In the last months of 2024, at least three notable events have struck the Web3 & crypto community that cyclically resonate with the history of this space strong enough, that I have to acknowledge them before we continue with this second half. For in many ways, they illustrate so bluntly what I’ve set out to document.

Prior to Substack, I had dabbled with on-chain publishing. I liked the idea of cementing articles on Arweave, and giving people the opportunity to collect my posts as NFTs. But ultimately, at that time, I felt the audience was smaller than the reach I could potentially get here. However I really enjoy and respect what Paragraph and others like T2 are trying to achieve.

Recently, I received an email addressed from the staff at Paragraph, notifying that they were “depreciating membership features, including paid subscriptions, gating features, and token-gated memberships.” This would come into effect from November 13th. Their reasoning was that whilst users loved collecting posts…

“membership and token-gating features haven’t gained as much traction. By simplifying our product and focusing on collecting, we believe we can increase the value of the Paragraph ecosystem and help writers better connect with their readers.”

At first I was a little suspicious, and even wondered if this was a malicious or hoax email. Not least because I couldn’t find any public announcement of this on their X account, nor their Discord. However, I managed to chat with the founder, Colin Arms, who confirmed this was all legitimate. I queried why they hadn’t made a public statement on the rollback of such intrinsic and core features of the platform, but he said “there aren't many people using gating/memberships, so 1:1 outreach was more effective”.

Could this quiet approach have anything to do with the fact that only just in May 2024, they celebrated the acquisition of fellow Web3 publication platform Mirror, as well as raising an impressive $5m from USV and Coinbase Ventures? A move of which I was so happy for them, a big milestone in the site’s evolution. Yet despite this, they were now having to make these significant changes to how parts of the platform operated.

“Token gating” isn’t a new phenomenon. Just look at Medium, Substack, Patreon, hell even Spotify and YouTube. Paying a premium to unlock access to tiered content is a tried and tested model. But for some reason, Paragraph’s userbase has, for reasons, decided that the ROI just isn’t there enough for them to sign up and cough up to ensure this model could stay intact.

Why is any of this important? Because it draws distinct parallels to the changing attitudes and interactions with consuming Art & Media based Non-Fungible Tokens over the course of the past few years, and the changing of course other platforms have chosen to make to adapt in response.

Acquired by Nike in December of 2021 during the hype season of NFTs, RTFKT (that’s “Artifact”) was a digital fashion company selling blockchain clothing and sneakers in the metaverse. As Decrypt’s R\Scene writes…

The company burst onto the digital collectible scene in 2021 selling $10,000 sneakers on Nifty Gateway, building a sprawling ecosystem of Ethereum-based NFTs and physical collectibles over the years, partnering with artists like Takashi Murakami along the way.

The former Nike CEO and President John Donahoe saw the acquisition as a way to enhance the brands ability to “serve athletes and creators at the intersection of sport, creativity, gaming and culture.”

And yet, despite RTFKT making around $50 million in earnings since it launched, including over $45 million in royalties, much of this success was made in the thriving 2021-2022 period, with sales since dwindling and secondary market prices dropping dramatically as the brand struggled to keep the community engaged. The formal announcement was made just two months after Elliot Hill became new Nike CEO, and is part of the company’s “reassessment and recalibration” of their priorities in the digital space.

Several web3 influencers and NFT project owners have offered to buy RTFKT from Nike to keep it going, but for now it seems unlikely. This comes at a time when Global NFT sales are at a six month high. Is this closure a good move for Nike?

RTFKT will have one final project release this month before its retired - “MNLTH X featuring the Blade Drop.”

Many corporate brands have tried their hand at NFT products, whether it be purely digital, or “phygital” products where you purchase and / or burn redeem tokens for rare wearable goods. However, very few lines have successfully maintained interest or value in the long run.

It is of my own opinion, based on observations and experiences within the web3 space, that whilst fans of on-chain content are still more than enthusiastic to collect, the general populace are less willing to collect at a premium, than the willingness of the consumer base of 2021.

Oh boy.. where to start with this lot?

First off, access to Pump.fun, the 4chan of meme token platforms has been banned in the UK. Pump.fun is a decentralized platform on the Solana blockchain that enables users to create and launch their own tokens, primarily meme coins, without requiring technical expertise. However it quickly became a wild west operation, with countless rug pulls and out of control livestreams which led the platform to temporarily stop video streaming. However, the site has also gained notoriety for the stories of users refusing to let rug pulls get the better of them.

