The memecoin scam and its impact on the Ethereum culture

The relentless and deceitful promotion of worthless tokens poses a significant threat to the reputation of Ethereum .

The memecoin culture is populated by individuals in the crypto industry who are excessively driven by social influence, dwelling in what can be referred to as the Influencer Pit of Despair. This is a dark and deep pit where fraudulent influencers compete against each other to exploit unsuspecting retail investors. You can identify this Influencer Pit through platforms like Twitter Spaces (oh boy, this is wild out there), but not just any Space – it feels more like being trapped in a disheartening state of mind while being in a Johannesburg dive-bar without your wallet.

There exists a fundamental paradox within Ethereum: the fact that anyone can utilize the Ethereum blockchain also means that anyone can use it. If Ethereum were compared to a local park, memecoin enthusiasts would resemble an unruly gang of teenagers playing music on obnoxious Bluetooth speakers.

Now, picture yourself diligently working on projects like Eigen Labs or zero-knowledge (ZK) proofs at Matter Labs , or maybe you're an Arbitrum delegate or implementing LayerZero Labs to scale your chain. While you invest your efforts in something valuable, it becomes frustrating to witness brainless individuals making a fortune simply by posting a tweet.

Memecoins will always have a presence on an open-source network like Ethereum. However, for the cryptocurrency industry to achieve widespread adoption, it is crucial to collectively address the most detrimental forms of profit-seeking without substance.

There is a sense of hopelessness in the memecoin scam, offering very little in return. For instance, when the pepe ($PEPE) token was created, the team openly admitted that the project was based purely on memeology, riding on the popularity of a rehabilitated frog. At this stage in the industry's cycle, returning to such meme-based projects feels hollow, as if we invented the wheel but only use it to move in circles.

And those Spaces... Your ears will bleed instantly. Memecoin Spaces seem to be obligated by some unwritten rule to have the loudest and most obnoxious hosts for no apparent reason. The typical Space will have 3+ speakers, who have equally terrible investments in NFTs as their PFPs, confessing to various wrongdoings within the span of an hour while being either drunk or really stoned. In all likelihood, 75% of the audience will have purchased something from Supreme and suffered losses as a result.

Before we feel disheartened, let's remember what the Influencer Pit actually does. It lures in retail investors, convincing them that financial nihilism is the only truth. It reinforces the idea that blockchain, cryptocurrency, or web3 are solely about speculation. It implies that your only option in life is to hustle relentlessly and hope you don't become a victim featured in a CoffeeZilla video.

The latest trend in memecoin scams is painfully banal. It's such a low-level trick that it's embarrassing to even discuss. Influencer grifters, often double-dipping from previous memecoin promotions, simply post an Ethereum address and request people to send ether (ETH) to it. One can only hope that the IRS does take an interest. The implicit wink and nod in this scam is the explicit promise of no return. Sending a transaction like this is essentially equivalent to setting your physical wallet on fire.

In Ethereum, there is no formal policing. In a decentralized and permissionless culture, there is no authority that can hold you accountable like the law would in the real world.

Determining the appropriate punishment for these offenses is a challenging task. Perhaps first-time offenders should be required to attend Bitcoin Miami while wearing an Ethereum T-shirt. Serial offenders, on the other hand, might necessitate harsher penalties, such as being trapped in a dark room forced to listen to a Richard Heart monologue on repeat for up to two years. Alternatively, we could gather all the influencer grifters on an isolated island. We could create a fake conference called NFT Pitcairn Islands and establish a DAO with the sole purpose of preventing any escape, using the treasury funds to bribe the islanders into distracting the influencers with shiny objects.

There is undoubtedly a significant problem here. Influencer grifters openly state, "you will receive nothing," and somehow expect people to be content with that. But beneath this facade lies a much darker message: We can do nothing. This is the inherent paradox of permissionlessness in blockchain communities. Permissionlessness is a non-negotiable and crucial aspect of Ethereum culture. Without it, Ethereum wouldn't exist.

Since technical solutions are not feasible, our only option is to explore social alternatives. Let's envision Ethereum as a cosmopolitan city. It has its Municipal Hall where developers, organizers, and researchers congregate. It has a finance district dedicated to decentralized finance. There's a bohemian quarter bustling with NFTs, and there are everyday individuals residing on Main Street. However, it also has a shady downtown area where the grifters thrive.

Downtown isn't as dire as Skid Row, where individuals may be plotting to manipulate Bored Ape owners. Similar to any city, you can isolate yourself in safer areas and hope that the authorities will address the issues. However, in Ethereum, there are no authorities. In a decentralized and permissionless culture, there is no one who can hold you accountable like the law (although governments can intervene outside of Ethereum).

Consequently, we must create an atmosphere and cultural context where the principles of long-term regenerative culture overshadow the short-term degenerative culture, relegating it to an immature phase. The "regens" within Ethereum culture are individuals dedicated to ensuring that the technology generates positive impacts on society over the long run, while avoiding negative externalities. How can we, as Kevin Owocki, the founder of Gitcoin , puts it, guide more Ethereum participants towards regen rather than degen?

If the idea is to onboard the masses, the crypto community will need to explore ways to actively steer people away from degenerative behavior and encourage regenerative actions. You just don't build new paradigms on the premises of fraud. Participants from each stakeholder group, including validators, developers, application builders, and everyday users, need to engage in open discussions to find solutions.

One crucial outcome is a sense of responsibility for the protocol across the entire Ethereum community, emphasizing the importance of social matters alongside technical considerations.

Alternatively, we can continue to send ETH to the grifters, but you can kiss bye bye to your new paradigm.