Author: YBB Capital Researcher Zeke

Preface

On the evening of January 17, just before the inauguration of the U.S. president, Donald Trump announced the launch of his personal cryptocurrency — $TRUMP— on his own social media platform, Truth Social. Initially, many believed that this was the result of a hack on Trump’s account. However, within minutes, Trump confirmed the authenticity of the news by retweeting the promotion of the coin on his personal main account on X (formerly Twitter).

What followed was a surge that will go down in cryptocurrency history. A massive inflow of funds quickly pushed $TRUMP’s market value from zero to a peak of $80 billion within just two days, absorbing nearly all of the market’s liquidity. The reach of this event was as wide as the assassination attempt Trump faced last year in Pennsylvania, with a level of surrealism that was equally remarkable — much like how he narrowly avoided that bullet. I’d like to share a few simple thoughts on this event.

Meme

In the Eastern country where I reside, the ultimate monetization of private traffic often happens through live streaming sales on an app called “Douyin” (TikTok). On the other side of the Atlantic, the 47th president of the United States has done something unprecedented: the leader of the “world’s lighthouse” is using a digital token to measure the value of his influence and power, accumulating enormous wealth for his family. Without a doubt, we are entering a special era, an era where Crypto can officially be called Web 3.0.

The internet was originally intended to end the monopoly of the attention economy held by radio stations and TV channels, and return control to users. However, its development path eventually strayed from its original course. In Web 2.0, the early internet companies that controlled chat platforms and search engines have developed into the giants we see today, such as Google and Tencent. These companies have accumulated wealth by controlling massive traffic entry points, achieving long-term monopolies. Today, ByteDance almost dominates social media in both the East and the West. While it is undeniable that short-video platforms have given many ordinary people the chance to turn their lives around, most of the profits are still shared between influencers and the platforms, which hold absolute power.

No matter how the form changes, the central theme of Web 2.0 giants remains the monopoly over the economy of traffic. Ordinary people have very limited opportunities to benefit from this system; users can only contribute traffic and money, with minimal return. Meme Coins might be a new opportunity. To be sure, participating in the Meme PVP is risky, and scams are rampant, with even $TRUMP’s coin being distributed in a very unfair 2:8 ratio. But how many chances does the average person have to benefit from the attention of the U.S. president? The process of $TRUMP’s rise from 0 to 80 could very well be a once-in-a-lifetime opportunity.

In the past, if I had to explain what a Meme Coin is, I would have struggled to define it. But now, I feel I can explain it with a few simple words: the value of a Meme is the pricing of something — be it a person, an event, or a trend — during a specific time period, just like how the market initially valued Trump’s coin at $80B. On the other hand, Meme is also a fragmentation of the traditional internet attention economy. People are drawn to things that capture their attention, and Meme gives users the opportunity to participate in the value distribution of these hot events.

Pump

I previously mentioned in an article that the best form of SocialFi isn’t a rigid Dapp like Friend.tech, but rather, it is Pump. The team behind the Trump coin also chose Pump for this very reason. The rationale is simple: people have a need to belong to a group, but that doesn’t mean they should accept unfair terms to fulfill that need. The primary reason for the failure of Friend.tech is its token pricing and the complex token-related mechanics that followed, which limited its potential. Looking back at past SocialFi projects, dividing users into different tiers based on token holdings to allocate power and services was also a fundamental flaw.

Small and precise doesn’t work for Crypto that depends on community culture. This applies not only to SocialFi but also to many other fields outside it. For instance, Trump also once issued NFTs. The large supply of Meme coins often allows them to quickly amass a massive community. Whether you hold $100 worth of tokens or $10 worth, you are part of the group.

In the past, we would promote a project on Twitter and then direct users to Telegram or Discord to build the community. Even further back, with ancient Memes like Doge, you had to find “organizations” on forums. Pump combines the benefits of traditional social media with AMM and hands the rule-setting back to the creator. This is the key reason for its success: it compresses countless fitting processes, allowing users to always find a sense of belonging behind the countless token icons on the Pump homepage.

Retro Wave

Regardless of how you view Trump’s personal token, we are entering an era where Meme coins become mainstream, and many things are tokenized. In fact, this is somewhat similar to what I mentioned last year in my article on stablecoins, comparing it to the medieval coinage rights in Europe. Unlike China, where for most of its history a unified currency system was in place across dynasties, Europe was always fragmented, with each country, and even each noble or bishop, having the right to mint and issue their own currency.

Although TRUMP is not a practical currency backed by gold or silver, the fact that the president has pioneered this move means many other celebrities in the U.S. and Europe will likely join this medieval retro trend. Another aspect worth considering is that Trump holds 80% of the tokens. Will this coin truly become a pure Meme, as stated on its official website, “Trump Memes are intended to serve as a way to express support and participation in the ideals and beliefs represented by the symbol ‘$TRUMP’ and associated artworks”? Will it just be a tool for monetizing power and influence?

Among the many conspiracy theories, I lean towards believing that this is a grand shift for the Trump family from real estate to crypto. Leveraging media influence is embedded in the family’s DNA. A bizarre event can quickly gain traction, and choosing Meme as the starting point is highly fitting — it offers numerous captivating wealth-building stories while maintaining a stark contrast to the high-status president. I believe that most of the remaining tokens (based on the token release schedule, there may be three potential uses) could be airdropped to voters, donated to reduce U.S. national debt, or used for construction projects. All of this would help solidify Trump as a cultural symbol in America and shift the public’s perception of crypto after the FTX incident. The family’s transformation from traditional capital to crypto will begin with this nearly $100 billion IP. (According to reports from Jin10, Trump himself may not fully understand the crypto projects or his own token within the family, which further confirms that it’s the behind-the-scenes team and his children operating around Trump’s IP.)

