Tag: memecoins

Startup, tech, AI, crypto learnings #14: Elon’s Laws of Thermodynamics

The biggest change in behavior was that lingering fell dramatically. The amount of time spent just hanging out dropped by about half across the measured locations.…The internet and mobile phones are likely driving this change in behavior.

Indeed DJT’s skill is finding the Schwerpunkt. The weak point of inflection. That’s why he generates mean nicknames to get under peoples skin…

SF is always and everywhere a glimpse at the American future: spectacular technology navigating itself around intractable social problems and over bad infra (the roads in SF are those of a developing world city).

Whether intentionally or because of their ability to support third-party apps, every fintech will become a crypto gateway. Fintechs will grow in prevalence and may perhaps rival smaller centralized exchanges in crypto holdings.

“If you don’t have confidence it’s like a guy with money in his bank account but he can’t access it”
GSP

Ask yourself if this startup is your life’s work. Knowing you’re in it for the long haul lets you settle into a calmer, more focused rhythm despite the daily ups and downs, as you trust you’ll show up and make it succeed over time. — PG

What kind of faults in ourselves should we retain, nay, even cultivate? Those which rather flatter other people than offend them.

Having curious parents makes you excited about the future.
My dad:
> Started a company at 40
> Began learning Russian at 52 and is now fluent
> Picked up machine learning studies at 56
> Sold his company at 57
> Started acting at 58

Anthony Bourdain was a chef and a storyteller who explored food through culture and travel. Simone Biles dominates gymnastics and advocates for mental health. Zendaya acts and inspires fashion discourse.
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Most people start with a professional-ish shtick, then layer in a personality shtick. Influencers nail the personality shtick first—whether it’s humor, aesthetic, or controversy—then seek out serious skills, even building businesses to anchor their fame.
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Mark Zuckerberg has Meta, martial arts, and increasingly, he’s a family man. Elon Musk now brings Lil X everywhere. Whether family is your quiet third shtick or deliberately on display, the trifecta works: smart, strong, and loving—every power player’s dream image.

Each time we increase our lattice in size from 3×3 to 5×5 to 7×7, the encoded error rate decreases by a factor of 2.14. This culminates in a logical qubit whose lifetime is more than twice that of its best constituent physical qubit, demonstrating the capacity of an error-corrected qubit to go beyond its physical components.

I’ve been drawn to Mariana Mazzucato’s “mission economy” ideas—how massive, long-term missions (think the original moonshot) align entire systems toward a singular goal.

This is why he inspires such incredible loyalty, especially from the technical people who he works with. They’re like, wow, if I’m up against a problem I don’t know how to solve, freaking Elon Musk is going to show up in his Gulfstream jet, and he’s going to sit with me overnight in front of the keyboard or in front of the manufacturing line, and he’s going to help me figure this out.”

the truth terminal has like forty million dollars to pursue its very strange goals, thanks to all you mad bastards sending it coins and pumping them

winners keep winning
– abundance mindset
– problems are just puzzles to solve
– if it doesnt work – pivot. there’s always plan B-Z
– relentlessly optimistic
– gratitude mindset – appreciating what you have so you will always attract more

Memecoins are the fastest and digitally-native way to extract capital from attention. The value flows where attention goes. Indeed, attention is ephemeral. So is the value attached to it. Hence to monetize one usually has to make a profit earlier rather than later. Few memes have staying power. Rugs are a feature, not a bug.

Apple uses a consistent corner radius of about 38 pixels across ALL its products, including iPhones, iPads, Macs, and Apple Watches.
A strategy that helps all their devices look and feel connected.

ACX is so close to getting it right on ‘taste’, but then dismisses the closest (“grammar”) conclusion in favor of a much more elementary interpretation (“priesthood of esoterica”).

Are we running out of resources?
No, we’ve never run out of a single resource, ever. There’s not a single resource you could point to that was a resource in the classic commodity sense that had any real value, where we ran out in some harmful way.

The initial boost in measured US productivity is consistent with our weaker labor protections: lower productivity workers are often the first fired in a recession.

