Author: Vishal Kankani & Shayon Sengupta & Kyle Samani, Partners of Multicoin Capital; Translation: Golden Finance xiaozou
In the traditional financial system, it is almost impossible for ordinary people to create new tradable assets. But encryption technology makes this easy. Today, anyone in the world can create new assets on Solana in seconds and at almost zero cost.
As a result, user-generated assets (UGAs) have ushered in explosive growth. The concept of UGAs has existed in the crypto field for some time, initially in the form of social tokens (such as BitClout, FriendTech, etc.), and more recently in the form of meme coins (pump.fun) and content tokens (Zora).
Since the birth of the Internet, the basic trading model of the secondary market has not changed substantially. The earliest online brokerage services 30 years ago were almost identical to today's Robinhood, Coinbase, and Phantom. Specifically, users enter the asset code (or contract address) they want to trade in the search box, and the asset page will display charts, related news, and of course, buy and sell buttons.
This model is not only found in financial applications, but also in all business fields. eBay and Amazon also follow this basic process.
Crypto infrastructure makes it easy for software developers to embed asset creation and trading functions into any software. Thanks to the flexibility of crypto technology, entrepreneurs have developed new issuance platform products and trading models in the past few years, which are significantly different from the traditional Phantom process. This evolution in the trading field has not been fully appreciated, and we will focus on some observations in this article.
Our partner Shayon mentioned a variation of this concept in his blog post a year ago.
In the past few years, several trading models and issuance platforms have gained significant attention, and there are also some areas with great potential but have not yet exploded.
1. Issuance platform/asset creation system: (i) Pump.fun, (ii) Zora
2. Trading model: (i) Single-player telegram robot, (ii) Multiplayer telegram robot, (iii) Doomscroll information flow, (iiii) Trading terminal, (iiiii) Live broadcast token class, (iiiiii) Tinder interactive interface.
1. Launchpad issuance platform
The first issuance platform in the cryptocurrency field was Coinlist, which pioneered the SAFT (Simple Agreement for Future Tokens) model through the Filecoin sale in 2017 and attempted a compliant ICO. Although Coinlist has undergone transformation, it still supports new project issuance, including the validator node sales of DoubleZero in our investment matrix and the community token sales of Pipe Network.
In late 2019, Binance launched its Launchpad product, which is still in use today. The platform selects selected assets for listing.
During the Layer1 explosion period from 2020 to 2022, dozens of teams developed issuance platforms, mainly as ecological preemptive tools for emerging public chains such as Solana, Polkadot, and Avalanche. As far as we know, most of them have disappeared.
Obviously, none of these platforms have solved the issuance problem. But in early 2024, pump.fun made a breakthrough.
After overcoming the issuance problem, pump.fun began to expand upstream and downstream of the technology stack - launching its own AMM and new trading model respectively.
We believe that the bonding curve + graduation mechanism pioneered by pump.fun cannot be the only solution to establish trust in the issuance of meme coins. We are still looking for teams that have unique insights into the market microstructure and can design better issuance mechanisms and trading models.
Recently, Zora has attempted to stimulate consumer behavior around content tokens, but this idea does not seem to have achieved product-market fit yet.
2. Trading model
Below we will explore the existing trading model landscape.
(1) Single-person Telegram robots
Popular single-person Telegram robots include Banana Gun, Unibot, Bonkbot, Trojan, and Maestro. These robots first experienced explosive growth in the summer of 2023. For users accustomed to the Phantom-style interface, these robots are superficially confusing. Due to the limitations of the Telegram API itself, their portfolio management view is very simple. However, they excel in the following aspects:
Convenience - Most Telegram robot users are already active in Telegram groups for a long time, hoping to get trading signals. When messages come from other groups, they want to act as soon as possible. In our experience, opening a third-party wallet (such as Phantom) will delay execution by at least 5 seconds, or even 10 seconds. Telegram robots can usually complete transactions within 1-2 seconds.
Sniping function - Based on the understanding of the psychology of Telegram robot users, many developers have added the function of automatically sniping new token issuance. These users want to be the first to enter the market.
Obviously, whether in single-player or multiplayer mode, these Telegram robots can integrate large language models (LLM) to implement more complex transaction types, including lending, revolving strategies, vault deposits, etc. Although this field is full of heat, we believe that the emergence of LLM has not really changed the trading model, it just provides stronger capabilities and flexibility for these new models.
It is worth noting that mainstream wallets such as Phantom and BackPack are likely to integrate LLM bots in the near future. This may blur the line between traditional brokers/wallets and Telegram bots, but we do not expect this to have a substantial impact on projects focusing on Telegram bots.
