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In the less than 24 hours since megastar Will Smith permanently damaged his public image by slapping Chris Rock, a man half his size, the cryptosphere has launched at least two projects purporting to somehow put the event on the blockchain. Despite no obvious logical connection between crypto and The Slap Heard Round the World, the newly minted digital assets even appear to have generated some sales.
But does that mean you should pile in? Absoluuuuuutely not.
Katie Notoupolos at BuzzFeed spotted something Monday morning called “Will Smith Slap DAO” selling non-fungible tokens (NFT) on the OpenSea marketplace (I’ll just be referring to it as SlapDAO). And, a token called “Will Smith Inu” has begun trading on UniSwap and other decentralized exchanges. (I will as usual avoid linking directly to suspicious projects.) Will Smith Inu saw a short, brief price surge overnight, and attracted about USD$1.9 million in trading volume.
That’s not as much as it might sound like. But for those new to the crypto space, it’s enough to invite some basic questions, such as What? and perhaps Why? Why would Will Smith approve such a thing? What possible reason could there be to buy it? Does this somehow make sense and I’m just missing some novel but well-known crypto business model?
The short answer to any and all such questions is "Hold on a minute." If you think these projects are legit or investable, it’s time to take a step back and brush up on some important crypto knowledge.
In fact, it may be the most important thing to know: Anyone can create a token and call it anything, and say anything they want to about it, and they’ll probably never get in trouble.
Ethereum, Binance Smart Chain and other crypto systems have tools for quickly creating secondary tokens (ERC-20 or BEP-20, respectively). These have no inherent value, and it can take just minutes to launch a “new project” claiming some vague association with a public figure or cultural event.
This goes back at least to 2014, when Coinye West launched without any actual affiliation with rapper Kanye West. More recently, we’ve seen “Squid Game Token” capitalize on the Netflix hit, and the infinite variations on “Dogelon Mars” and “Elon Doge” attempting to capitalize on Tesla CEO Elon Musk’s profligate s**tcoinery.
Because the crypto market is global, and because you can sell more or less any token on a decentralized exchange (DEX), these shallow deceptions gain some trading momentum and volume. But they’re fundamentally tricks, and almost all of them collapse as fast as they rise.
Kanye West, for his part, quickly sued the Coinye project into the dirt. But these things usually collapse without outside help. After the token shot up immensely in a few days, the “developers” behind Squid Game token abandoned it – a classic "rug pull" – and it dropped to zero. Expect these Will Smith Slap things to suffer a similar fate.
The broader takeaway is just as simple, and just as vital for anyone new to the space to internalize: Not all cryptos are created equal. Not by a long shot. And while “hot and new” is a positive feature in a lot of sectors, it’s often a bad thing in crypto, where the “Lindy Effect” appears to be quite strong. The Lindy Effect is an investing theory that the longer something has existed, the longer it will continue to exist. New cryptos, much like new companies, have a very high mortality rate.
Memes Without Meaning
There is also room for confusion between “memes” and “meme tokens.” They’re very, very different things.
“Memes” in general are hugely influential in crypto – in fact I’ve written an entire book about them. But memes are communication tools, not a value proposition or selling point in themselves. The good memes in crypto are condensations of much more complex ideas. “Bitcoin Maximalism” is a simplified meme – “Bitcoin (BTC) will become the world’s reserve currency.” It stands in for a much more complicated set of arguments, though, about the utility of a neutral digital currency layer, and Bitcoin’s unique positioning to be that layer.
Then there are, let’s just say it, the Bad Memes, which come in at least two varieties. There are memes that purport to represent more nuanced ideas, but are simply wrong (“XRP the standard”). There are also meme coins with no underlying deeper message at all, pure mindshare plays that slap a catchy image or a slogan on a token created from an open source algorithm and call it a day. Dogecoin (DOGE), shiba inu (SHIB), Coinye West and SlapDAO all fall in this category.
SlapDAO, like most of these empty signifiers, leans into winking self-awareness about its own ephemerality. It features lo-fi pictures of various Will Smith slaps from various angles, plastered with random low-IQ crypto slogans. They’re pretty funny, in a 4chan chud kind of way.
But however drenched in irony a project may be, the money is still real: As tracked by OpenSea, the definitely infringing Will Smith Slap DAO has sold 13.3 ether (ETH) worth of these destined to be short-lived NFTs in less than 24 hours. That’s more than $40,000 at current prices – arguably a sweet spot for short cons because it’s not enough to trigger much investigation.
(They’re destined to be short-lived because OpenSea, the 800-pound gorilla of NFT marketplaces, tends to delist infringing or scammy projects. The NFTs still exist after being delisted, but once they can’t be traded on OpenSea their value generally tanks.)
At the same time, those purchases might themselves be fake “wash trades” meant to create the impression there’s market interest and trick real traders into buying in. Wash trading is incredibly simple – you just use your own good crypto (BTC, ETH) to buy a fake or shoddy crypto asset you created, usually from a new wallet that slightly obscures the source of the funds. That fake buy drives up the markets’ perception of the “correct” price for your crummy asset, essentially tricking subsequent buyers.
Wash trading and other manipulation is extremely common in crypto, especially in new or unknown projects. There are few systematic and reliable ways to prevent or detect it. LooksRare, an NFT platform that sought to challenge OpenSea’s dominance, appears to have hosted rampant wash trading.
To be clear, I don’t have evidence this is happening with the Will Smith Slap assets, and given the smallish amounts involved, it seems plausible people are genuinely just piling in for a laugh. That’s another dynamic important to understand: Whether or not they're an outright scam, meme tokens are heavily traded by people who explicitly understand what they’re doing as a form of gambling.
The “game” of meme trading is usually to try to catch a very short “pump,” a price peak sometimes lasting just hours or even minutes, before a worthless token collapses to zero, usually forever. You mostly don’t want to trade against the self-identified “degens” who try and catch these pumps: they pride themselves on obsessiveness, sleeplessness and general lunacy.
See also: A Dictionary for Degens | Opinion
As a testament to just how many worthless crypto tokens already exist, there are also “slap”-themed cryptos that have nothing to do with Will Smith or the Oscars. A SLAP ERC-20 token that launched more than a year ago was supposedly linked to a dating service, but now appears to be dead. There’s a second unrelated token called ShibaSlap that launched in January as a naked and seemingly unsuccessful attempt to siphon off meme-coin interest. There are probably more.
The basic point is this: Anyone can create a digital token and they can call it anything they want. Then they can easily list it to a decentralized exchange without permission or approval from anyone. Then they can easily buy their own token from another wallet they control, creating the impression that there’s organic demand. Keep all of that in mind when pondering any crypto trade.