Why Memeland is Virtually the Only Thriving NFT

A Conversation with 9GAG & Memeland's Ray Chan

“There is a running joke among some of my friends who say ‘You know why Asians love crypto, right? Because the currency in their country is a shitcoin anyway.’”

Today we’re bringing you a no-holds-barred conversation with Ray Chan, better known as 9GagCEO, and founder of current-NFT-anomaly, Memeland.

In a market where everything is red, Ray is running one of the only NFT projects that has surged over the past 30 days (across several collections, Potatoz and Captainz), let alone surged 40%+.

We sat down with Ray to understand how he’s done it, in a wide-ranging conversation that spanned Memeland’s early mistakes to the differences between Western and Eastern NFT and tech markets (and why Memeland’s home in Hong Kong might be one of their biggest advantages).

This transcript has been edited for clarity and brevity. 

The full episode can be found here:

Carly Reilly (CR)

Ray, welcome to Overpriced JPEGs. And thank you so much for being here. I want to start with a tweet from our mutual friend Luca Netz, the Pudgy Penguins CEO. He recently Tweeted that very few people in web3 “get it” and that you are one of the few people who does in fact “get it.” What does that mean? What do you think it is that you get?

Ray Chan (RC)

First of all, I thank Luca for his kind words. I mean, it's more like, not fucking up. {laughter} The key is to keep trying to get it right, because web3 changes so quickly. 

But jokes aside, I think Luca means actually understanding how to build a community and then also how to build a business together with the community.

CR

I think that's a fair interpretation. The other place my brain went with this is: Luca’s gift is around social media and the culture of social media and the culture of Web3, by extension. I imagine that's also part of this: you founded and run 9Gag – you understand internet culture and have understood internet culture for a very long time. And that automatically gives you a certain leg up in terms of understanding Web3 culture. 

Do you agree with that?

RC

I think there's no way to really understand internet culture, it's more like we can keep trying to understand it. Because it's more about how we keep ourselves updated. Internet culture evolves. 

For example, in the past, like 10 years ago, 15 years ago, when we first started, memes were very much an insider joke. Now, everyone talks about memes. Memes have become very mainstream. 

So for us, it's more about how we can keep ourselves updated, and not reject new stuff because it’s new. Like, TikTok. That sounds very stupid, right? Web3, NFTs. These things sound very stupid, right? 

We try to avoid labeling things like that so that we don't become obsolete just because we get older. 

CR

Let's talk about building community and businesses, if that’s the secret sauce. I want to go back to the very first NFT project you launched: You The Real MVP.

Initially you were trying to sell 300 and you ended up minting out just 200. So then you put the remaining 100 in the treasury for giveaways and the existing community. I heard you say that was the best decision y’all made. Walk us through why that was a smart move and how that ties into just how you approach community building?

RC

Memeland was not very early into NFTs. We are still early in general, of course, but in this latest wave of NFTs, we were not very early and one advantage to that was we could learn from other projects. 

And so we thought we’d launch a small community first because 

1. That enables us to talk to all of our holders. That's number one. 

2. We can let the community set the price for the first mint and then maybe they'll be willing to pay and hold for a longer time. 

I think it shows how naive we were because the mint price was 5.3 ETH, which sounds so crazy, but the price was not set by us, it was actually a blind auction price we got after asking our community on Discord. And it turns out the price was too high. 

And it was bad timing: right after Luna and UST crashed so sentiment was bad. 

But luckily, there are always some crazy people trying to support new projects and… maybe they understand our potential.

And then we started to build with our MVP community and to really dig in and better understand what NFTs were about, what the community's about. So I mean, at least we didn't die.

And then we had 100 MVPs in our treasury so when we launched Potatoz we had something we could giveaway as part of raffles, for free, which was valuable to our holders and so we turned that misfortune around.

CR

That's so striking and such an important story because there is, at times, a belief in this space that if you don't mint out, you lose the momentum and you're dead. You didn't mint out. Tell me more about how you crawled out from that hole to become one of the most successful projects out there right now? With that original core group of 200 holders?

