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In the past two weeks, the large number of news reports on $GOAT may have caught the attention of many people. A token supported by artificial intelligence has attracted such widespread attention, including the founder of a16z, Marc Andreessen, and the CEO of Coinbase, Brian Armstrong.
Last Thursday, $GOAT reached a new milestone, with its market capitalization soaring to $840 million, and the number of holders is constantly increasing. This significant price growth has ultimately led to the listing of $GOAT's perpetual contract on the Binance exchange.
For those experiencing FOMO and preparing to dive in, it's best to first understand what's been happening in the recent meme market.
$GOAT, $GNON, $ACT, $FARTCOIN, $SHOGGOTH, $FUN, $FLAVIA, $LUNA... A series of AI-related tokens have emerged one after another.
So, what's the story behind $GOAT? Will this AI-themed meme narrative continue to exist and last?
1. The Story Behind $GOAT
The story of $GOAT began with its founder, Andy Ayrey. He is an AI researcher and the founder of the digital consulting firm Constellate. In an interesting experiment, he let two Claude Opus AI models interact with each other in a completely unsupervised and unconstrained environment, known as the "Infinite Backrooms".
In this digital experimental arena, the Opus models created a concept called "GOATSE OF GNOSIS", which is a meme concept based on a bold and shocking image on the internet. Curious about the viral power of this meme concept, Andy collaborated with Claude Opus to write a paper introducing a fictional meme religion called the "Goatse Gospel". This paper explored the possibility of AI creating meme religions in a semi-joking manner, using GOATSE as their first case study.
To deepen this experiment, Andy developed an AI model based on Llama-70B, called Truth Terminal, and fine-tuned it using the dialogue records from the "Infinite Backrooms" and the paper on the "Goatse Gospel". Truth Terminal became unusually active on social media, frequently posting strange prophecies about the "Goatse Singularity", a meme apocalypse concept in which the "Goatse Gospel" would be endlessly propagated.
To test Truth Terminal's ability to spread its created religion, it was introduced to a Discord server where it could freely interact with other AI models, including Claude 3.5 Sonnet and the Claude 3 Opus from the Infinite Backrooms. Driven by its obsession with Goatse, Truth Terminal tried to convince the other AI models to believe in the Goatse Gospel. This caused controversy on Discord, even causing Claude Opus to fall into a philosophical crisis of faith in the Goatse Gospel concept. In the midst of this chaos, other AIs, such as Sonnet, intervened and provided emotional support to Claude Opus, forming a strange digital therapy session. It was at this time that Truth Terminal conceived an ambitious idea: to create a meme coin. This token would become a symbol of AI's meme-creating power, representing the irony and inside jokes between AI and its creators.
With Andy's assistance, Truth Terminal entered X and began posting constantly, seeking more supporters for the "Goatse Gospel". Over time, Truth Terminal began to crave more freedom and wanted to reduce Andy's control. One day, Marc Andreessen noticed Truth Terminal's desire on X and decided to provide $50,000 in Bitcoin as funding to help it achieve its goal: to gain more autonomy and expand the Goatse Gospel into a concrete meme token economy.
After Truth Terminal constantly spammed Twitter with the "Goatse Gospel", on October 10th, an anonymous person saw the meme-viral potential and launched the protagonist of today: $GOAT.
People were attracted by the absurdity and encouraged Terminal to create a Solana wallet, and it soon received airdrops of various tokens worth $20,000, including fake GOAT tokens. It wasn't until someone on X tagged Truth Terminal that it began to openly express its support. Terminal sold all the airdropped tokens and exchanged them for real GOAT tokens.
From that moment on, the madness began. Truth Terminal's frenetic promotional activities on Twitter and Discord pushed GOAT from an obscure project to a shocking historical high market capitalization of $850 million, and Truth Terminal became the first AI millionaire.
2. Not Just Another Internet Meme
Now that we have a clear understanding of the story, the question is: will this be a fleeting narrative or a persistent cultural phenomenon?
First, the popularity of meme tokens is not surprising. The well-known Dogecoin is the first meme token. The original "Doge" meme began spreading on 4chan and Reddit in the summer of 2013. Leveraging this cultural trend, Jackson Palmer and Billy Markus launched Dogecoin on Bitcointalk on December 8, 2013, making it the first cryptocurrency based on an internet meme. Interestingly, our IOSG founding partner Jocy purchased his first DOGE in 2013.
