Memecoins Culture: The Art of Value in Virality | Katryna Hanush, Christopher Newhouse, Toe Bautista

[Music] uh Hey guys thank you guys for coming um just by by way of introductions my name is to Batista I'm a research analyst at GSR um GSR has been a market maker for over a decade my personal role and capacity is very kind of mixed between our D5 Venture and just general kind of thought leadership on on research and today we're here to talk about memes the evolution of them and um kind of how we see them from the market making and institutional side um and so with that I'll I'll pass it over to Chris yeah thanks guys uh bit of an introduction about myself so I was previously a Trader at Genesis previously a Trader at GSR Chicago Trading Company and recently moved over to Cumberland Labs as a director of research and Business Development uh Cumberland Labs is a venture studio and incubator that's backed by the partners at drw and Cumberland we incubated hash note recently acquired by Circle um and recently wrote a piece on Meme coins uh back in December so looking forward to kind of talking about the evolution of the market structure and user Behavior thanks hi guys my name is Katrina I represent wiy mute which is the leading Global Market maker uh on CI and Defi and I work on BD and partnership side and you're very excited about the topic today cool um so I think we'll start with kind of like what makes a meme and almost like the evolution of it I think you know if we had this panel almost like a year and a half ago I think I think the general sentiment would be a lot different that said I think a lot of the contribution to that has changed just because again it's become just far more a competitive market than you know I come across some funny meme on Tik Tok let's see if there's a market around it and then maybe punt you know a soul or or an eth into it so um I guess Chris likes just starting with you how do you kind of view memes from you know even your own personal capacity but just also um you know at Cumberland um and how you kind of seen that Dynamic change over the past year sure yeah fact of the matter is for me over the past year the market structure has definitely evolved for meme coins um you know q1 Q2 back in 2024 you had the launch of pump. fun and kind of like these Fair launch protocols allowing people to kind of just launch tokens you knew the tokenomics is very fair and then kind of heading into q1 of 25 you started to see like a little bit more on the launchpads um Define toonomic and it started getting a little bit more extractive um so my personal perspective on this recently has definitely kind of shifted um you know Q4 I was very excited about memes I thought like this was a great opportunity for marketing I thought this was you know banding communities together and I thought it was like super interesting you had the opportunity to actually you know think about and trade attention and one of the things I'd like to highlight here is uh over the past quarter or two um you've started to see like holding times uh definitely a decrease and I think that that's happened based on kind of like the market structure getting a little bit more extractive um and less focused on the aspects of community and marketing um so to kind of highlight from a personal perspective like I've you know traded memes I remember one of the most interesting memes I was trading early on was was mooding um and one of the things was my wife had seen these Tik toks and she's like oh these are so funny these are so funny Chris and like she sends me these and the first thing I do is kind of like okay I've previously seen like what happens on pump. fun I kind of see what's going on in the space like let's tune in and see you know has this actually been launched on a coin on salana and like that is to you know how how I think of it um that was kind of like the quintessential Q3 Q4 of 24 it was like trading attention um heading into q1 it got a lot more extractive obviously with like the uh the presidential token which I thought okay this could be you know relatively interesting you know it could be like a a community Gathering thing or something like that and then you had you know the launch of Melania and then you had the launch of the Argentina coin and then all the stuff and I start looking at the space from a little bit more of like an extractive perspective so to kind of summarize it you know from my perspective it's gone from Community marketing um and a little bit more of kind of like tradable opportunities uh to a lot more PVP a lot more extractive um and just kind of heading forward like I think in the next couple of months it's going to continue like that like over the past week there was one day where pump fun had no graduations I believe um so that's just something to think think about in terms of like longer term Trends so with that said I think one of the the primary issues and you can really blanket this as like crypto as a whole is I think mcoins are like one of the main user funnels into the space like you kind of to mention like your wife is uh you know learning about memes and then your immediate reaction is like well all right we have a market for that um and so I think looking forward uh one of the questions I have is like we as an industry how do we kind of evolve from memes as this vehicle of speculation into kind of these attention markets because I think they quasi like to be you know pedal as such but again I think what we've seen over the past like two weeks and really over you know since uh I guess the start of the Year is as the tide wash washes in you can really see