Parsec Weekly #73
Celebrity meme coins: 2024 edition and the relentless march of USDe
Weekly round up
Good morning everyone, this week was a largely choppy week for both majors and sentiment after the prior weeks ETH ETF approval. When this happens we generally get some nice infighting and controversy about whatever the hot topic of the week is on twitter, this week was celebrity meme coins. Never a dull day I tell you, but it does get exhausting, I’m tired boss.
Celebrity coins
A few days ago and almost out of the blue, Caitlyn Jenner launched a coin on Solana. The topic has been super controversial and polarising on twitter. The two sides are:
‘Celebrities launching coins is a net positive and will onboard users to crypto’ - Ansem
‘Celebrities launching coins is a net negative, will not onboard anyone and will end in extractive outflows from the ecosystem’ - Evan, Foobar, CBS, and pretty much everyone with an opinion other than Ansem (He really stuck to his guns on this one lol)
but right off the bat let me say that I’m not going to give an in depth opinion, simply because I haven’t had the urge to think deeply enough about it to form one.
Anyone who has been around through a few different week to week onchain trends will know that when something like this happens, we are about to experience an onslaught of copies until it is no longer profitable for new iterations.
Quick analogy:
Person A creates a new style of water bottle that has a differentiating feature > they start marketing it through social media ads > it goes viral and they sell one million units in a short timespan
Person B copies the design and follows the same route > they go slightly less viral and sell less units but are still successful
Person C, D, E and so on also copy the design and follow suit, but with each iteration the marketing gets more click-baity, the materials and business practices cheaper and more shady until eventually there is no person F because it is no longer deemed a worthy venture
This is basically what we see happen to varying degrees any time something new comes along that is profitable and an instant success. If there is an opportunity to profit, they will come because ambition and greed are parts of human nature.
Some of the earlier and larger examples are OHM forks, high yield food farms and algo-stablecoins.
Smaller examples are the derivatives you see of a popular meme coin or NFT: Anything ending in ‘yacht club’, or the various permutations of DOGE, PEPE and [insert anything]wifhat.
And some more recent and exotic, yet successful metas we’ve seen are things like hamster racing and the artist/influencer presale meta.
With a very high hit rate, Derivatives = diminishing returns
That was a little bit off topic but I thought it good to explain if not only for my own understanding.
Ok, back to what’s actually been happening.
Jenner launched a coin, people were scrambling to figure out if it was real or she was hacked through a series of videos of her and her manager, that had some odd components and were extremely out of touch and grifty. It turned out to be real and the coin went briefly to $40m in the first 24h before topping out. A couple of days later she launched another coin on ETH resulting in the the SOL coin getting nuked which now sits -90% off the high.
We had a tonne of other D-list celebs like Trippie red, Lil Pump and Soulja Boy launch coins and do all sorts of shady stuff like selling at the same time as promoting on a twitter space - Most of these people had already pulled the same shit in 2021/22, and most of their 2024 editions were EXTREMELY short lived, I’m talking 30 minutes.
The one redeeming part of this meta so far has been that whilst all of the above was going on, Iggy Azalea also launched a coin yet is seemingly semi in tune with crypto twitter and it’s been doing ehh, better than the others.
Don’t get me wrong it’s still been a pretty down only chart after the initial pump, but at least it’s gone like this:
She is a good shit poster
She hasn’t done anything as bad as the alternatives
She has been experimenting on chain to get the lay of the land, buying other coins and is now rocking a Madlad as her pfp
She opted out of launching it with this guy called Sahil who has been ‘helping’ all of the other celebs out with theirs (Basically sniping supply, promoting at the same time as dumping and extracting six figures each time, but that’s another story which I won’t get into)
She launched in secret under another name unlike JENNER, TRIPPIE, SOULJABOY etc, she didn’t immediately launch and tweet things like “$FDSHIF is live! BUY NOW! TO THE MOON 🚀”
It will be interesting to see how this all pans out, whether anyone actually ends up being onboarded through these coins. One of the arguments against which is pretty hard to oppose is:
“If they truly were here to help grow the space and not for profit, they wouldn’t launch a coin on the first day and instead just get involved in existing communities” hmmm.
I suppose I’m giving her the benefit of the doubt for now. I’m hoping that she is here because she is genuinely interested in the space, that her coin garners a real community, has longevity, and her entrance turns out to be a net positive.
The funny thing is that while all of this is happening, the platform that was meant for this exact thing is seeing little traction and the coin is down only. I guess social-fi was celebrity coins all along.
The relentless march of USDe
While most segments of the market are chopping around with no clear trend, there are pockets of momentum. However in this case, I am not referring to the price of an asset but rather the supply of the USDe token (Ethena’s stablecoin):
USDe supply has been on a relentless rampage upwards since the beginning of the year and is showing no signs of slowing down any time soon. The supply of USDe recently flipped First Digital USD making USDe the 4th largest stablecoin by market cap as it approaches 3 billion in supply:
DAI will be next in the sights of the hungry Ethena team although that flippening is likely a ways away with DAI supply sitting at ~5.3 billion. There are a couple of reasons for the success and relentless supply growth of USDe. The first of which and the simplest reason is simply the consistently attractive yield offered by sUSDe:
sUSDe continues to pay a consistently high yield at scale and from a source which large capital allocators are clearly comfortable with. When I explain these yields to tradfi people I know, they literally think I am lying to them... earning 33.5% on USD exposure (yes I know the risk profile is nuanced) is insane.
The second reason is related to the incredible work Ethena are doing on the partnerships/BD side. It is rare that a week passes without seeing yet another integration or partnership being announced with USDe, a few examples below:
The power in these partnerships is twofold, firstly they reduce the need for current USDe holders to swap out of USDe as they traverse on-chain opportunities, providing support for USDe supply. Secondly, they implicitly increase the yield for sUSDe. If you make USDe useful on other chains, you guarantee that a portion of USDe supply is not being staked so the yield being generated on the underlying collateral of that USDe is directed towards a smaller pool of staked USDe, increasing the yield.
We continue to be impressed by the Ethena team and the growth of USDe, follow along for yourself on the Parsec Explorer:
USDe - https://parsec.fi/eth/address/0x4c9edd5852cd905f086c759e8383e09bff1e68b3
sUSDe - https://parsec.fi/eth/address/0x9d39a5de30e57443bff2a8307a4256c8797a3497
As always we appreciate your readership, if you enjoyed this article please leave a like and share it around. Have a good weekend and we’ll see you next week!