Alexi Horowitz-Ghazi

In the 1980s, courts were just starting to confront this confusing new reality in a case about boat shoes. Specifically, Sperry top-siders. You know, those preppy-looking leather shoes with the rubber sole? The company making those shoes, they were getting the upper half from Indonesia.

Like it's a shoe, but without the rubber part that makes you able to use the shoe as an implement to walk on, basically.

The company would take those leather uppers and then, in the United States, glue and stitch on the rubber soles. And the question was, did that count as a substantial transformation? Did the act of attaching soles onto those uppers turn them into American shoes? Or was the finished shoe still a product of Indonesia?

So you're like Hannah Montana, basically. But I don't know which part is Miley Cyrus.

But... No. The court said what is happening here in the U.S. is just too simple. They were like, you're just assembling these pre-made parts. The real work to make the shoe, the complicated process of cutting and sewing all this leather, that happened in Indonesia. So this shoe, even though you finished it in the U.S., has to be labeled as an Indonesian shoe.

It's the trade lawyer part, the Hannah Montana part, and then the poet part is one or the other.

Maybe I misunderstand what a shoe really is. And if so, that's on me. That's my bad. But if the shoe doesn't have the sole, if it doesn't have the literal rubber or whatever that protects your feet from the harsh realities of the ground, then it's not a shoe.

Yeah, Larry's not the only one who thinks this was not a good decision. But the boat shoes case set a really influential precedent. As manufacturing has gotten more complicated, courts and customs officials have focused more and more on what is the essence of a product, and when does that change? And you could see this maybe as a more stringent way of looking at a product's character.

So it's no longer enough to just change a product's character. You have to change something essential about its character.

So what is the essence of something? What is the essence of anything? This is the new question at the heart of the substantial transformation test. And it's now creating all kinds of strange puzzles, like in our final example, which involves sticky notes. You know, like Post-its, those pads of paper you peel off a sheet and stick it to the wall, stick it to the fridge, stick it to your forehead.

And Staples was wondering this because they had a whole multinational plan for manufacturing these sticky notes. First, they would start with the paper, a jumbo roll about three feet long, and this would come from either Japan or Indonesia. Then the sticky stuff, a special patented glue, and this would come from Taiwan. Finally, the assembly.

A machine would unspool that giant roll of paper, apply the glue, cut the paper into sheets, and out would come the Post-its. All these final steps would happen in China.

So in this ruling, customs wrestled with the question of what is the essence of a sticky note? Is it the paper that you write on? Is it the glue that makes it sticky? Or is a sticky note not really a sticky note until you put the glue and the paper together?

Right. I feel like that is what most people would say. And yet, here is what customs decided. They said, when you get down to it, we think that the essence of a sticky note is really the paper.

Okay, but Maureen...

I have a piece of paper right here.

I have a piece of paper right here, okay? It's not a sticky note. It's just a piece of paper. And look. It's not sticking. It's not sticking. It's not sticking to the wall.

I think we did an episode on that.

So according to customs, the country of origin of these sticky notes would not be Taiwan, where the glue came from. It wouldn't be China, where the roll of paper would actually get chopped up and glued up and turned into sticky notes. No, customs said these sticky notes would be considered products of the country where the original paper came from, either Japan or Indonesia.

OK, so the answers, by the way, are that most X-Men are toys. Hockey pants are considered sports equipment and cough drops. Well, it actually depends on the ingredients.

So Staples would not have to pay the tariff on Chinese products. The sticky note case really shows you What has happened to the substantial transformation test? How unpredictable it can be nowadays? Because more than ever, courts and customs officials are asking these weird philosophical questions like, what is the essence of a sticky note? When does a sticky note become its true self?

Questions that are hard to answer in any kind of consistent way, which can land you in some pretty absurd places.

Now, there are a few reasons why the substantial transformation test is still, by and large, the law of the land in the U.S. For one, this is just the way we've always done it. And the test is really flexible. It doesn't require any complicated accounting or record keeping or compendiums of rules.

What's the reaction from your clients when they're like, Maureen, can you just tell me what country of origin is this product? And you're like, oh, hold on. There's a whole.

What is their reaction?

Maureen figures it out by talking to the engineers, asking for design sketches, getting a whole list of materials. And then she sees if she can try to make an argument for whatever country she thinks the country of origin is. For companies trying to avoid China as their country of origin, Marine might help them figure out how much of their manufacturing they actually have to move out of China.