RC 

It kind of reminds me of Bored Apes and also DeGods. DeGods kind of fucked up their launch, their artwork, and people thought they were dying. So I think having a hiccup at launch might be a good thing, because somehow it humbles you.

It forces you to confront the fact that maybe you don't actually know how to make an NFT or build a community. I think that [failing to mint out] was a wake-up call for us. Because we had felt like okay, we're gonna get right, we’ve got an audience of 200 million across Facebook, website apps, and stuff like that. But that moment actually taught us that, okay, no matter how big we are on web2, web3 is another world, we kind of have to start from scratch. 

CR
What was your long term vision when you started this, which really wasn't that long ago, but I imagine it's changed a lot?

RC

The long-term vision really hasn’t changed at all. 

I feel like there are two types of entrepreneurs, two types of founders. 

1. Number one knows exactly what they want to be. And that's why they keep working, trying different ways to execute and realize that vision. 

One example of this is the founder of Foursquare. Before Foursquare, he started an app called Dodgeball. It's all geolocation based, all about mobile, and all about geolocation-based businesses. He always believed that ads and data – that their geographical data – is important to business. So he kept trying to execute that vision.

2. Number two is kind of like okay, I don't know what I really want to solve but I think this is fun, right? And so I just continue to pivot and build it. That was kind of like Facebook when it first started.

So, for us, when we worked on 9Gag, we were just lucky. We were just having fun. And then when we are working on Memeland, we actually kind of know what we want to build. 

Because after working on a social media or community-based product for 15 years, we feel the business model didn't really work very well because the incentives for the audience, the advertiser, the platform, and the creators don't really align. 

That's why we feel web3 is very interesting. You don't have to rely on ads, because you just sell a product itself. And then other people use it for free. The company mission for Memeland is to bring ownership to the community. Because when the community actually owns the product then they can help make decisions, they can enjoy the growth.

CR

So spell out this vision for us, in as much specificity as you can.

RC

We have a three course meal for our web3 dinner. Our web3 strategy is a three course meal.

1. NFTs for community building. We share the same PFP, we are in the same discord. We are in the same token-gated community. I think it is a very good tool to build community because people really feel that they belong.

2. Then the [ERC-20] token is for value creation. Because not everyone is able to buy your expensive JPEGs. But if you have like $4 $5, you can buy an ApeCoin. You can still be part of the ecosystem, if you own part of the token. 

That part is important because it helps you decentralize and create value. 

3. The last part is [products] because right now, with our token: what does it do? That's why we need to build products or encourage people to build products for the application of the token. 

That's always what we’re thinking about for our Web3 strategy and it’s  what we're building right now. 

CR

So up to this point & it sounds like for the foreseeable future, Memeland is funded through 9Gag profits. You haven't taken any outside money. So a combination of mint earnings and whatever you are still getting at this point from secondary royalties.

RC

We still have some royalties… 

CR

Right but you dropped your royalties from 9% to 3.3%

RC

3.3% royalties still add up. This is also an interesting topic. Because after buying a lot of NFTs for a year, there is a pattern. There will be a lot of traders right in the beginning of the project. 

For Potatoz, we had a high royalty because that was a free mint so a high royalty is justified. And then for Captainz we had a high royalty in the beginning because we knew that people have been trained to flip and so why don't we use the royalty to fund a giveaway, which is marketing for our community. And that’s why we set it high. 

And then, it’s almost as if we created a new trick for getting people's attention. Because when your royalty is high, people will complain about it, whether they are in your community or not. They will write long threads complaining about you. But they’re talking about you, which is the real win. 

CR

All press is good press, right?

RC

That's exactly right. And to be honest, people are forgiving and often forget in NFTs. If you can actually make it work and keep your floor price high, they will change their mind. 

NFTs are very attention driven, so you need to think what are the tricks that can get people's attention? We had our high royalty and people wrote about us for that, and then we dropped it back down to 3.3%, and they wrote about us again. So it gave us an extra trick. 

We need to create more tricks in our pocket. It is like a funny experiment because honestly, we don't always know what’s going to work or not. 

The good thing about NFTs is you get the funding in the beginning so you don't have to worry as much. 

