New Modalities for Issuance and Trading

It is effectively impossible for a regular person to create a new tradeable asset on traditional financial rails. Crypto trivializes this. Today, anyone in the world can create new assets on Solana in a few seconds for ~$0 cost.

Consequently, there has been an explosion in user-generated assets (UGAs). The idea of UGAs has been around in crypto for some time, first in the form of social tokens (e.g., BitClout, FriendTech, etc.), and more recently in the form of memecoins (pump.fun) and content coins (Zora).

The general trading modality on secondary markets has not really changed since the advent of the internet. The earliest online brokerage services from 30 years ago look roughly like Robinhood, Coinbase, and Phantom do today. Specifically, users type in the ticker (or contract address) for the asset that they want to trade in a search box. Asset pages have charts, some news, and of course, buy and sell buttons.

This pattern is common across all commerce, not just financial applications. eBay and Amazon have this same basic flow as well.

Crypto rails make it trivial for software developers to embed asset creation, along with buy/sell functions in any software. Because of the flexibility provided by crypto rails, entrepreneurs have built new launchpad products and trading modalities in the last couple of years that meaningfully deviate from the traditional Phantom workflow. This is a pretty under-appreciated evolution in trading, and we want to highlight some of those observations in this post.

Our partner Shayon touched on a variation of this idea a year ago in his blog post on Publisher Exchanges.

There are a few trading modalities and launchpads that have gained meaningful traction in the last couple of years, and a few more areas that are interesting but haven’t broken out yet:

Launchpads/Asset creations systems:

• Pump.fun
• Zora

Trading modalities

• Single-player telegram bots
• Multiplayer telegram bots
• Doomscroll feeds
• Trading terminals
• Livestream tokens
• Tinder-inspired swipe UIs

Launchpads

The first crypto launchpad was Coinlist, which pioneered the SAFT and an attempt at compliant ICOs with the Filecoin sale in 2017. Coinlist has pivoted over time, but continues to support new launches today, including a recent validator sale for our portfolio company DoubleZero and a community sale for our portfolio Pipe Network.

Later in 2019, Binance built their Launchpad product, which continues to operate to this day. They selectively choose which assets to feature.

Through the L1 launch phase of 2020-2022, dozens of teams built launchpads, primarily as a land grab on new L1s such as Solana, Polkadot, Avalanche, and more. To the best of our knowledge, most of these faded away.

Suffice to say, none of these launchpads cracked the code. But in early 2024, pump.fun succeeded.

Since cracking the code on issuance, pump.fun has begun to move both down and up the stack, launching their own AMM and novel trading modalities, respectively.

We find it unlikely that the only possible mechanism to engender trust for new memecoin launches is the bonding curve + graduation mechanism that pump.fun pioneered. We continue to look for teams with unique insights about market microstructure that can design new or better launch mechanisms and trading modalities.

More recently, Zora has tried to unlock consumer behavior around content coins, although it does not appear that this idea has found PMF just yet.

Trading Modalities

Below we explore the landscape of existing trading modalities.

Single-Player Telegram Bots

Popular single-player Telegram bots include, for example, Banana Gun, Unibot, Bonkbot, Trojan, and Maestro. These bots first exploded in popularity in the summer of 2023. On the surface, they are confusing to most users who are used to a Phantom-style interface. These bots have very poor portfolio management views because they are constrained by the Telegram API itself. However, they tend to excel in a few areas:

1. Convenience — most users of Telegram bots spend a lot of time in Telegram chats already, where they hope to find some trading signal. When a message comes through in another chat, they want to act as quickly as possible. Opening a 3rd-party wallet, such as Phantom, in our experience, will add at least 5, if not 10, seconds to execution. Telegram bots typically facilitate execution within 1-2 seconds. 2. Sniping — building on the convenience and understanding of the psychology of traders who use Telegram bots, many Telegram bot developers have added the ability to automatically snipe new token launches. These users want to be first.

It’s fairly obvious that these Telegram bots—both in single player and multiplayer configurations—can implement LLMs for more advanced transaction types, including borrow/lend, looping, depositing into vaults, and more. There is a lot of excitement about this sector, but in our view the advent of LLMs does not really change the modalities for trading; LLMs just provide more power and flexibility within these new modalities.

It’s also worth noting that major wallets, such as Phantom and BackPack, are likely going to integrate LLM-bots in the near future. These may blur the line a little bit between traditional brokerages/wallets and Telegram bots, but we do not expect that they will materially impact focused Telegram-bots.

Many of the early Telegram bots have broadened their product surface area. For example, Unibot has expanded into a full blown trading terminal.

