Arthur Hayes: The Future of Political Memecoins

Original title: Zero Knowledge Proof

Author: Arthur Hayes, founder of BitMEX; Translated by: 0xjs@

In the past century, with the advancement of communication technology, the essential skills politicians use to attract the public have also changed. To illustrate my point, I would like to quickly review the history of U.S. presidents, focusing on key advancements in communication technology.

The hottest tech stock of the 1920s was RCA, which was the dominant consumer radio manufacturer at the time. RCA’s price-to-earnings ratio reached a historic high of 73 before the crash, after which it never recovered. This is a point to remember about tech stocks… and this time is no different. During World War I, radio emerged as a military technology, and after the war, it was commercialized under the leadership of the United States. By 1940, nearly 80% of American households owned a radio. Wartime President Franklin Roosevelt was known for his fireside chats, where he communicated with the American public, instilling the necessary propaganda to unite society in sacrificing blood and wealth to fight against the Germans and Japanese. To succeed, later politicians had to carve out a place in the radio waves.

Television became the main consumer product in the United States in the 1960s, with 90% of households owning a TV. This was the first time that the entire nation could watch the propaganda of the ruling class together. The political turning point of television as a powerful political advertising tool was the presidential debate between John F. Kennedy and Richard Nixon in September 1960.

Nixon was the favorite to win because he was a more experienced politician. People are familiar with his voice, but not with his face. Kennedy, on the other hand, was a mild-mannered, inexperienced young man. However, the televised debate showed the American people a Nixon who looked old and frail, and a young and energetic Kennedy. Nixon’s poor television performance turned the tide, and Kennedy won the race. Since then, a poised television presence has become a necessity for winning senior positions.

Politicians took some time to truly leverage social media, which originated from the personal computer and internet revolution. However, by 2016, this political force had emerged. To understand the amount spent on political television and radio advertisements during the presidential election year, let’s look at this statistic: in the 2012 U.S. presidential election, Barack Obama and Mitt Romney spent approximately $2.6 billion on television and radio ads.

Donald Trump’s rise almost began as a joke. He entered the Republican Party’s competition for the 2016 presidential candidate. No one thought he could succeed, and Trump had no intention of spending a large amount of money on television and radio ads, only to take political hits. He was seen as a nuisance within the party and therefore would not receive significant donations. However, while Trump lacked the substantial campaign funds to spend lavishly on television and radio ads, he did understand how new technologies were changing the media landscape.

Pew Media estimated that 68% of adults had a Facebook account in 2016. At that time, it was not common to micro-target groups for political gain based on activities within social networks. The Trump team seized this gold mine, cheaply targeting potential supporters and delivering political ads to them at a much lower cost than through television or radio. Additionally, Trump utilized Twitter (now known as X) to communicate directly and in real-time with people. It was raw, unfiltered, and chaotic. But it was humanizing, capturing the attention of both supporters and opponents. Attention has always been a valuable commodity, and Trump used social media to attract more attention at a much lower cost than any other politician, ultimately winning the presidency.

Global political figures have witnessed the success of social media in shaping public opinion and have adjusted their communication strategies accordingly. The comprehensive effect of social media in disseminating political propaganda was fully demonstrated during the COVID-19 pandemic. Governments around the world have urged large tech social media platforms to propagate lies about COVID and vaccines to the global audience, while suppressing any dissenting opinions that differ from the official narrative. Content that was canceled or taken down has instead turned to private podcasts to survive and thrive on the internet.

By 2024, many people will get news and form their political views by listening to their favorite podcast hosts. Joe Rogan is by far the most successful podcaster in the United States. He recently signed a multi-year contract worth $250 million with Spotify. Rogan has influenced public opinion in the recent U.S. presidential election, especially among undecided voters. Trump appeared on Rogan’s show, but Harris did not. Trump appeared on numerous podcasts that attracted his supporters. Harris continued to rely on tried-and-true television and radio programs, supplemented by stale ads on social media platforms. Trump defeated Harris by leveraging advancements in communication technology that connected him more directly with voters.

What have we learned?