For instance, A 13-year-old boy got doxxed by crypto traders after pulling the rug on a pump.fun token he named Gen Z Quant. Traders then doxxed his whole family and turned them into pump.fun tokens.

If that wasn’t enough, then you’ll be happy to hear that Hayley Welch is alive and well, finally waking up after going to bed for seemingly 3 weeks on an X space, shortly after she and her “team” at overHere were being called out by Coffeezilla and others for rugging her $HAWK coin and costing people millions of dollars.

Welch last addressed the public in a late-night X Spaces audio stream on the day of the December 4 launch of the $HAWK coin on the Solana blockchain, which reportedly soared to a $490 million market capitalization then fell 95 percent within minutes.

They have professed their innocence, accusing “snipers” of being responsible for the loss of funds, but the damage is done. Hayley is now “Fully cooperating with a legal team representing alleged victims of coin losses”.

I wonder if that will also include the alleged $3 million in transaction fees that may have been scooped up by the foundation set up by overHere?

By the end of 2022, and rolling into 2023, many crypto investors and web3 members were left licking their wounds and sewing the holes in their pockets from a tumultuous rollercoaster of a year. However, others had kept themselves busy, quietly building a new venture which would soon revolutionise the OG blockchain.

In December 2022, Casey Rodarmor created the first-ever Ordinal inscription by inscribing an original pixel art of a black and white skull on the Bitcoin blockchain, assigning it the number #0. By January of 2023, the “Ordinals Protocol” was launched, and the first ever collection was inscribed in February entitled “Bitcoin Shrooms”.

Ordinals differ from regular NFTs, in that instead of tokenised on-chain code pointing to an off-chain stored asset, Bitcoin Ordinals are assets that have had data inscribed (written to) on individual satoshis, the smallest unit of bitcoin on the Bitcoin blockchain. Every satoshi is given a serial number based on the order in which it was mined. These numbers are called ordinals. The result is that the Ordinal is entirely on-chain, and inherit the security, immutability, and durability of Bitcoin itself.

Sounds fantastic, but the major downside is the cost.

The process of inscribing is NOT cheap, (even by Ethereum gas standards), and is directly tied to the file size of the asset. This is why most Ordinals are typically Kilobytes, rather than Megabytes, with many creators opting for low poly, pixel-based designs. However, this didn’t stop developer Udi Wertheimer pushing the limits and inscribing a 4mb Taproot Wizards ordinal with the help of Luxor mining pool. The process of minting the inscription required the cooperation of a number of Bitcoin miners, who agreed to process the large transaction.

Ordinals continued to gain huge traction throughout 2023. In February they reached 100 thousand inscriptions. By August the number hit 21 Million. This meteoric jump is also thanks to the creation of the BRC-20 Protocol, The launch of Gamma.io and Ord.io, the inclusion of ordinals on Magic Eden, and the introduction of Recursive Inscriptions.

However, once again, due to the high cost to inscribe, many artists felt the ecosystem was financially gatekept to those with the money to spend, despite the allure of security and immutability. If only there was another means of income?

In an aggressive bear market, when gains are rock bottom and NFTs are down, people look to alternative sources of crypto income. None more so tantalising as the humble Meme Coin. As Doumkou Stefani writes for Vision Factory…

Meme coins are cryptocurrencies that take their inspiration from internet jokes or pop culture. Fundamentally, they start out as fun projects or humorous ones. Since it is designed to be highly dependent upon community support and social media trends, it usually causes volatile price actions. Unlike other cryptocurrencies, they normally do not have any practical usages associated with them except speculation, and their success is not measured by financial metrics but rather the size and passion of their community.

Whilst early tokens such as Doge and Shiba Inu gained a solid fan base in the earlier years of crypto, 2023 saw Meme coins explode in popularity. Arguably the most notable being $PEPE.

Based on Matt Furie’s creation Pepe the Frog, $PEPE quickly became one of the most actively traded cryptocurrencies since its public launch in April 2023 with a max. supply of 420.69 Trillion coins (heh). It drew a passionate and active community, leading to a remarkable $5 billion market capitalization. Even despite the efforts of some to initially label it, and soon after hastily apologise for doing so, as a hate symbol by alt-right groups. With a huge following, and trending hashtags like #frogsoverdogs dominating Crypto Twitter at the time, the coin seemed it would go from strength to strength…

$PEPE was released as an ERC-20 meme token on Ethereum. Shortly afterwards, a slew of copycat Pepe coins were also created across other chains in a bid to cash in, including Tezos (Tezos Pepe) and Binance Chain ($PEPE COIN) amongst many others.

