Polychain CEO: Transforming popular content into on-chain assets for trading

The TOKEN 2049 Singapore event officially started today. At the OKX Main Stage, Polychain CEO Olaf Carlson Wee delivered a keynote speech titled “Memecoins as an Information Market.” He stated that cloud services are gradually being monetized, but the efficiency of this process is very low. He believes that posts can be “traded” in a way similar to trading currencies. If every post can become a “Token,” then the future competitive market for value will not be a zero-sum game, but will have positive external effects that can actually organize the entire world. Opaque algorithms will be replaced by market-driven prices, allowing content creators and traders to directly benefit from the profitability and popularity of the things they participate in.

The following is the full text of the speech.

Today I would like to talk a little about a trend I have observed in the cryptocurrency space over the past few years. These are the main points. I have never seen such a large interest gap arise between institutional cryptocurrency investors like myself and retail participants in cryptocurrency like Polychain. I received some messages from friends who had never been involved before. Just because I have been interested, they started to take an interest.

Moreover, I believe that when it comes to institutional investment in cryptocurrency, people quickly reduce it to gambling speculation, zero-sum games, and so on. However, I feel there is something deeper happening here. I have been thinking about this for the past few years because so many people are interested in cryptocurrency; they do not come from online, they are not transitioning from online poker or online slots to cryptocurrency, nor do they think the cryptocurrency market is a hot investment area.

I believe that there are certain overlooked factors in the investment field, and retail investors seem to be able to sense them intuitively, even though they may not be able to provide a precise explanation. Therefore, for the past few years, I have been thinking deeply about this issue. I think there is a crucial missing link in our understanding of the reasons behind it. This missing link is closely related to social effects. In fact, this is not simply individual speculation, but rather akin to participating in a large multiplayer game, in which investors are both teammates and competitors, collaborating and competing with each other to drive the market's operation.

So I think I want to try it out and see if these markets have some sort of social laddering, which I believe is actually the case on social media. Therefore, I see several ways this situation can develop, namely the merging behavior between people on social media and those in mainstream training. The platform where this phenomenon can be observed first is TikTok. Sometimes, people comment under certain videos claiming they have invested in a certain Token, when in fact they have not made any real investment. This behavior is more of a mock expression. In the early stages, I noticed such content. I believe this type of content is very likely to spread rapidly and widely.

Therefore, this phenomenon contains a cultural consciousness regarding the awareness of being able to detect internet content with viral potential in advance. People believe that such content is likely to spread quickly and widely, even though it has not yet reached a viral level. Do you agree with this point? Similarly, in the mainstream cryptocurrency market, it is often seen that people discuss tracking specific addresses. However, they often do not have a precise understanding of who the owners behind these addresses are.

They may not fully understand the reasons for buying and selling assets at these addresses. Nevertheless, they are still tracking these addresses. In fact, when people trade in these markets, tracking these addresses is used as a strategy. It is worth noting that on social media and mainstream platforms, even when just discussing cryptocurrency investments, the phenomenon reflected behind the act of 'following' is remarkably similar. So, is there some kind of mutually reinforcing relationship between the attention economy, social media, and the market economy presented in its most basic form?

So, can we to some extent replace cloud services? This is the development direction of Thera Cloud. It can be said that platforms like applications or YouTube directly pay creators, for example, companies pay creators for having popular content on the platform. Fans tipping content creators or paying for some premium services provided by creators is also becoming increasingly popular.

While this points to the current development trend to some extent, I find it interesting that most of the influence generated by those with a large following is actually monetized outside of the platform, so they are not directly compensated on Instagram for having a popular account. They often sign some off-platform contracts to promote a brand, share certain content, or even launch their own influencer products.

In the current landscape, cloud services are gradually being monetized, but in my view, the efficiency of this process is quite low. In the existing social relationship networks, people tend to participate in derivative contract trading outside the capital system. For example, even if someone has up to 50 million followers on the Instagram platform, they do not directly receive economic returns from that platform. To convert the influence they have accumulated on this platform into actual gains, they often need to actively contact certain energy companies or skincare brands, and try to reach cooperation agreements with them.