With the development of technology, information can be spread to a larger audience more quickly and cheaply, and the connection between politicians and the people they govern has become more direct. As rulers become more humanized, they must adapt the way they convey their policies to the public. Humanization is not always advantageous for politicians, as the public quickly realizes that they are just as foolish.

Trump is the first politician to officially launch his own memecoin, and can be said to be one of the three most influential politicians in the world (alongside the leaders of China and Russia, who are on par with or close to him). Trump has ushered in a new era of political memecoins.

I believe that Political Meme Coin will achieve the following points:

Provide real-time global opinion polls on politicians.

Almost no cost is required to increase the participation and influence of political campaigns.

Let billions of people join Web3

Let’s delve deeper.

The popularity of politics is a common sense game. Everyone believes that what others believe has a greater influence on our views of politicians than what we believe ourselves. This leads to information asymmetry, as in public we believe one thing, while privately we believe another. Therefore, we provide pollsters with garbage information about our true opinions. This puts politicians in a dilemma, as they want to know our real private views in real time. However, if openly supporting unpopular politicians is socially acceptable, it also allows unpopular politicians to pretend to be popular. In short, both the government and the governed possess imperfect information, which can lead to policy mistakes.

Political Memecoin provides zero-knowledge proofs of political popularity. Specifically, as an individual, you can now privately support politicians by purchasing their memecoins, which your friends vehemently oppose, and you will not face any social stigma. Therefore, politicians can understand the true opinions of the public. Ultimately, those who just want to go with the flow can support politicians because the price of their memecoins has risen, giving them the confidence to support the side that everyone knows will win.

The rise of Polymarket reflects this phenomenon. Polymarket is a decentralized exchange that allows betting on political outcomes using cryptocurrency. Polymarket gained fame for its 2024 election prediction market featuring Trump and Harris, which shows in real-time who the global community believes is more likely to become the next President of the United States. Anyone with an internet connection and cryptocurrency can place bets on the outcomes, allowing participants from around the world to make guesses.

Polymarket has come under attack in the United States because their market shows that the Democratic candidate, establishment favorite Harris, will lose. The Democrats are trying to deceive the public into believing that Joe Biden is not crazy and that Harris is popular. But that is not the case; mainstream media has been using this trick until Biden self-destructed in the debate with Trump, and Harris lost the election. However, despite the establishment media and big tech platforms lying to the public, Polymarket clearly indicates that Trump is the most likely candidate to win. The establishment is very angry because the public has a real barometer of the election, to the extent that the CEO of Polymarket has faced fierce criticism.

In other parts of the world, authorities may proactively ban Polymarket to prevent unfiltered public opinion from being expressed in real-time. France has banned Polymarket. Why should France care about political prediction markets in a non-election year? President Macron is very unpopular, but he will not allow new elections to be held until necessary in 2027. If there is a real-time market showing that Marine Le Pen is most likely to win the 2027 French presidential election, this would not be good for him and his political allies. This could accelerate the collapse of his globalist order in France. Therefore, Polymarket must disappear.

If the goal is a globally accessible, easy-to-understand, and impossible-to-ban popularity metric, then trading political Memecoins on DEX is the perfect tool.

Let us evaluate the political Meme coin based on the three attributes required to create a global political trending market:

Globally Accessible:

A Meme coin is simply a unique public address that issues a certain number of tokens that exist on a public blockchain. The DEX itself is a snippet of code that executes on a public blockchain where you can trade these tokens. The most popular trading pair is [Memecoin/USDe]. As a result, anyone with an internet-connected device can trade political Memecoin.

Easy to understand:

Do you like this politician and are you willing to express support?

Do you believe that other people like this politician or will like this politician in the future?

Before you decide to buy a political memecoin, you just need to answer these two questions.

People buy TRUMP because they want to be part of the Trump supporter community, or they believe that Trump’s popularity will increase in the future.

That’s it. You don’t need to understand any fancy economic or financial theories. You don’t need to know algebra, basic calculus, statistics, or probability. You just need to think and feel like a vibrant person. Therefore, anyone can understand what gives political meme coins their value.