Ethereum

Solana is undoubtedly the biggest winner of this crypto weekend, having set new all-time highs for the SOL price and breaking historical records with daily trading volumes many times higher than Ethereum. In contrast, the Ethereum community seems somewhat forlorn, with growing protests from core OGs against the Ethereum Foundation and its approach to Layer 2 development.

However, from the perspective of Solana’s soaring transaction fees and failed transaction volumes, it’s clear that crypto is still far from true mass adoption. Therefore, on the issue of Ethereum, I still maintain the same viewpoint as before: the route focused on Layer 2 development was simply too fast and too ahead of its time. Within the Ethereum ecosystem, there’s almost no project that can compete with Solana in terms of social buzz, even Base struggles to keep up. The small, high-frequency demand of Layer 1 has completely shifted to Layer 2, but Layer 2 DApps haven’t seen any breakthroughs. A lot of idle block space is being ignored, and transaction fees are pitifully low. This is the current state of Ethereum, as well as the epitome of what ETH Killers have experienced.

The paradox of public chain development is not just the triangle problem, but also the contradiction between gas revenue and technological progress. To put it in simple terms, Ethereum can be imagined as a casino that requires an entry ticket. In the past few years, the business was booming, with tickets in short supply, and people kept bidding higher to acquire tickets for investment purposes. The price of the ticket kept rising. The owner realized that the casino was too small, not spacious enough, so they built a 100x bigger casino. Given the size, they reduced the entry ticket price by 100x, so now one ticket could be used 100 times. However, it turned out that there were still the same number of customers, and the existing infrastructure didn’t require such a large venue, so ticket prices began to plummet.

This is the conflict between Ethereum’s technological advancement and the price of its tokens. Additionally, Ethereum’s backing has never been from social media influence but rather from the moat it built during the ICO era and the DeFi Summer. Therefore, the problem of lacking fresh blood continues to grow.

Apart from the urgent need for reform within the foundation (which I discussed in my article “The King of Counterfeits: Why is It Surrounded on All Sides?”), the real challenge lies in how to gain an advantage in the social sphere (making Ethereum’s complex and obscure technical concepts more understandable and integrated into traditional social media), how Layer 2 can provide better feedback (buybacks, revising DA pricing, ecological support for the main chain), and how to better support the development of emerging DApps (Ethereum Grants should no longer focus solely on infrastructure projects, and various L2s should have better interoperability and compatibility). In a stagnant application layer, public chain competition often boils down to details and differentiation.

Crypto 2.0

Trump has entered the 2.0 era, and the next era of crypto will also be shaped by this family. What are they aiming to do? Although the family’s first launched project, World Liberty Financial (WLFI), hasn’t gone live yet, we can still gain some insight into its direction from the project proposal forum. In the first proposal, it is described as follows:

The WLFI protocol will provide liquidity for Ethereum (ETH), Wrapped Bitcoin (WBTC), certain stablecoins, and potentially other digital assets. WLFI will allow users of the WLFI protocol to access the Aave instance within the WLFI protocol, which will be managed by Aave’s risk management system. WLFI aims to introduce a new class of users to over-collateralized lending, one of the most important features of decentralized finance (DeFi). WLFI plans to attract new users to DeFi by offering a seamless experience for supplying and borrowing digital assets. Many of these users will be first-time DeFi users, helping build brand loyalty and recognition for WLFI and Aave, and maintaining Aave’s leadership position in the digital asset lending and supply space.

Initially, the WLFI protocol will allow USDC, USDT, ETH, and WBTC for lending and borrowing. In the future, additional assets may be added through WLFI voting proposals.

WLFI will adopt the same reserve ratio system in this Aave V3 instance as in the main Aave instance. AaveDAO will receive 20% of the protocol fees generated by the WLFI Aave V3 instance and will receive approximately 7% of the total circulating $WLFI tokens to participate in future WLFI governance processes, liquidity mining, and to promote decentralization of the WLFI platform. Revenue distribution will be set through a trustless smart contract, which will direct the appropriate percentage of protocol fees to the AaveDAO treasury and the WLFI treasury address.

Given the recent surge in purchasing tokens from various projects, WLFI seems to be a blockchain lending institution created by Donald John Trump Jr., leveraging his father’s influence. The strategy involves selling WLFI tokens with one hand, while using the other to buy valuable coins (if a major project takes an equity stake, the WLFI strategy could escalate rapidly). It’s a self-reinforcing loop. In addition, WLFI has been aggressively acquiring various domain names. According to information from Cointelegraph on Twitter, WLFI has already purchased daolationship.eth, yatogame.eth, WorldLiberty.eth, trumpcoin.eth, erictrump.eth, barrontrump.eth, and 9290.eth. From this, it’s clear that the Trump family’s future theme will still revolve around the TRUMP IP, but it will have a much broader focus, and in the next four years, Trump family projects may appear across public chains just as Trump Group real estate is spread throughout New York.

The curtain is slowly falling, and a very special era is about to begin. Whether you accept this “crypto president” or not, you must admit that many major events shaping the future of crypto will unfold across the Atlantic in the next four years. Crypto can either follow this trend or experience a rebirth that will take place all around the world.

About YBB

YBB is a web3 fund dedicating itself to identify Web3-defining projects with a vision to create a better online habitat for all internet residents. Founded by a group of blockchain believers who have been actively participated in this industry since 2013, YBB is always willing to help early-stage projects to evolve from 0 to 1.We value innovation, self-driven passion, and user-oriented products while recognizing the potential of cryptos and blockchain applications.

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