Meme, Runestone, and UXLINK: Some Thoughts on How Crypto Assets Drive Communities

IntermediateMay 07, 2024
The essence of a truly sustainable decentralized community is to embed a fair asset distribution plan that is both motivating and sustainable in the community structure.
Meme, Runestone, and UXLINK: Some Thoughts on How Crypto Assets Drive Communities

TL;DR

“The imagination of the collective will change everything, whether it is true or fictional.” - Michel Foucault

The essence of decentralized communities lies in the deconstruction and innovation of asset allocation models. In the transition of communities, the concept of assets always occupies a pivotal position. In the real world, people often come together because of common interests and goals. With the evolution of society, the presentation of these goals has become increasingly diverse, becoming ‘assets’ of various kinds. The acquisition, distribution, and value growth of community assets is fundamentally driven by ‘consensus’.

In primitive societies, humans cooperated to obtain food, defend against external enemies, and protect assets based on consensus on tribal totems, thereby maintaining the development of the tribe. In the Internet age, empowerment through various media satisfies people’s desire for expression while also leading to consensus on traffic. Nowadays, having a large following often represents a certain authority and becomes a virtual asset with monetization capabilities. The monetization of traffic assets has become increasingly smooth, which is also the core way of social growth in today’s traditional Internet.

In Web3, the speed of community iteration far exceeds that of the Web2 era. New projects emerge every day, becoming headlines on certain chains, while many others quietly fail. In this cycle of rise and fall, we can already summarize a rule: the essence of a truly sustainable decentralized community is to embed a fair asset distribution scheme with incentives and sustainability in the community structure. This is similar to primitive societies where although the totem is a common belief among members, fair and reasonable disposal of collective assets is still necessary to maintain trust and consensus among members. The principle of ‘the more you work, the more you get’ is the most basic and understandable asset allocation scheme, and it is equally applicable in the encrypted world.

The Pioneers Of The Crypto World Are Attempting To Innovate Asset Distribution In New Ways.

Focusing on Web3, the pioneers of the community continually innovate, experiment, and improve in pursuit of achieving asset distribution in the most ‘decentralized’ manner. Based on the consensus of Satoshi Nakamoto, the creator of Bitcoin, asset distribution through the Proof of Work (PoW) mechanism was the initial attempt. In the PoW mechanism, miners compete for the right to validate transactions based on computing power, in return for Bitcoin as mining rewards. We know that mining is highly challenging and resource-intensive. So, how did Bitcoin’s consensus successfully break through and attract a multitude of miners to invest significant capital? It’s primarily due to the continuously soaring price of Bitcoin and its scarcity with rewards halving every four years. These factors make Bitcoin’s incentive mechanism under Satoshi Nakamoto’s consensus highly attractive, thereby making miners loyal supporters of the consensus, maintaining high levels of enthusiasm and investment.

The Ethereal Meme Coins, Why Have They Become Beloved Assets for Everyone?

If Bitcoin is considered the cornerstone of the crypto world, the first and most core asset for realizing blockchain value, then how have the explosively popular memes in recent years gradually become perceived as high-quality assets by people? Starting from the likes of Dogecoin, Shiba Inu, and various cute pets, to this current bull market featuring sad frogs, sloths, matchstick figures, and other abstract small drawings.

These coins, originally created for the purpose of “satire,” have garnered attention from Web3 players due to their trendiness and entertainment value. They don’t require an understanding of any complex technical principles. This trend has successfully attracted capital, with Musk’s endorsement directly propelling Dogecoin into the mainstream market. Nowadays, popular meme coins are being created by project teams or players spontaneously to form communities, becoming familiar IPs in the crypto world, fundamentally based on the community’s identification with this trending culture. Originally elusive memes have become tangible due to the entry and accumulation of capital, forming a consensus of trendiness and revitalizing with new vitality.