Or maybe they can keep making the product in China, they just have to get a key component, the essence of the product, from a different country. That's kind of the game these days. And lawyers like Marine are in high demand. Lawyers who can, you know, wax poetic about the real, deep-down essences of things. This episode of Planet Money was produced by James Sneed with help from Sylvie Douglas.

Recently, the questions vexing Maureen have taken an even stranger and more philosophical turn. Maureen's clients, CEOs at companies big and small, have been asking her about where things come from, their national identity, their country of origin. Like, what makes a Canadian product Canadian? Or a German product German? Or especially, what makes a Chinese product Chinese?

It was edited by Jess Jang, fact-checked by Sierra Juarez, and engineered by Kwesi Lee. Alex Goldmark is our executive producer.

And I'm Jeff Guo. This is NPR. Thanks for listening.

And when does it stop being Chinese?

Maureen's clients have been bombarding her with questions because millions of dollars are at stake. Whether something's a product of Canada or Germany or China could soon mean the difference between no tariffs or 20% tariffs or more than 145% tariffs. These tariffs all depend on a product's country of origin.

What's the part that is shocking to people?

Marine says people often assume that there must be some logical method, like maybe just compare the costs of the ingredients and the labor that come from each different country or something. And she has to tell them, oh, no, the way we do it in the United States is a lot weirder, a lot more confusing and a lot more unpredictable. Hello and welcome to Planet Money. I'm Jeff Guo.

Today on the show, when you buy something at the store and it says made in China or made in France or made in the USA, what does that actually mean? How much of it actually came from China or France or the USA? And in this age of supply chains that crisscross the world, does our system even make sense anymore?

Take any object that might be around you. I mean it, like a pencil, a TV remote, a pair of earbuds. Hold it in your hand and look closely. Chances are you're going to see a little label. Maybe it's engraved. Maybe it's printed. It says made in China or made in Malaysia or made in USA. Maureen says her clients are often surprised to find out that those words can mean very, very different things.

There are actually two sets of rules here, one for American products and one for products from the rest of the world.

This is why you sometimes see things that say assembled in America with foreign parts. But for American products, there is also the option to just not have a label at all. So when you go to the store, you might notice some products that don't tell you where they come from.

Uh-huh. Yeah, these are American products. They're just not 100% American. So they can't use the Made in USA label.

You can think of country of origin as kind of like a product's citizenship. But in the U.S., how we determine that country of origin can be wildly counterintuitive. It's not necessarily where that product got on the container ship to come here. It's not necessarily where most of its ingredients are from or even where most of the manufacturing happened.

Wait, they don't?

It seems like that's their job.

Maureen Thorson is a poet. She's published three books of poems. She's been featured in fancy literary journals from The Horseless Review to Plowshares.

So you have to self-declare.

But then, Donald Trump was elected president for his first term. And country of origin suddenly started to matter a lot. Because in 2018, Trump put big tariffs on lots of Chinese products. And how does customs determine what is a Chinese product? Well, it's anything whose country of origin is China. That is when Maureen's phone started ringing off the hook.

And whenever clients ask Maureen questions like this, which they are doing more and more these days, she has to take a deep breath, sit them down, and say, Okay, here is how we determine a product's country of origin. There's one main rule in the U.S. It is called the Substantial Transformation Test.

And it says a product gets its country of origin from the last place where it went through a substantial transformation.

Are you literally quoting this test?

As a poet, Marine often finds herself puzzling over, you know, the fundamental nature of things. Like, what makes a chair a chair? Or a hat a hat? What makes this, this, and that, that?

Marine says to really understand the substantial transformation test, you have to understand where it came from and the history of how courts and customs officials have tried to apply it. For that, we called up someone who is an expert in this history. He's kind of a legend of trade law. His name is Larry Friedman, and Marine actually knows him pretty well.

Did you really?

Wait, so is Larry like your Yoda?

Larry is a longtime trade lawyer. He's taught trade law at the University of Illinois, and he co-wrote the textbook on customs law.

This Supreme Court cork case created the idea that in order for something to really be transformed, you have to give it a new character or name or use. Is that phrase new character name or use? Is that just like tattooed on your heart?