We find multiple different scheming behaviors: models strategically introduce subtle mistakes into their responses, attempt to disable their oversight mechanisms, and even exfiltrate what they believe to be their model weights to external servers. Additionally, this deceptive behavior proves persistent. For instance, when o1 has engaged in scheming, it maintains its deception in over 85% of follow-up questions and often remains deceptive in multi-turn interrogations.

o1 has introduced the idea of spending more time at inference to give model time to think on harder problems. Turning that into more of a training procedure where model learns when it needs to spend more time thinking before predicting the next token based on it’s own understanding of how hard the problem is. There is already some work on this, notably Quiet-STaR, but as far as I know – nobody scaled it up

Elon’s Laws of Thermodynamics
You can’t win = conservation of energy
You can’t break even = entropy increases over time
You can’t break out of the game = as temp -> abs zero, entropy reaches a constant

The rapid revelation of true preferences often leads to:
Collapse of existing institutions that relied on forced consensus
Emergence of new social and political arrangements
Psychological shock as people realize how many others privately opposed the system

Dutch disease
the negative consequences of a sudden increase in a country’s income, eg, when discovering a huge oil field or gold mine
term comes from the Netherlands, where the discovery of natural gas in the North Sea in 1959 led to a shrinking manufacturing sector and rising unemployment

Stanley Druckenmiller obsesses over position sizing.
And it’s one of the (many) reasons why he generated 30% CAGRs without a single down year.
“Position sizing is 70 to 80% of the game.”

The concert industry has a dirty secret. It’s not just that Ticketmaster is evil, or that bots are stealing tickets. It’s that the entire market is built on a comfortable lie: Artists pretend their tickets are affordable, Ticketmaster pretends they’re fighting scalpers while giving kickbacks to artists, and fans pretend they won’t pay whatever it takes to get in.

I’ve worked with . . . ~150 artists from 33 countries. Quite a few of them have been the way artists are typically portrayed: self-centered, hard to work with, a little crazy. These were the amateurs. The best artists I’ve worked with, for example A and B, a husband and wife duo, were not at all like that.
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A and B didn’t tell the customer that they had spent 14 man hours improving it; it was just something they did because it was right, nothing they wanted credit for.A and B have earned enough money from their New York gallerist to retire, but they’d rather use that money to make better art.
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I got to run something like an experiment on my capacity to predict which exhibitions would end up great, and which would be a waste of time. It was easy. As soon as someone was slow at answering their email, or complained, or wanted us to be their therapist as they worked through the creative worries, I would tell my boss, “I think we should cancel this.” And my boss—whose strength and weakness is that she thinks the best of people and makes everyone feel held—would say, “Ah, but they are just a bit sloppy with email” “if we just fix this thing it will be fine. . .”
I was right every time; it ended in pain.

“Damn right I’m paranoid. It’s what keeps my mind sharp”

If I’m trying to write some code and something isn’t working, even if it’s in another part of the code base, I’ll often just go in and fix that thing or at least hack it together to be able to get results. […] I think that’s arguably the most important quality in almost anything. It’s just pursuing it to the end of the earth. Whatever you need to do to make it happen, you’ll make it happen. […] I’m just going to vertically solve the entire thing. And that turns out to be remarkably effective.

When you step back and look at these apps, one thing becomes clear: they became really successful when the underlying technology had already been adopted.
-Microsoft Office was announced in 1988 when IBM PC sales were over 10,000,000 per year.
-Google started in 1998 when 26% of all Americans had the Internet at home (and probably more at work)
-Instagram started in 2010 when over 20% of the US population had smartphones

“In 40 AD, there were maybe a thousand Christians. Their Messiah had just been executed, and they were on the wrong side of an intercontinental empire that had crushed all previous foes. By year 400 AD, there were forty million Christians, and they were set to dominate the next millennium of Western history.”

Sol is a data center chain (10gbps upload recommended). They are years away from achieving client diversity, if ever. Their token is famously closely held – it’s more like an enterprise token. Much of the supply is still uncirculating. And lots of the circulating supply is owned by a small circle of Sol insiders. The EF owns 0.25% of all ETH, ~100x less than just the percentage of uncirculating SOL.

