Olaf Carlson Wee - Memecoins are Information Markets - TOKEN2049 Singapore 2025

I want to talk a little bit um today about a trend I've seen emerge over the last couple of years in the cryptocurrency markets and these are meme coins. Um, I've never seen something that created such a divergence in interest between institutional crypto investors like myself and firms like Poly Chain and retail participants in cryptocurrency. I was receiving messages from friends of mine that had never touched Bitcoin in their life, never touched Ethereum, never touched Solano, all interested because of memecoins. Um, and I felt that cryptocurrency institutional investors were very quick to write this off as just kind of gambling, speculation, zero sum games, etc. However, I felt there was something deeper happening here and I've spent the last couple of years thinking about it because so many people were interested in memecoins and came into crypto through memecoins and they weren't interested in online gambling.

It's not like they were coming from online poker or online slots and moving over to, you know, investing in memecoin markets. Nor did I feel like memecoin markets were top of funnel leading to any sort of other gambling. So, there was obviously something happening here that I felt investors were missing that retail participants somehow intuitively understood even if they couldn't exactly explain it. Um, so I've spent a couple years now thinking about this and I think there's a very critical um, missing kind of piece of understanding for why memecoins are so interesting. Um, and it has to do with the social effect of memecoins.

The fact that, you know, it's not a um, simple simple bet against um, a computer or some sort of game. you're actually playing this big multiplayer sort of game um with teammates and competitors and things like that um to sort of make money in these memecoin markets. Um so I think that I want to try to explain today how these meme coins markets have a sort of social layer to them that I think is the future actually of the way we will interact on social media. So, there's a couple ways that I see this um play out where there's this kind of merger between behavior of people on social media and in the memecoin markets. Um the first you'll see this on Tik Tok sometimes people will post um as the first comment to some video investing in this post and they're not actually investing.

It's just sort of their way of joking. I found this content really early and I think this content is going to go viral. Um, so there's kind of in this the cultural consciousness this feeling of kind of finding early this internet content that you think is going to get big that I think this is going to go viral even though it hasn't gone viral next yet. Um, similarly in the cryptocurrency memecoin markets you often find people talking about following addresses. So they don't necessarily know who this address is.

They don't necessarily know why this address is buying or selling the assets they are, but they're following these addresses. So people actually um have as a strategy to trade in these memecoin markets at you know following of addresses. And again, it's it's interesting that even the language of investing in this post or following this cryptocurrency address is the same um across this kind of social um social media and sort of memecoin markets. So is there this kind of merger um between the attention economy um of social media and the market economy mo expressed in its most raw form um through memecoins. So can we sort of replace clout with money, right?

Um and this is directionally the way clout so to speak is going. So increasingly platforms uh like X or YouTube, they directly pay their creators um like from the company for having popular content on the platform. Um, it's also become more and more popular for fans to sort of tip um, content creators or pay for some sort of good or service that content creators are offering. Um, while that is kind of directionally the way this is going and I find that very interesting, most of the influence that people with big accounts um, have is actually monetized off platform. So, they're not actually paid on um Instagram for like having a popular Instagram account per se.

They usually actually have sort of off-market contracts um to promote a brand, to repost a piece of content or even launch their own um like influencer products. For example, uh the energy drink prime I think is a good example of this. So we are in this world where clout is kind of becoming money. Um but it's happening I think very inefficiently. So in these existing social graphs, people are mostly driven to derivative contracts that are happening outside the platform.

So if I have an Instagram account with 50 million followers, I'm not actually getting paid by Instagram at all. um I really have to go to some energy drink or some skin cream or something like that and try to strike a deal um in order to monetize the clout that I have on that platform. Now this is obviously I think a very inefficient market. It relies on oneoff negotiated contracts between influencers and some sort of brand um that wants to sort of buy that influence temporarily. um very high cost of doing business, extremely illquid and then the platform or protocol itself.