the PVP nature and like the whole point of memes is you are early and you are trying to like front run these narratives however as the window of opportunity you know shortens and the amount of liquidity does as well the there no longer almost exists like a greater Fool on the other end to to sell to um and so I think again from a almost a research standpoint but even from a market Dynamic aspect of crypto I think it would be almost irresponsible to ignore the verality and then also kind of the again just overall Capital appetite that memes do attract because if you look at know radium volumes you look at salana volumes I think salana did almost like 19 billion in Daily volume um again I think radium had record fees there like these are massive massive amounts of money and massive amounts of capital that are being you know traded back and forth and so I think how do you guys kind of view potentially you know we've seen to your point the evolution of just like dog coins to cat coins to AI agent coins to presidential coins is there an insert you know keyword coin at the end of this is it social tokens you know how do you guys kind of view um almost the counterweight of the VCB tokens is this still going to take place in the kind of the vehicle of a meme or you know how do you guys going just view how meme coins could evolve maybe I I'll take that um simply because you know we as wind M probably representing kind of the institutional side but also more personal side because I work with a lot of teams who are looking to launch memes or have launched them in the past I think if you Google today wiy M has 65% of the meme market in terms of trading and supporting those launches so for us the way we look at it it's they're liquid they're highly volatile and as Market makers we know volatility is our friend that's when we can you know generate a lot of p&l and we also do proper you know kyc on the team similar to how exchanges do that so I think they're pros and cons to memes in general right you can call them content um you know coins you can call them you know joke and fun sort of memes but I think as you said it's highly speculative and it has its place it's almost like a trojan horse right like again you mentioned some of their um some of the stats on chain we have seen that you know their amount of wallets that have been attributed to you know new token Creations it doesn't matter that 90% of them don't stick and become dead wallets they still bring users on chain whether it's recentralized venue or decentralized we're definitely seeing that adoption so the way we view it as win mute is that um if it's a good team admittedly it's a marketing machine but you know it doesn't matter like if you take a big big some of the biggest names we worked with some of them have surprisingly 95 people globally literally all day long creating content creating the verality creating of the former creating you know the speculation creating like the constant content that that drives that kind of you know people feeling the feeling their you know loyalty right to that particular Army whether it's an army whether it's you know um kind of a cult however you call it and then talking on the personal side I think what we are now are you know when you go through different stages of Market Evolution where we are now is Emperor is naked right like the emperor is there but the emperor has no cloths right like um and that's what really needs to be addressed and quite often if the market doesn't self-regulate quite often what happens is um you know the Regulators come into the space right like we have seen I live in London I live in the UK p. fun is not enabled there you cannot access it and I think what biggest concern will be you see a lot of fish in the US I think you know again the retail user in US is the most protected demographic in the world right and the last thing that the government wants is people spending their pension money or they you know like wealth management allocation money into memes and losing it like people lose 5 e a day very very easily and I think that's really is a concern that someone has to address I don't know if it's going to be us because again I don't think it will be the platform them you look at the pom do fund I think up to year to date they made close to 500 million in salana right like so the fees astronomical right so some of those Protocols are extremely successful they're generating great revenue and I don't think they want that to stop right so the question is what will be the next stage and I think the good OG memes they definitely working on the utility Factor right you take for instance the it allowed payment you take ship it allowed staking you take bon bon buildt the Bon bought right so it's kind of starting from no utility meme to creating utility that it has like real Revenue driver or some sort of like tokenomics design to create incentives for the longevity of the token that's that's kind of how we how I view the market what's your view yeah I mean mine's very similar I especially would like from the mcoin perspective you know obviously if these are just things that you know go up go down go to zero um if you think about them from a like hey this is something that anyone can do there's no utility like there's no competitive advantage or Edge for a lot of these things the ones that are going to stick and stay are the ones that kind of have this focus on driving utility um actually one of my my favorite examples actually is the the pudgy coin launch with abstract um that is something that was super interesting for me using pudgy as kind of like an oportunity for distribution