The Past and Present of Runestone, Further Attempts and Deepening of Community Asset Strengthening

After discussing Bitcoin and memes, on this day of the halving completion, we cannot overlook the recent phenomenon of Runestone from the perspective of asset innovation. One significant reason for Runestone’s project to break into the mainstream is its achievement of three major records on the Bitcoin chain: the largest Bitcoin block ever, the largest Bitcoin transaction ever, and the largest Ordinals inscription ever. The miner fee paid for airdrops from the proceeds of the famous 8BTC auction also reflects the Runestone project’s commitment to the entire community.

Of course, there are three most important reasons for Runestone’s skyrocketing success: fairness, fairness, and damn fairness.

The narrative of “airdrops” + “fairness” + “Runes protocol” has fueled FOMO in the secondary market, with prices soaring to nearly $6000. Unlike previous inscriptions, BRC-20 is more popular in the Chinese-speaking community, while Runestone has gained consensus among users in both Eastern and Western communities. Founder Leonidas mentioned in his tweets that without the joint efforts of the East and the West, today’s achievements would not have been possible, highlighting Runestone’s important role in connecting global communities. The miner fee paid for airdrops from the proceeds of the famous 8BTC auction also reflects the Runestone project’s commitment to the entire community.

Despite the market panic caused by local geopolitical crises in the past two weeks, leading to a slight decline in Rune prices, with Bitcoin halving and the official launch of the Rune protocol imminent, coupled with the continued anticipation of additional Rune airdrops following Leonidas’s crazy tweets on Twitter, the absolute fairness of the free airdrop mechanism has kept the price of Runestone resilient. With no pre-sale rug pulls, no scientists, and no skyrocketing gas fees, many project teams are attracted to ride the hype wave and airdrop tokens for holders for free, consolidating Runestone as the golden shovel in the inscription ecosystem, spearheaded by Leonidas. It can be said that the emergence of Runestone represents a further attempt and deepening of community assets in the crypto world.

The Recipe for Decentralized Social: Integrating Community Engagement and Asset Distribution

For Web3 social platforms, the mainstream channels currently consist of Twitter and Telegram, which do not fully align with the spirit of decentralization. SocialFi products are dedicated to creating a decentralized platform for Web3 communities, aiming to develop decentralized social platforms on par with Facebook and Twitter. Therefore, while focusing on social functionality, it’s also essential to adhere to the aforementioned principles by strengthening the nature of assets and building a diverse asset structure to drive community engagement. This approach will help products successfully break into mainstream adoption.

A Wolf in Sheep’s Clothing: Ponzi Schemes Based on Tokenizing Social Networks

The previous generation of SocialFi products had a rather straightforward approach. Friend.Tech, for example, focused on tokenizing social network influence as its core concept, providing early users with significant wealth effects through a bonding curve.

Through its economic model, Friend.Tech established a pricing formula for its core asset, Key, as Price = S²/16000 (where S represents the number of people entering the room), creating an extremely Ponzi-like SocialFi product. As shown in the image, the steep yield curve was the fundamental reason for Friend.Tech’s popularity, gives users the intuitive feeling that as long as they entered earlier than others, they could earn higher returns.

However, due to its overly direct nature, this model lacks sustainability when user numbers skyrocket. Although a 10% transaction fee is set for each transaction, with 5% going to the protocol and 5% to the Key issuer, combined with the model, it can be inferred that user transaction costs far exceed 10%. Therefore, for users entering later, the expected high returns cannot be realized, resulting in a significant gap between user EV (Expected Value) and BV (Believed Value). User assets are drained by the protocol and the Key issuer who entered early, which is the essence of this Ponzi scheme.

From a game theory perspective, Friend.Tech hopes to achieve a stable model of (3,3) on the asset side. However, since those who run first can earn higher returns under this economic model and cause harm to others, the motivation for players to run first will increase, leading to mutual suspicion. Once a chain of suspicion forms, the final Nash equilibrium is only (-3,-3). At this point, everyone may have forgotten that we are not discussing a DeFi product but a SocialFi product, which is one of Friend.Tech’s biggest problems.

