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I'm starting to rethink my stance on NFTs. During market downturns, the concept of utility feels meaningless. The idea of shifting value from X to Y seems doomed to fail. Deeply entrenched in utility-centric thinking, I began to question the purpose of my efforts. It wasn't until I had an epiphany that NFTs are about culture, and nothing more. Today, my perspective on NFTs is crystal clear: culture and identity will ultimately prevail, while everything else will diminish in importance over time. Though identities may be subjective, the influence of culture is undoubtedly profound. This realization sparked my fascination with culture, and I believe the trajectory of tokenization will move in this direction.
Currently, the crypto industry is focused on pursuing the next breakthrough in technology. It feels like 98% of the industry's talent and resources are striving toward this goal. While I acknowledge the importance of addressing infrastructure challenges, I believe the ultimate state of cryptocurrency is not far off. So, while the industry seeks to create cheaper, faster transaction solutions, I ask you: What happens next in a world where cryptocurrency technology reaches its peak performance?
I believe the future lies in tokenized culture. I envision a world where the majority of crypto tokens are cultural tokens—tokens as indices, allowing speculation on various cultures from the past and present. Today, we see glimpses of this through so-called Meme tokens or NFTs. However, I believe the potential and opportunities are greater than most people realize.
First, let's address an obvious question: Why tokenize culture? The answer has two parts. First, tokens create consistent incentives, motivating community members to embrace the culture and thereby drive its development. Second, tokens democratize access to culture, allowing anyone with an internet connection to participate. The combination of consistent incentives and democratized access leads me to believe that the future of culture tokenization, on balance, benefits the spread of culture more than it hinders.
This opens up a whole new category of tokens called cultural tokens. Cultural tokens have the following subcategories:
Social Tokens (ST): Tokenization of individuals/influences.
IP Tokens (IPT): Tokenization of intellectual property.
Consumer Brand Tokens (CBT): Tokenization of consumer brands.
Non-Fungible Tokens (NFTs): Tokenization of art and collectibles.
Historical Artifact Tokens (HAT): Tokenization of historical artifacts.
Meme Tokens: Tokenization of memes.
Sports Tokens (MT): Tokenization of sports.
Some cryptocurrency purists may disdain these trends, but I view such viewpoints as negative-sum. In recent years' headlines, all of the above have driven interest in the crypto industry. Why? I believe the answer lies in simply meeting consumer demand. Consumers understand memes, they understand toys on shelves, they understand Veblen goods. The tokenization of culture is effective because people understand culture. Regardless of personal preferences, the average person doesn't care about ZK proofs, optimistic rollups, or parallelized EVMs. All of these things are amazing, but they don't serve as a motivator to attract more people.
I believe there's a yin and yang relationship between infrastructure and culture. Without the right infrastructure, on-chain culture will never thrive; without culture, our industry will never grow.
Therefore, I encourage anyone with a negative view of cultural tokens to reconsider their approach. We need each other, whether you like it or not.
Building the Future of Tokenized Culture
My intent in writing this article is to help inspire more crypto builders to construct culture. While the graphic below is just a doodle I made on Figma, I believe it still reflects reality. Everyone is turning left, no one is turning right. At least for those reading this article, that means you're early.
Clearly, people want culture on-chain, and they want more of it. However, while the industry focuses on building more efficient versions, few builders are developing products that are necessary to accelerate on-chain culture. Yet, in my view, this is where the biggest opportunity lies. If all goes according to plan, there should be consumer applications on-chain whose enterprise value exceeds the underlying chain they sit on. Culture isn't just IP and memes; it can also be applications, marketplaces, games, DAOs, and more. In the real world, examples of enterprises building, creating, and pioneering culture include Instagram, Snapchat, and LVMH.
Paradigm Shift
A paradigm shift is taking place at the intersection of culture, not only in the crypto space but also in traditional finance. The pace of cryptocurrency development is lightning-fast, allowing us to glimpse the potential of financial markets in the near future. In the 90s, you had Bowie Bonds; in 2020, you had $GME; today, you have $DJT, each representing a version of culture in some form. For $GME, it represents the significance of "opposing bankers and short-sellers," while $DJT is speculation on Donald J. Trump, in a way, it's a social token. Unfortunately, for traditional finance, this future may or may not reach its pinnacle due to barriers to entry. Nevertheless, the concept of culture- and trend-driven financial assets isn't new, and with the increasing speed and accessibility of cryptocurrencies, it will only become more prevalent.
Editor's Note: Bowie Bonds refers to the issuance of $55 million in "Bowie Bonds" by the musician in 1997, backed by his income from 25 albums recorded before 1990. $GME refers to the GameStop short squeeze incident. $DJT is the abbreviation for former U.S. President Donald Trump, and a new stock trading under the code "DJT" has recently gained popularity in the U.S. stock market.
An Interesting Idea
Tokenizing culture can also be taken literally. Imagine a world where you tokenize real-world intellectual property and let it exist on-chain, serving as a fun beacon for the community to speculate on. Here's how it works:
Create X Protocol/Launchpad to bring real-world intellectual
property onto the chain; the protocol lands Star Wars and launches an officially sanctioned Star Wars token → Star Wars licenses its intellectual property to X Protocol, launching the official $Stars token. Through the licensing agreement, Star Wars receives 15% of the token supply, unlocked monthly. X Protocol promotes this officially supported $Stars token, sparking curiosity from billions of Star Wars fans. If even 1% of Star Wars fans become interested in cryptocurrency, that's a huge win for our entire industry. The snowball effect of this model working perfectly could attract even more traffic to cryptocurrency.
Some may question the logic behind such a move and its benefits. The answer lies in the need for brands for attention and revenue. This model can both prevent brands from facing systemic shocks when they cannot compete for attention in an AI-dominated world and can earn more money from intellectual property by tokenizing it (tokenized intellectual property is likely to have higher upside potential than selling to traditional private equity/mergers and acquisitions).
Final Thoughts
For me, the biggest opportunity in cryptocurrency today lies in the development of culture at the protocol layer. The best entrepreneurs aren't building for themselves; they're building for their users. It's clear that cryptocurrency users now want more culture. To all cryptocurrency entrepreneurs, I say it's time to give people what they want; the future of culture won't build itself. |
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Post time 17-4-2024 21:08:50