Author: Jesse Walden, Founder of Variant Fund

Translation: Felix, PANews

Smart contract platforms have been around for nearly a decade, and what has frustrated many is that as of the end of 2023, the most successful crypto products still treat crypto as the "What" rather than the "How".

Cryptocurrencies as "What" products revolve around assets as investments: users buy, earn, trade, borrow, and leverage assets, including internet money, memecoins, and NFTs, hoping for their prices to rise. The creation and loss of wealth can happen quickly. These extreme situations are embraced by self-proclaimed "Degens" within the industry, but are ridiculed by those in power outside the industry.

What disappoints many is that, apart from being an investment, crypto assets have not seen much innovation. However, these products have strong market fit. Jesse Walden believes that this trend may intensify, and the following will attempt to explain why, as the reasons are subtle and often overlooked.

Variant's argument is that the next generation of internet networks will turn users into owners, particularly asset owners. Just as the internet enables everyone to be a publisher, crypto enables everyone to be an asset owner and, consequently, an investor. You don't need capital to invest; you can invest your time or work in creating art, running machines (such as the DIMO Mobile project that turns car data into assets), or performing physical labor.

From this perspective, cryptocurrencies can be seen as "democratizing investment." Cryptocurrencies serve as native internet value services for many other forms, such as currency, digital art, memes, and early-stage tech projects.

Whether in the crypto space or beyond, democratizing investment is achieved in the most intriguing speculative ways, which also confirms the saying "the most interesting outcomes are the most likely" (Note: Musk's tweet in 2021). Previous instances like GameStop, Dogecoin, Bonk, and Dogwifhat have demonstrated this. What's the deal with that?

The movie "Dumb Money" attempts to capture the cultural context behind this trend. The film provides a perspective that helps people understand the characteristics of the modern investment world, including online accessibility, the impact of social media on information flow, the psychology of prevailing over the strong, and the opportunity to get a piece of the pie (Note: The movie "Dumb Money" is based on the 2021 GameStop stock surge, telling the story of retail investors banding together on forums to fight against Wall Street).

For those in power, this speculative investment seems like a joke or perhaps a strange form of entertainment. For participants, it's a lottery, a sport, a team activity with friends online, or some combination thereof. Like all games, there are expected winners and losers. There are also cheaters trying to gain unfair advantages (which should be punished).

Jesse Walden has asked every crypto entrepreneur he has encountered how they got involved in the crypto space. The most common story he hears is that they started with speculative investments, usually in BTC, ETH, ICOs, DeFi summer, or NFTs. This resonates with Jesse Walden because it's also his story. For many entrepreneurs, including the author, these early investments changed their lives—from having almost no savings to having some savings, which served as a safety net for further ventures.

Suddenly, they also became underlying investors in some leading-edge projects or communities. The initial investment sparked their interest in the underlying technology or ideology, and many found work in the crypto space or started startups. In most cases, the investments did not succeed. But in any other context, paying attention would lead to such cutting-edge financial opportunities.

In extreme cases, for those paying attention today, memecoins still represent the same prospects. The prospect of participating in economic growth has attracted so many entrepreneurs and users, which is important because some users learn from these experiences and think and act like investors. This process often starts with something seemingly absurd, like a "toy," but leads to a thorough psychological transformation, where money, effort, or skills are honed to make a more "serious" contribution to the field. Many people have also been hurt in the chaotic, unstable free market process. Nevertheless, speculative investment continues to drive the growth of cryptocurrencies, which in turn drives technological progress in non-speculative use cases.

Variant's vision for crypto is a fairer internet: the mission is to make 1 billion users owners. This is a long-term, ambitious goal. Variant believes that this path is being paved by an ongoing cultural shift, where more and more users think like investors and want to own what they believe in and understand (such as memes used in daily life). This means embracing memecoins as part of internet native culture and inviting people to invest/use/contribute to projects.

By the end of 2023, speculative investment in crypto has once again become the market focus. Speculative projects have the most activity, users, and attention. Meanwhile, permissionless tracks continue to develop and innovate around non-speculative use cases. It's not a question of whether this will happen, but rather when the latter will have an impact, validating the speculative enthusiasm surrounding the former.

Even in the case of failure, avoiding speculation can seem "high status," while embracing speculation is seen as a "low status" path to success. The reality is more subtle: speculation can be a powerful strategy that allows users to step through the door and invest in the success of projects and the entire field; it is not just an end but also a means.

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