In summary, Friend.Tech emphasizes financial attributes too much, making itself a DeFi Ponzi scheme disguised as a social platform. Moreover, since user consensus mainly comes from expected returns rather than the community itself, when users realize they have fallen into a Ponzi scheme where expected returns cannot be realized, Friend.Tech cannot prevent user loss, ultimately leading to the burst of the bubble.

My Name is Liu Cong Degen, Circulating Like Currency

And this generation’s hot product, Farcaster, has made a better attempt. By organically integrating traditional social functions with asset distribution, Farcaster has created a SocialFi product with stronger social attributes.

Farcaster puts a lot of effort into encouraging user interaction and deep community involvement. For example, it introduces interactive posts, and various forms of community activities, encourages high-quality long-form tweets, and initiates features like $degen tipping. It’s worth emphasizing that Farcaster’s tipping system sets a new benchmark for the integration of decentralized communities and assets. This feature incentivizes users to deeply engage in the community, publish quality content, and engage in grassroots promotion.

As a result, the community asset $degen circulates in the ecosystem like currency, allowing users to both ‘earn’ and ‘spend’ assets within the ecosystem, completing a closed loop of asset structure. Additionally, the Farcaster team has also released two NFTs: OG NFT and Farcats. As official assets, they also carry future expectations of being empowered by Farcaster.

Compared to Friend.Tech, Farcaster’s asset distribution focuses more on the level of user participation in the ecosystem rather than relying on gambling. We can liken Friend.Tech to a casino, where users need to bring assets to gamble against opponents, essentially a zero-sum game where the house profits. On the other hand, Farcaster’s asset distribution mechanism achieves a positive feedback loop between the price of $degen, platform DAU (Daily Active Users), and user earnings. In summary, the circulation of assets and the spread of the community complement each other, creating a sustainable growth decentralized social ecosystem.

Regarding the Future, the Path of Integration Between Community and Assets Based on Economic Models

UXLINK, as one of the hottest decentralized social products currently, also has innovative ideas when it comes to the integration of community and assets. The path of integration between the community and assets in UXLINK mainly consists of three aspects: decentralized applications, community interaction, and a dual-token economic model.

Users can create their own DID (Decentralized Identifier), Web3 wallet, and Web3 social network through the DApp, and can also achieve integration with Web2 social networks. The integration of a full set of financial-related DApps encourages users to bring assets to UXLINK, rather than just participating passively. Because these complementary DApps reduce the barrier for users to participate in the ecosystem and community interaction with their assets, and provide greater flexibility. For example, through the combination of UX Wallet and DEX (Decentralized Exchange), users no longer need to go to another wallet or exchange to exchange tokens and then transfer them to the social platform for use. Instead, they can directly exchange them within UXLINK, enhancing users’ willingness to participate in community dissemination by improving convenience and liquidity.

Similar to Farcaster, UXLINK also emphasizes community interaction. Users can participate in activities such as providing traffic, leveraging their social networks to promote social games, product marketing, DApp virality, and more. Additionally, they can utilize their traffic to attract new audiences and reward users who contribute to growth. Furthermore, UXLINK’s dual-token economic model divides the main community assets into two parts: the utility token $UXUY and the governance token $UXLINK. Following the Ve (3,3) model, it aims to maximize returns based on fairness for both the overall ecosystem and its participants. This economic model ensures that community assets have the ability to capture value, giving assets intrinsic value independent of liquidity.

Conclusion

Driven by the consensus in the crypto world, the relationship between community and assets is constantly evolving. From Bitcoin to memes to inscriptions, the driving force of consensus has evolved from the initial practicality of price to culture, and finally abstracted to the spiritual level of ‘fairness’. In the future, there will be many new development models worth imagining. For example, a tribe spontaneously creates totems, and every decentralized community can release its own memes as community assets.

After all, in the final analysis, interest is the eternal principle.

Disclaimer:

  1. This article is reprinted from [Go2Mars Capita], All copyrights belong to the original author [Go2Mars Capital]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
  2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
  3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.

