The hosts discussed the impact of hardware advancements on blockchain scaling solutions. Zen Llama pointed out: "The same hardware advances that are going to speed up ZK are going to speed up non ZK chips, like AI is not afraid of hardware. They're going to make hardware fast, like whether blockchains do it or not."

This observation suggests that improvements in hardware technology could benefit various blockchain scaling approaches, not just those relying on zero-knowledge proofs.

Monad's Approach to Building a Developer Community

Towards the end of the discussion, Zen Llama shared insights into Monad's efforts to build a developer community. He described an ongoing bootcamp or accelerator program: "We're actually doing like a little like, I guess we'll call it like our first like, what would we call it? Maybe like a bootcamp, maybe like an accelerator, right? It's our like, our testing ground."

This initiative demonstrates Monad's commitment to fostering a strong developer ecosystem, similar to the early days of Solana's hacker houses.

The Importance of Product Focus in Blockchain Development

The hosts emphasized the significance of product-focused development in the blockchain space. Zen Llama noted the difference in approach between Solana and Ethereum-based projects: "One thing is like incredibly clear when you go to Solana hackathons is like people are product focus and like shipping focus. And like, it is cool to see that energy starting to come out, especially just today was the first day, right?"

This focus on building practical applications and shipping products quickly is seen as a key strength of the Solana ecosystem and something that other platforms are looking to emulate.

Conclusion: The Evolving Landscape of Blockchain and Cryptocurrency

As the discussion wrapped up, it became clear that the cryptocurrency and blockchain space is in a constant state of evolution. From the rise of celebrity memecoins to the ongoing debate between L1 and L2 solutions, the industry continues to grapple with complex challenges and opportunities.

The hosts' insights highlighted the importance of community, culture, and product focus in driving adoption and innovation. While concerns remain about the sustainability of certain trends and the long-term viability of different approaches, the overall sentiment was one of cautious optimism about the future of the space.

As blockchain technology continues to mature and new players enter the market, it will be crucial for developers, investors, and users to stay informed and adaptable. The success of platforms like Solana and the potential of newcomers like Monad and TON demonstrate that there is still significant room for growth and innovation in the cryptocurrency ecosystem.

Facts + Figures

  • Celebrity memecoins have gained significant attention and controversy in the cryptocurrency space.
  • Iggy Azalea's involvement in launching a memecoin was noted as a positive example of celebrity engagement.
  • The hosts discussed the potential for new token standards and improved guardrails for memecoin launches.
  • Solana was highlighted as a preferred platform for developers due to its existing user base, liquidity, and infrastructure.
  • TON (Telegram Open Network) has reportedly gained 40 million users in a short period.
  • TON's market cap is estimated to be about 25% of Solana's market cap.
  • The hosts noted a 6:1 ratio of investment in infrastructure versus applications during the previous bear market.
  • Binance's BNB token was discussed, with CZ reportedly owning 55-60% of all BNB.
  • Solana has surpassed Ethereum in daily trading volumes and daily MEV capture.
  • Solana's inflation rate is set to decrease to 1.5% by 2031.
  • The hosts mentioned that Ethereum's long-term vision involves becoming a "stateless zk root."
  • Monad is currently running its first bootcamp or accelerator program for developers.

Questions Answered

What are celebrity memecoins, and why are they controversial?

Celebrity memecoins are cryptocurrencies created or endorsed by famous individuals. They're controversial because while they can bring new users into the crypto space, there are concerns about their lack of utility and potential for celebrities to exploit their fans. Some argue that these coins can provide unique ways for fans to interact with celebrities, while critics worry about the financial risks for inexperienced investors.

How does Solana compare to Ethereum in terms of developer appeal?

Solana is currently seen as more appealing to developers due to its existing user base, liquidity, and infrastructure. The hosts argued that developers are likely to choose Solana because it offers a "shortest path" to building useful applications, with ready-made DEXs, APIs, and data available. In contrast, Ethereum's fragmented L2 ecosystem may be less attractive to developers looking for a straightforward building experience.

What is TON, and why is it gaining attention?

TON (Telegram Open Network) is a blockchain platform integrated with the Telegram messaging app. It's gaining attention due to its rapid user growth, reportedly reaching 40 million users in a short period. The platform's seamless integration with Telegram allows users to create wallets and interact with blockchain applications easily, making it a potential competitor to established cryptocurrencies.

How does the concept of "economic security" factor into the L1 vs L2 debate?

The concept of "economic security" has been a point of contention in the L1 vs L2 debate, particularly regarding Ethereum. Some proponents argue that it's crucial for securing in-flight transactions on L2s and bridges. However, the hosts expressed skepticism about the concept, suggesting that it's poorly defined and may not be as important as claimed, especially given the current market trends towards more user-friendly and efficient blockchain solutions.

What role does community and culture play in blockchain ecosystems?

Community and culture are considered crucial elements in blockchain ecosystems. The hosts emphasized that cryptocurrency is fundamentally about social coordination, making the social aspect and community engagement essential for a platform's success. Strong communities and distinct cultural identities, like those seen in Solana and emerging platforms like Monad, can drive adoption and foster innovation within an ecosystem.

How might hardware advancements impact blockchain scaling solutions?

Hardware advancements are expected to benefit various blockchain scaling approaches, not just those relying on specific technologies like zero-knowledge proofs. The hosts noted that improvements in chip technology driven by AI and other fields will likely speed up both ZK and non-ZK blockchain solutions. This suggests that multiple scaling approaches could benefit from ongoing hardware innovations, potentially leveling the playing field in terms of technological advantages.

What approach is Monad taking to build its developer community?

Monad is focusing on building its developer community through initiatives like bootcamps or accelerator programs. These efforts aim to bring founders and native teams together, fostering a product-focused building culture similar to what has been successful in the Solana ecosystem. By providing hands-on support and creating a collaborative environment, Monad hopes to attract and nurture talented developers to build on its platform.

How does the approach to building differ between Solana and Ethereum-based projects?

The hosts observed a significant difference in the development approach between Solana and Ethereum-based projects. Solana hackathons and developer events tend to be more product-focused, with an emphasis on shipping functional applications quickly. This contrasts with the Ethereum ecosystem, which has been more focused on infrastructure and theoretical discussions. The hosts suggested that this product-centric approach has been a key strength for Solana and is something that other platforms are looking to emulate.

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