Vitalik: Besides hype, what else can Meme coins do?

Author: Vitalik Buterin

Compiled by: TechFlow

Meme coins are undoubtedly the protagonist of the crypto market in this cycle.

But every day we see a variety of copy-pasted Meme coins in batches, and most of them have no value other than hype. So, what else can Meme coins do?

Vitalik is thinking about this as well, and explored it in a recent blog post .

Vitalik publicly stated that he has "zero enthusiasm for any token named after something that is exciting in month N but uneasy in month N+1", pointing out that Meme coins rely on names and concepts to attract attention, and in terms of economic benefits It’s a zero-sum game;

At the same time, he is also exploring whether Meme coins can do other things, such as directing this attention for charity and games, and becoming a public good to benefit certain social sectors.

Shenchao has compiled Vitalik's latest article. The following is the text.

Ten years ago, two weeks before the Ethereum project was publicly announced, I published this article in Bitcoin Magazine arguing that issuing tokens could be a new way to fund important public projects.

The idea is: society needs ways to fund worthwhile large-scale projects, markets and institutions (including companies and governments) are the main technologies we have today, but they work in some cases and fail in others . Issuing new coins appears to be a third type of large-scale financing technology, which seems to be very different from both markets and institutions, and it will succeed and fail in different places - so it can fill some important gaps.

People who care about cancer research can hold, receive, and trade AntiCancerCoin; people who care about saving the environment can hold and use Climate Coin, and so on. The tokens people choose to use will determine which causes can be funded.

Today in 2024, a major topic of discussion in the “crypto space” seems to be memecoins. We've seen meme coins before, starting with Dogecoin in 2015, and "Dogecoin" was a major topic of the 2020-21 crypto season. This time, they're heating up again, but in a way that upsets a lot of people because there's nothing particularly new and interesting about meme coins. In fact, it's often the opposite: Apparently, a bunch of Solana meme coins were openly super racist recently. Even non-racist meme coins often appear to just move up and down in price and bring no value.

And, people are frustrated with this phenomenon:

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

One answer to this dilemma is to shake our heads and send out "virtue signaling" to show how much we hate and object to such stupidity. To some extent, this is the right thing to do. But at the same time, we can also ask another question: if people value fun, and financialized games seem to provide this at least sometimes, then can the whole concept have a positive-sum? The interests of both parties are increased, or at least the interests of one party are increased while the interests of the other party are not harmed)?

Charity Coin

The most interesting coins I've seen are ones in which a large portion of the token supply (or some ongoing fee mechanism) is dedicated to some kind of charity. A year and a half ago, there was a token called "GiveWell Inu" (now no longer active) that donated proceeds to GiveWell. In the last two years, a coin called Fable of the Dragon Tyrant has appeared, supporting cultural projects related to anti-aging research, among other causes. Unfortunately, both of these are far from perfect: GiveWell Inu doesn't appear to be maintained anymore, and the other coin has some very annoying core community members who keep bugging me for attention, making me unwilling to do so multiple times at the moment Mention them. Even more successfully, after I obtained half of the Dogelon Mars token supply and immediately re-gifted it to the Methuselah Foundation, the two Methuselah Foundation and the Dogelon Mars community seemed to have a positive-sum relationship with each other, bringing Convert $ELON to Charity Coin.

It felt like there was an unclaimed opportunity here to try and create something more correct and, more lasting. But ultimately, I think even that creates some fundamental limitations, and we can do better.

Robin Hood Game

In principle, people participate in memecoins because (i) the value is likely to increase, (ii) they feel democratic and open to anyone, and (iii) they are fun. We could drain a large portion of the memecoin supply to support public goods that people value, but this does not directly help participants and actually comes at the expense of (i), which if not done well will (ii) for consideration. Can we do something to improve both of these aspects for the average user?

The answer to (iii) is simple: don’t just make tokens, make games. But make a game that's actually meaningful and fun. Don’t think about making a Candy Crush on the blockchain; think about World of Warcraft on the blockchain.

The "Ethereum Researcher" in World of Warcraft. If you kill it, you get 15 Silver, 61 Bronze, and a 0.16% chance of getting some "Ethereum Relay Data". Don't try this in real life.

Now, how about the Robin Hood part? When I travel to low-income Southeast Asian countries, one statement I often hear is that there are people or their family members who were previously poor but have become moderately wealthy in 2021 through Axie Infinity’s earn-while-playing feature. Of course, Axie Infinity's situation in 2022 is somewhat unfavorable. But even so, my impression is that if you take into account the "earn-as-you-play" nature of the game, the net financial benefit is negative on average for high-income users, but maybe (emphasis on maybe!) for low-income users just. This seems like a nice property: if you have to be cruel to someone financially, be cruel to those who can handle it, but have a safety net to protect low-income users and even try to leave them better off than they came in better.

No matter how well Axie Infinity does this, it intuitively feels like (i) if the goal is to satisfy people's desire to have fun, we shouldn't make simple copy-paste tokens, but more complex and interesting games , and (ii) games that make low-income players especially financially better off are more likely to leave their communities better off than when they came in. Charity coins and games could even be combined: one of the game's features could be a mechanism whereby players who successfully complete a task can vote on which charities to allocate issued funds to.

That said, making a truly fun game is a challenge - take a look at some of the negatives Axie has said about making the game fun, and the positives about how they've improved since then. The team I personally have the most confidence in making interesting crypto games is 0xPARC, as they have successfully made two (!!) crypto games (first Dark Forest, then FrogCrypto) that players are willing to play purely for fun, not Out of a desire to make money. Ideally, the goal is to create a co-created environment that satisfies all players: money is zero-sum, but fun can be positive-sum.

in conclusion

One of my personal moral principles is "If there is a category of people or groups you dislike, be willing to praise at least some of them who best satisfy your values." If you don’t like the government because they infringe on people’s freedoms, maybe you’ll find space in your heart to say good things about the Swiss government. If you don't like social media platforms being exploitative and encouraging bad behavior, but you think Reddit is twice as bad, then say something nice about Reddit. The opposite approach—yelling “yes, all Isolate any moral claims you may have.

I think about the “Degen” part of the crypto space in the same way. I have zero enthusiasm for coins named after totalitarian political movements, scams, pulls, or anything that is exciting in month N but makes everyone uneasy in month N+1. At the same time, I value people’s desire for fun, and I would rather the cryptocurrency space somehow go with the flow rather than swim against it. Therefore, I would like to see more attention given to higher quality interesting projects that make a positive contribution to the ecosystem and the world around it (rather than just "bringing in users"). At the very least, there are more good memecoins than bad ones, ideally those that support public goods rather than just enrich insiders and creators. But ideally, make games instead of tokens, and make projects that people enjoy participating in.