Impossible to prohibit:

Memecoins are built on public blockchains, and the existence of the public chain itself is due to miners or validators running specific software. At a high level, to destroy a public chain, you need to remove all miners/validators and then shut down the internet.

With the current scale and penetration rate of public chains, it’s impossible to remove all miners/validators. It’s like playing whack-a-mole. Once an operator is removed from the network, profit motives will attract others to join.

Due to the reliance on internet-connected devices in modern society, the government cannot shut down the internet and survive as a governing body in its current form.

Therefore, although the government can severely criticize the negative impact of Memecoin from its own perspective and selectively prosecute individuals and companies that provide or participate in Memecoin transactions, they will never be able to eradicate Memecoin on a large scale. Attempting to do so will only make Memecoin transactions more popular.

Since participants vote with their wallets, memecoins are the purest and most honest indicators of popularity. When people talk to pollsters or friends, they often misreport their true political views for fear of going against the mainstream. Memecoin trading is a zero-knowledge proof of political popularity; unless traders expose their identities, no one knows who owns or trades what. Given that true digital currencies are at risk, if you hate Trump or believe his popularity will not rise, then buying $TRUMP is meaningless. If you think this way, you wouldn’t buy it at all, or you would short the $TRUMP/USDe perpetual contract. This is why the price trend of $TRUMP indicates his true global popularity.

Belonging and greed are the two strongest motivating factors in memecoin trading. Therefore, I believe we can infer politicians’ specific situations by looking at the memecoin charts. If the price of a memecoin rises, it indicates that people are satisfied with current and expected policies; if the price falls, it signifies dissatisfaction. With the surge in political memecoin trading, we will be able to directly identify changes in public sentiment based on discrete policy outcomes. Legislation passed, wars launched, speeches given, etc., will immediately affect citizens, which can be observed by looking at the price performance of specific political memecoins after these events.

Most politicians only want the public to know when others like them, not when others despise them. So why do they want to launch their own memecoin? I believe that in so-called democratic countries, any politician officially endorsing their own memecoin would become a political necessity. To understand the reason, let’s discuss how to win elections.

To win an election, politicians must get people out to vote. This is difficult to achieve because voters have too many other things to do. But if the politician has a memecoin, and you purchase it, then voting is in your best interest, so that it can retain its value. Thus, memecoin is the best political participation tool ever. They directly link economic benefits to each voter’s voting support, not just to large campaign donors.

As long as challengers support political memecoins in a certain campaign, they have the upper hand. This is because they can provide direct economic benefits for going out to vote without any payment. Memecoins are the most effective form of political advertising because they can serve as viral digital word-of-mouth promotion. Trump succeeded in one fell swoop, just recently enacting campaign finance reform, and I don’t think he even realizes it.

To activate their supporters, challengers will participate in cost-free online events. Trump won the 2024 election because he was willing to appear on podcasts like Joe Rogan. The outcome of the next major election cycle will be decided on X-spaces or Discord channels. The politicians’ goal is to discuss their political agendas and increase the number of memecoin holders. Using the internet and social media, one-to-many conversations are free; building a community is both difficult and time-consuming. However, when everyone can gain economic benefits from political success, establishing a fervent supporter community becomes much easier. This is far more effective than broadcast, television, or internet advertising.

Many “old-school” politicians won’t believe me. At least in the United States, the 2026 elections will see a surge of new personal political brands created through memecoins, which will defeat the so-called unbeatable incumbents. What if Elizabeth Warren, Nancy Pelosi, and Maxine Waters were to lose to the new money in their own party because of political memecoins?

Although we still need to wait a few years for the political memecoin earthquake to shake the peace under U.S. rule, its effects may soon be felt in Europe. Germany will hold new elections next week. The powers that be are doing everything they can to prevent the AfD (Alternative for Germany) from coming to power. What if the AfD creates a large number of political memecoins for every candidate running? What if they become the largest party in Germany, gaining so much support that a government cannot be formed without their participation?

I know time is running out, but it takes less time to create a political Memecoin than to be rejected from entering the Federal Assembly.