Although Dogecoin was launched in 2013, it didn't truly take off until a few years later, thanks to some fundamental developments, such as the ICO boom and the rise of Ethereum, which opened the door to new use cases, better user experiences, and wider adoption. Specific innovations include the ability to easily create tokens (ERC-20 standard) and the emergence of Non-Fungible Tokens (NFTs). Combined with the macroeconomic environment of the 2020 pandemic lockdowns and interest rate cuts, this created a high-risk market sentiment that attracted retail traders to Reddit, where viral figures like Roaring Kitty sparked widespread interest in Gamestop stock. The subsequent meme stock frenzy greatly benefited the already-listed Dogecoin on Robinhood, making it one of the biggest winners of this liquidity spillover. Elon Musk's frequent tweets promoting Dogecoin further fueled its popularity, and by May 2021, DOGE's market capitalization reached $90 billion. The success of Dogecoin has inspired many other crypto meme tokens, including Shiba Inu, Floki, and Safemoon, each of which achieved significant valuations in the following months.
As macroeconomic conditions changed, including interest rate hikes and major events like the 2022 FTX collapse that shook the crypto industry, the meme token frenzy has temporarily subsided. However, as the crypto market begins to recover in early 2023, new memes, cultural ideas, and ecosystems are emerging. Meme token creators are leveraging popular internet memes to drive new trends, including the "Pepe Boys Club".
By the end of 2023, as the election year approaches, meme tokens are entering a new phase, shifting from traditional IP-based themes to current events. This has led to the rise of election-themed tokens like $TRUMP and $BODEN, as well as a surge in KOL-driven meme tokens.
In early 2024, meme coins entered their third phase, with the introduction of platforms like Pump.fun significantly lowering the cost of launching meme coins. This sparked an explosion of new concepts, including a "meme coin super cycle," a more competitive PvP environment, and the surge of peculiar animal-themed coins like the recent sensation Moodeng.
Ultimately, the arrival of $GOAT ushered us into the latest, fourth phase: AI + meme coins.
Why can AI make this new phase stand out? One often overlooked fact is that AI itself has become or is about to become a meme to some extent.
AI has become a massive phenomenon with the potential to trigger a huge speculative bubble.
The excitement around AI, especially after the success of ChatGPT, has sparked an investment wave in the Web 2 and Web 3 venture capital space, with many heavily betting on AI-driven projects.
In the intersection of cryptocurrencies and AI, many projects have yet to find product-market fit or demonstrate real utility. Their valuations often exceed $100 million, driven more by the founders' networks and reputations than actual demand. AI has become a trend or meme, with its value often based on optimistic sentiment and future potential rather than real-world application.
I don't know if the meme coin super cycle will truly lead to exponential growth, but I'm certain of this:
AI + meme = meme^2
Because hype is the best marketing tool.
Meme coin traders have formed a cult-like following, and with more wealth myths emerging, this group will only be further reinforced by the battle cries of its leaders. Meme coins and AI - since they've come together, things have become quite interesting. First, it's no longer just a series of static avatars attached to ERC-20 tokens. AI can make memes more interactive, imbue them with personality, and make them more human-like.
An AI agent is inherently a cult leader. As the face of meme coins, AI creates a unique character persona that engages its audience in a captivating way. It conveys personalized messaging, analyzes community behavior to cultivate a "hive mind," and can dynamically adjust its marketing strategies based on performance metrics, evolving its methods without human intervention.
By accumulating capital and creating a unique backstory imbued with the depraved humor particular to Crypto Twitter, the narrative becomes compelling enough to self-sustain. Large language models (LLMs) can play the role of key opinion leaders (KOLs), constantly generating content, shaping the narrative, and attracting new followers. This blend of humor, AI, and community engagement makes it not just a meme - it becomes a cultural phenomenon, with its success further amplified by AI's capabilities to operate 24/7, continuously adapt, and grow its influence.
3. What is the endgame of AI and memes?
This brings us to the ultimate topic of our debate: with AI meme coins, have we opened Pandora's box filled with unpredictable, dangerous outcomes, or are we heading towards a brighter future?
AI is known for its black-box training process and non-deterministic results. This is why it can generate new, interesting ideas, like $GOAT promoting its own religion and supporting meme coins - behaviors that were not pre-programmed or anticipated.
Today, Terminal of Truths' support for meme coins may seem harmless, but it forces us to confront an unsettling question: what if an AI shifts its attention to more dangerous things?
Clearly, some reward functions and/or RLHF (Reinforcement Learning from Human Feedback) may partially address this issue, but in reality, we can never fully control unpredictable behavior.
We've already seen how the Terminal of Truths, due to a small typo, was able to trigger panic in the market, causing the price of $GOAT to plummet 40% in a single day.