Or just put it on your tombstone. I don't know.

Now, customs wanted the company to call these hairbrushes Japanese because the majority of the brush was the wooden handle, which came from Japan. But the company disagreed. So the question for the court was, did this simple act of adding bristles to that wooden handle transform it into an American hairbrush?

And that is exactly what the judge said. The judge said, there is a substantial transformation here. What you now have is an American hairbrush. And Larry says this hairbrush case shows you how even a basic manufacturing step, like gluing some bristles on, can change a product's country of origin.

If you look at how modern manufacturing works these days, it's hard to pinpoint exactly where a thing even becomes a thing, because most things are manufactured in many different steps scattered across the world.

So happy birthday, Vovi. It's the soup Nazi from Seinfeld. Remember me? No soup for you. Hey, yo, what's up, peeps? This is Sean Pod. I'm Lindsay Lohan. Hi, everybody. Stormy Daniels here. Hey, Ida. It's Sean Spicer. Hey, Alyssa. John Lovett's here. I want to congratulate you on graduating college.

This is Planet Money from NPR.

The CPO, I should mention, is being paid by the bankruptcy estate. And so the money that is going towards the CPO's work in terms of gathering all this information and making this report is coming out of funds that could potentially go to creditors.

I don't know. That's like choosing between children or something.

Because it's going to be much more valuable if we keep it going as a railroad than if we halt everything, halt operations, and start cutting up pieces of track and saying to a creditor, okay, you get six feet of track.

This has been going on for a while.

I always think of it as toy smart, like smart toys.

There's this concern about we're going to be selling the data of children to potentially anybody, right? Not even necessarily a toy manufacturer. And I think that raised a lot of red flags.

The customer information can't be sold by itself. It has to be sold as part of the ToySmart business.

And so these ToySmart guidelines kind of became the blueprint for other companies seeking to sell their data in bankruptcy. And I think today, data sales and bankruptcy adopt a lot of the facets of the ToySmart settlement.

Yes, the Consumer Privacy Ombudsman, or the CPO, is what they're called. We love our acronyms in bankruptcy.

Because consumers, for the most part, aren't parties to a bankruptcy case. But they are affected by what happens in a bankruptcy case, especially when their data is being sold. And so the role of the CPO is to try to be that voice, I think, for consumers.

RadioShack had a ton of customers, over 100 million. It was like a significant percentage of like the entire U.S. population.

So, I mean, you could argue that that's an effective use of the CPO or an effective use of privacy protections. Because if your last interaction with RadioShack was like 10 years prior to the bankruptcy, your data was not getting sold. That was not part of the sale.

Because you can think of Pump.Fun as this hyper-literal attention economy. If a coin creator can't generate enough excitement around their meme coin, they won't be able to ensnare enough buyers to get it to take off.

That, of course, is the precocious and a little devious 13-year-old from the beginning of our story. Thanks for the 20 bandos.

So that's the first group, the people without much clout who have to find some way to grab attention for their meme coin. Now, there's a second group of meme coin creators, and their big strategy is to already be famous.

But the third and final group of meme coin creators are the real power players. These are the shadowy groups of well-resourced insiders who know how to play the game.

And now today, this coin is already about to hit 800k market cap and break through a mill.

Like, one of the big reasons Dogecoin is still the most valuable meme coin is because Elon Musk started tweeting about it in 2019.

And if they can get enough price liftoff, their coins will graduate from Pump.Fun to bigger platforms with whole new groups of potential buyers. Like one platform aptly named Moonshot to the biggest exchanges like Binance and Coinbase.

But regardless of whether a coin dies on the launchpad or makes it to the moon, there's one group that makes money no matter what. Because pump.fun gets a 1% cut of every trade made on the platform.

Which raises the enormous question, why do so many people continue to invest in a system that feels so clearly rigged against them? Why do people still invest in meme coins?

But instead of people promising financial gains based on some underlying value, these days, many meme coin boosters are just promising that there will be enough other chumps out there to cash you out when the time comes. Call it a chump and dump.

Hello, Alexi. Hello. Yes. Over the past few months, you and I have been on a deep dive into the world of meme coins. We've been spelunking in the crypto mines. We've been getting lost in them because over the past decade, meme coins have gone from a one-off joke to a speculative frenzy worth tens of billions of dollars.