Meme, Runestone, and UXLINK: Some Thoughts on How Crypto Assets Drive Communities

IntermediateMay 07, 2024
The essence of a truly sustainable decentralized community is to embed a fair asset distribution plan that is both motivating and sustainable in the community structure.
Meme, Runestone, and UXLINK: Some Thoughts on How Crypto Assets Drive Communities

TL;DR

“The imagination of the collective will change everything, whether it is true or fictional.” - Michel Foucault

The essence of decentralized communities lies in the deconstruction and innovation of asset allocation models. In the transition of communities, the concept of assets always occupies a pivotal position. In the real world, people often come together because of common interests and goals. With the evolution of society, the presentation of these goals has become increasingly diverse, becoming ‘assets’ of various kinds. The acquisition, distribution, and value growth of community assets is fundamentally driven by ‘consensus’.

In primitive societies, humans cooperated to obtain food, defend against external enemies, and protect assets based on consensus on tribal totems, thereby maintaining the development of the tribe. In the Internet age, empowerment through various media satisfies people’s desire for expression while also leading to consensus on traffic. Nowadays, having a large following often represents a certain authority and becomes a virtual asset with monetization capabilities. The monetization of traffic assets has become increasingly smooth, which is also the core way of social growth in today’s traditional Internet.

In Web3, the speed of community iteration far exceeds that of the Web2 era. New projects emerge every day, becoming headlines on certain chains, while many others quietly fail. In this cycle of rise and fall, we can already summarize a rule: the essence of a truly sustainable decentralized community is to embed a fair asset distribution scheme with incentives and sustainability in the community structure. This is similar to primitive societies where although the totem is a common belief among members, fair and reasonable disposal of collective assets is still necessary to maintain trust and consensus among members. The principle of ‘the more you work, the more you get’ is the most basic and understandable asset allocation scheme, and it is equally applicable in the encrypted world.

The Pioneers Of The Crypto World Are Attempting To Innovate Asset Distribution In New Ways.

Focusing on Web3, the pioneers of the community continually innovate, experiment, and improve in pursuit of achieving asset distribution in the most ‘decentralized’ manner. Based on the consensus of Satoshi Nakamoto, the creator of Bitcoin, asset distribution through the Proof of Work (PoW) mechanism was the initial attempt. In the PoW mechanism, miners compete for the right to validate transactions based on computing power, in return for Bitcoin as mining rewards. We know that mining is highly challenging and resource-intensive. So, how did Bitcoin’s consensus successfully break through and attract a multitude of miners to invest significant capital? It’s primarily due to the continuously soaring price of Bitcoin and its scarcity with rewards halving every four years. These factors make Bitcoin’s incentive mechanism under Satoshi Nakamoto’s consensus highly attractive, thereby making miners loyal supporters of the consensus, maintaining high levels of enthusiasm and investment.

The Ethereal Meme Coins, Why Have They Become Beloved Assets for Everyone?

If Bitcoin is considered the cornerstone of the crypto world, the first and most core asset for realizing blockchain value, then how have the explosively popular memes in recent years gradually become perceived as high-quality assets by people? Starting from the likes of Dogecoin, Shiba Inu, and various cute pets, to this current bull market featuring sad frogs, sloths, matchstick figures, and other abstract small drawings.

These coins, originally created for the purpose of “satire,” have garnered attention from Web3 players due to their trendiness and entertainment value. They don’t require an understanding of any complex technical principles. This trend has successfully attracted capital, with Musk’s endorsement directly propelling Dogecoin into the mainstream market. Nowadays, popular meme coins are being created by project teams or players spontaneously to form communities, becoming familiar IPs in the crypto world, fundamentally based on the community’s identification with this trending culture. Originally elusive memes have become tangible due to the entry and accumulation of capital, forming a consensus of trendiness and revitalizing with new vitality.