Many early Telegram bots have expanded their product functionality. For example, Unibot has evolved into a complete trading terminal.
(2) Multiplayer Telegram bots
PVP is the best example of a multiplayer Telegram bot. The PVP bot is in your group chat with your friends. You can send a command to the bot, such as /long BTC, and it will immediately execute the command (as a BTC-USD perpetual contract transaction) and then broadcast the message to the group chat along with the BTC-USD price chart. It then provides a quick option for friends in the group chat to choose to copy the trade or do the opposite of you.
The core value proposition of PVP is not the trading itself, but the people in the group chat. The main purpose of PVP group chat is not to find trading signals, but camaraderie, competition, and comedy. This group of friends brings constant emotional fluctuations.
We are in the same boat, and we live and die together. The solidarity, camaraderie, and competition that naturally form in this model are very unique and cannot be replicated. Once users are involved, retention rates are high.
Currently PVP is mainly trading perpetual contracts on Hyperliquid. But it is easy to imagine other multiplayer telegram bots expanding to memecoins, assets with fundamental logic, stocks, and most obviously - sports betting.
(3) Doomscroll Streams
We use the word “Doomscroll” as cordially as possible. Doomscroll streams dominate the internet today: Twitter, Instagram, TikTok, etc. They are the ultimate content aggregators.
Farcaster, Lens, 0xppl, Bags, and most recently, Zora, have all attempted to build a new kind of Doomscroll stream similar to Twitter or Instagram, but with crypto-native features (such as trading) built in. The common challenge facing these networks so far is a lack of interesting content. The network effects of Twitter, Instagram, and TikTok have proven almost unshakable.
Zora is arguably the most interesting of the bunch, in part because it combines asset creation with a new kind of trading model. Zora is building an Instagram-inspired stream where each piece of content has its own 1 billion supply of meme tokens, 1% of which is automatically distributed to the creator of the post. Zora places the greatest emphasis on the idea of creators monetizing; however, the challenge, at least for now, is that it’s unclear why people would want to collect any of Zora’s content.
As far as we know, none of the traditional crypto wallets (Phantom, MetaMask, Backpack, Rainbow, etc.) have attempted to introduce any form of Doomscroll information flow. Coinbase Wallet has announced that it will integrate Farcaster in an upcoming release; however, this is unlikely to solve the content quality and quantity issues facing Farcaster.
A few teams, including token.com and Involio, are trying to curate specific content streams that crypto traders want to see and embed trading execution into content discovery. These products are a lot like TikTok, but with crypto trading capabilities naturally superimposed. This is an interesting design space. Rather than trying to create a completely new content aggregator, these companies are trying to layer on top of existing aggregators (although this may be less stable in practice due to the aggregator’s third-party API support).
Vector has built a Doomscroll product where the basic unit of the feed is not a traditional social media post (text/picture/video), but a transaction. In our opinion, this is the most interesting way to build a crypto-native Doomscroll product, as it embodies the idea of "voting with your money" more than the content-first Doomscroll feed.
A big challenge for Vector is to populate the feed with interesting transactions (and thus interesting content). We suspect that the best Doomscroll products will intelligently use AI to extract data from multiple sources (not just on-chain transactions) to automatically populate interesting content.
Doomscroll feeds, if successful, will have a huge impact. They naturally tap into the dopamine cycle and create amazing engagement. Combined with retail order flow, crypto Doomscroll feeds may be the largest consumer opportunity in crypto today. And the hardest to grasp.
(3) Trading Terminal
It is no accident that traders choose a particular interface - every trader is playing a particular game and they need tools to win it. A user who downloads Moonshot after seeing "moo deng" on TikTok has a clear motivation, while a trader who is doing volatility arbitrage based on macro flows chooses Deribit for completely different reasons.
The memecoin game is unique, and many traditional perceptions of market structure do not apply to the market makers and takers of this game (for example, the saying that "professional traders focus on best execution" - the most profitable players in this game often pay 10% slippage just to enter the market three blocks earlier than their competitors). To summarize the key factors for winning in the pump.fun battlefield in the simplest way, the two important variables are speed (the speed of discovering assets and completing related transactions) and social signal quality (the number and quality of audiences paying attention to specific assets).
At its core, memecoins are a manifestation of the financialization of attention, and the trading supply chain that competes for that attention is constantly evolving. Issuers, KOLs, snipers, retail investors - for better or worse, they are all in some part of this supply chain. The core mission of these trading terminals is to provide supply chain analysis tools that surpass the competition and enable fast action. This means two things: extremely fast transaction execution (usually achieved through a combination of Jito bundled transactions and custom RPCs), and extremely detailed social/address analysis (usually including popular address tags, supply concentration indicators, and high-performance chain state indexing in addition to a large number of off-chain social/discovery indicators).