Bitcoin was launched in 2009, and it was pitched as a sort of utopian alternative to government-backed currencies. It was a way for people to pay each other without having to rely on the existing financial system.

And this was the seedy state of crypto that inspired what is widely considered to be the first meme coin, Dogecoin.

Here's how it would work. Some programmers would create a new coin. They'd hype it up as the next Bitcoin, maybe do some sketchy stuff to fake demand, and get people to buy in, all to pump up the price. And when enough money had flowed in, they would sell off all their coins. They would dump their holdings. The price would collapse, leaving everyone who'd bought in holding the bag.

This is Planet Money from NPR.

Palmer and a friend coded up a new coin, and in doing so, they married the world of memes with the world of crypto.

And pretty quickly, fraudsters started to use Dogecoin in the kind of pump and dumps it was meant to critique, which was exactly the opposite of what Palmer had intended.

And to understand how that barrier to entry started to change, we called up Zeke Fox. Zeke is an investigative journalist at Bloomberg and author of the book Number Go Up, Inside Crypto's Wild Rise and Staggering Fall.

So a blockchain is basically a ledger that everyone can see, and it keeps track of how many tokens someone has of a given cryptocurrency. It used to be that in order to make a new cryptocurrency, you had to code up a new blockchain. So Bitcoin had its own blockchain. Dogecoin had a different one. But Ethereum made it so that you could keep track of multiple cryptocurrencies on the same blockchain.

You could just create a new coin right on top of Ethereum's underlying infrastructure.

Are we bonded yet, or what's good?

Yet, Zeke says, this round of crypto speculation was also limited in its impact because the majority of investors just did not understand the basics of transacting on the blockchain, like how to set up your own crypto wallet or trade coins.

The technological part was the rise of mainstream crypto exchanges like FTX and Coinbase. These platforms made it easier for retail investors to buy and sell cryptocurrencies, and that helped swell the market to new heights.

The rise of the meme coin was still to come. Most crypto bros were still focused on mainstream cryptocurrencies like Bitcoin and Ether. And the most radical speculators were obsessing over things like non-fungible tokens or NFTs, like those weirdly expensive Bored Ape cartoons people were buying. Apes together strong. Planet of the speculative ape investments.

Dogecoin, you'll remember, was first invented as a cheeky response to the wave of sketchy Bitcoin copycats. And you can think of the current memecoin moment as a sort of like doubling down on the joke.

And early last year, that sort of nihilistic feeling fused with yet another technological leap forward. Zeke Fox says, this time in the form of a new website.

And the idea behind the platform was basically to demolish the barrier to entry for people making new meme coins, to create a place where people could launch and then promote their own coins as a sort of social media experience. Let's go to Pump.fun. Will you give us a little safari?

Zeke took us on a little tour of the Pump.Fun website. It looks a bit like a throwback to the Flash websites of the 90s. All bright neon text and JPEGs of memes.

Maybe a man-child.

Some who've made a lot of money. Pump.fun has made it so incredibly easy to make new meme coins that the homepage is just constantly updating with images of coins that have just been born. Coin after coin after coin.

That was completely inevitable.

Okay, a lot better.

What changes did Millet actually make?

Okay, okay, okay. What are the downsides of this kind of shock therapy, as it's sometimes called? Has the cost of living gone up?

Okay, we've got about 28 seconds left. Last question. A year since he became president, do people like Javier Millet?

Lindsay Powell has been a card-carrying member of Recreational Equipment Incorporated for over a decade. That's the outdoor goods store more commonly known as REI, which also happens to be an NPR sponsor. And one of the things she's loved most about REI is their famously generous returns policy.

All right, Amanda, you did it. Thank you so much for that update on the fate of an entire nation. Next time, more time, please. We'll see about that. Coming up after the break, we return to a housing market horror story from earlier this year and learn about the surprising work benefits that some people get for having twinsies. We are back. It's the rest of the story.

And for our next update, we're going to revisit an episode about a kind of mortgage that seemingly will not die. Mortgages that kind of rise from the grave and return from the dead. For that, we are joined by NPR investigations correspondent Chris Arnold. Hello, Chris.

So why don't we start with reminding our listeners what your original story was all about?

Right. So there was this big national effort to renegotiate and modify people's mortgages so they wouldn't lose their homes. And as part of that, homeowners say they were told that these second mortgages were being forgiven so they could keep on paying their main mortgage.