Meme coins on Binance Chain (BNB) such as Doge gained popularity due to their ease of listing and trading on the platform. Binance's decentralized exchange (DEX) and smart chain allow for fast and low-cost transactions, making it an attractive option for meme coins.

However, as of today if you compare the original ERC-20 to its BNB counterpart, ETH’s $PEPE sits at a highly impressive #23 on Coinmarketcap after having a resoundingly successful 2024, reaching an all time high in December. Meanwhile, the Binance $PEPECOIN is fumbling at a meagre #4705.

DYOR, and always make sure you’re investing in the right coin.

That said, it also helps to have a mouthpiece with a massive audience. Just ask both Doge at #7 and Shiba Inu at #16. (Thanks Elon?)

“In late April to May 2023, the explosive surge of $PEPE induced what some may dub a "meme coin season", causing other meme coins — some launched within hours — to go on spectacular pumps and just as astounding dumps.” - Coinmarketcap

It wasn’t long before multiple blockchains including Avalanche, Solana, Tezos, and Base Chain provided people the ability to create countless meme coins, all vying for the attention of hungry investors and starving artists. All with no real indication of the motives, or the technical competency of the teams behind them. (Make a note… We’ll come back to this in a minute.)

However, all this hype & laser-focussed attention on Meme coins created a serious rift in the crypto artist community. At this time, the NFT market was on life support for most creators with sales at an all time low, it’s prospective audience being a shell of its former self and in dire need of financial gain. Even the web3 influencers & “collectors” who had been engagement farming NFT artists, masquerading as interested buyers, were suddenly farming meme coins instead, eager for a serving of the money that was being made.

Many artists also chose to diversify and get some gains of their own (and why not? Crypto is Crypto after all). Others chose against it, but some vocally grew resentful and called out their peers & collector base for no longer “being here for the art”.

There was one other notable reason to be frustrated as an artist during this time. Such a huge increase in blockchain transactions from meme coin trading caused a general swell in gas fees, especially on Ethereum with the likes of $PEPE. The knock-on effect was that minting fees and other gas interactions on NFT platforms also swelled. Not only were artists’ sales down and their audience diminished, they were now having to pay through the nose just to release more art for sale.

It felt like they just couldn’t win. But you know what they say..

If you can’t beat ‘em, ask AI how you can join ‘em.

Rhett Mankind is an award-winning digital artist with over 20 years of experience in branding, advertising, and digital art. His works have been showcased in top galleries and auction houses, including Sotheby's and SuperRare.

In 2023, frustrated with the near-death state of the NFT market, and observing the hype and popularity of meme coins, he chose to experiment with some recently released AI tools. Namely, Chat GPT.

In a now famous thread on Twitter (now X), he announced the following..

Together with both Chat GPT & his followers, over the next few days they fleshed out the name of TurboToad, the tokenomics, whitepaper and the smart contract. He even used Midjourney to generate the art for “Quantum Leap”, TurboToad’s mascot. Mankind even created a website and social accounts for the coin.

The initial launch did not go exactly to plan. At all. As NFTNow writes..

After a failed launch of TurboToad that saw bots swoop in and ruin the experiment by snatching up most of the liquidity pool, throwing the price out of proportion and preventing him from adding more liquidity to the project, Mankind decided that was the end of the line. He had sunk around $600 at this point (well beyond the $69 budget he began with) and didn’t have the funds to try again.

However, his followers weren’t ready to see the experiment end so soon. They rallied behind him and with ChatGPT’s help, Mankind chose crowdfunding as the next step, promising investors equitable reward with the token for whatever they put in to fund it. They also chose a new name of $Turbo for the relaunch, and a supply of 69 billion tokens.

With a a major boost from well-known Web3 collector Pranksy, who made a V3 liquidity pool, the coin reached a $1 million market cap in just 48 hours. It also caught the attention of Pak, Beeple and even Elon Musk.

Today, $Turbo is at a decent #137 on Coinmarketcap. But this success story is more so down to the passionate community participation, and the openness and transparency of its creator.

“The amount of positive responses I receive from my YouTube video opening up about the process has brought so many tears. So many have seemed to understand where I was in life before launching this project and how success must feel.” - Rhett Mankind.

For every success story, there are countless horror stories.. (Just look up Ben.eth’s $PSYOP coin fiasco).