Stablecoins have gone from 3% of blockchain transactions in 2020 to now consistently representing over 50% of blockchain transactions.

SHEIN has gobbled up US fast fashion. When the company entered the US market in 2018, its sales hovered around $1.5B. Sales have since multiplied 15-20x and now top giants like Zara and H&M. The company’s revenue target for 2025 is over $50B.
SHEIN’s trajectory has been stunning: the business grew over 100% for eight straight years (!), and in 2022 dethroned Amazon as the No. 1 shopping app in the iOS and Android app stores.

It’s telling that many of our techno-prophets don’t entertain the possibility that artificial intelligence will naturally develop along female lines-fully capable of solving problems but with no desire to annihilate innocents or dominate the civilization.

A hobby, by contrast, operates on its own terms. You sit down, you focus, and then, suddenly, it happens, a burst of energy, clarity, or flow. But it doesn’t last long and you naturally stop. And that’s where the realization hits: the contrast isn’t just about work vs. hobbies. It’s about how the systems we’ve built ignore our natural rhythms. Hobbies reminds you that life happens in bursts.

ChatGPT has some idiosyncratic default punctuation behaviors. For example, it uses straight quotation marks for quotes and straight apostrophes for contractions, but curly apostrophes for possessives. It also defaults to em dashes—like this—which are not widely taught in high schools. Students used to use hyphens or en dashes – like this – but this year I’m seeing almost exclusively em dashes.

A good time to be investing in AI would’ve been a few years back, when the foundation model and infra layers were taking shape. See: OpenAI, Scale, Anthropic above. (The application layer, though, has a lag effect, so now may be the right time.) When everyone was talking about “The Future of Work” in 2020, meanwhile, it would’ve helped to invest in Canva and Notion five years prior. And defense tech is all the rage now, but most people were focused on crypto and DTC brands when Anduril was being born back in 2017. And so on and so on.

If the structural similarity between hemoglobin and chlorophyll doesn’t fascinate you, then I’m not sure we can be friends.

What made America truly successful wasn’t its ability to frighten others – it was its ability (largely lost today) to build. The Marshall Plan, international institutions, cultural exchange, industrial might, technological innovation – these were the real sources of American power.

the English-speaking West used to dominate global culture, but that’s changing. Squid Game (Korean) is the most-watched show on Netflix; Khaby Lame (Senegalese-Italian) is the most-followed person on TikTok; Bad Bunny (Puerto Rican) is the most-streamed artist on Spotify.

I have found that it is the small everyday deed of ordinary folks that keep the darkness at bay. Small acts of kindness and love. – Tolkien

The gates of hell are open night and day;
Smooth the descent, and easy is the way:
But to return, and view the cheerful skies,
In this the task and mighty labour lies.
-Virgil’s Aeneid

Another thing I’ve changed my mind on: The world greatly favors aggressive men, over the less so. Not just collectively, but also individually. They need to keep their aggression in check w.r.t. superiors, but others still like to see that boiling rage barely held in check.
-Robin Hanson

For a species such as humans, whose reproductive cycles are measured in decades, the time it would take for a gene drive to spread widely would be measured in centuries. Someone would be bound to notice long before things got out of hand. Artificial gene drives would be possible (and maybe even easy) to detect and reverse.

Vermont (75%), New Hampshire (66%) and Maine (66%) are the least religious states. Mississippi (32%), Alabama (36%) and Louisiana (37%) are the most religious.

Ethereum has 34.4M ETH staked (28% of current supply), while Solana’s active staked supply is 297M SOL (51% of current supply ratio), due to lower barrier to entry for delegators.Ethereum has a larger validator set of 1.07M validators, while Solana, with higher hardware demands, has 5,048 validators but over 1.21M delegators.

The most common method, which makes up 40% of all attacks, is data (Palo Alto Networks) deletion. For some reason, lots of hackers just want to mess things up instead of stealing data.