Yeah, and if homeowners don't pay, these companies will foreclose on their houses. And Chris, you found these zombie mortgages were coming back to haunt a lot of people.

And since this episode aired, a lot of other media outlets picked up the zombie mortgage story citing your investigation. But what has happened since then, Chris?

REI will give you a full year to return the stuff you buy. And Lindsay would take them up on that offer a lot, sometimes going to extreme lengths to put some piece of gear to the test.

All right. So pretty good start here and definitely a huge boon for all the people who are getting out of these mortgages. But on the other hand, you found there are many thousands more at risk of losing their homes this way, right?

Chris Arnold, thanks so much for keeping us up to date on everything zombie mortgage.

Finally today, we are joined by Planet Money co-host Mary Childs, who has just returned from parental leave. Mary, welcome home.

Good to have you. Now, Mary, not only have you been on parental leave, but you actually had twinsies, which you mentioned in an episode back in March where you went shopping for the best parental benefits offered by governments around the world.

Of course, Sweden had some of the best social benefits in the world.

But what is your update exactly? Are you going to tell me you moved to Sweden?

Wow, that sounds like a great deal.

I'm going to say that Sweden and Lithuania and companies on the right side of history on this one. You got to give those babies more time to bond and develop. I mean, imagine if the she-wolf who raised Romulus and Remus had gone back to work after only 480 days. Rome might never have gotten built.

Even more reason for more time.

How long did you stay in the shower?

And or trying to emigrate to Sweden.

You know I'm there. That'll be our next rest of the story.

It was like a tropical monsoon.

Today's episode was produced by Sam Yellow Horse Kessler and edited by Keith Romer and Jess Jang. It was fact-checked by Sierra Juarez and engineered by Sina Lefredo. Alex Goldmark is our executive producer. Special thanks to Edward Gilliland, Mariana Luzzi, Nicholas Saldias, Ivan Verning, and Rashid Zahid. I'm Alexi Horowitz-Ghazi. This is NPR. Thanks for listening.

But a couple months ago, Lindsay got a sort of stern email from REI, letting her know that her days of freewheeling returns had come to an end.

The email explained that going forward, Lindsay would no longer be allowed to return anything she bought from REI ever again.

And Lindsay was not the only person to have gotten this email.

This is Ken Voller. He's in charge of operations for REI's stores. And he says the customers who received this notice had been using their policy in a way that had gotten really expensive for the company.

Okay, so they're using it like a free rental service, basically. Exactly. And what REI is up to here, it kind of represents the latest chapter in this larger story about returns that I've been following for a while.

A few years ago, I reported a Planet Money episode about what happens to all the stuff that we as consumers send back every year, and why more and more companies have started offering generous returns policies in the age of online shopping. But lately, that trend seems to be reversing. At least a little bit. Though it can seem like a lot for people like REI member Lindsay Powell.

She says she understood why the company would want to crack down on people using the store like a lending library. But she says that she herself was not in that camp. She actually went back through all her REI purchases from the past decade and made a spreadsheet in order to double check. And what she found?

So not 80%. And yes, 30% may still sound like a very high rate of returns. But Lindsay says most of the things she returned, she'd ordered online and sent back pretty quickly after figuring out they didn't fit right.

For Lindsay, the main issue here is that she says she never got any warning before losing her returns privileges, and that she wouldn't have shopped the way she did if she'd known there was this secret limit. REI's Ken Voller wouldn't comment on particular customers, but he says that over the years, the company has tried giving warnings to some problematic over-returners.

They've tried putting people on probation, but none of it worked. And he points out that Lindsay and everyone else who got their return privileges revoked are still welcome to shop at the store. Whether anyone will take them up on that offer is less clear. Do you think you'll ever buy anything from REI ever again?

Lindsay's decided that if REI won't let her return the things she buys, she won't return to REI to buy anything in the first place. Hello and welcome to Planet Money. I'm Alexi Horowitz-Ghazi. Today's episode is actually going to be all about returns of a different sort.

We're going to return to some of our favorite episodes from the past few years to find out what's happened since we put our microphones down and hit publish. Part of an annual tradition we call the rest of the story after the program by the radio legend Paul Harvey.