The Past and Present of Runestone, Further Attempts and Deepening of Community Asset Strengthening

After discussing Bitcoin and memes, on this day of the halving completion, we cannot overlook the recent phenomenon of Runestone from the perspective of asset innovation. One significant reason for Runestone’s project to break into the mainstream is its achievement of three major records on the Bitcoin chain: the largest Bitcoin block ever, the largest Bitcoin transaction ever, and the largest Ordinals inscription ever. The miner fee paid for airdrops from the proceeds of the famous 8BTC auction also reflects the Runestone project’s commitment to the entire community.

Of course, there are three most important reasons for Runestone’s skyrocketing success: fairness, fairness, and damn fairness.

The narrative of “airdrops” + “fairness” + “Runes protocol” has fueled FOMO in the secondary market, with prices soaring to nearly $6000. Unlike previous inscriptions, BRC-20 is more popular in the Chinese-speaking community, while Runestone has gained consensus among users in both Eastern and Western communities. Founder Leonidas mentioned in his tweets that without the joint efforts of the East and the West, today’s achievements would not have been possible, highlighting Runestone’s important role in connecting global communities. The miner fee paid for airdrops from the proceeds of the famous 8BTC auction also reflects the Runestone project’s commitment to the entire community.

Despite the market panic caused by local geopolitical crises in the past two weeks, leading to a slight decline in Rune prices, with Bitcoin halving and the official launch of the Rune protocol imminent, coupled with the continued anticipation of additional Rune airdrops following Leonidas’s crazy tweets on Twitter, the absolute fairness of the free airdrop mechanism has kept the price of Runestone resilient. With no pre-sale rug pulls, no scientists, and no skyrocketing gas fees, many project teams are attracted to ride the hype wave and airdrop tokens for holders for free, consolidating Runestone as the golden shovel in the inscription ecosystem, spearheaded by Leonidas. It can be said that the emergence of Runestone represents a further attempt and deepening of community assets in the crypto world.

The Recipe for Decentralized Social: Integrating Community Engagement and Asset Distribution

For Web3 social platforms, the mainstream channels currently consist of Twitter and Telegram, which do not fully align with the spirit of decentralization. SocialFi products are dedicated to creating a decentralized platform for Web3 communities, aiming to develop decentralized social platforms on par with Facebook and Twitter. Therefore, while focusing on social functionality, it’s also essential to adhere to the aforementioned principles by strengthening the nature of assets and building a diverse asset structure to drive community engagement. This approach will help products successfully break into mainstream adoption.

A Wolf in Sheep’s Clothing: Ponzi Schemes Based on Tokenizing Social Networks

The previous generation of SocialFi products had a rather straightforward approach. Friend.Tech, for example, focused on tokenizing social network influence as its core concept, providing early users with significant wealth effects through a bonding curve.

Through its economic model, Friend.Tech established a pricing formula for its core asset, Key, as Price = S²/16000 (where S represents the number of people entering the room), creating an extremely Ponzi-like SocialFi product. As shown in the image, the steep yield curve was the fundamental reason for Friend.Tech’s popularity, gives users the intuitive feeling that as long as they entered earlier than others, they could earn higher returns.

However, due to its overly direct nature, this model lacks sustainability when user numbers skyrocket. Although a 10% transaction fee is set for each transaction, with 5% going to the protocol and 5% to the Key issuer, combined with the model, it can be inferred that user transaction costs far exceed 10%. Therefore, for users entering later, the expected high returns cannot be realized, resulting in a significant gap between user EV (Expected Value) and BV (Believed Value). User assets are drained by the protocol and the Key issuer who entered early, which is the essence of this Ponzi scheme.

From a game theory perspective, Friend.Tech hopes to achieve a stable model of (3,3) on the asset side. However, since those who run first can earn higher returns under this economic model and cause harm to others, the motivation for players to run first will increase, leading to mutual suspicion. Once a chain of suspicion forms, the final Nash equilibrium is only (-3,-3). At this point, everyone may have forgotten that we are not discussing a DeFi product but a SocialFi product, which is one of Friend.Tech’s biggest problems.

