The Politics (And Economics) Of Memes

As a palette cleanser from last week’s moment of clarity, I decided to write something lighthearted and fun this week. Politics was an obvious choice.

Granted, I’m not interested in a polarizing discussion, as all political debates in our divided climate tend to gravitate toward these days. I’m talking about two topics Americans of every stripe can get behind: money and memes.

Among the many “get rich quick” avenues in the DeFi space, meme coins are capable of getting you the richest the quickest — if you don’t bankrupt your life’s savings first. That’s because meme coins are, in effect, a decentralized extension of prediction markets.

For the uninitiated, prediction markets are gambling sites enabling you to bet on the likelihood of future events and their outcomes. These can be familiar bets like boxing fights, but are typically more geared toward elections, social events, or other specific contests. As a data scientist, I believe prediction markets are some of the purest ways to gather data about individuals and their beliefs, because the monetary risks they are taking reflect a certain magnitude of conviction in their beliefs on a future outcome.

While meme coins are ephemeral and don’t necessarily “end” in the way events or elections do, they do act as a proxy for the ebbs and flows of the cultural discourse. As such, they give us an avenue for collecting financial value from the awareness that certain brands or topics give off at their moments of peak public relevancy.

But what brands or topics? Well, the ones people are meme-ing, of course. Beyond the OG meme coin $DOGE (R.I.P. Kamuso) or its chief competitor Shiba Inu ($SHIB), many meme coins align with specific celebrities, cultural artifacts, or events.

For example, $MILK, a somewhat tasteless coin dedicated to Sydney Sweeney, surged around her SNL appearance. I had the pleasure of taking a position weeks before. Here’s how I rode the wave.

The key to success in prediction markets is, predictably, predicting. First, I figured meme coin investors and fans of Sweeney’s, um, work overlapped to a certain degree. It helped that her X account was hacked to shill the coin, explicitly drawing a connection between the two. As soon as the excitement from that initial exposure died down, I bought in. Then, as the web3 hype machine began to roll and the extremely online crowd convinced themselves the meme coin tweet would get called out on live TV, many more investors took positions, driving the price higher.

But it wouldn’t be wave-riding if there wasn’t a wipeout. I made what I thought was a shrewd prediction: buy the dip, sell the opening monologue. Short of Sweeney actually calling out the coin on SNL (which obviously did not happen) it was a safe bet that excitement would peak early in the show, before reality began to sink in for the straggling HODLers. Problem is, I made that prediction publicly. Maybe I shouldn’t have tweeted it out, because “sell the monologue” turned into a rush of people front-running the first minute of the show. Prices peaked earlier that afternoon. But I 10x’d anyway, so it’s hard to have regrets.

I don’t say all that to brag, but to set the scene for the real life bets that took me to this perspective. There are meme coins for almost anything, and not every host of SNL is going to drive a shitcoin pump-and-dump. But by closely examining the intersection of crypto investors and culture icons, these meme coins can be a legitimate pathway to very serious gains. Which brings me to said perspective.

I, and several of our playhaus team members speculating in our local NFT Central community telegram channel, have compiled portfolios with heavy exposure to political meme coins like $TREMP and $BODEN, the latter of which just went viral in NYC. These investments were made in light of former President Donald Trump’s comment that he “will build a crypto army” — not to mention the passage of decidedly pro-crypto acts by the government, and crypto’s progression toward a bipartisan issue that will remain at the forefront of the political conversation, regardless of the ultimate electoral results.

With the rise of AI and deepfakes, the centralization of political discourse on social sites, and the rise of decentralized encrypted communication and financial transfer protocols, crypto is, in the immortal words of Derek Zoolander, so hot right now. I unironically believe political meme coins are the vehicles best positioned to capture that heat. These tokens might just represent the future of discourse, or at least another avenue for monetization and value capture. Regardless of your politics, you don’t have to sit on the sidelines while this wave rides by. No matter who wins in November, $TRUMP and $BODEN could both come out on top.

—El Prof