Clearly, I think this is a highly inefficient market. It relies on one-off negotiated contracts between influencers and certain brands, which is extremely costly and has very poor liquidity. There are also the platforms or protocols themselves. For example, in the case of Instagram, they have no understanding of the scope and scale of these derivative contracts and cannot see how the fan profiles generated on their platform are monetized in other ways.

And they really have no idea how this monetization happens, nor do they understand its scale. Of course, they also do not take a cut from it. So, if you are one of those platforms that allow influencers to establish social graphs, when influencers monetize these graphs, you will not be able to take a share. I also believe that, overall, in these social graphs, content curation work is relatively low paid. Therefore, we are moving towards a direction where creators earn directly from the platform, which is the so-called derivative contracts gradually penetrating through the platform.

It should be noted that only after streaming platforms took over did users begin to receive rewards simply for being popular. However, it is somewhat ironic that these platforms pay users directly to make them popular, while the algorithms that determine this popularity are set by the platforms themselves. So, I find it a bit strange because it essentially resembles a planned economy, just dressed in the guise of a market.

So I think this trend of derivative contracts, monetization, and transfer to platforms will continue. But it's a bit strange that at the same time, these platforms decide which content will stand out through their proprietary algorithms. So this raises questions about the cryptocurrency market, right?

Can we “trade” posts as if we were trading currency? In other words, people could invest in specific posts. For example, I would be willing to “bet” on the popularity of a particular post. And if I could get ahead of the game in building a social graph around this scam and correct it, I would receive rewards from other participants in this market, similar to the situation in cryptocurrency where later participants are essentially paying for your foresight. So, can a reward incentive mechanism be established on these platforms that replaces the proprietary algorithms that decide which content stands out with actual market forces? This way, there would be no algorithms.

In fact, it is the market participants and traders who decide what content you see on social media. Then, once we organize this information flow through market forces, can we incorporate the payments made to influencers into the platform system, so that you no longer need to obtain rewards from the information platform through these derivative contracts or by reaching some kind of agreement with a face on the screen.

Next, let’s compare this type of cryptocurrency market with content markets. In discussions with investors who almost daily trade new coins, I learned that their primary method for achieving excess returns is to track those investors who are already profiting. In fact, there exists a decentralized social graph based on financial conditions, in which people invest by following certain wallet addresses and potentially mimicking the trading actions of these wallets. These followed wallets may also be monitoring other wallets, and others can also mimic these trading operations.

Therefore, there exists a social graph here that overlays the actual addresses participating in these cryptocurrency transactions. It can be said that Twitter in the cryptocurrency space is a rough and inefficient version of this concept to some extent. On this platform, people follow others, partly to obtain relevant content and partly to expect investment returns. In reality, people make profits on this platform by promoting various assets and so on. However, this model is currently quite rudimentary and inefficient, and I believe it has great optimization potential.

So, how can we find key points similar to copy trading in actions like forwarding content? In this type of market, a feasible profit strategy is to pay attention to and invest early in valuable posts. Similarly, in the trading field, people can track certain profitable traders or learn from their trading patterns, right? Specifically, it means focusing on wallet addresses that can continuously generate profits. Likewise, in the content field, focus on publishers whose published content is likely to spread widely and attract attention.

So, for these two types of graphs, how can we integrate them into a unified social graph, merging the address information focused on profit acquisition and the account information focused on content acquisition? I believe this largely depends on how to make the posts themselves possess attributes similar to cryptocurrencies, allowing for transactions under the premise of bearing financial risks. For example, in the third conceptual model, we can imagine that posting an article requires spending 1 dollar, and this value represents the initial worth of the post; each repost is equivalent to investing 1 dollar into that post.

Therefore, creators and investors can proportionally earn profits from the future popularity increase of posts based on their participation in this system. Furthermore, to transform it into a socially meaningful application, an automatic trading mechanism is crucial. Under this mechanism, users do not need to manually sell the posts they invested in; the trading process will be completed automatically. A social graph built on the aforementioned mechanism allows followers to receive timely notifications when users post new content; it can even be set to automatically forward, further expanding the reach of information dissemination. Similar to when the addresses you follow are equipped with smart programs that provide effective trading signals, the system will automatically execute purchase operations.