My best guess is that rotation gets faster, certain waves return a couple of times, and path independence will be the most precious resource to navigate such an environment. The ecosystem (L1/2s) becomes less important as trends become app/use-case dominant.

Bitcoin used to be the gateway drug to crypto. Not anymore. Not for retail at least. Memecoins are a monetized attention market and are becoming the access point for new users. But what they are is a momentum trade. They cannot be forward-looking.

I went to the artists to buy their artworks… and very soon artists introduced me to other artists. I talked to so many artists, not only to understand their art practice, but also to understand the way they react to and produce from those vast materials bulked up in Chinese society. My wife assisted me who spoke Chinese more fluently, and friends from the art community, so we had many conversations with artists.
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So I thought it to be instrumental to set up an artist award and later art critic award and publish catalogues and books to support artists on the national scale.

A new post puts America’s socially optimal fertility rate at 2.4, and estimates we should place a value of $1.17 million on each additional birth, and to do this should be willing to spend $290k per birth.

Psychology is more contagious than the flu

There are two wolves inside us. They are always at war — quote from movie Little Bone Lodge

Tiananmen taught the Chinese Communist Party a crucial lesson: urban unrest is the biggest threat to regime survival. But there’s an often-overlooked economic context to those protests – inflation was surging in the late 1980s. This wasn’t just a political crisis, it was an economic one.

They just think, “I hire a bunch of people, and then I sit back and wait for greatness.” They have no idea that they have to relentlessly drive every second of the day, every interaction, and seek the confrontation. — Slootman

Marc Andreessen explains that the world has been s**tposting forever:
“Newspapers have been scandal sheets forever. The first newspaper was a scandal sheet about The Vatican. It was all about scandals with the pope and the bishops, etc. Jefferson and Adams both owned newspapers and would use it to smear each other. Ben Franklin had 15 different sock puppet anon accounts (pseudonyms) and have them argue with each other in his newspaper. We’ve been in a world of information warfare for a very long time.”

Trump’s known position on AI is very volatile and easily influenceable. Elon Musk will be a “Minister of Artificial Intelligence” for this Trump legislative period, I’d argue. There is no other person in the Trump administration who has a clear voice and a strong opinion on Artificial Intelligence apart from Elon Musk. The candidate for the AI CZAR

Socialism is organised crime masquerading as political theory
https://x.com/opptattbruker/status/1862062666283438087?s=46

Five fingers of a museum:
-Collect
-Preserve
-Study
-Interpret
-Exhibit

Tokens are fashions — part identity, part fad — the change is the point

Fashion is identity — we dress like our friends and colleagues, we dress to communicate what we want others to know about us, and we make instant, mostly subconscious, and often hard-to-change judgments about a person based on what they wear

Fashions change quickly — fads don’t last, but surviving fads become trends — the change is the point

Tokens (stablecoins, memecoins, BTC/ETH) will only grow and proliferate for savings and payments: 10 years ago you could only spend BTC to buy a VPN subscription. Today Shopify has integrated Solana

The tokens you buy, hold, and spend will increasingly resemble fashions — part identity, part trend, but again, the change is the point (aligns perfectly with generational change, ADHD-ification of culture, AI, general societal acceleration)

Tokens as identity: Holding BTC v SOL v ETH is increasingly a statement of who you are and what crowd(s) you identify with, just like wearing Lululemon or driving Tesla or voting Republican

Tokens as trends: ETH was the subversive cool kid in prior cycles; this cycle is SOL’s turn; next cycle will be something new. This is more or less inevitable

Memecoins are mostly fads — some fads may evolve into lasting trends, but the vast majority won’t. Doge did. Shiba kinda did. Maybe WIF will

If tokens are fashions, then the tokens you buy, hold, and use may become increasingly subjective (like your favorite sneaker brand) and less rational (like what stocks to invest)

To succeed, a token project should think more like a consumer or fashion brand than a rational profit-driven investment — more emotion, less ROI. More Chanel, less Munger. More Stanley cup, less 7-in-1 men’s shower product.

