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The Art of Making Money: Memecoin Economy Examination

making money
By Luigi Savarese
Luigi Savarese

5 Min

August 21, 2023

In the expansive and diverse Web3 universe, a new phenomenon has caught the public eye. Rhett Mankind is a digital artist based in Melbourne. He struck a rich vein with his daring blend of art and finance - TurboToad, a memecoin. This venture provides a captivating example that allows us to scrutinize the flourishing memecoin economy and its role within our financial landscape.  

TurboToad Raise and Popularity

Screenshot of Rhett Mankind's YouTube video "How I used AI to make a $20M memecoin”

Mankind, a seasoned player in the digital art realm, dared to ride the waves of two dominant currents. One is the burgeoning interest in memecoins, and the other is the technological excitement surrounding AI. With a $20 ChatGPT subscription and $69 in his pocket, Mankind set out to launch a memecoin. At the same time, he was sharing his journey live on Twitter from April 23. Each step was documented, and his Twitter audience was invited to partake in the process by voting on various aspects.

His initial budget was soon surpassed. Moreover, to check the AI-written code, he depended on his Twitter followers, who volunteered their skills and time. When funds ran dry, Mankind once again consulted ChatGPT. It led him to crowdsource funds for his project by offering $TURBO tokens in exchange for donations. In just a few weeks, TurboToad's market cap skyrocketed to an awe-inspiring $200 million. This implies that Mankind’s personal stash of 9 billion $TURBO has likely fluctuated between $5 million and $33 million! 

$Turbo/USD Trend, Coingeko

Memecoin Economy Danger & The Gamification of Financial Markets 

This scenario poses intriguing questions. The memecoin sphere is renowned for its volatility and speculative nature. Its values swinging dramatically based on internet trends and investor buzz. While TurboToad's achievement is commendable, it's crucial to remember that it is, as Mankind himself describes, a "creative experiment". There is no tangible asset, no dedicated team, no strategic plan, and no certain future for this memecoin. We find ourselves at a crucial crossroads.  

The ascent of memecoins and their explosive price surges present a puzzle for the financial community. At the core of this issue is the gamification of financial markets. It is a trend that is especially pronounced among the younger demographic. Memecoins, TurboToad included, do not follow traditional economic fundamentals. Their prices often soar due to speculation and hype, not intrinsic value or physical asset backing. The risk tied to these tokens is significant, as their worth can swing wildly in short timeframes. This high-risk, high-reward dynamic is more akin to a high-stakes gamble than a prudent financial investment.  

This gamification of financial markets could potentially jeopardize the financial well-being of younger generations. When investment is viewed as a game, the complex and serious aspects of financial markets can be overlooked. Investing becomes a quest for immediate gains and rapid wealth accumulation rather than a long-term strategy rooted in meticulous research and risk evaluation. While financial democratization is a positive shift, it is crucial that it is accompanied by proper education and responsible investment practices.

Memecoin Economy Innovation and Integrity  

The allure of memecoins and the gamification of investing can push inexperienced investors towards impulsive decisions. Furthermore, it might expose them to significant financial losses. Andy Warhol once said, "Making money is art, and working is art, and good business is the best art."  

Andy Warhol/Original work "Test signed dollars"

Mankind's audacious blend of art and finance is undoubtedly engaging and innovative. However, it's essential to evaluate the implications of such ventures critically. This isn't merely a riveting narrative about an artist and his AI assistant. It's a litmus test for how our financial system can adapt to the unique challenges and opportunities brought about by the digital era. As Warhol posited, making money can indeed be an art, and in our current digital age, new and innovative forms of this art emerge. However, it's equally essential to remember that good business—the best art, according to Warhol—also involves responsibility, integrity, and foresight

The growth and popularity of memecoins like TurboToad raise important questions about market dynamics, investor behavior, and regulatory frameworks. They represent a new form of asset, one that is driven more by social and cultural trends than by traditional economic indicators. This shift has significant implications for how we understand and navigate financial markets. As educators and leaders in the field of finance, we should stimulate our students and colleagues to engage in these pivotal discussions. It's an opportunity to shape the future of finance in a world that is becoming increasingly digitized and interconnected

We can appreciate the artistry and ingenuity in ventures like TurboToad while still critically evaluating their implications. After all, as Warhol would likely agree, the best art—whether in finance, business, or other fields—is not just about making money, but about pushing boundaries, questioning norms, and driving meaningful change. As we move forward, we should encourage responsible innovation in the financial markets and prioritize education and risk assessment, particularly for the younger generations. It's crucial to ensure that the 'art' of making money doesn't become a high-risk game, but rather, remains a well-thought-out strategy underpinned by understanding, responsibility, and a long-term vision