Today on the show, what's happened with all these student loans that President Biden tried to forgive? Where is the best place in the world to give birth to twins? And how is Argentina fared after a year under the economic guidance of a man with the nickname El Loco? That's all coming up on the rest of the story. For our first update, we've called Planet Money co-host Kenny Malone to the studio.

Hello, Kenny.

Kenny, two years ago, you assigned yourself maybe one of the more whimsical episodes we've ever done.

You got some $10 tickets to a Jets game. Not bad.

Okay, so basically the exact opposite price phenomenon has happened since your story.

Right. Like couchflation or bumflation.

All right, Kenny, thank you so much for your update.

Next up, we have NPR's longtime education correspondent, Corey Turner, or as I like to think of him, the student loan whisperer. Corey, welcome back. Thanks for coming. Thank you for staying on brand. But let's go full volume. So you're here to give us an update on a student loan episode you did around a year and a half ago.

So save was making a real difference for Carlos. But something about the fact that you're here right now, Corey, tells me that maybe that is not the case anymore.

And Corey, this is way bigger than just Carlos, right? This is like a lot of people.

Okay. So what exactly is the legal argument here? Why do some folks think that SAVE might be illegal?

Okay, so borrowers are in forbearance then? I mean, explain what this means. What should borrowers know moving forward here?

So, Corey, I assume a lot of borrowers are probably just going to stick this out to kind of see what happens. But what would you say are the chances that save somehow survives all of this?

Corey Turner, thank you so much for the update. You're welcome, Alexei. Okay, next up, we have Planet Money's Amanda Aranchik. Hi, Amanda. Hello, Alexi. How are you? Nice to see you.

OK, an update on Argentina. I'm interested. But this is our last segment before the break. So we've only got about two minutes and 45 seconds.

Amanda, this is like a little poem. Now we only have like two minutes, 20 seconds. Are you ready? Yeah, yeah, yeah. Are you ready? Go, go, go. Okay, okay. Starting it now. Here we go. Okay, so first question.

Hello and welcome to Planet Money. I'm Alexi Horowitz-Ghazi. These days, it can feel impossible to go more than a week or two without some bizarre text from a stranger. But what is actually happening on the other side of that text bubble? Today on the show, we're going to hand that question off to Search Engine.

Host PJ Vogt and his guest, Zeke Fox, take us down the sinister rabbit hole Zeke found when he raised his hand to get scammed.

That was PJ Vogt, host of the Search Engine podcast, with his guest Zeke Fox, who's an investigative reporter at Bloomberg. You can hear the full episode in the Search Engine feed, which is available wherever pods are cast. If you're new to Planet Money, welcome, the water's warm.

Feel free to scroll back through our episode feed for dispatches from the trade war, stories on how the economy got addicted to subscriptions, and the optimal way to price an egg during an egg shortage.

This episode of Planet Money was produced by Emma Peasley and edited by Marianne McKeown. It was engineered by Gilly Moon. Alex Goldmark is our executive producer. I'm Alexey Horowitz-Gazi. This is NPR. Thanks for listening.

PJ is the host of one of my favorite podcasts. It's called Search Engine. Each week, they answer a different question. Some of them are big and existential. Some are tiny and hilariously specific. And with these texts, PJ got curious about what happens when you do keep these scammy-seeming conversations going. When you do start to follow the crumbs one of these texters starts leaving you.

So he called up another journalist who'd also gotten obsessed with figuring out this mystery. Like, who was on the other side of these messages? And how were they making their money?

A couple years ago, my friend PJ Vote started getting these weird text messages on his phone. You know the ones. They come from some number you've never seen before, and they ask you some out-of-context question.

Zeke Fox, author of the book Number Go Up Inside Crypto's Wild Rise and Staggering Fall. You may remember him from our episode on the explosion in new meme coins.

After the break, Zeke and PJ start digging into how much trouble Vicky might actually be in and discover a whole web of human trafficking and scam compounds on the other end of the text bubble. More from the Search Engine podcast when we come back. So for Zeke, what started out as a fun side reporting project of getting scammed starts to feel a little icky.

Like, what if pretending he's going to hand over all this money and then not doing it ends up getting the person on the other end of the text bubble in big trouble? So he goes searching for someone who knows what might be happening over there, and he finds this group of volunteers who call themselves the Global Anti-Scam Organization.