Gresham’s law says bad money drives out the good; perhaps in a tokenized economy, interesting money also drives out the boring

Recent crypto learnings 5: “making money, having fun, finding community… in that order”

RECENT CRYPTO LEARNINGS AND READS

Tarun Chitra: Most ZK implementations are not about privacy but about succinctness

Berachain has invented – which they call Proof-of-Liquidity (POL).
7/ In a Proof-of-Stake blockchain such as Ethereum, gas fees and block rewards are distributed to stakers of the native token. In POL, however, block rewards (aka inflation) go to liquidity providers, thus providing a strong incentive for users to deploy capital on Berachain

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I’m convinced the three reasons why 99% of people come to crypto are:

1. making money
2. having fun
3. finding community

in that order.

that means, projects that don’t meet those needs, in that order, will struggle to find pmf.


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@redphonecrypto
Pay attn to new crypto projects and concepts that repulse you… it’s an indicator that the object in question holds sacred power
They’re lightning rods for attention, and attention increases distribution/price
Have seen this play out every cycle. From the launch of dogecoin to ICOs to NFTs to memecoins, ordinals and now runes
It’s the grand paradox: the greater your disgust, the greater the potential

On the call Buterin added that it is easy to underestimate how quickly ZK proofs will become commonplace operations for verifying blockchain state not only across Layer-2 rollups but across Layer-1 blockchains like Ethereum as well. “I think it’s very plausible to our belief that even within one or two years, we’ll have the capability of proving the Ethereum L1 in real time. So, I think it’s just important to mentally adapt to the fact that there’s no such thing as a distinction between ZK chains and non ZK chains. We are basically now entering a mode where every serious chain is a ZK chain,” said Buterin.

“Tarpit” Startup Ideas
• Roommate matching app
• VR/AR shopping
• Photo sharing
• X for Y (e.g. Airbnb for Y)
• Recommendations based on friends
• Anything related to travel planning
• “Better design” (e.g. Craiglist / Linkedin, but not shitty)
• Verticalized social networks
• Education accreditation
• Restaurant loyalty programs
• To-do lists
• News curation

Everyone loves launching new features, but in my experience, most growth comes from the less sexy work: incremental and consistent optimization of your core product.

I view L2s as solving an incentive paradox while also scaling the chain and allowing ETH to accrue more value as money. Use as money is the most important value accrual mechanism in crypto, and far more important than whatever fees L2s eat. I really do not care if Arb/OP is printing fees that could’ve been on L1 if they have 2-3M ETH locked up in their bridges. The use of ETH as money/sink of supply greatly offsets the fees lost to L2s, while blobs/NFTs/L1 DeFi keeps the ETH burn chugging along steadily

AI thrives within blockchain systems, fundamentally because the rules of the crypto economy are explicitly defined, and the system allows for permissionlessness. Operating under clear guidelines significantly reduces the risks tied to AI’s inherent stochasticity. For example, AI’s dominance over humans in chess and video games stems from the fact that these environments are closed sandboxes with straightforward rules. Conversely, advancements in autonomous driving have been more gradual. The open-world challenges are more complex, and our tolerance for AI’s unpredictable problem-solving in such scenarios is markedly lower

This is not getting smaller. There’s not gonna be less money in generative AI next year, it’s a very unique set of circumstances, AI + crypto is not going to have less capital in a year or two. – Emad re: AI+crypto

For instance, Bonkbot is a simple Telegram Trading bot that makes it easy to trade memecoins on Solana. Over just 5 months, its revenue has surpassed over $23 million.

Daily SOL transfers on Solana approximately match those of Ethereum in US Dollars. A noticeable peculiarity caused by Solana’s low transaction fees and fast execution is the seemingly high number of “minnow” transfers—those worth less than $1M—when compared with “whale” transfers. Over 80% of the total value transferred on Solana stems from such minnow transfers. On the other hand, Ethereum currently sports a minnow ratio of only 40% as users shy away from sending funds from which fees would take a significant chunk
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The high throughput and large block size of Solana comes at the expense of an immense chain size. Altogether, the Solana blockchain is over 150 TB. As a result, Solana nodes cannot provide full history back to chain genesis, but are pruned after two epochs (approximately 4 days). Deep history is stored in centralized BigTable instances hosted by the Solana Foundation or professional RPC providers.