Multiplayer Telegram Bots

The best example of a multiplayer Telegram bot is PVP. PVP’s Telegram bot lives in a group chat along with you and your friends. You can issue commands to the bot such as /long BTC and it will execute that command instantly (as a BTC-USD perp), and then it will broadcast that message along with the BTC-USD price chart to the group chat. It will then provide a quick option for your friends in your group chat to either copy trade or countertrade you.

The key value proposition of PVP is not the trading. It’s the people in the group chat. The primary purpose of the PVP group chat is not about discovering trading signals. It’s about camaraderie, competition, and comedy. The group of friends provides perpetual emotional volatility.

Ride together, die together. The solidarity, camaraderie, and competition that naturally emerges in this modality is very special, and impossible to replicate. Once users become engaged, retention rates stay high.

Today PVP is primarily trading perps on Hyperliquid. But it’s easy to imagine other multiplayer Telegram bots expanding to include memecoins, assets with fundamental theses, equities, and most obviously, sports betting.

Doomscroll Feeds

We use the term doomscroll as endearingly as possible. Doomscroll feeds dominate the Internet today: Twitter, Instagram, TikTok, etc. They are the ultimate content aggregators.

Farcaster, Lens, 0xppl, Bags, and most recently Zora have been trying to build a new doomscroll feed that looks a lot like Twitter or Instagram, but with crypto-native features (such as trading) built in. So far the challenge for all of these networks has been the lack of interesting content. The network effects of Twitter, Instagram, and TikTok have proven nearly impossible to overcome.

Zora is arguably the most interesting of this bunch, partially because it combines asset creation and a new trading modality. Zora is building an Instagram-inspired feed where each piece of content has its own memecoin with 1B supply, and 1% automatically given to the creator of the post. Zora leans most strongly into the idea of creator monetization; however, the challenge at least so far is that it’s not clear why anyone should collect any of the Zora content.

To the best of our knowledge, none of the traditional crypto wallets (Phantom, MetaMask, Backpack, Rainbow, etc.) have tried to introduce a doomscroll feed of any form. Coinbase Wallet announced that they will integrate Farcaster with an upcoming release; however, that is unlikely to solve the content quality + quantity problem that Farcaster faces.

A handful of teams—including token.com and Involio—are trying to curate specific content feeds that crypto traders want to see, and to embed trading execution alongside that content discovery. These look a lot like TikTok, but with crypto-trading layered in naturally on top. This is an interesting design space. Rather than trying to create an entirely new content aggregator, these companies are trying to layer on top of existing aggregators (though given 3rd party API support from aggregators, this can be wonky in practice).

Vector built a doomscroll product where the atomic unit of the feed is not a traditional social media post (text/image/video), but rather a trade. This is, in our view, the most interesting approach to building a crypto-native doomscroll product, as it encapsulates the idea of “put your money where your mouth is” far more than content-first doomscroll feeds.

A big challenge that Vector faces is populating the feed with interesting trades (and therefore, interesting content). We suspect that the optimal doomscroll product intelligently uses AI to pull data from multiple sources—not just on-chain trades—to automatically populate a feed with interesting content.

Doomscroll feeds, when they work, produce massive outcomes. They naturally capitalize on the dopamine-cycle, creating incredible engagement. Coupled with retail order flow, a doomscroll crypto feed is likely the largest consumer opportunity in the crypto space today. It is also the most difficult to nail.

Trading Terminals

No trader is on a particular interface by accident — each trader is playing some specific game, and they want tools to help them win that game. The user who downloads Moonshot after seeing moo deng on TikTok is on Moonshot for a reason, and the trader scalping volatility based on macro flows is on Deribit for a very different set of reasons.

The memecoin game is unique, and a lot of conventional wisdom about market structure does not apply to the makers and takers in that game (for example, the claim that sophisticated traders care about best execution — the most profitable players in this game are regularly paying 10% slippage to get into a block three counts ahead of their competitors). If we were to be extremely reductive about the inputs to success in the pump.fun trenches, the only two variables that matter are speed (to discover an asset, and to land transactions around it) and quality of social signal (what is the number and quality of eyeballs looking at a particular asset).

Ultimately, memecoins are financialized representations of attention, and there is a constantly evolving transaction supply chain competing for that attention. Issuers, KOLs, snipers, retail — for better or worse, they all sit at some point in that supply chain. The primary job-to-be-done for each of these terminals is to give traders everything they need to parse this supply chain better than competing products, and to act within it quickly. This means two things: extremely fast transaction landing (usually through some combination of Jito bundles and custom RPCs), and extremely detailed social/address analysis (usually through labels around popular addresses and supply concentration metrics, and generally very high performing chain state indexing in addition to a plethora of off chain social/discovery metrics).

