Memetic Premium
Briefly On Memes. Again
Lately I have been publishing mostly on Zee Prime’s writing section thus falling short of my goal of posting here monthly. Hoping for a bi-monthly posts on topics of different themes, not just crypto.
Memecoins, particularly Doge, emerged as a real crypto genre in the past bull market. But not only meme coins are subject to memetic premium. Every successful token in existence is subject to it. I would go even further and argue that every product wrapped in brand includes memetic premium.
Memetic premium is a phenomenon in which people attribute higher monetary value to an idea because they:
1. See other people value an idea as well
2. Expect more people to value the idea
Memetic premium is an imitative (mimetic) Keynesian beauty contest that lasts forever. It is a pure form of speculation that existed before humanity knew what financial speculation meant. As Plato speaks to us through Durant:
“Men soon tire of what they have, and pine for what they have not, they seldom desire anything unless it belongs to others.”
In the social media-dominated world speculation became a novel form of consumption. What used to be serious became entertainment, while entertainment became serious. We are polluting entertainment with politics and making a spectacle of war or inflation. Crypto plays into this culture shift.
While in the last cycle, the degening was portrayed as the dark and fringe side of crypto, it made the cycle. Jpegs, memecoins and yield ponzis became the entertainment. Even the meltdown and scapegoating of Three Arrows, Do Kwon and SBF was broadcasted and widely consumed with a sense of enjoyment.
And while the most “serious” crypto investors were talking about crypto infrastructure SaaS, the degen side of crypto has grown and, I think, we are poised for the most spectacular degening ever seen in crypto. We are doubling down on the insanity - whether it’s memecoins, SocialFi, GameFi or restaking.
Whereas last cycle memetic premium was more implicit, this cycle it will become fully explicit. Crypto will become more degen than ever before. And that could mean you don’t have to buy Doge to buy into memes. You can buy any coin out there because the cat is out of the bag - every coin is a memecoin.
The Anatomy Of (3,3)
I have previously elaborated on how there is nothing fundamental about Coke Inc stock other than its brand and subsequent customer demand. I have proposed that speculating on coins is a form of consumption, the same way drinking sugar water is. The value of Coke Inc is just a sticky Lollapalooza (RIP Charlie Munger).
Munger was not a big crypto fan dubbing it cryptoshit and cryptocrapo. While his infinite wit will be sorely missed, his outdated view on what can be bought and sold, less so. Anyways, I believe that if Munger was in his 20s or 30s, his Poor Charlie’s Almanack would include a chapter on the memetic premium.
I merely propose to amend some of our outdated wisdom with these experimental constructs we value in trillions today. They may be small and individual odds of success fickle but they are growing. Rather than normatively reject them, the cynics should try to understand them better. After all; technology is a substrate upon which society happens. Not the other way around.
Let’s make an effort to understand crypto as a consumer product rather than normatively object over how it is consumed. Capitalism is powered by markets and markets are driven by consumption.
Speculation is also a form of consumption. Every brand in this world relies on the memetic premium. The (3,3) narrative that ruled OlympusDAO in 2021 explicitly expressed memetic premium.
And this is where we’re finding ourselves on the crypto adoption curve: the transition from memes for the sake of memes to memes with utility (aka SocialFi). I hope that at this point we can agree that all of our coins rely on memetic premium to a large extent - and there’s nothing wrong with that.
In this cycle, memes will become directly monetizable and there is less of a need to bet on memecoins. Memes serve as a coordination tool and pricing them is a social game. I would not be surprised to see dumb memecoin value pivot into smaller coordination experiments with “infinity” upside.
The equivalent of our DeFi summer could be a meme summer wrapped in a narrative of SocialFi (Blast season currently seems like a Schelling point). Instead of buying into one overplayed singular meme that is Doge and a long tail of copycats, people might play various mini-games with some degree of purpose.
After all, money is a coordination game and price is a signal. OlympusDAO’s (3,3) was a demonstration of a meme that had it all: GameFi, SocialFi and a serious attempt at utility. It has been a true memecoin, even more so than Doge. Because if you see a memecoin as a mere memecoin, the magic that is the retardation of the crowd is bound to be ephemeral.
Learning how to price memes was always the alchemy that is finance. The memes back in the market wizards' age were different. From the invention of derivatives all the way to the memecoins, finance is evolving because markets spill over into the unbounded digital world.
To fully leverage the power of crypto means to understand reflexivity not in terms of things going up or down but in terms of price-transforming fundamentals. The world is malleable to markets’ whims. Memetic premium is a potential energy ready to be transformed into kinetic energy.
The late 2020s and 2030s could be the golden era of memetic-value-oriented crypto hedge funds embracing the inherent reflexive nature of digital assets. Crypto might have been in denial about itself for a while but we can maximize the value it truly offers only once we embrace its true nature.
Great post, Matti. Hope to see you @2049 in DXB.