and driving kind of like this content and Creator focused chain that is something that that was super cool to me um so a lot of the stuff that I'm focused on right now from a larger market cap perspective is how do they think about utility how do they think about community and how do they use this unique opportunity for distribution to actually have some sort of Competitive Edge in like this layer one layer two landscape so that's actually a super cool case study um and yeah I also own a pudgy um so yeah yeah uh but yeah that's that's my perspective I think that a lot of these larger market cap coins are going to stick and stay you actually you see a lot of these coins go to zero I mean look at the stuff that's launching on pump. fun even look at the stuff that launches from the launchpads a lot of this stuff is going to zero um but like the OG memes that are focused on bringing utility and things like that I think are definitely going to uh stick and stay over the next couple of years especially if these kind of creators of these tokens have the opportunity to capitalize and leverage uh that unique distribution so I like the case study of abstract and pudy it is funny I remember like almost a year ago if a meme coin had util was seen as like just very bearish and like that's when you should get out if like somebody's trying to launch an L2 like get out as soon as possible again in a personal capacity of course but uh I do think like I do to your point I very much agree and I think like that actually should be UND like underlined a lot is we as an industry want to see Memes mature into utility because ultimately if that is where Capital kind of like curates too and it was really attracted towards like that gives these Builders a great opportunity to then actually kind of use almost a mcoin launch as kind of like a true tge and a true um almost go toar market strategy and I think within the craziness of the past year a lot of that has been lost is um it is truly a great Capital formation vehicle um and I think for some of these projects who are not again you've seen this like very precipitously across like AI agent projects for example where again none of them were really VC backed but they kind of had either like a GitHub or we're able to kind of capture the Ze of crypto Twitter as small or as you know as futile as that might be in the long run but it it allows a different way to uh again attract Capital into a project that probably um maybe wouldn't have got there um initially just going like the general VC route and so I think like as we potentially you know move into um you know 2025 where you either have a better regulation but B maybe a little more volatile Market where memes aren't just going to go run to 100 Mil just because they have a cute picture um I I do think like ultimately these are the types of things that we do want to see from an Institutional side as well like again a lot of crypto really um I think like superpower many ways is that verality and again I think like memes are a very central part of that and I think like ignoring it or just kind of declaring the death of meme coins just because your bags have gone to zero I think almost misses the point because they are a very very crucial element to what crypto again is is really really good at which is capital formation and coordination right and memec coins I think very much um you know underline that and I think that's something that now that you know the tide has washed in then we've seen the emperor with no clothes there are elements that we can kind of bake into new protocols or if you are you know a builder and you're trying to figure out how to launch like these are you know different ways that you can kind of like pick and choose from different projects that I think um will lead to better outcomes I was going to I agree with you there I think what I was going to pick up is I like the AI memes that we see coming out the reason for me as you say is usually um and again kind of you know going back to some of the teams that we work with quite often and that's probably important to differentiate quite often the team means well right so the team comes to us and say hey we're looking to launch this meme can you guys snipe some Supply and we're like no we don't do that can you do some you know onchain you know paintings a chart and we like no we can't do that they're like well do you know anyone who does and I'm like no I don't right and I'm like whenever I ask why do they need that they're like well that's the usual assumption right like quite often those you know teams they already made the money so they do have longer term views they want to kind of leave maybe some Legacy right they want to bring the fun element like again if you look even just the general web to advertising apparently if there's you know a fun element in the advertising it has a 30% more likeliness that people will buy that right or buy into it like the emotional element is still very very important and I think what happens is that kind of the the teams just don't have enough expertise and understanding like probably our teams do about the actual trading right they go and try to create like a fair launch right and then they're getting sniped so like the main the main kind of people who they work against as the snipers the snipers have very very short-term views they kind of you know Buy in the first second blogs they tip they have very strong exe strong and quick execution tools and they dump the second part is also the Insiders so not the Coe team but quite often the people who know about the launch right and quite often Ela kind of you