Therefore, for end users, the key to profitability here is to participate as early as possible. Whether a post ultimately receives 10 million likes or shares or just 10,000, what matters is your position relative to those absolute numbers. This is because a certain proportion of users can claim to have made money, as they participated early, and the content shared is indeed highly relevant to the social network or to you.

For example, if you are the last person to forward or repost a certain piece of content, and no one else forwards it after you, it is clear that you have made no contribution to this information or to the information within this network. However, if you are the first person to forward a piece of viral content, then you have clearly made a significant contribution to this social information network.

Interestingly, when we examine market prices, we often find that they tend to exhibit a fluctuating trend. Similarly, taking posts on social media platforms as an example, certain popular content that appears on TikTok often goes viral quickly and spreads widely, but then gradually fades away, just like some economic indicators that experience abnormal fluctuations in the short term before returning to the mean. This phenomenon is also reflected in price movements.

Then you might usually overlook this part, because when these tokens go to zero, that's where many people start to doubt the market, feeling like it's a Zero-sum Game, right? This thing goes up, that thing goes down. But has anything of value been created? Ultimately, it's basically poker or some sort of gambling application that doesn't really point to anything. But interestingly, all those TikTok posts ended up going to zero.

So it first spread like a virus and then disappeared, but in fact, it exists forever. It wasn't initially meant to go viral, but rather to always occupy the top of the Algorithm. It is a useful piece of information that spread through social networks, but later became no longer useful, thus gradually fading away.

So, if we can turn every post into a “Token”, then these competitive markets focused on future value will not feel like a Zero-sum Game, but rather have this positive external effect of actually organizing the entire world.

Therefore, by participating in these cutting-edge hot information markets, which is essentially betting on the future dissemination power of a certain piece of content, even those who do not participate in this market but are merely browsing this content, those traders and market participants are actually organizing global information for those who browse this content and hope to filter it. Thus, these traders ultimately become filterers for profit, competing with each other to predict the future popularity of various information.

This will ultimately organize this information. To some extent, this is the positive external effect brought by this market. Therefore, many things will gradually, well, relatively quickly converge, but I think we have not fully broken through yet.

Therefore, first, these opaque algorithms will be replaced by market-driven prices, allowing content creators and traders to directly benefit from the profitability and popularity of the things they are involved in.

From a generational perspective, such situations are not uncommon. Regardless of how seemingly lacking in practical value the activities of the younger generation may be, or the behaviors of elite groups engaging in entertainment purposes during leisure weekends, they often evolve into skills with commercial value in the future. For example, the current situation of mastering trading operations may actually become an essential competency for predicting future trends and conducting profitable trading activities on a global scale. Additionally, platforms for information dissemination and trading activities, such as TikTok, Twitter, and Instagram, have an alternative income model, which is to generate profits by charging transaction fees.

Therefore, instead of inserting ads in all content, there is actually a way to profit based on user interaction, as users are participating in this global risk and return financial market to organize the world's information. Ultimately, the platform can charge fees. Of course, by profiting in these markets, you can gain followers and earn cash. So here are some extensions that I find interesting.

One scenario is that a user account essentially becomes similar to a tradable account, meaning you can invest in a certain Twitter account and invest in that user. Similarly, in this model, if you engage in copy trading, then every post made by a loser will mimic the kind of financial gains from investing in that user. Thus, this use case is also covered.

To some extent, this model of trading people, or what can be referred to as a “personal stock market” operating mechanism, I believe will generate a series of downstream effects. At the same time, we should also recognize that although most related value curves exhibit fluctuations, not all changes in value occur so rapidly. This leads us to the concept of “blue chip posts.” As we all know, the first tweet on Twitter has been sold as an NFT, and on this basis, we can also leverage the ideas related to CFA to construct a relevant permission system.

Therefore, once all these posts become blockchain assets, people can interact without permission. Of course, this mechanism is indifferent to the type of content being traded. So, whether it's images, text, forums, short articles, videos, etc., it applies.

I would like to point out that there are many nuances and complexities that I have not addressed here. But if you are interested in this and want to learn more, please contact me. I am very willing to collaborate with developers working in this field. I believe this is the future of social media, which will help organize the world using real markets instead of these key proprietary algorithms. Thank you very much, everyone.