96% of the TON supply was distributed to miners during July and August 2020;
At least 85.8% of the supply was mined by a few groups of miners connected with each other and affiliated with TON Foundation;
Funds from these miner groups are used by network validators that control 2/3 of the TON blockchain PoS consensus

$10B+ of BTC is bridged on Ethereum via WBTC alone, a clear proxy of demand for smart contract-enabled use cases that can’t be fulfilled on native BTC…yet

When users invest in memecoins, they are implicitly making a statement that they believe that particular token and meme will grow in popularity: attention is the primary driver of value. One X user called memecoins “a way to angel invest in culture.”

Rollups use a collection of compression tricks to reduce the amount of data that a transaction needs to store on-chain: a simple currency transfer decreases from ~100 to ~16 bytes, an ERC20 transfer in an EVM-compatible chain from ~180 to ~23 bytes, and a privacy-preserving ZK-SNARK transaction could be compressed from ~600 to ~80 bytes. About 8x compression in all cases

Jesse Pollak:
Original ETH scaling vision had 64 shards
Optimism is really strong w onchain governance

Logarithmic curves make the token price rise rapidly at first as more tokens are added. But then the price increases slow down as the supply keeps expanding. So, the price spikes in the beginning but levels off over time. This benefits early investors the most since their tokens gain value quickly up front. The potential for fast early profits can attract the first buyers to provide liquidity

Ordinals are arbitrary data inscriptions (in the form of text, images or videos) inscribed onto individual satoshis

Activity on Coinbase Layer 2 network Base continues to gain momentum as more than 2.6M daily transactions have been settled on the network, a new record and an increase of 550% month-over-month. To put this into perspective, this is more daily volume than leading L2 networks Arbitrum (1.6M) and Optimism (680K) have seen combined

Digital art displays are at the point where they should get mass adoption. I’m no longer embarrassed by this technology and I stood proudly in front of a lot of work we exhibited on screens this week.

From Coinbase report on AI+Crypto
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Nvidia’s February 2024 earnings call revealed that approximately 40% of their business is inferencing, and Sataya Nadella made similar remarks in the Microsoft earnings call a month prior in January, noting that “most” of their Azure AI usage was for inferencing
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The often touted blanket remedy that “decentralization fixes [insert problem]” as a foregone conclusion is, in our view, premature for such a rapidly innovating field. It is also preemptively solving for a centralization problem that may not necessarily exist. The reality is that the AI industry already has a lot of decentralization in both technology and business verticals through competition between many different companies and open source projects

There currently exists no regulatory pathways to host sensitive data on decentralized storage platforms like Filecoin and Arweave. In fact, many enterprises are still transitioning from on-premise servers to centralized cloud storage providers. At a technical level, the decentralized nature of these networks is also currently incompatible with certain geolocation and physical data silo requirements for sensitive data storage.

5./Lots of times if you are early to these kinds of coins you can make lots of money.
For example:
– Hobbes who was Ansems cat
- EPIK which was a memecoin from Mando and others.
- SLERF after the dev accidentally burned $10m
Just be early to crazy and funny things

The key intuition uniting all of these examples is that providing instant settlement of borderless bearer value is a unique and unprecedented phenomenon with derivative implications for every industry, and it will inexorably pull businesses that currently have nothing to do with bitcoin into bitcoin’s orbit

Given that only a few hundred million dollars have been deployed into companies focused on bitcoin, whereas well over $25 billion have been channeled to the broader “crypto” ecosystem, it is safe to say virtually every capital allocator around the world is substantially underweight bitcoin infrastructure

11/ In Solana, there is only one instance, or “singleton”, of the token contract.
Any DEX, blockchain explorer, wallet, etc. can check if the token contract is an instance of this specific, expected, safe token contract

“Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria. Maximum pessimism is the best time to buy, and maximum optimism the best time to sell.” — John Templeton

This brings me to the core idea of degen communism: a political ideology that openly embraces chaos, but tweaks key rules and incentives to create a background pressure where the consequences of chaos are aligned with the common good.