The most important lesson learned from watching this process over the last ~2 years is that traders have no loyalty to interfaces they trade on.

We think the question now is not so much "can someone build a better Axiom?” If a new team can land transactions faster and provide more meaningful signal somehow, traders will switch. The more interesting question is "how does the memecoin game evolve as there are new types of assets and new types of traders?", and there will be interfaces that serve the game as it evolves. It’'s hard for us to believe that the memecoin attention market structure has achieved a stable equilibrium. New prosumer venues for trading will skate to where the puck is heading — market structure will change, and there will be new opportunities and new entrants.

Livestream Tokens

One of our portfolio companies, Unlonely, has played with ideas at the intersection of livestreaming and tokens. Late last year, the pump.fun team launched (and then suspended, and then re-launched) a livestream product that is gaining traction.

Livestreaming is an interesting product surface for trading tokens because the streamer can engage in real time with the audience. Streamers can encourage their audience to buy or sell based on specific actions, or to get everyone to work together to achieve some shared goal. The most common structure in livestreams is “streamer will do action X if token market cap hits $Y.” The biggest problem with this mechanic is that it creates a ceiling for the token price.

One compelling example here is Fishtank, which is effectively a real-time, interactive reality show. Over a six-week season, a rotating cast of contestants is confined to a fully surveilled house—every room equipped with always-on cameras. Audience members can purchase tokens to alter the environment, deliver text-to-speech messages, trigger challenges (and sometimes remove contestants’ access to basic comforts like beds). This interaction is built into the core of the experience, and turns spectators into active participants who shape outcomes on the fly.

The underlying thesis here is that content can be made programmable, and audience input can dissolve the boundary between producer and viewer. We think of this as an emergent category of media — livestream tokens are traded in response to live media and trading activity simultaneously influences the media.

The behaviors around livestreaming are still nascent, and it’s hard to say that anyone has truly found product market fit yet. However, we think there is a unique surface area here for innovation, especially when coupled with other longstanding ideas like social tokens.

Tinder-Inspired UXs

For context, Tinder-inspired UXs are experiences in which left/right swipes execute a trade. The trade could be a prediction market, a sports bet, or buying/selling any asset. The core insight here is that the swipe-first UI, a proven modality, encourages rapid decision making.

We believe that Tinder-inspired UXs will work particularly well for short-horizon prediction markets. The most obvious example of this is event contracts for whether the next play will be a run or pass in football. You can imagine companion-apps being built for all kinds of live broadcasts from the Oscars to the nightly news. There is a strong incentive for broadcasters to build these supporting bet experiences as a way to increase engagement and produce more revenue (by monetizing order flow).

Kyle tweeted about this idea a few months ago and got quite a few responses. We continue to believe there are large and interesting businesses to be built leveraging the swipe-first design paradigm that encourages explicit action. Examples include Hookt, Memelut, and Guess.best (not swipe but head to head).

Tap to Trade

On Euphoria, placing a bet is as easy as tapping your screen. With just a tap on your smartphone, the user places a bet that an asset’s price will hit a specific level at a specific time. In traditional finance, this is known as a barrier option – a sophisticated product typically reserved for high-net-worth clients on Wall Street. Robinhood is trying to disrupt this with a similar, recently-launched feature they call trade from chart.

Euphoria strips away the complexity and delivers this powerful mechanism in a seamless, gamified interface. It’s fast, it’s engaging. The crypto community has been waiting for structured products since 2021, and tap to trade UX might actually be the unlock.

One can also see this tap-to-bet mechanic to power real-money mobile games. Each tap is a wager, and crypto rails unlock instant, secure payouts to winners.

New Modalities, New Potential Unicorns

As trading layers into all software, the boundaries between culture and finance will blur – ephemeral assets born from trends, narratives, and internet-native creativity. In this world, attention begets liquidity. And liquidity begets more attention.

These applications will become the consumer’s go-to for discovery, execution, and entertainment. The apps that nail the user experience across different modalities will dominate order flow, and in doing so, be in the best position to both produce meaningful revenue and ultimately produce exceptional outcomes.

These applications aren’t just wallets that store assets and provide a portfolio overview – it’ll be where users discover, trade, and socialize. Trading provides far more signal than likes and reposts because it requires users to take financial risk. Ultimately, AI algorithms will look to incorporate signals from trades to figure out what to show users, even if a user has trading disabled in their doomscroll feed.

The future of finance lives across all of software, not just in dedicated portfolio viewers.

We are interested in novel trading modalities. If you’re building in this design space, please reach out to (Vishal, Shayon, Kyle).