In an alternative timeline, $Art coin could have been a rebound the web3 artist community desperately needed. Instead, it was a disaster practically setup to fail, by nefarious and seemingly incompetent individuals that rugged struggling creators who backed the token like the last horse in a race they’d never win.

Having witnessed the meteoric rise of $PEPE, and the community hype surrounding $Turbo, a number of artists banded together to say “why don’t we make our own coin? The problem was, to do so you needed someone who could write smart contracts, publish tokenomics and look after all the technicals (unless you went the AI route).

Enter a gentleman called Christopher Wheeler, also known as “@stocktrader”. He too seemed frustrated with the state of the NFT market, and on May 6th, in a now deleted series of posts, he asked…

Make a note of that last reply… you’ll see why.

People were sceptical, but a lot of others bought in to the idea. Soon Chris and a small team had set up a Discord Server, and created a Twitter Account called “@Artethcoin”, with none other than a repurposed Bob Ross as their Mascot, and a black outline easel logo. Memes were posted and interest gained momentum.

When the pre-sale for the token was announced, people were encouraged to send ETH to a contract address, in anticipation for the official launch. The coin reached almost 100ETH by the time it went live.

And instantly tanked. Hard.

If you had been on Uniswap at the time of the launch, you could watch the value of the coin literally freefall in real time in the exchange window. Its one of the craziest things I’ve witnessed first hand in the space.

Someone majorly screwed up the liquidity pool, by about three zeros. This means there was never enough liquidity to begin with, and as “@SpacedPainter” wrote..

“We all bought empty bags”.

A terrible mistake, you might think. But when everyone took to the discord for answers, they found that Wheeler was “having a break”, as confirmed by the coin’s twitter post below.

To make matters worse, the discord team that remained would often mockingly respond to criticism and genuine questions by those affected. The whole thing was a train wreck, and was the nail in the coffin for many who had given it a chance.

Then, if you checked the coin’s listing on coinmarketcap, you were presented with the following header…

“smart contract of the following asset can be modified by the contract creator (for example: disable selling, change fees, mint new tokens, or transfer tokens”)

You see, Wheeler’s previously dealings in penny stocks had got him into hot water. As laid out so eloquently by @Rocketgirl in this thread, In 2011, The S.E.C charged him & his affiliated website with fraud for failing to disclose that he was paid by certain issuers to promote their stock while simultaneously liquidating millions of his own shares for profits of at least $2.95 million. He was given a 10 month sentence for tax evasion, and was banned from trading penny stocks.

If that wasn’t enough, in the dumpster fire of the discord immediately after the coin nosedived, it came to light that one of his key team members was allegedly just a young teen, who reportedly accused Wheeler of threatening him.

Yet none of this was enough.. even in the backlash, Wheeler doubled down, going as far as launching a second token poking fun at one of his more outspoken critics.

Then posts of Wheelers surfaced of him begging for money, claiming he was broke from no art sales, just a few days before his first posts about $ART.

With stories like this, its not hard to see why many artists and web3 creators grew tired and weary of these quick rich schemes in Crypto, but its also easy to see how such claims can be so enticing. Something needs to change, but if anything, the initial preamble to this chapter proves that this space exists in cycles and many do not learn, seemingly so quick to forget or ignore these lessons, only to make outcry when their fingers are burnt and their bags are emptied yet again.

If you visit $ART Token on Coinmarketcap today, and check the social links, you’ll find that the Website, Telegram and Discord no longer work. However, the X account is still live, and regularly reposts artists work in a bid to “support the community”.

In September 2024, the account posted the following..

A discord link was also added to the bio, with Wheeler as a Mod/Owner. But this Discord isnt for $ART. Its for a new token called $KUSHIM. A token launched on a site called SunPump.Meme, on the Tron Blockchain. SunPump is the Tron equivalent of Solana’s Pump.fun.

As we close out this second chapter, Before $ART was duly abandoned, Wheeler and his team made one last ditch attempt at raising capital for the project in 2023, promising billions of tokens to people for one simple action… all revolving around a harmless looking pair of bunny ears.

When we return, we’ll explore the ups, downs & fallout of Social Fi, the meanwhile earnest efforts & strides made by those still “here for the art”, and introduce some new challengers to the notion of NFT platforms, with new business models and visions for the future.

Dan | Digitalgyoza is a lighting designer and digital AI artist based in the UK, who writes about Art, Technology, Web3, Culture and Blockchain.

Have any thoughts on this article? I’d love to hear them! Drop them in the post’s comments section and let’s talk about it.

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