Looking into the current virtual economy.
From a tokenomics architecture perspective, the current Genesis Launch, which is a Gen2 of a pump fun hardfork, is not really sustainable for a project to succeed.
To run a project, you need either a really rich founder who has exited once or twice at a higher million value, or you need funding while giving out shares or tokens, or you bootstrap the service as well as possible (which also means that the founder needs to be somewhat rich enough to survive on ramen).
Whatever it is, you can print a token within a few seconds. There are a ton of tools out there like Mintclub and others, with included bonding curves and so on. Pumpfun is also a way to easily create a token.
The difficulty is not in creating the token but in getting people to buy the token. For memes, it is at least clear. Just be funny, crazy, and have the talkability to gain attention. Because having no utility is the utility of meme coins. But we have also seen that, in the end, it is an endless game of pump and dump, with not even a handful being successful at the end.
With virtuals, it was not different at the start. It was one of the reasons that I did not look into it, as I categorized it into "AI Agent called Meme coin," and in a lot of cases, it was true. I have nothing against meme coins and the culture. I am just very bad at investing in them and earning something. In most cases, I am losing a ton of money betting on them, LOL.
Genesis Launch looked much better, and with @VaderResearch around, you had something to value. Founders, backgrounds, the reasons why they are doing something, and the vision they are trying to achieve, whether it makes sense or not.
But the weak point that Vader mentioned is that investors may get quickly rich with a decent x10 or x100, but the team is left with not much and still needs to bootstrap a product.
It is actually one of the reasons that Web3 gaming is difficult. It is not enough to give out tokens and let people click on buttons and call it a game. It does not last. Games need a ton of planning, designing, developing, and based on that, a ton of money to create and even more to market it.
Products also need that kind of cycle, but with AI, it is actually changing really fast. Give a great team with superb execution power a good kickstart for funding and time, and with AI, you can create really great products with market fit. With the right marketing (let's create a yapping framework for other projects to use, without needing the listing cost for Kaito? Ahh, that is actually something I could build...) we could soon see 2-300M FDV projects, raising more money and growing to a 1B FDV value. Tweaking the economics of the current Genesis Launch could help to get to this road.
I personally don't know if we will see a 1BN project within the virtual economy, but the current puzzle pieces are looking good for me.
How to attract a $1bn project to launch on Genesis?
One of the keys to Genesis’ success is for retail to
Invest in $30m FDV worth projects at $200k FDV
Earning 10x to 150x on a regular basis is crazy
And creates strong virality & word of mouth growth
Most startups fail - applies to Genesis launches too
Most Genesis projects will be sub $500k FDV in 1y
Yet 3-4 winners will make up for all the losses
My biggest regret is not buying $VIRTUAL (used to be called $PATH) at $10M FDV right after having a call with @everythingempty in Dec 2023
You always regret missing out on a 500x more than
Experiencing one position go down 99%
Missing out on $500 > Losing $1
Since the name of the game is to attract
Projects with $1bn FDV potential
Then the success metric should not be
The number of projects that successfully launch
It should be
The number of projects that exceed $50m FDV
During the Dec 24-Jan 25 Virtuals wave
5 projects exceeded $100m FDV; AIXBT, GAME, LUNA, VADER, AIXCB
3 more exceeded $50m FDV; SEKOIA, ACOLYT, TAOCAT
Fast forward today; TIBBIR exceeded $100m FDV
And will likely flip AIXBT eventually as TIBBIR is a very strong cult coin whose holder base is completely out of touch with reality (they're gonna hate me for this but I think this is what makes TIBBIR bullish)
IRIS exceeded $100m FDV at launch day
But we haven’t heard much from the team since then (which frankly disappointed me)
And the price action followed the lack of communication/leadership
MAMO and AXR exceeded $50m FDV
MAMO will likely remain above $50m FDV given extremely low float, legit product/team and close CB ties
And AXR is currently the best performing project out of Genesis so far (surpassing BIOS and IRIS recently)
SOLACE and BIOS hit $40m FDV but were down bad last week
Looking at other projects, most of them are stuck at FDVs below $5m
So what is the missing piece?
Why aren’t $1bn potential teams launching on Virtuals?
Lets look at the evolution of Virtuals' launchpad
Virtuals Launchpad V1 was a pumpdotfun fork for agents
The main BUILDER problems with V1 were
1️⃣ Limited marketing support from Virtuals
2️⃣ Snipers buying at ~$50k FDV (instead of Virgens)
3️⃣ $12k required to buy 50% of your token supply
4️⃣ Lack of funding to cover operational expenses
Fast forward to Genesis 4 months later, most of these problems are solved
1️⃣ Kaito yapping + virality from wildly successful Genesis ROIs
2️⃣ Diamond hand Virgens buying at $200k FDV, snipers buying at >$4m FDV
3️⃣ $200 required to buy 50% (if the raise is successful)
Except for one...
FUNDRAISING
Teams give 50% of their token supply
Leverage the marketing, community and all other valuable ecosystem benefits Virtuals provide
But don’t raise a penny in exchange
Sharing trading fees with builders is GREAT
But volume during a bear is typically low
Still could be sufficient for many teams if combined with token liquidations for treasury building
Yet there are some options to solve the fundraising problem upfront to give more certainty for teams
But this usually comes with TRADEOFFS
One tradeoff is bad actors can abuse this
Remember a dev that defined raised funds as “guaranteed profits”
So ideally Virtuals should monitor teams and distribute funds raised on a milestone-based basis rather than distributing it all in one go
Another big tradeoff is that it will push up the entry FDVs for Virgens
And thus potentially lower ROIs
When the raise is at $1m FDV instead of $200k FDV
$1bn is not a 5000x anymore (it is a 1000x)
But on the other hand, your allocation is higher
So instead of turning $20 into $100k
You are now turning $100 into $100k
Changing the entry FDV might open pandora's box
As projects will try to negotiate the entry FDVs
But despite all the tradeoffs, if providing upfront fundraising
Could attract $1bn potential teams
It is worth taking the risk
Post inspired by a quick convo with @Defi0xJeff in SG
CAP STAYS ON 🧢
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