Since the crypto market cap peaked in mid-2022, the crypto world has lacked a strong new narrative that excites the venture capital and tech communities. Meanwhile, generative AI has been attracting all the capital and attention with game-changing models like GPT and Stable Diffusion.
However, since the beginning of April, we have seen a surprising new wave of memecoin speculation. This trend is mostly just another zero-sum game that traders play to fill the void left by a lack of true breakthroughs in technology or use cases. But there is something else going on, too: Generative AI has been fueling the emergence of a new generation of meme coins.
Consider what is happening with Turbo Toad token — a memecoin that seemingly came out of nowhere to reap a fortune for its founder, Rhett Dashwood. A visual artist with no coding experience, Dashwood created the memecoin — even coming up with its name — with the help of ChatGPT.
In a tearful monologue on his own YouTube channel, Dashwood described his previous struggles to sell his digital artwork in a stagnant market. He came up with the idea of using artificial intelligence to create a memecoin, a process that he documented on social media. With a budget of only US$69, he tasked ChatGPT-4 with helping him create a successful meme coin, aiming for a top-300 ranking on CoinGecko while avoiding any illegal activity. “I leaned into AI all the way,” Dashwood said, on video.
Despite having no knowledge of coding or smart contracts, with the help of ChatGPT, Dashwood was able to develop his memecoin’s concept, write the white paper, build the smart contract, develop its tokenomics and even create a liquidity pool on a decentralized exchange.
Only two weeks after Dashwood’s initial ChatGPT prompt and less than a week after its launch, his memecoin TURBO reached a total market cap of over US$70 million dollars.
Generative AI tools are now leveling the playing field for creators, giving everyone an opportunity to create their own memes and launch their own coins, even if they do not have any coding or design skills.
The case of Turbo Toad hints at a future where tokenization is a wealth-creation tool that anyone can use. However, this also means that there will likely be countless more memecoins launched after this, most of which will not receive any public attention.
There will be a wealth of opportunities at the intersection of AI, meme and crypto, but mindlessly betting on memecoins will unlikely be one of them. When the barrier to create, replicate and remix memes is virtually non-existent, most memecoins can hardly have any moat.
So what opportunities will arise when AI democratizes the creation and tokenization of memes?
When we look back at the democratization of media in the Web2 era, which enabled mass users to create text, images and videos and publish them on the internet, UGC — or user-generated content — became the force that reshaped the internet ecosystem. Now with AI assisting users not only in creating content but also in writing smart contracts and designing tokenomics, UGC — or user-generated coins — may become a defining force of the Web3 ecosystem.
While building a decentralized finance (DeFi) protocol for million-dollar transactions may remain a professional endeavor, launching a memecoin that has cultural resonance with a specific audience is already within the reach of everyday users, as we see in the case of Turbo Toad.
User-generated content has already created superstars like Justin Bieber, who started his career by posting videos on YouTube. But more importantly, it has empowered anyone to create content, earn attention, establish influence in a community, and sometimes monetize that attention and influence.
User-generated coins might have impacts of similar magnitude. Yes, some memecoins might reach a million-dollar market cap miraculously. But the real change is that anyone will have the opportunity to launch their own personalized memecoins based on their interests, hobbies or affiliations. This could lead to the formation of niche communities with unique, tailor-made tokens that facilitate interactions and co-creation within the group.
By combining the content-creating and code-writing power of AI, the cultural resonance of memes, and the financialization capabilities of crypto, user-generated coins will have a variety of ways to create substantial value.
For example, they could become a powerful tool for crowdfunding and patronage, allowing content creators to raise funds for their projects by tokenizing their work. They could also be used to incentivize community members to participate in co-creation or to promote the meme project in their social circles.
Looking ahead, while the current generation of meme coins may be a passing trend, the democratization of meme creation and tokenization has real potential to unlock exciting opportunities in the long run. User-generated coins could provide fresh avenues for individuals and communities to interact, collaborate and create value in Web3.