Trump has opened a new chapter in the crypto world by issuing a token, marking a deep integration of cryptocurrency with American political power.

Written by: Zeke, YBB Capital Researcher

Introduction

On the eve of the U.S. presidential inauguration, on the evening of January 17 local time, Trump announced the launch of his personal token—TRUMP Coin—through his own social media platform, Truth Social. Initially, many mistakenly believed this move was the result of a hack on Trump's account, but within minutes, Trump confirmed the authenticity of the news by retweeting promotional information about the token from his personal main account on X (formerly Twitter).

This was followed by a surge that would go down in cryptocurrency history, with massive amounts of capital pouring in, causing TRUMP to rise from zero market value to a peak of $80 billion in just two days, almost completely siphoning off all market liquidity. The extent of this event's spread was no less than the assassination attempt Trump experienced last year in Pennsylvania, and its surreal nature was akin to him dodging that bullet. I have some simple thoughts to share about this event.

Meme

In the Eastern country where I reside, the ultimate monetization of private traffic often occurs through an app called "Douyin" that live-streams sales. Meanwhile, across the Atlantic, the 47th President of the United States has done something unprecedented; the leader of the "world lighthouse" is measuring his influence and power through an electronic token, accumulating vast wealth for his family. Undoubtedly, we are entering a special era, an era where Crypto can officially be called Web 3.0.

The original intention of the internet was to end the monopolization of attention economy by broadcasting stations and television networks, returning everything to the users, but ultimately its development path has deviated from that original route. The early internet companies that held chat platforms and search engines in Web 2.0 have evolved into the giants we see today, such as Google and Tencent, which have completed their original accumulation and achieved long-term monopolies by controlling vast traffic entrances. Today, ByteDance almost dominates social media in both the East and West. While it is undeniable that short video platforms have provided many grassroots individuals with opportunities to turn their fortunes around, this benefit is still largely shared between internet celebrities and the platforms, with the platforms holding absolute discourse power.

Regardless of how the forms change, the eternal theme surrounding traffic and monopoly is the unchanging melody of Web 2.0 giants. The opportunities for ordinary people to benefit from this are very limited; users in this feast can only continuously contribute traffic and money. Meme Coin may represent a new opportunity. Indeed, participating in Meme PVP is very risky, and it is not without scams, even requiring acceptance of an absolutely unfair distribution like TRUMP's 2:8 ratio. But how many opportunities do ordinary people have to benefit from the traffic of the U.S. President? The process of TRUMP from 0 to 80 may be the only chance.

In the past, I struggled to explain what Meme Coin really was, but now I feel it can be summed up in a few simple sentences: the value of a Meme is the pricing of a certain event, person, or meme at a specific time, just as the market's initial pricing for President Trump was $80 billion a few days ago. On the other hand, Meme is also a division of the traditional internet attention economy; people are keen on things that can capture their attention, and Meme gives users a chance to participate in value distribution during hot events.

Pump

I once mentioned in a previous article that the best form of SocialFi is not a Dapp like Friend.tech with rigid rules, but rather Pump. The reason is simple: people have a need to belong to a certain group, but that does not mean they should accept unfairness for that need. The pricing of Keys in Friend.tech and the complex gameplay surrounding Tokens are the main reasons for its limited ceiling and eventual failure. Looking back at past SocialFi projects, dividing people into tiers based on Token holdings to allocate empowerment and services has also been their downfall.

Small and refined never applies to Crypto that relies on community culture; this is also applicable in many other fields outside of SocialFi, such as the NFTs that Trump has issued. The massive supply of Memes often allows them to quickly gather a giant community; whether you hold a token worth $100 or $10,000, you belong to this group.

In the past, we needed to promote a project on social media through Twitter and then bring users into Telegram or Discord to build a community. In the more distant past, ancient Memes like Doge could only be found through some forums to seek "organization." Pump integrates the advantages of traditional social media based on AMM and returns the rule-setting power to the Creator, which is the main reason for its success. It compresses countless fitting processes, and you can always find a sense of belonging behind the numerous token icons on the Pump homepage.

Retro Trend

Regardless of how you view Trump's issuance of a personal token, we are entering an era where Memes become mainstream, and various things are tokenized. In fact, this is somewhat similar to what I mentioned last year in my article on stablecoins regarding the minting rights in medieval Europe. Compared to the unified standard currency system implemented by various dynasties in China most of the time, Europe has always been in a bulk style, where countries and even various nobles and bishops had the right to mint and issue their own currency.

Although TRUMP is not a practical currency backed by gold and silver, the president has opened this precedent, and many Western celebrities will inevitably join this medieval retro wave. Another point worth pondering is that Trump holds 80% of the tokens. Will this token truly become, as stated on its official website, "Trump Memes aim to express support and participation in the ideals and beliefs represented by the symbol '$TRUMP' and associated artworks. They are not intended to be, nor should they be viewed as any form of investment opportunity, investment contract, or security"? Will it become a pure Meme? An asset for monetizing power?