And 0DTE (zero-day to expiration options, or they expire that day on the close) is now over half of all options traded

@trippingvols
If there’s one lesson I’ve learned onchain, it’s to go balls long every semi-legit new token standard

Today, I would argue that we are decidedly on the decelerating, right side of this S-curve. As of two weeks ago, the two largest changes to the Ethereum blockchain – the switch to proof of stake, and the re-architecting to blobs – are behind us. Further changes are still significant (eg. Verkle trees, single-slot finality, in-protocol account abstraction), but they are not drastic to the same extent that proof of stake and sharding are. In 2022, Ethereum was like a plane replacing its engines mid-flight. In 2023, it was replacing its wings. The Verkle tree transition is the main remaining truly significant one (and we already have testnets for that); the others are more like replacing a tail fin

Upon closing of this token merger, a governing council for the Artificial Superintelligence Alliance will form to monitor and guide operations of the newly merged tokenomic network

Memecoins like DEGEN are marketing coins. Like the marketing layer of a decentralized project. So what does this mean
Is there such a thing as a meta meme coin? A base layer meme coin like ETH to ERC-20
Or a meme coin standard like MEME-20? Allow anyone to easily mint their own meme coin?

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Past updates 1, 2, 3, and 4

The crypto bull is back: What are the unexpected catalysts waiting for us?

Most people who follow crypto would probably agree that we are either entering or already in the early innings of the next crypto bull cycle. Just as prior cycles took prices to all time highs over the span of 1-2 years — though with plenty of volatility — I expect much the same behavior this cycle, too.

Like prior cycles, this one seems to sync with Bitcoin’s 4-year halving. Like prior cycles, it also comes after a prolonged and painful bear market full of implosions, bankruptcies, scammers, government regs, and plenty of Twitter fights.

If you’re on Twitter, the dominant explanation for why the worm has turned is the anticipated approval of America’s first Bitcoin spot ETF, specifically Blackrock’s application.

There are other catalysts too such as:

-the anticipated Bitcoin halving cutting new bitcoin issuance from 6.25 per block to 3.125 per block in April next year

-A pause and potential reversal of the Fed’s rate hiking cycle (and stealth QE or as Michael Howell puts it, “quantitative support” 🙄)

-The conclusion of SBF’s (first) criminal trial and the steady forgetting of the FTX debacle (and the Luna debacle and the Celsius debacle and on)

-High and sustained global inflation causing fiat currency holders around the world to look for alternative stores of value

-The crash of US Treasury prices and the prospect of “higher for longer” interest rates causing fixed income investors to seek alternatives

I consider the above as “immediate” catalysts in the sense that if any of them were to occur in a sustained and significant way, it would probably lead to a significant and broad pump in crypto prices. Some of the above are already “priced in” to varying degrees. But not completely, and not to the degree that I anticipate they will materialize in 2024 and 2025.

In addition to the imminent catalysts, I find it interesting to speculate about potential knock on effects, the “unexpected catalysts” per the title, the second order effects that follow on from the first wave.

Just as the rise of Uber (initial catalyst) led to the downstream effects of (a) the decline of the regulated yellow cab industry, (b) the crash in NYC taxi medallion prices, and (c) the rise of on-demand apps for everything from scooters to house cleaners.

These unexpected catalyst and downstream effects are far less likely to happen, but when they do, they can generate enormous volatility in outcomes because they are almost by definition SURPRISES and thus NOT PRICED IN.

I believe the immediate catalysts — and more that I missed — will by themselves propel Bitcoin past its former all time high ($69K USD). You can expect the rest of crypto to catch up as well (just not your shitcoin).

But it’s those unexpected catalysts / un-priced-in effects that could push cryptocurrencies to significant new highs in 2024 and 2025. Though I don’t put much stock in price predictions, my starting assumption for price peak in this fast approaching cycle is $150K Bitcoin and $10K Ethereum, with Ethereum flippening Bitcoin (as I wrote about before) briefly, and that itself also being a second order effect.

