Are We Witnessing the Dawn of PolicyFi?

In an earlier article on why memecoins matter, I argued that memecoins are ushering in a new era of civic engagement by forming speculative markets in which citizens are able to trade coins tied to government policies.

The convergence of a meme administration, a meme citizenry and meme advocacy has created fertile conditions for PolicyFi and, perhaps counter-intuitively, for better policy making.

When I wrote about why memecoins matter in an earlier piece, I suggested that they were ushering in a new era of civic engagement by forming speculative markets in which citizens traded coins tied to government policies. I argued that holder distributions and market caps in those markets would signal popular support for underlying policies to lawmakers, who would then take them into account when crafting public policy, fostering a new form of political dialogue between citizen and state.

I called this dynamic PolicyFi and presented it as a constructive use of memecoins.

With the Trump administration coming into office and the President-Elect and First Lady launching memecoins, it is a good time to ask if we are entering the PolicyFi era and, if so, whether we should welcome it.

I believe the answer to each of these questions is yes. The convergence of a meme administration, a meme citizenry and meme advocacy has created fertile conditions for PolicyFi and, perhaps counter-intuitively, for better policy making.

Meme Admin, Meme Citizenry, Meme Advocacy

PolicyFi requires the installation of meme-sensitive government actors, or a “meme admin.” In the original piece, I suggested that the incoming administration fit the bill because it understood and respected the power of memes. When I wrote that, I was thinking mainly of Elon Musk and his affinity for dogecoin but also of Trump’s own adeptness at creating and harnessing memes on the campaign trail and while in office.

Admittedly, the President-Elect’s issuance of his own Solana memecoin (Trump), soon followed by his wife’s (Melania), a few days before he took the oath of office surprised even me. (I suspect the timing was driven by concerns over the Emoluments Clause.)

The Trump memecoins immediately soared, draining liquidity from every crypto ecosystem and almost breaking the Solana blockchain. If you are a crypto-native, you will always remember where you were when the President-Elect and soon-to-be First Lady announced the launch of their memecoins.

The Trump coins sharply divided the crypto industry. But, more importantly for present purposes, they put beyond doubt that Americans had elected a “meme admin” that was prepared to engage with financialized memes, and was therefore more likely to engage with them while in office.

The Trump coins contributed another essential ingredient for PolicyFi: the en masse onboarding of the citizenry to memecoins and, in particular, political coins. The stats around the Trump and Melania memecoins, which were explicitly marketed as a form of political expression, are staggering and telling. Most holders were new retail buyers. Around 50% had never bought a Solana altcoin (i.e. tokens on the Solana blockchain excluding SOL and stablecoins) before. Nearly half of buyers created their wallets on the day that they purchased the tokens, and more than 80% of Trump and Melania holders hold less than $1,000 worth of assets on Solana, further suggesting retail popularity.

Many of these meme recruits seem puzzled about what to do next with their crypto. (I expect they’ll figure it out.)

Alongside this meme admin and meme citizenry is the proliferation of more (and more innovative) policy-focused memecoins. Many of the policy memecoins that I mentioned in the original piece, such as D.O.G.E. (Department of Government Efficiency) and SBR (Strategic Bitcoin Reserve), attracted substantial trading volume as the new admin took office and investors began to speculate on its initial policy steps.

However, these policy tokens are still relatively primitive from the perspective of PolicyFi because they place more emphasis on attention flows or prediction (like a prediction market) than on engagement with government actors.

Another token, MILK, fits the PolicyFi thesis better. The express purpose of the MILK meme token is to change U.S. food policy to allow for the sale of unpasteurized milk. The MILK community advances that tangible policy position through its token holdings (2,000 people hold MILK), the market cap of the token (as high as USD $1M) and the community’s production of MILK memes on social media (constant). In an era of PolicyFi, we would expect to see a Cambrian explosion of tokens in the mold of MILK.

A Dialogue with Leviathan

The expression of political will through meme policy markets is necessary but not sufficient for PolicyFi. Governments must also begin conversing with those markets when crafting policy. We may be seeing early indicators of this as well.

President Trump has long viewed public markets and especially the stock market as a barometer of his performance and has tried to satisfy them. More recently, he has adopted a similar stance towards the price of bitcoin (which is itself a brand of financial policy) and is doubtless monitoring the price of his own memecoin, which represents the majority of his net worth on paper.