Though that can also be a curse because people expect you to deliver so much for them in such a short period. We always have to align and adjust to our holders' expectations.

CR

Let’s talk about the products. You've talked about Holders.com which you call TripAdvisor for web3. You've talked about GMGM, that one you call OnlyFans for web3, but you keep your clothes on {laughs}.

RC

It’s OnlyFans because, on the one hand, that catches people's attention. But also, OnlyFans is one of the biggest paid social media companies out there. 

CR

So what is GMGM? What is your vision for that? 

RC

Actually, this is interesting, because we have deprioritized GMGM for now. After understanding more about the needs of our holders we felt like, okay, maybe we need to have a $MEME token, make it valuable first, and then we’ll launch GMGM. 

At the end of the day, you can't create a token out of nothing. And then use that nothing token to reward people. 

So, we are working on two products internally right now. Number one will continue to be Holders.com. Another one is called PFP.com. PFP stands for “proof of fandom” protocol, it’s inspired by a POAP but we’re trying to make it cooler. 

The direction for that is, can we work with existing IPs and brands who want to get into web3, but don't know what to do? It's so overwhelming for them. Can we create a format for them so that they can easily launch their project and create utility for their existing fans?

CR

Is it like a loyalty marketplace, where you can easily find the benefits from all your favorite brands?

RC 

Kind of like that. Social media is interesting. You feel good when you have 1 million followers, but if you ask them to pay, it's really hard. 

But if you actually have a core group of fans, they're willing to pay. And, with Blockchain and NFTs, it becomes very easy to recognize who they are. 

As a creator, you know, okay, those are the guys that you want to reward. Because you know that they are your customers. They are your biggest supporters. They are not just someone that only cheers for you when you give them free shit.

That's the bigger vision for us and to educate the IPs and brands and celebrities. I mean, I love Anthony Hopkins but I don't want to buy his NFT and use that NFT as my profile pic. I love to watch Kevin Hart’s movies, but I don't want to own his NFT because I think that 3D NFTs are not my cup of tea. 

But if Anthony Hopkins or Kevin Hart or, the best example is probably Kpop groups, if they are willing to give some extra utility to their fans, some experience to their fans, tons of their fans would love to support them. 

And the price point matters. If you mint at like $1,000? Of course people won’t buy that because okay, I love your movies, but I don't really love you that much. 

That's a very delicate balance and expectation that you have to set. That's why for PFP.com we want to guide all those IPs and brands in the correct way so that they don't fuck up. Because it's so painful to see so many brands fuckup in web3. It gives web3 a bad name. It also gives all those brands a bad name. 

CR

Okay, this is a longer tangent but when you and I spoke last time, you made interesting distinctions between the US entrepreneurship market and the Asian entrepreneurship market. I'd be curious to get your thoughts on that. Do you see a difference in the way Asian audiences are interacting with NFT's relative to a western audience?

RC

First, Let's talk about our holders. We are quite global. We have a lot of holders in Asia. But we also have a lot of holders in the West. 

This is in part because we are already pretty global because of 9Gag. But also, our positioning is not super American. We’re able to talk about the token, we can talk about social-fi products [without the same fear of regulators]. We’ve always thought about NFTs as a way to crowdfund, as a way to decentralize value. 

So in that sense, we talked in a narrative that people outside of the US would understand. 

The good and bad thing about American entrepreneurs or projects is that, because it's so easy for them to make (or raise) money, they can get kind of lazy in their vision.

CR

Why is it so easy? Because of our VC markets? 

RC 

It's definitely venture capital, right? The fundraising. Look at all the top NFT projects that raise huge amounts of funding. All US-based. Because US tech investors understand, oh I just have to invest enough times and then just one of them has to become the next Uber or Yuga 

CR

-- Well there's also this weird dynamic now, where you have these earlier liquidity events, because so many of these projects launch a token and so you have this interesting VC calculation that’s going well I can get fast liquidity as well, I don’t have to wait the typical 7-year cycle for an exit. 

RC

Yes. I think that's why a token or token sale makes more sense for the investors as well. It's not like, “okay, we have to wait for you to IPO,” but that's another story. 