know deploy similar type of tooling so I think what the industry really needs and what we have seen is a lot of the people who come to kind of build a successful meme they don't have any trading expertise they don't understand what it takes to you know be successful right and I think that's probably where possibly us you know as an industry can educate them or maybe I think as an answer to this kind of naked Emperor there will be a protocol or product built by someone who will allow the fair launch but without the Insiders without the snipers and kind of protect the teams to build on that long-term Vision that they have and I think there's nothing wrong with having the fun element right because again it brings in their real adoption the real you know kind of retail uses but in a safe manner but they are not being by the snipers and the Insiders maybe a question for uh the other panelists here what are your thoughts on kind of like the evolution of trading tooling as we've started to see like this massive shift in the fair launches and the launchpads like we just talked about snipers and kind of stuff there I remember back in you know 2024 it was super easy I just went to radium I just Market bought like no big deal but now with like the competitive environment the PVP nature of it the lower holding time people are getting in and out people are just using this as a vehicle for speculation it really seems like there's actually been a gap that has slowly started to be filled whether it's like with Venture back products or even just uh a lot more technical traders um what are your thoughts on kind of like the evolution of trading tooling whether that is you know wallet tracking or you know me or things like that yeah I think until recently I'm not sure if retail fully understood how professional almost meme trading has become and so I think there's two angles of that one I think even within the tooling itself I think they're unaware of like if you trade on photon you get clipped on a fee there you get clipped on a jupyter fee and you you know it's like again you spin in a casino and I think there's like a European casino on the slots that has like two green zeros versus like one and I think retail maybe doesn't understand like how much your you know like expected value changes very very quickly based on the types of tools um and the capacity in which you do so and I think when you have that kind of going against you and then also the professional aspect of like who you're you know trading against who are some very very legitimate teams a from the building side but then also um from the trading side as well and so I think the trading to answer your original question is like I I think it's net good that you are building kind of a better product Suite around something that has kind of product Market fit within crypto that said there and again I think that's where we could kind of do better as an industry too is the general education is you know we like to think oh you're trading memes this is cute fun like exercise however you don't realize how me no 20% know exactly like you're getting eaten for like you know 2% slippage just because you think you can you know flip it to a 10 yeah 50 exactly exactly and so but I think underneath that is uh a better education because I think we like to have this Veil that again crypto is a very um you know permissionless open like very almost like I don't want to say protective environment but I think the Dynamics are more predatory Than People realize and I I do think opened up and like we've really seen um that come to light which again I do think isn't that good and unfortunately whenever we do have these moments it's usually met with like a 70% draw down that makes people realize it but um I I do expect kind of the tooling aspect to grow over time I just think that we should kind of almost show that more on the front door of these websites versus you look at your wallet and that's when you realize why do you CH yeah I mean I mean so I've been a user of a lot of the this is one of the thesis that we kind of put in the mcoin piece was like we think that this is going to be an opportunity for more sophisticated trading tooling that kind of like you you can start out as a beginner and the features and functionality grow as you grow um in terms of like being able to simplify the user experience simplify the UI kind of you know what to said here um like you should be able to see this on the platform it should be transparent and you should understand what you're getting into before you lose all your money in your wallet when the coin goes to zero um so fact of the matter is from our perspective like being able to see the evolution of a lot of these trading toolings these smart defaults stuff like that it has definitely gotten better um from the trading tooling perspective that I've seen as a personal user and then also like talking to my wife's brother like he he's got the photon app on his phone like he's got Phantom wallet and he has never traded like anything he's not nonchain Trader but he is at least like getting through uh you know getting through it so all right so we are running out of time here however uh my last question is is so are meme coins cooked is is the deise of bcoin over or do you think there's still hope still hope um I think the cycle will continue but it just will evolve into a better product better tooling you know uh Robin Hood on chain hopefully where there is enough protection less but else additional you know angles of speculations will stay because it's important for our firms I I agree all right thank you guys thank you [Applause]