So in this case for example Instagram, they really have no insight or visibility into the scope or scale of these derivative contracts where the follower graph that's created on their platform is being monetized some other way and they really don't know how that monetization is happening, the scope or scale of it and of course they don't take a cut. So if you are um this these platforms that allow influencers to build social graphs when they monetize that in some way off the platform you don't take a piece of it. I also think that curation um feels in general relatively undercompensated in these social media graphs. So, we're moving this direction where creators are paid directly from the platforms, right? Where these sort of derivative contracts, so to speak, are sort of creeping onto the platforms.

You know, it's only since um Elon Musk took over Twitter that we've had people actually be paid simply for being popular on the platform. The kind of ironic piece of this though is that these platforms pay users directly for being popular, but those same platforms actually decide the algorithms that quantify that popularity. So, I do think it's a little odd because it's kind of a centrally planned um economy masquerading a little bit as an open market. So I do think this trend of sort of derivative contracts monetizing influence moving onto the platform will continue. Um but it's it's a little odd that at the same time these platforms determine um through their proprietary algorithms which content rises to the top.

So this gets to this question of kind of memecoin markets, right? Could we trade posts the way we trade coins where you actually invest in this post? Right? I want to bet on the virality of this post. And if I'm early to that sort of creation of the social graph around that post and correct, I'm paid by the other kind of participants in this market.

very similar to the way that when you are early to a coin, you are paid by later participants who who buy the coin after you. Um, could we actually build a remuneration or payment system into these platforms and replace these proprietary algorithms that determine what rises to the top with actual market forces? So, there's no more algorithm. It's actually market participants and traders that determine what you see on a sort of social media feed. And then once you have this sort of feed organized, you know, um through market forces, can we move those payments um to pay influencers into the platform?

So, you're no longer having to run out to these derivative contracts and make a deal with some sort of face cream or energy drink or something to get paid for the influence you have on this platform. So, some some more comparisons here between these kind of memecoin markets and and content markets. When I talk to trenchers who are sort of like trading memecoins every day, the number one source of alpha I hear is that they follow profitable wallets. And so there's actually an onchain social graph based on financial alpha in that you're following a wallet and maybe copy trading it. Um that wallet is also following some other wallets and copy trading it.

So there's kind of a social graph and it's it's layered on top of the addresses actually participating in these memecoin markets. Um crypto Twitter I would argue is in some ways a very crude and sort of inefficient version of this concept where you're following people sort of for content um but also alpha um and people actually monetize their following on that platform you know by maybe promoting um assets and things like that, but it's very crude, inefficient, and um I think it could be a lot better. So, how could we sort of have copy trading coins look like um reposting content? So, the profitable strategy in this type of of market is buying valuable posts early. Um and similarly, you know, it's you could sort of follow or buy a profitable trader early, right?

Follow the address, you know, that's that's profitable. Follow the poster that's going to uh gain a following and go viral. So these kind of two graphs um you know how could we converge these into a single social graph where following addresses for alpha and following accounts for content merge into one thing. Um and I would argue that um a lot of this has to do with posts actually becoming coins and being tradable with financial risk. So for an example app concept here, imagine creating a post costs a dollar.

This mints a coin that represents that post and each further repost invests $1 in that coin. So then creators and investors, they earn a percent of the future um popularity um based on you know where they were in this. Um, and also I think it would be very important for this to be a social media app where there's kind of an autosell system where users don't have to think about later selling a post that they invested in. It sort of automatically happens for them. And I think that with a follower graph layered on top of this, you can get a notification when somebody posts something or you could even auto repost, right?

sort of like auto buy when your uh address that you're following that has alpha buys. Um, and so what matters here in terms of profitability for the end users is being relatively early in that regardless of whether a post ends up reaching 10 million uh likes or reposts or ends up reaching just 10,000, what matters is relatively to those absolute numbers where you sit because some percentage of the users will be sort of in the money so to speak in that they were early and the reposting actually shared relevant information to the social network or you're relatively late. So, for example, if you're the final person to sort of retweet or repost a piece of content and nobody does after you, it's very clear that you've contributed nothing to that information to the information in that network. Whereas, if you're the, you know, first reposter for something that goes viral, you're obviously contributing a lot to that information network of that sort of social graph. So interestingly when we look at memecoin prices you know they often have this sort of up and down um look to them.

