Crafting the Next Meta with User-Generated Assets

Author: KINJAL SHAH

Source: DAOSquare

Meme coins are having their moment in the spotlight. However, at their core, what we have witnessed in the Crypto world over the past four years is merely the realization of some of the same ideas in different new mediums. For example, social tokens, NFTs, or meme coins. Their common feature is the financialization of shared ideas, assets, or information. Participating in these markets means engaging in the next "meta" that is continuously created, disseminated, and evolved.

The current state of meme coins is highly controversial, as their culture is one that glorifies (near) gambling mechanisms. Yet, mimicking online behavior is a very popular form of entertainment on the internet. If you look closely, you can see that this could evolve into a deeper form of engagement regarding participation, ownership, and monetization between creators and users.

In a previous article I published, I stated that user-generated content is a form of native currency on the internet. User-generated content, such as memes, is primarily published and disseminated on media aggregators like Meta (Facebook) and X (Twitter). With cryptocurrency, it has taken a step forward. User-generated assets are published and disseminated on digital native exchanges, as we are beginning to see; they are a new form of publication. Memes are just another way to attract attention, a means of distribution on web3 platforms.

Meme Coins as Part of the Creator Toolkit

Although still in its infancy and not yet fully formed, a toolkit serving web3 creators is gradually emerging. Mechanisms like points and airdrops reward the use of protocols. In terms of airdrop design, we still have a long way to go towards maturity, such as limitations on whitelists and release mechanisms, all of which have the potential to give rise to more specific reward mechanisms. Further growth can be driven by existing communities, on-chain referral rewards, and "token social proof."

Meme coins can also be used to bring different communities together or capture a specific moment. For example, Seed Club recently launched $ENJOY on Zora in a completely permissionless manner. This meme coin was specifically airdropped to users who interacted with Zora and Seed Club in various forms. Such operations allowed them to attract attention from a broader audience by leveraging the traffic of the Zora network.

With on-chain addresses and wallets, $ENJOY can specifically reward deeper engagement behaviors beyond simple minting actions. Holders of $ENJOY represent a unique set of wallet addresses that have demonstrated a certain level of loyalty and engagement with Zora and Seed Club. While meme coins may be ephemeral in nature, they are also effective tools for gaining attention and marketing.

We will start to see more and more creators and brands rewarding and attracting their users through on-chain mechanisms. Your favorite newsletter authors might offer referral rewards to a portion of their readers. Additionally, those KOLs might airdrop their meme coins based on the engagement levels of their social channels. Here are some examples of tools creators can use to acquire users and enhance asset value.

Social consensus and narrative building play a crucial role in this regard. We have seen almost all forms of content aggregation happening on the internet. To this day, the Crypto community largely relies on traditional social media platforms to build narratives. However, we also have instances of on-chain publishing products, with protocols including Lens and Farcaster, as well as applications built on these protocols like Warpcast, Drakula, and Orb.

With these platforms, meme coins can become part of the product experience. For example, you can comment on a post (Cast) on Warpcast, and then the wallet address linked to your Warpcast account (FID) will receive BONSAI, where $BONSAI holders can access specific collectibles or join specific groups. Additionally, we see this kind of social behavior appearing in other emerging markets, such as wallets and Telegram trading channels. Publishing platforms can then use this data to provide a seamless user experience for users of specific protocols or applications.

So far, the main mechanisms for monetizing internet memes and content have relied on advertising and sponsorship. With the emergence of on-chain assets, we are witnessing the next generation of internet "meta" led by a series of new behaviors and mechanisms. And today, we have only just opened this Pandora's box. If you are building products in this space, DM me!

Thanks to Denise Shaefer, Anay Simunovic, Sterling Campbell, and Jess Sloss for reviewing this article.