TrumpCoin: Crypto's "Sovereignty Transfer"

Original Article Title: "TrumpCoin: A 'Sovereign Shift' in Crypto"

Foreword

On the eve of the U.S. presidential inauguration, on the evening of January 17th local time, Trump announced the launch of his personal token — TRUMP Coin — through his own social media platform, Truth Social. Initially, many people mistakenly thought this move was a result of a hack on Trump's account. However, within minutes, Trump used his main personal account (formerly Twitter) to retweet promotion of the token, formally confirming the veracity of the news.

What followed was a surge monumental enough to be recorded in cryptocurrency history. A large amount of funds began pouring in, and within just two days, TRUMP's value skyrocketed from zero to a peak market cap of $800 billion, nearly fully absorbing all market liquidity. The reach of this event was no less than that of the assassination attempt Trump experienced last year in Pennsylvania, and the spectacle was just as magical as his dodging of that bullet. I have some simple thoughts to share about this event.

Meme

In the large eastern country where I reside, the ultimate monetization of private traffic often occurs through a live streaming e-commerce process within an app called "Douyin." Across the Atlantic, the 47th U.S. President did something unprecedented — the leader of the "world's beacon" is now measuring his influence and rights' value through an electronic token, accumulating vast wealth for his family. Undoubtedly, we are entering a special era, an era where Crypto can be officially referred to as Web3.0.

The original intention of the Internet was to end the era of attention-monopolizing broadcasters and TV stations and return everything to users. However, its development trajectory ultimately deviated from the original path. Early internet companies in Web2.0 that held chatting platforms and search engines have evolved into the giants we see today, such as Google and Tencent, which have achieved early accumulation and long-term monopolies through control of massive traffic entry points. Today, ByteDance almost dominates social media in both the East and the West. While it is undeniable that short video platforms have provided many grassroots individuals with opportunities for transformation, in most cases, this benefit is shared by internet celebrities and platforms, with the platforms holding absolute discourse power.

Regardless of how the form changes, the economy of monopoly around traffic is the eternal theme of Web2.0 giants. The opportunities for ordinary people to benefit from it are very limited. Users in this feast can only continuously contribute traffic and money. Perhaps the Meme Coin represents a new opportunity. Admittedly, engaging in Meme PVP is very risky, fraught with scams, and even requires acceptance of an absolutely unfair 2:8 distribution like TRUMP's, but how many opportunities do ordinary people have to benefit from the traffic of a U.S. president? The process from 0 to 80 for TRUMP may be the only one.

In the past, I used to struggle to explain what a Meme Coin truly is, unable to clearly articulate its essence. But now, I feel that a few simple words can convey its meaning: the value of a Meme is the pricing of a certain event, person, or meme during a specific period of time, just like how the market recently valued former President Trump's initial coin offering at 80 billion. On the other hand, a Meme also represents a redistribution of attention in the traditional internet attention economy. People are enthusiastic about these eye-catching phenomena, and Memes provide users with an opportunity to participate in value distribution during a hot event.

Pump

I have previously mentioned in an article that the best form of SocialFi is not a rigid Dapp like Friend.tech, but rather Pump. The coin issuance team behind the president also chose Pump. The reason is simple: people have a need to belong to a certain group, but that does not mean they should accept unfairness in pursuit of this need. The pricing of Keys in Friend.tech and the subsequent complex gameplay centered around the Token are the main reasons for its limited ceiling and ultimate failure. Looking back at past SocialFi projects, dividing people into different tiers based on token holdings to allocate empowerment and services has also been a contributing factor to their failure.

The concept of being small but exquisite never applies to Crypto that relies on community culture, and this applies to many races outside of SocialFi, such as the NFTs that Trump once issued. The large supply of Memes often allows them to quickly acquire a huge community. Whether you hold 100U tokens or 10WU tokens, you belong to this group.

In the past, we used to build a project by promoting it on social media like Twitter and then guiding users to Telegram and Discord to build a community. In the distant past, for ancient Memes like Doge, you could only seek "organization" through certain forums. Pump has succeeded by leveraging the advantages of traditional social media on top of AMMs and returning the rule-setting power to creators. It has streamlined numerous fitting processes, allowing you to always find a sense of belonging behind the countless token icons on the Pump homepage.

Retro Wave

Regardless of how you view the personal token issued by Trump, we are entering an era where Memes become mainstream and various things are tokenized. In fact, this is somewhat similar to what I mentioned in my stablecoin article last year about the coinage rights in medieval Europe. While most dynasties in China primarily implemented a unified standard monetary system, Europe has always been more fragmented, with each country, and even individual nobles and bishops, having the right to mint and issue their currencies.

Although fundamentally TRUMP is not a precious metal-backed currency, the president has set a precedent, and it is inevitable that many European and American celebrities will join this medieval retro wave. Another point worth pondering is that Trump owns 80% of the tokens. Will this token truly be just a Meme as stated on its official website, where "Trump Memes are intended to be an expression of support and participation in the ideals and beliefs embodied in the symbol '$TRUMP' and associated artwork. They are not intended to be, nor should they be construed as, any form of investment opportunity, investment contract, or the subject of securities"? Or will it become a purely a Meme? An asset for monetizing influence?