Um similarly posts like on say Tik Tok you know they sort of go viral and then they disappear forever much in the way that memecoins can sort of go viral that's reflected in the price and then often we might forget about them forever. Um, the thing here is that when memecoins end at zero, and this is where a lot of skepticism about the memecoin market comes from, it feels like a zero- sum game, right? This thing went up, it went down, but was there any sort of productive thing that was created? Um, at the end of the day, this is basically poker or some sort of gambling app that really doesn't create anything. But what's interesting is that these Tik Tok posts end at 02.

Um, so by kind of going viral and then disappearing forever, it actually is useful. It's not that the point was to um be viral and sort of the front of the like the top of the algorithm forever. It's a useful piece of information that finds its way through the social network um and then is no longer useful and so it kind of dies and goes away. So if we can make every post into a coin, these competitive markets that bet on the future value, they instead of feeling like a zero- sum game actually have this positive externality of organizing the entire world's information. So, by sort of participating in these frontline memecoin information markets where you're betting on future virality of a piece of content, even for people that aren't participating in that market and are just looking at their feed, those traders and market makers are actually organizing the world's information for the people you looking through this content and looking for it to be curated.

So the traders are ultimately curators for profit in competition to predict the uh future popularity of various pieces of information and this ends up organizing that information and it's kind of this positive externality that would come from this type of memecoin market. Um so I do think there's a lot of very interesting implications to this kind of future that I think we are slowly um conver well relatively quickly converging to but I don't think we've sort of broken out yet. Um so the first is that these opaque algorithms are replaced with marketdriven prices. So, um, content creators and traders, they sort of profit directly from the profit from the popularity of the thing they're interacting with. And I think this is often the case generationally.

Whatever the kids are doing that seems useless, um, or what the smart people are sort of doing on the weekend for fun often ends up being a profitable skill down the line. Um, in this case, being really good at doom scrolling may end up being actually the training you needed to be a profitable trader in this global competition to predict predict the future. In addition, platforms where all this happens um this is like Tik Tok, Twitch, Twitter, Instagram, etc. Um, they have an alternative revenue model which is collecting trading fees. So rather than having to insert ads um into everything, there's actually a way to monetize the interactions of the user base because the users are all participating in this kind of global risk and reward financial market to organize the world's information and the end platform can take a fee for that.

Um and of course you kind of earn followers and earn cash by being profitable in these markets. So some extensions here that I think are interesting. Um one is that user accounts effectively become tradable like if you want to um in the in the way that Bitclout or Friend tried to make uh user accounts tradable where you could actually invest um in a Twitter account and invest in that user. Similarly with this model if you copy trade every post that user makes it mimics the sort of financial um gain of investing in that user. So you kind of cover this use case as well.

The ability to sort of trade on people and the sort of stock market for people so to speak I think is created as a downstream effect downstream effect of this. Um, I also think that while most curves may go up and down, um, not all this value necessarily is that fast. There will be this concept of blue chip posts. Um, you know, the first tweet on Twitter I remember was bought as an NFT for a lot of money years ago. Um, you'll be able to build permissionless DeFi on top of this.

So all of these posts once they're blockchain assets, you can have people permissionlessly interacting with them. Um, and of course this mechanism is agnostic to the type of content being traded. So this works for images, text, forums, short form video, etc. And I will note there's a lot of nuance and complexity that I didn't cover here. Um, but if you're interested in talking about it and figuring it out, please reach out.

This is my Twitter handle. Um, I'm very interested to partner with builders who are in building in this category. I think that it is the future of social media um and it will help um replace these central proprietary algorithms with real markets that organize the world's information. So, thank you all very much for having me.