Welcome
In an earlier post, VC's vs Crypto, I alluded to the cultural aspect of crypto and the importance of understanding it. I will be elaborating on that thought more in this newsletter.
Meme Basics
Memes are ideas and information that spread to other people within cultures. The two main components of the memetic lifecycle are transmission and retention. Memes that are sticky have a higher retention, which raises their probability of being transmitted. A lot of information can be stored inside memes so a good mental model to have for them is to think of them as units of culture, carrying the cultural information to other people.
Memes Today
If you go on crypto twitter today, memes are a good portion of what you will see. They span a vast array of anything from pepes to cute dogs. Why do we use these so much? What value do they actually have?
Memes are able to pack a lot of information into a more digestible format. The memes like the examples below are able to reflect the consciousness of the community and culture at the time.
The image above is a reaction to the regulatory scrutiny the crypto industry has been facing recently. The general message could be interpreted as: âEven though we are in different camps in terms of what chain we believe in the most, we are still all believers in cryptoâ. This meme sends the message to the community to remember the values we are fighting to protect.
In this example, we see an attack on "crypto influencers". People with large audiences who have been known to advertise certain coins that they already hold to their viewers, and then take profits once the assets pumps in price. This meme shows how crypto people are able to spread warnings to others about the dangers of these types of influencers.
People in crypto use memes to express their sentiments towards certain people or ideas because it is a better way to get the point across. Being sticky and highly transmissible is very valuable when attempting to spread ideas in an age of information overload.
Importance of Memes
As mentioned before, memes pack a lot information into a digestible format. They are the common language of the internet, serving as a new way to spread ideas. Their ability to bring communities together and bootstrap evangelists to spread the narrative makes them a very powerful tool.
An example of a powerful meme is Doge; it created more value for the cryptocurrency DogeCoin. The meteoric rise of its popularity, particularly over the last 6 - 8 months has been due to the narrative behind it.(Robbinhood reported that of the 41% of its revenue that came from crypto, 62% of that came from Dogecoin).
I think the reason for its success so far is due to the way it resonates with young people, who feel like the current financial system has been stacked against them. Buying a "silly dog coin" with the rest of your friends is a big middle finger to the institutions. This is a similar sentiment that was expressed during the short squeeze of GME stocks back in January 2021. Doge illustrates the real utility a meme can have for projects, communities, and businesses. Putting a face to a movement makes it more powerful.
Other strong examples of memes propagating themselves in crypto culture in a meaningful way include the following:
"gm" - Good morning
"wagmi" / "gmi" / "ngmi" - Weâre gonna make it / Gonna make it / Not gonna make it
These are terms commonly used when interacting with people in crypto. âgmâ is a gesture to everyone in the space as a way to express your hope for others doing well and reminding everyone that we are all humans at the end of the day. âWagmiâ is similar to âgmâ because it is a way to reassure those who are struggling that we are all in this together. As long as you stay focused an work hard, you will make it too. âNgmiâ is a way to call out undesired behavior or ideas. If you donât know what ngmi means, youâre ngmi because youâre not in touch with the culture.
We can see how memes can be used to express complex thoughts and emotions through simple phrase like âgmâ, and we can also see how they are able to be the face of larger cultural movements. This versatility in style on and utility is what makes them powerful.
Memes All The Way Down
At the very heart of every culture there are memes. The culture of crypto was born and bread in the internet age, making the spreading of memes much more important and powerful. We use memes to give ideas a life of their own and to make them sticky enough that nobody will forget them (stickiness). Memes drive narratives, and in crypto, narrative is everything. Behind every coin or project, there is a narrative that propagates itself through memes. Itâs not an accident that many defi projectsâ mascots are some sort of animal or food (Uniswapâs unicorn, Popsicle finance, Yam finance, etc.). It is a way to form communities and be memorable.
Closing Thoughts
Memes are the new utility. They are used to bootstrap communities, and capture mindshare. Holding someoneâs attention in this digital age is not getting easier, which may explain why so many companies have a large budget for marketing. This is not the case for web3 or crypto companies that leverage the power of memes. Memes are your marketing. Their network effect is more powerful because the people (consumers) will spread the your message for you. I think companies that want to be successful need to employ this strategy of marketing with memes. If you control the memes, you control the narrative.
Rabbit hole Readings â¨đ
Twitter thread for more takes on memes in crypto: On SHIB and $GME, degeneracy vs nihilism, meme coins and maximalism, and of course how NFTs win
Podcast about crypto and game theory here. At minute 54:20, Su Zhu discusses his theory on Doge