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Learn: The Memecoin Grift and How It Threatens Ethereum Culture
If Ethereum is to grow it’ll have to mature beyond the antics of those shilling the token-of-the-moment, says CoinDesk columnist Paul Dylan-Ennis.
The ceaseless and cynical pumping of tokens devoid of value is an existential threat to Ethereum’s reputation.
This memecoin culture is populated by the most chronically clout-addled people in the crypto industry, who exist in the Influencer Pit of Despair. This is a deep, dark hole where grifter influencers clamber over one another to rob the nearest retail tourist. You can locate the Influencer Pit in the form of a Twitter Space. But not just any Twitter Space. More like Twitter Spaces experienced as a debilitating K-Hole in a Prague dive-bar. And you’ve lost your wallet.
It’s a fundamental paradox that since anyone can use the Ethereum blockchain, anyone can use the Ethereum blockchain. If Ethereum were a local park, the memecoiners would be an unruly gang of teenagers listening to music on some god-forsaken Bluetooth speakers.
The ceaseless and cynical pumping of tokens devoid of value is an existential threat to Ethereum’s reputation.
This memecoin culture is populated by the most chronically clout-addled people in the crypto industry, who exist in the Influencer Pit of Despair. This is a deep, dark hole where grifter influencers clamber over one another to rob the nearest retail tourist. You can locate the Influencer Pit in the form of a Twitter Space. But not just any Twitter Space. More like Twitter Spaces experienced as a debilitating K-Hole in a Prague dive-bar. And you’ve lost your wallet.
It’s a fundamental paradox that since anyone can use the Ethereum blockchain, anyone can use the Ethereum blockchain. If Ethereum were a local park, the memecoiners would be an unruly gang of teenagers listening to music on some god-forsaken Bluetooth speakers.
Paul Dylan-Ennis is a CoinDesk columnist and lecturer in the College of Business, University College Dublin.
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Imagine you’re working on Eigenlayer or zero-knowledge (ZK) proofs or you’re an Arbitrum delegate. And while you’re valiantly working away on something useful you can’t help but grit your teeth to hear some braindead dolt just made a cool million by tweeting.
Memecoins will always be part of an open source network like Ethereum, but for cryptocurrency to be widely adopted the industry needs to find a way to collectively address its worst forms of valueless profit seeking.
There is something hopeless about how little is offered by the memecoin grift.
When pepe (PEPE) was created the team outright admitted that the project was pure memeology, propelled along by our favorite rehabilitated frog. There is, at this stage in the industry’s cycle, something quite empty about returning to the meme well, eking out a living as bottom feeders on some anon team’s larp. Its mindless algorithmic churn, like we invented the wheel but only used it to go in circles.
And those Spaces! My word. Memecoin Spaces seem to be required by law to have the most obnoxiously loud host, for no apparent reason. At least three of the speakers, sporting equally terrible NFT (non-fungible token) investments as their PFPs (profile pictures), will admit to several misdemeanors over the course of an hour. At least 75% of the audience has bought something from Supreme and made a loss on it.
Before you feel bad, let’s remember what the Influencer Pit does. It sucks in retail investors, selling them on the concept that financial nihilism is the truth. It contributes to the idea that blockchain (or crypto or Web3) is merely about speculation. It stipulates your only option in life is to hustle fast enough and hope you don’t end up as fodder for a CoffeeZilla video.
The latest trend is painfully banal. It’s such a low-brow grift I’m embarrassed to even write about it. Influencer grifters, often double-dipping from prior shilling of memecoins, will simply post an Ethereum address and ask people to send ether (ETH) to it. One can only hope the IRS does not ENS. The wink and nod in this scam is the explicit promise of no return. You would, and I mean this quite literally, be just as well setting fire to your physical wallet than sending a transaction like this.
In Ethereum there are no police. In a decentralized, permissionless culture there is nobody who can sanction you like the law might IRL
I’m not sure what the appropriate punishment should be for these crimes against humanity. First-time offenders might have to attend Bitcoin Miami wearing an Ethereum T-shirt. Serial offenders will need harsher punishments, perhaps trapped in a dark room with a Richard Heart monologue on repeat, for up to two years. We might instead decide to capture all the grifter influencers on an island somewhere. Perhaps we could create a fake conference, NFT Pitcairn Islands, and then create a decentralized autonomous organization (DAO) whose only purpose is to ensure no flight ever leaves, spending treasury funds on bribing the islanders to distract the influencers with shiny objects.
There is a real problem here. Influencer grifters tell us upfront "you will get nothing" and you will be happy. But underlying is a much darker message: We can do nothing. This is the paradox of permissionlessness intrinsic to blockchain communities. Permissionlessness is a red line, non-negotiable topic in Ethereum culture. Without wishing to get all esoteric, if you lost the property of permissionlessness you wouldn’t have Ethereum at all.
With technical solutions verboten this leaves us only with social options. Imagine Ethereum as a cosmopolitan city. It has its Municipal Hall of developers, organizers and researchers. It has its finance district with decentralized finance (DeFi). It has its bohemian quarter of NFTs. It has its Average Joes living on Main Street. But it also has its shady downtown where the grifters live.
Downtown is not as bad as Skid Row where you’ll probably find people plotting to social engineer Bored Ape owners. Like any city you can silo yourself in the safe areas and hope the police might deal with it. Except in Ethereum there are no police. In a decentralized, permissionless culture there is nobody who can sanction you like the law might IRL (of course governments can outside Ethereum).
This means you have to create an atmosphere, a cultural context, where the message of long-term regen culture overshadows short-term degen culture, relegating it to an immature phase. The regens are those within Ethereum culture dedicated to ensuring the technology does not generate negative externalities, but instead positively impacts society over the long term. How do we, in the words of Gitcoin founder Kevin Owocki, funnel more Ethereans into regen than degen?
Here I advocate for something a little unorthodox. I believe Ethereum should introduce a Citizen’s Assembly. In my home country of Ireland, citizens are randomly selected to convene and discuss important issues relating to the Irish Constitution. In Ethereum, we don’t have a Constitution but there could be value in an annual forum where various stakeholders in Ethereum meet to discuss important concerns.
Similar to the open-source concept that many eyes can fix a problem quicker than a single pair can, the Ethereum Assembly could consider pressing issues (e.g. what to do about Lido, a decentralized service that is said to be dominating Ethereum staking) but also how to encourage people away from degen into regen with active efforts. Citizens from each stakeholder group, from validators to developers to application builders to Average Joes could come together and hash it out.
And the most important effect? I believe it would encourage a sense of responsibility over the protocol across the community spectrum, introducing social matters as important as technical ones.
Or we could just keep sending the grifters ETH…
This is written by Dr. Paul J. Dylan-Ennis, a lecturer/assistant professor in the College of Business, University College Dublin, first appeared in Coindesk