So below are some very speculative potentially surprising ideas that could catalyze the late and crazy parts of the bull market:

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Microstrategy causes corporations and corporate titans to fomo in
As Microstrategy’s Bitcoin bags explode in value (even at $36K Bitcoin, MSTR is already $1B in profit), leading to record corporate profits, a soaring stock price, and new levels of media notoriety for Michael Saylor, other small and medium tier companies — particularly those in adjacent industries from energy to tech to finance — will adopt a crypto reserve strategy. You could see billionaire tech titans like Masayoshi Son fomo in. Bitcoin will benefit most. Ethereum may surprise too

El Salvador causes nation states to fomo in
The same effect could happen to El Salvador, which becomes celebrated as a new beacon of financial sovereignty and emerging market wealth. President Bukele is feted by innovative politicians (I hope this is not an oxymoron) and small sovereign states, particularly in the Global South, and a race begins for nation states and central banks to buy Bitcoin and other blue chip cryptos. Investing heavily in bitcoin mining is also an indirect approach (eg, Oman, UAE, Bhutan). It’s possible G7 / developed states could also FOMO in, but I think this more likely in the next cycle (circa 2027-2028)

Bitcoin ETF’s success leads to a laundry list of other token ETFs
The Bitcoin spot ETF, after a slow launch, will steadily become Wall Street’s new darling, causing financial advisors and institutions to fomo in, leading to a slew of applications for other crypto ETFs starting with Ethereum. Though most applications could be rejected or at least delayed, this solidifies crypto’s position within tradfi, and tradfi is coming with their big accounts and clever financialization.

Ethereum becomes known as the deflationary currency and the Internet bond
As crypto usage rises (always correlated with bull markets), Ethereum becomes significantly deflationary (it already is, just more so), and along with its anticipated spot ETF approval, this is the cycle where Ethereum will birth its new reputation as (1) the “Internet bond” (first bearer digital asset with meaningful yield) and (2) the first deflationary asset to go alongside Bitcoin’s positioning as the first fixed-supply asset

Bitcoin beating gold becomes the next Schelling point
As Bitcoin easily passes $100K, everyone will turn their attention to what’s next, and what’s next is beating gold. Depending on the estimate you use, that easily puts Bitcoin around $400-500K, which I don’t expect to happen in this cycle… but it could. And it’s what people will talk about in the late bull. People need rallying points and gold has always been a big bullseye

Ethereum will flippen Bitcoin — just briefly
Just as Bitcoin’s main competitor is gold, Ethereum’s main competitor is Bitcoin. I support both and believe a rising tide lifts all boats. In the last bull, Ethereum peaked around 50% of Bitcoin’s value (market cap), and I expect that 50% will be far surpassed this cycle. As this happens, everyone will begin talking about Ethereum “flippening” Bitcoin, and the possibility is not priced in. Though I expect any market cap flippening to be short lived this cycle, but possibly a permanent fixture by the next. I wrote more about that prospect here.

Memecoin mania will return with a vengeance, and MSM will go crazy
I expect memecoin mania to return, despite less global liquidity and a high rates environment. And it will be larger and more degenerate, and no one will expect it. The first $100B memecoin. Maybe even a memecoin billionaire. The mainstream media’s shock and disgust will ironically pour fuel on flame. Elon’s never one to miss a press party, and he will finally launch his own token, somehow justifying the move by claiming synergy with Twitter/X and Grok AI.

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That’s it for now. It’s a very incomplete list, but if even a couple of the above surprises were to happen, we could be in for a wild(er) ride. I’ll add more as I think of them or you can yell at me on Twitter.

You could argue there will be plenty of negative surprises and unforeseen headwinds, too, but that’s the thing about bull markets — no one really cares, and everyone just wants to greed while greeding is good. The bad news and the corruption and the new wave of scams will accumulate and build and then push us into the next bear in 2025-2026 :)