Among many conspiracy theories, I actually lean towards this being a grand opening for the TRUMP family to fully transition from real estate to crypto, leveraging the influential power of the media, an ability engrained in the DNA of this family. A nonsensical event can quickly gain momentum. Choosing a Meme as a starting point is most appropriate, with various eye-catching myths of wealth and a stark contrast to the elevated status of the president. I believe that ultimately most of the remaining tokens (based on the token release schedule, perhaps for three purposes) distributed through airdrops to voters, donated to U.S. debt repayment, and used for development would help solidify Trump as a cultural icon in America. This may also reverse the public's stereotype of Crypto after the FTX incident. The family's transformation from industrial capital will start with this IP worth close to a billion. (According to JIN10's report, it seems that Trump's understanding of the family's internal crypto projects or even his own token is limited, further confirming that it is the team behind the scenes and his children who are operating around this IP of Trump.)

Ethereum

Solana is undoubtedly the biggest winner in this crypto weekend, achieving new highs in SOL price and daily transaction volume surpassing Ethereum's by multiples in just two days. In comparison, the Ethereum community seems very lonely, with increasing protests from core OGs against the Ethereum Foundation and the development surrounding Layer 2.

However, looking at Solana's skyrocketing transaction fees and failed transaction volume, it is clear that Crypto still has a long way to go before real Mass Adoption. So, on the issue of Ethereum, I still maintain the same view as in the past. The push around Layer 2 development is simply too fast, too ahead of its time. The social heat within the entire Ethereum ecosystem that can hold a candle against Solana is almost non-existent, yes, even at the Base layer. The demand for small, high-frequency transactions at Layer 1 has completely shifted to Layer 2, while Layer 2 DApps have not seen any breakthroughs. A large amount of idle block space is ignored, transaction fees are pitifully low. This is the current state of Ethereum, and it is also a microcosm of the ETH Killers of the past.

The paradox of public chain development involves not only the trilemma but also the contradiction between Gas revenue and technological advancement. To use a very simple analogy, Ethereum can be likened to a casino that requires a ticket. In the past few years, the business has been booming, tickets have been in short supply, and some people have even continuously bid up prices to invest. The price of this ticket has continued to rise. The owner realized that the casino was indeed not big enough or spacious enough, so they built a casino 100 times larger. Considering this scale, they reduced the entry price by 100 times, allowing one ticket from the past to be used 100 times. However, it was found that the same number of customers remained, the existing infrastructure did not need such a large space, and the ticket price began to decline.

This is the conflict between Ethereum's technological advancement and token price, compounded by the fact that Ethereum is backed not by social media influence but by the moat accumulated from the ICO era to the DeFi Summer. Therefore, the problem of lacking fresh blood is constantly growing.

In addition to the Foundation's urgent need for reform (I have mentioned this issue in this article "The King of Shanzhai, Why Is He in a Dilemma?"), how to gain an advantage on the social level (making it easier for users to understand Ethereum's various obscure technical concepts, integrating more with traditional social media), how Layer2 can provide better feedback (repurchase, modifying DA pricing, ecosystem feedback to the main chain), and how to better support the development of emerging dapps (Ethereum Grants should no longer focus solely on infrastructure projects, various L2 solutions should have better interoperability and compatibility) - in the application layer stagnation situation, the competition among public chains often lies in details and differentiation.

Crypto 2.0

Just as Trump ushered in the 2.0 era, the next era of crypto will also be shaped by this family. What do they want to do? Although the first project launched by the family, World Liberty Financial (WLFI), has not yet gone live, we can still get a glimpse from the project's proposal forum. The first proposal describes WLFI Protocol as follows:

The WLFI protocol will provide liquidity for Ethereum (ETH), Wrapped Bitcoin (WBTC), certain stablecoins, and potentially other digital assets. WLFI will enable WLFI protocol users to access the WLFI protocol Aave instance, and the WLFI protocol Aave instance will be managed through Aave’s risk management system. WLFI aims to introduce a new class of users to over-collateralized lending, which is one of the most critical features of Decentralized Finance (DeFi). WLFI plans to attract new users to the DeFi space by providing a seamless experience for users to supply and borrow digital assets. Many of these users will be first-time DeFi users, which will help build brand loyalty and awareness for WLFI and Aave, helping Aave maintain its market-leading position in the digital asset lending and supply space.

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

WLFI will adopt the same reserve factor system as the main Aave instance in this Aave V3 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 supply of the $WLFI token to participate in future WLFI governance processes, liquidity mining, and promote the decentralization of the WLFI platform. Income distribution will be set up through a trustless smart contract that will direct the respective percentage of protocol fees to the AaveDAO treasury and the WLFI treasury address.

Considering the recent surge in purchases of various project tokens, WLFI can be seen as a Donald John Trump Jr.-backed on-chain lending institution leveraging his father's influence. Sell WLFI tokens with one foot, buy blue-chip tokens with the other foot (if a major project invests, this move of selling and buying can skyrocket WLFI to new heights), directly spiraling to the moon. In addition, WLFI is also massively buying various domain names. According to information shared by Cointelegraph on Twitter, WLFI has already acquired domain names such as daolationship.eth, yatogame.eth, WorldLiberty.eth, trumpcoin.eth, erictrump.eth, barrontrump.eth, and 9290.eth. From this, it is not difficult to see that the future theme of the Trump family will still revolve around the TRUMP intellectual property, but the ventures will be quite diverse. In the next four years, Trump family projects may exist in various public blockchains, similar to the Trump Group real estate that is now spread across New York.

As the curtain falls, a very special era is about to begin. Whether you accept this "Crypto President" or not, you must acknowledge that many significant events that will impact Crypto in the next four years will take place on the other side of the Atlantic. Crypto's role in shaping these events is either to follow along or to undergo a rebirth that can impact the world.

This article is a contributed piece and does not represent the views of BlockBeats.