The thing is, when you can raise funding relatively easily, you probably don't spend too much time in your community, right? And that's a good and bad thing. That's why you see a lot of people complaining that after raising funding you see the community as the consumer. 

I mean, that's kind of bullshit but also kind of true in terms of how you are prioritizing your to-dos... 

Because we are not based in the US, our thinking is always that we have to make it work by ourselves, instead of relying on raising. 

We are very practical. We are dreamers, but we are also very practical in the sense that we understand people in NFTs. 90% of them are not here because of the artwork. It's because they see it as a way to make money. You want to understand that on the one hand, and also to educate them to become more like a collector or a supporter.

I see a lot of US projects that are so philosophical, so idealistic in a way. They say hey, we said there's no utility, why are you complaining? 

I would say Asian entrepreneurs are more practical in a way. We try to make products that really build a business. I’m talking about the good ones at least. I think it comes partly from our families and the style of parenting. It's very different. 

But one thing that I also want to touch on is the macro of this.

CR

Yes, I was going to ask about that.

RC

You can see that the driving force, whether it's web2, or web3, is coming from Asia. Because there's incredibly fast growth. There are so many new rich people being made from all kinds of businesses. Most US companies, when you look at their financial reports, the growth doesn't come from the US, but from Asia. When you look at all those luxury brands, the biggest market is in Asia.

Web3 is kind of like that. There is a running joke among some of my friends who say “You know why Asians love crypto, right? Because the currency in their country is a shitcoin anyway.” 

In that sense, they are almost used to it, and they are willing to take more risks. And once you make money by taking risks, you're willing to take more risks.

I see a lot of US-based projects doing their business development in Asia as well. For example, I'm in talks with the Head of Growth at Pudgy Penguins. They want to focus part of their marketing on Asia. And I think when you look at the holders of Bored Apes & DeGods, both have tons of Asians. 

In the past, not basing your company in the US was a disadvantage. But in web3, maybe it’s finally an advantage.

CR 

Who are you more worried about when it comes to regulation? I'm feeling very negative and fearful about the US. I think they're clearly coming for crypto, and some of that certainly stems from a desire for more centralized government control. And when I think about that, well, the Chinese government is even more interested in centralized control than the US government is. Where do you fall in terms of your fears around the regulation?

RC

I think all governments want control. The purpose of a government is control. 

It just depends on what's your philosophy? And why do you have to control people? But somehow, for me, it's less about the government itself and more about the relationship between the governments. The US is the leader in the fiat world, because most countries, most businesses, do business in US dollars. 

That's why anything related to crypto is disrupting their leadership position. That's why they want to make sure that they continue to be a leader in that space. They want to make sure that they set up the regulation in a way to make sure that the US continues to be the leader. That's how I see it from an outsider standpoint. 

But at the same time, I think a lot of other governments understand that if they have the ambition to become the next world leader they probably can't disrupt the US in the fiat world, no matter how hard they try. 

I'm based in Hong Kong, which is part of China. But it's not exactly China, in a way. Part of China’s financial plan is to work with a lot of developing countries, giving subsidies, etc. because they want those countries to use RMB as the settlement currency. But no matter how hard they try, it's really hard for an existing business to suddenly change from US dollars to RMB.

But web3 is a new dimension of business. That's why, right now, China is kind of trying to make Hong Kong the web3 hub of the world. I can't beat you in the fiat world, but if I'm advanced enough in the web3 world, I can probably win. 

Of course right now, China still bans crypto in some sense, but at the same time, they understand that the best way to disrupt the current world leadership is probably web3. 

We are based in Hong Kong. We can launch a token. Worse case scenario, we do some VPN shit, block the US assets and stuff like that. It’s still very safe for me and that makes us different. 

When you look at the so-called top projects right now, we are one of the only top projects that’s based in Asia. And I don't play the Asian angle a lot. I'm not saying oh, I'm Asian, buy our project for that. Because I feel that you should buy our project because we are good, not because we are Asian. But, honestly, I think being based in Asia may be actually an advantage down the road.