If the British Conservative Party reorganizes and does not want young girls to be lured by creepy old men, what would happen if Keir Starmer is forced to hold new elections? Can Reform UK launch a series of political memecoins supported by its future MPs to reclaim the UK Parliament? I don’t know, but memecoins are the most popular way to spread the wisdom of the crowd, and Trump has just opened Pandora’s box.

For any reader with new ideas who is eager to serve society but has empty pockets, this article can serve as a blueprint to fund your budding political career.

Let’s make a joke. Imagine that bankrupt Infowars host Alex Jones wants to run for a U.S. Senate seat in New York in 2026, competing against powerful incumbent Chuck Schumer. Alex clearly has no money and lacks the credibility of large corporate donors. While people may agree with some of his views, no one is willing to take a risk for a loser in broad daylight.

Alex decided to raise funds for his campaign by issuing the $JONES memecoin. At the time of issuance, only 10% of the supply was in circulation, while 90% was held by Alex’s campaign organization, with no lock-up. Experienced memecoin traders might shout “RUG PULL” because the campaign holds a large amount of unlocked tokens. However, the campaign needs to raise funds by selling tokens.

Anyone who buys $JONES implicitly understands that they are providing exit liquidity for the campaign. The campaign must raise funds by selling the memecoin, so by purchasing $JONES at a higher price, buyers are effectively donating to Alex’s campaign. However, the likelihood of Alex winning is that the price of $JONES will soar.

$JONES holders will be incentivized to promote Alex’s political agenda and how it will benefit the constituency. This will attract more buyers, allowing the campaign to raise more funds through the sale of memecoins, which will increase Alex’s chances of winning, thereby raising the price of $JONES, creating a cycle. Additionally, schadenfreude may encourage many buyers to purchase $JONES to support the establishment, as it would be amusing to see Schumer lose to Alex Jones.

This is how political disruptors proficient in Web3 fund campaigns and create viral marketing machines.

Before discussing how Maelstrom will profit from the future of political memecoins, I would like to first talk about some negative sentiments surrounding this new asset class.

It’s really amusing to hear those cryptocurrency people scoff at political Memecoins. I will elaborate on some of the main complaints one by one and explain why I disagree.

Politicians should not use their power for personal gain.

The simplest way to eliminate this concern is to distribute 100% of the tokens at issuance. Then, if politicians want to believe in themselves, they will enter the market at the same price as everyone else. If their popularity rises, they will profit personally, but I would prefer this over accepting bribes and pseudo-bribes from wealthy companies and individuals behind the scenes. If politicians can earn more money more transparently just by holding their memecoin, then they will do the right thing for the people instead of doing the right thing for the rich, as popularity can become very profitable.

$TRUMP looks like a scammer because his family and close associates hold 80% of the supply. However, I don’t believe it. The tokenomics are well known. If you choose to buy it, you will be wide-eyed in your purchase. This is much better than the Biden family lining their pockets through massive secret bribes from foreign companies to this or that super secret corporate entity. Well, if the recipient isn’t a junkie, they will become super secret.

When $TRUMP is dumped, it will destroy retail holders and regress the industry by many years.

The volatility of Memecoins is a characteristic, not a flaw. Cryptocurrency is a free market, manipulated by central banks, commercial banks, and governments. Everyone knows this, and they know the game is rigged. Remember GameStop? Cryptocurrency, for better or worse, is a globally competitive free market without a governing body. If people can now express their views on politicians through financial markets, that is progress. If politicians deceive their followers, they will be voted out.

Trump should focus on developing regulations that support cryptocurrencies, rather than memecoins.

I believe that Trump inadvertently provided the people with a new weapon to combat political corruption. This is why the mainstream media tries to cover up this phenomenon. They realize that the improper dealings of electoral advertisements and campaign funding will come to an abrupt halt. They also recognize that political movements that are not allowed to win can now change the common sense by showcasing the correct political Memecoin price.

Memecoins, especially political Memecoins, are useless; the industry should rebuild “real” technology.

