social media feeds becoming downstream of meme price discovery: when i ask onchain traders how they find alpha, the #1 response is tracking profitable wallets. in parallel, KOLs and influencers play a bigger role in price discovery across all markets than ever before..

right now there is no direct way for these onchain traders or influencers to monetize their following—in the worst case they are incentivized to countertrade or rug their followers. in the best case they attempt to sell a product to their followers..

there is a known mechanism that better aligns the interests of influencial investors and their capital following: investment funds. in a typical fund the onchain account or influencer contributes capital and allows others to join their active portfolio, in exchange for a fee..

consider how many active crypto investors there are, and how many crypto funds there are. the ratio is close to a million to one. the reason there are relatively so few funds is the fixed costs associated with starting and operating a fund, and the trust required to startup..

imagine if we could reduce startup/operating cost of a fund to effectively zero, by putting the fund onchain. designed correctly, it prevents managers from stealing, investors have flexible liquidity in the form of a token which tracks the fund NAV, and it’s real time audited..

we are close to sufficient infrastructure for these onchain, more meritocratic, nano-funds. and i think the effect it will have on the number of funds created is conceptually similar to the effect pumpfun has had to the number of tokens created..

it’s logical to me that instead of every retail trader having to build and manage an entire portfolio, they simply “follow” investors who compete on social media and onchain for capital. it’s pretty much what’s already happening, but with worse alignment and extra steps..

this is just one way we will see social media and capital markets combine. following onchain and following on social media will merge. virality of content and viral coins will merge. eventually your timeline will be determined by market mechanisms instead of a central algorithm