In summary, Friend.Tech emphasizes financial attributes too much, making itself a DeFi Ponzi scheme disguised as a social platform. Moreover, since user consensus mainly comes from expected returns rather than the community itself, when users realize they have fallen into a Ponzi scheme where expected returns cannot be realized, Friend.Tech cannot prevent user loss, ultimately leading to the burst of the bubble.

My Name is Liu Cong Degen, Circulating Like Currency

And this generation’s hot product, Farcaster, has made a better attempt. By organically integrating traditional social functions with asset distribution, Farcaster has created a SocialFi product with stronger social attributes.

Farcaster puts a lot of effort into encouraging user interaction and deep community involvement. For example, it introduces interactive posts, and various forms of community activities, encourages high-quality long-form tweets, and initiates features like $degen tipping. It’s worth emphasizing that Farcaster’s tipping system sets a new benchmark for the integration of decentralized communities and assets. This feature incentivizes users to deeply engage in the community, publish quality content, and engage in grassroots promotion.

As a result, the community asset $degen circulates in the ecosystem like currency, allowing users to both ‘earn’ and ‘spend’ assets within the ecosystem, completing a closed loop of asset structure. Additionally, the Farcaster team has also released two NFTs: OG NFT and Farcats. As official assets, they also carry future expectations of being empowered by Farcaster.

Compared to Friend.Tech, Farcaster’s asset distribution focuses more on the level of user participation in the ecosystem rather than relying on gambling. We can liken Friend.Tech to a casino, where users need to bring assets to gamble against opponents, essentially a zero-sum game where the house profits. On the other hand, Farcaster’s asset distribution mechanism achieves a positive feedback loop between the price of $degen, platform DAU (Daily Active Users), and user earnings. In summary, the circulation of assets and the spread of the community complement each other, creating a sustainable growth decentralized social ecosystem.

Regarding the Future, the Path of Integration Between Community and Assets Based on Economic Models

UXLINK, as one of the hottest decentralized social products currently, also has innovative ideas when it comes to the integration of community and assets. The path of integration between the community and assets in UXLINK mainly consists of three aspects: decentralized applications, community interaction, and a dual-token economic model.

Users can create their own DID (Decentralized Identifier), Web3 wallet, and Web3 social network through the DApp, and can also achieve integration with Web2 social networks. The integration of a full set of financial-related DApps encourages users to bring assets to UXLINK, rather than just participating passively. Because these complementary DApps reduce the barrier for users to participate in the ecosystem and community interaction with their assets, and provide greater flexibility. For example, through the combination of UX Wallet and DEX (Decentralized Exchange), users no longer need to go to another wallet or exchange to exchange tokens and then transfer them to the social platform for use. Instead, they can directly exchange them within UXLINK, enhancing users’ willingness to participate in community dissemination by improving convenience and liquidity.

Similar to Farcaster, UXLINK also emphasizes community interaction. Users can participate in activities such as providing traffic, leveraging their social networks to promote social games, product marketing, DApp virality, and more. Additionally, they can utilize their traffic to attract new audiences and reward users who contribute to growth. Furthermore, UXLINK’s dual-token economic model divides the main community assets into two parts: the utility token $UXUY and the governance token $UXLINK. Following the Ve (3,3) model, it aims to maximize returns based on fairness for both the overall ecosystem and its participants. This economic model ensures that community assets have the ability to capture value, giving assets intrinsic value independent of liquidity.

Conclusion

Driven by the consensus in the crypto world, the relationship between community and assets is constantly evolving. From Bitcoin to memes to inscriptions, the driving force of consensus has evolved from the initial practicality of price to culture, and finally abstracted to the spiritual level of ‘fairness’. In the future, there will be many new development models worth imagining. For example, a tribe spontaneously creates totems, and every decentralized community can release its own memes as community assets.

After all, in the final analysis, interest is the eternal principle.

Disclaimer:

  1. This article is reprinted from [Go2Mars Capita], All copyrights belong to the original author [Go2Mars Capital]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
  2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
  3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.
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