Anyone who says this has a bunch of zombie cryptocurrencies in their portfolio. Or they are the founders of a project whose token price has been continuously declining. They see people expressing their enthusiasm through trading culture and are dissatisfied that those people haven’t done anything “useful” with their money. They only believe that if the common people’s money goes into their pockets, then that is “useful”. Fuck you and your garbage coins.

Maelstrom can benefit from this movement in several ways.

L1 Blockchain

L1 blockchains benefit from memecoin trading because every transaction must pay gas in native tokens. Clearly, Solana is the chain for most memecoin transactions and is also the chain for $TRUMP. However, according to Moonshot statistics, 50% of the wallets holding $TRUMP are new Solana wallets with almost no funds. Therefore, Solana is not necessarily the chain for most political memecoin transactions.

You all know what I am going to say. Remember, Maelstrom will not provide services for free. We believe Aptos has the opportunity to dominate this market. It depends on speed and cost. Aptos has the fastest block time and the cheapest transaction fees among all L1s. The way Aptos will win this market is through seamless integration with Web2 platforms that have users. Aptos was born from the Web2 giant Facebook, and its team has the capability to execute such collaborations. Stay tuned!

Spot.dog

Jupiter and Raydium are two of the most popular places for trading memecoins on-chain. Their tokens have performed very well, and trading volume is expected to continue to increase. However, the user experience is more suited for native cryptocurrency users. For those who just want to mimic the memecoins of their favorite politicians, Spot.dog (Maelstrom portfolio company) offers a better and simpler user experience for memecoin trading. Due to their collaboration with Stocktwits, they have a large user base, and we believe this will become the go-to place for ordinary people to trade memecoins.

political memecoin derivatives

Options

Political memecoins have generated demand for options trading. This is because certain discrete events (such as elections or votes on specific bills) can lead to dramatic changes in the popularity and price of particular memecoins. The best way to express bullish or bearish views on the outcomes is to use options, which give you the right but not the obligation to buy (call) or sell (put) at a predetermined strike price. Platforms like Derive (Maelstrom Investment Group) are well-suited to explore these markets.

On-chain ETF

In the near future, when every politician around the world supports their own political memecoin, traders will want to trade a basket of memecoins related to specific political parties. Imagine being able to trade the popularity of the Democratic and Republican parties in the U.S. based on the vote price of all elected members of the House of Representatives. Or, in a parliamentary system, you could trade the Labour Party and the Conservative Party in the UK. Maelstrom will definitely invest in a protocol that allows for the easy creation, listing, trading, and redemption of these types of political memecoin ETFs.

Will some Western country leaders launch their own political memecoins? No, not now, but it may happen in the future.

While it is great to enjoy the glory of the people through objective standards, there are also some downsides when your words and actions lead to a decrease in the price of memecoins. Ultimately, every leader, whether elected through democratic means or not, will support their own political memecoin because when it comes to political popularity, people will no longer trust dishonest pollsters and the propaganda of mainstream media machines. They will demand a political memecoin and eventually issue a political memecoin.

Narcissism is an essential personality trait for successful politicians. They must be confident in their unique ability to plan a better future for everyone and constantly remind everyone how great they are. Therefore, I believe that Trump checks the price of $TRUMP as frequently as he checks the level of the S&P 500 index, meaning he is checking it all the time.

$TRUMP has dropped about 80% from its peak, while Bitcoin has yet to recover the $110,000 level (the peak reached during the $TRUMP frenzy). I believe that if the cryptocurrency sentiment improves, $TRUMP will lead Bitcoin. If politicians believe that certain policies will positively impact cryptocurrencies, then $TRUMP will rise significantly before the good news is announced, followed closely by Bitcoin.

In light of other major fiat currency issuing centers responding to Trump’s macroeconomic and monetary policies, the United States is in the lead, with other countries following closely behind. Therefore, I have listed $TRUMP as a prominent part of my cryptocurrency watchlist. If I see it surge or plummet quickly, then I know something is happening.

We have entered a new stage in the crypto capital market. Now, we will have a plethora of forward-looking tools to trade based on political factors that directly influence cryptocurrency price movements.

The game has started!