The most important lesson we have learned from observing over the past two years is that traders have no loyalty to the interface they use.
We believe that the core question at present is no longer "Can we build a better Axiom?" As long as there is a team that can achieve faster transaction execution and more valuable signals, traders will migrate. The more interesting question is “How will the memecoin game evolve as new assets and traders emerge?”, and trading interfaces will inevitably evolve with them. It is hard to believe that the memecoin attention market structure has reached a stable state. New semi-professional trading platforms will predict trends like ice hockey players - the market structure will change, and new opportunities and new entrants will emerge.
(4) Live Streaming Tokens
Unlonely, a company in our portfolio, has explored the intersection of live streaming and tokens. At the end of last year, the live streaming product launched (later suspended and restarted) by the pump.fun team is gaining market attention.
Live streaming has great potential as a token trading vehicle because the broadcaster can interact with the audience in real time. They can guide the audience to buy and sell tokens based on specific operations, or work together to achieve common goals. The most common model is "when the token market value reaches Y dollars, the broadcaster will perform X action." The biggest problem with this mechanism is that it sets a ceiling on the token price.
Fishtank is a classic example - it's essentially a real-time interactive reality show. During the six-week season, rotating contestants are confined to a fully monitored house (every room is equipped with 24-hour cameras). Viewers can buy tokens to change the environment, send voice messages, trigger challenges (even depriving contestants of basic living facilities such as beds). This interactive mechanism forms the core of the experience, turning bystanders into active participants who can instantly influence the results.
The underlying logic is that content can be programmatic, and audience participation can eliminate the boundaries between producers and viewers. We think this is an emerging form of media - live broadcast tokens are traded for real-time content, and the trading behavior reverses to shape the content.
The related behavior of live broadcast tokens is still in its infancy, and no project has truly achieved product-market fit. But we think there is a unique space for innovation in this field, especially when it is combined with long-term ideas such as social tokens.
(5) Tinder-like interface
It should be noted that Tinder-like interface refers to the experience design of executing transactions by swiping left or right. The transaction type can be prediction market, sports betting, or buying and selling any asset. The core insight is that this proven "swipe first" interface can promote quick decision-making.
We believe that Tinder-like interface is particularly suitable for short-term prediction market. The most typical example is the instant contract that predicts whether the next round will be a run or a pass in a football game. One can imagine developing supporting applications for various live broadcast scenes - from the Oscars to the evening news. Content broadcasters have a strong motivation to develop such auxiliary betting functions, which can not only increase participation but also generate revenue through order flow monetization.
Kyle expressed this idea on Twitter a few months ago and received a lot of responses. We have always believed that this "slide-first" design paradigm that promotes clear actions is expected to build a scalable and interesting business model. Existing examples include Hookt, Memelut, and Guess.best (although not a slide model, it uses a duel mechanism).
3. Click trading
On the Euphoria platform, betting only requires a tap of the screen. With a simple click of a smartphone, users can bet that the price of an asset will reach a certain level at a certain time. In traditional finance, this is called a barrier option - a complex product that is usually exclusive to high-net-worth customers on Wall Street. Robinhood is trying to disrupt this field with a similar feature of "chart trading" recently launched.
Euphoria removes complexity and provides this powerful mechanism through a seamless gamified interface. It is fast and engaging. The crypto community has been waiting for structured products since 2021, and the click trading interface may be the key to unlocking it.
This click-to-bet mechanism can also be applied to mobile games with real money. Every click is a bet, and the crypto infrastructure can provide instant and secure payments to winners.
4. New models, new potential unicorns
As trading functions are integrated into all software, the boundaries between culture and finance will become blurred - instant assets born from trends, narratives and Internet-native creativity will prevail. In this world, attention breeds liquidity, and liquidity breeds more attention.
These applications will become the first choice for consumers to discover, trade and entertain. Those applications that provide a perfect user experience across different modes will dominate the order flow, thereby generating considerable revenue and ultimately achieving extraordinary success.
These applications will not only be wallets that store assets and provide portfolio overviews - they will become places for users to discover, trade and socialize. Trading provides far more signals than likes and retweets because it requires the user to take financial risk. Eventually, AI algorithms will incorporate trading signals to decide what to show users, even if they have trading turned off in their Doomscroll feed.
The future of finance is in all software, not just specialized portfolio viewing tools.
Weatherly
Anais
Catherine
Kikyo
Alex