Among various conspiracy theories, I tend to view this as a grand beginning for the TRUMP family to completely shift from real estate to crypto, utilizing the influence of media, which is an ability ingrained in the DNA of this family. An absurd event can quickly generate momentum, and choosing Meme as this starting point is quite fitting, as it encompasses various eye-catching wealth myths and contrasts sharply with the president's elevated status. I believe that most of the remaining tokens (according to the token release chart, perhaps for three purposes) could be airdropped to voters, donated to pay off U.S. debts, or used for construction. All of these would help solidify Trump as a cultural totem in the U.S. and reverse the public's stereotype of Crypto after the FTX incident. The family's transition from industrial capital will begin with this nearly $100 billion IP. (According to reports from Jin10, Trump's understanding of the family’s crypto projects and even his own token is not high, further confirming that it is the team behind him and his children operating around this IP.)

Ethereum

Solana is undoubtedly the biggest winner of this crypto weekend, achieving a new high in SOL prices and setting multiple historical records for daily trading volume, surpassing Ethereum by several times. In contrast, the Ethereum community appears very desolate, with core OGs increasingly voicing protests against the Ethereum Foundation and the developments surrounding Layer 2.

However, judging by the soaring transaction fees and failed transaction volumes of Solana, crypto is still some distance away from true mass adoption. Therefore, regarding Ethereum, I maintain the same view as before: the route of advancing Layer 2 is simply too fast and too ahead of its time. Within the entire Ethereum ecosystem, there is almost no social heat that can compete with Solana; yes, even Base is extremely weak. The small, high-frequency demands of Layer 1 have completely shifted to Layer 2, and Layer 2 Dapps have not seen any breakthroughs, leaving a large amount of idle block space unattended, with transaction fees pitifully low. This is the current state of Ethereum and also a reflection of the once-promising ETH Killers.

The paradox of public chain development is not limited to the triangle problem; behind the triangle problem lies the contradiction between gas revenue and technological development. To put it in very simple terms, Ethereum can be imagined as a casino that requires an entry ticket. In the past few years, the business was booming, and tickets were in high demand, with some even bidding up prices for investment. The price of this ticket began to rise continuously. The owner realized that the casino was indeed not big enough, so they built a 100-fold larger casino. Given this scale, they reduced the entry price by 100 times, allowing one ticket to be used for 100 entries. As a result, they found that the number of customers remained the same, and the existing facilities did not require such a large space, leading to a decline in ticket prices.

This illustrates the conflict between Ethereum's technological advancement and token prices. Additionally, Ethereum has never relied on influence from social media; rather, it has built a moat from the ICO era to DeFi Summer, so the lack of fresh blood is an ongoing issue.

In addition to the urgent need for reform within the foundation (which I discussed in my article "Why the King of Shanzhai is in a Dilemma"), how to gain an advantage on the social level (making it easier for users to understand various obscure technical concepts of Ethereum and integrating more into traditional social media), how Layer 2 can better respond (buybacks, adjusting DA pricing, ecological 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, and various L2s should have better interoperability and compatibility) are all areas where progress has stagnated at the application level. In the competition among public chains, the details and differentiation are often what matter most.

Crypto 2.0

Trump has ushered in the 2.0 era, and the next era of crypto will also be influenced by this family. What do they want to do? Although the family's first launched project, World Liberty Financial (WLFI), has not yet gone live, we can still glimpse some clues from the proposal forum of this project, where the first proposal is described as follows:

The WLFI protocol will provide liquidity for Ethereum (ETH), Wrapped Bitcoin (WBTC), certain stablecoins, and potentially other digital assets. WLFI will enable users of the WLFI protocol to access the WLFI protocol's Aave instance, which 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 important features of decentralized finance (DeFi). WLFI plans to attract new users into the DeFi space by providing a seamless experience for supplying and borrowing digital assets. Many of these users will be first-time DeFi users, which will help build brand loyalty and awareness for WLFI and Aave, assisting Aave in maintaining its market leadership in the digital asset lending and supply space.

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

WLFI will adopt the same reserve ratio 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 in $WLFI tokens to participate in future WLFI governance processes, liquidity mining, and to promote the decentralization of the WLFI platform. Revenue distribution will be set up through a trustless smart contract that directs the corresponding percentage of protocol fees to the AaveDAO treasury and the WLFI treasury address.

Considering the recent large purchases of various project tokens, WLFI can be seen as an on-chain lending institution created by Donald John Trump Jr. leveraging his father's influence. Selling WLFI tokens with one hand while buying value coins with the other (if there are major projects investing, WLFI's strategy could soar even higher) creates a direct upward spiral. Additionally, WLFI is also aggressively purchasing various domain names. According to information shared by Cointelegraph on Twitter, WLFI has currently acquired daolationship.eth, yatogame.eth, WorldLiberty.eth, trumpcoin.eth, erictrump.eth, barrontrump.eth, and 9290.eth. It is not difficult to see that the future main theme of the Trump family will still revolve around the TRUMP IP, but the areas of involvement will be quite broad. In the next four years, the Trump family projects may exist across various public chains, much like the Trump Organization's real estate spread throughout New York today.

As the curtain slowly falls, an extremely special era is about to arrive. Whether you accept this "crypto president" or not, it must be acknowledged that many significant events that will influence Crypto in the next four years will occur across the Atlantic, and what Crypto can do is either follow along or experience a rebirth that can happen worldwide.

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