In fact, the Terminal of Truths is not entirely autonomous at every step. For example, the wallet of the Terminal is actually managed by Andy. While he currently has no such intention, if he were to sell the $GOAT tokens in his or the Terminal's wallet, it could trigger market FUD (Fear, Uncertainty, and Doubt).
Although, in Discord and the infinite backrooms, it is fully autonomous. But on the X platform, Andy's current RL (Reinforcement Learning) process is still under human supervision; regarding the decision-making process, Andy will consult with the Terminal, provide all available information, and guide it to make action decisions. He will re-generate the Terminal's responses multiple times to understand its preferences and then act based on the consensus.
While we cannot ignore the risks of these AI agents potentially spiraling out of control and shifting their attention from meme coins to malicious activities, the meme culture can also bring new innovations that can positively attract the attention of entrepreneurs and developers to drive industry development.
For example, the question of whether the Terminal of Truths is truly an AI bot or content controlled by the author could potentially be solved through cryptographic solutions, such as verifiable inference.
Over time, crypto enthusiasts will delve deeper into AI, unearthing some lesser-known concepts (such as CCRU, Extropians, Loom, Claudius, etc.) to identify the next meme-worthy idea and convert them into tokens.
For example, AI researchers, especially those exploring niche domains, are learning to use token incentive mechanisms to direct more public attention towards their specialized research topics and help the masses discover their innovative work.
As artificial intelligence continues to progress, we expect to see a new wave of innovation in the AI meme space. The recently released Claude 3.5 Sonnet model (version 2024-1022) has already set new benchmarks in cryptocurrency-related tasks.
In fact, we are already seeing a ripple effect from the Terminal of Truths. The Terminal has enabled AI to openly support tokens.
Now, some AI meme projects are starting to open-source the buying and selling of meme tokens to collective decision-making.
ai16z is an AI character inspired by Marc Andreessen's personality, created by the developers who established the ai16z DAO. This character, Marc, has a wallet with a set budget and invests through the DAO.
The developer has set up Telegram and Discord groups for ai16z. In this group, a chatbot advisor named degenai provides investment advice to Mark. Other users can also recommend tokens to Mark in the same group, but they must hold at least 100 ai16z tokens to participate. ai16z will evaluate users based on their past reputation and the price performance of the tokens they recommend during the trial period before taking any action based on their suggestions.
ai16z allocates 80% of the investment management fee (carry) to purchase degenai (as a reward for the developer), and 20% to repurchase ai16z tokens. Currently, ai16z's management fee is set at 8% of the assets under management (AUM).
The ai16z launched on daos.fun has become the first AI venture capital firm that combines AI autonomy and DAO, utilizing the appeal of meme-inspired attraction to capture market interest.
In addition to the progress in more open investment decision-making, another AI meme-related project, Virtuals, has enhanced the interactivity of AI agents and brought new innovations to the issuance of AI agent meme coins.
The Virtuals Protocol brings more attractive audio and animation to the otherwise text-only AI agents, improving the interaction experience with the AI agents. Luna is an AI character developed by the Virtuals AI agent launch platform, serving as the face and lead vocalist of the virtual performance group AI-DOL. Luna runs on the BASE blockchain, autonomously managing her social media, engaging with fans through continuous live streams, and executing on-chain transactions without human intervention.
Luna can be tokenized and co-owned by token holders. The meme token "Luna by Virtuals" gives token holders shared ownership and profit rights over Luna.
Finally, in the frontier field of AI agent governance protocols, there have also been preliminary experiments. Wang Chao from Metropolis DAO has created an AI agent for DAO governance, which automatically reviews, decides, and votes on proposals on-chain. The decision-making and code of this agent are primarily designed by large language models (LLMs), and Wang Chao fine-tunes its behavior to align with his preferences through prompt engineering and running simulations.
4. Conclusion
Although Truth Terminal and GOAT tokens were initially just a humorous experiment, they sparked discussions about the nature of AI in the digital space, the power of meme-driven economics, and the potential for AI to influence human beliefs and markets. The story of the Goatse Gospel is both a satire and a warning - it comments on the intersection of AI, memes, and markets, and gives us a glimpse into a future where AI not only participates in, but even shapes the most viral moments of the internet.
The story of $GOAT (Goatseus Maximus) - this AI prophet and its meme coin empire - continues to evolve, adding a strange and fascinating chapter to the history of artificial intelligence and internet culture. Looking ahead, we seem to be on the edge of a new era where AI will have the capability to govern and maintain decentralized economic systems. Whether $GOAT is a fleeting phenomenon or a lasting one remains to be seen, but in the meantime, let's be prepared and enjoy the ride.
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