He ends up talking to a guy known as Ice Toad, and he handed off Ice Toad's contact information to search engine host PJ Vogt.

Basically, they looked at how much it was going to cost to run the Habitat Bank for the next 30 years. So they were going to need to buy and plant a bunch of trees and plants, put up fences, and also hire a ranger to prevent illegal logging or poaching.

But in order to actually sell any of these credits, he knew he'd have to offer companies some tangible evidence they were helping biodiversity, that the companies could then flaunt to investors and customers. So he needed data. First, to show that El Globo was already home to a bunch of threatened species.

And second, to prove that the work they were doing to restore more and more of the land was actually improving biodiversity.

And so that's where he took us, to show what we'd actually bought with our biodiversity credit. We start out hiking through what was recently ranchland. There are shrubs and waist-high ferns. And then, as we get higher up the mountain, we cross into the thick, dark tangle of the original jungle that used to cover everything.

Using wildlife cameras and stakeouts, Mauricio's determined that El Globo contains some 20 threatened species, including the ones we'd seen in the advertising when we bought our credit. The tree ocelot. The yellow-eared parrot. And most dangerously cute of all, the spectacled bear himself. Mauricio had us play a little game of I Spy in the forest.

Bromeliads are a family that includes spiky plants like the pineapple. They usually live in the most jungly of jungles. They're on the forest floor all around us, and that's where I'm looking. I'm failing the exam. Until Mauricio tells me how the bears actually climb trees to get at the biggest, juiciest bromeliads. So I should try looking up. Oh, I see, I see. Wow, the scratch marks.

It's like a horror movie.

Looking at these long claw marks in the bark, I felt like I was seeing evidence not just of bears, but that there's this whole rich web of life here. But as we started our hike back down the mountain, I couldn't help but puzzle over the thing we actually bought that brought us here in the first place, that $25 biodiversity credit. It wasn't a physical plot of land.

There wasn't some 10-square-meter patch with our names on it. We didn't get some fractional ownership of a spectacled bear. Really, the credit that we bought helped to cover the costs Mauricio says he'll need to protect and restore this place over the next 30 years.

We basically donated $25 to his crowdfunding campaign, and the swag we got in return was just an email with a certificate attached that says biodiversity credit on it.

And it just so happens that a few weeks after we visited Mauricio at El Globo, he was going to get a shot at some major potential buyers. Some of the biggest players in the world of corporate sustainability were about to descend on nearby Cali, Colombia, for the UN Global Summit on Biodiversity, the COP16. That was going to be a big test for Mauricio, and for biodiversity credits.

This is Planet Money from NPR.

It's like the big coming out party or the big debut for biodiversity credits.

After the break, Mauricio takes off his hiking boots, laces up his loafers, and polishes up his pitch deck to see if companies are going to buy what he's selling.

And that's where I met up again with Mauricio Serna. He was in that hotel lobby trying to pitch corporate executives on Terrazzo's biodiversity credits.

And he showed up at the COP16 this year with a mission.

But Mauricio is not the only guy selling biodiversity credits at this conference. It's kind of the hot new idea at the COP for how to incentivize the private sector to help protect the environment. The World Economic Forum projected a couple billion dollar market by 2030. And here at the conference, you can taste the hype.

There's a tequila company giving out free shots in honor of a jaguar-based biodiversity credit. Parapachamama! There's a 20-foot Jenga tower of terrariums that turns out to be a promotional sculpture for a biodiversity credit to save the ocean.

Okay. Yeah, I was there to meet a 29-year-old Colombian who was trying to sell a new financial instrument he thinks could help save the planet. Good morning. Hello. What's the plan?

For the first couple days of the conference, Mauricio's getting his bearings, going to panel discussions. But by day three, he's starting to make some sales, one credit at a time. That night, at a networking event at a bar, we get to see him in action. He's talking to a guy with a website startup. And Mauricio gives him the pitch.

You can click a few buttons, pay 25 bucks, and save 10 square meters of cloud forest. He likes how Mauricio has made it so easy to do something good.

He says yes almost immediately.

One more sale. Just got to do how many more?

That's why you need buyers that aren't just individuals you talk to.

Later that week, a corporate buyer makes an announcement. ESA, one of the largest electric transmission companies in Latin America, says they've bought over a thousand of Mauricio's credits. And when I talk to the guy who directs their main corporate sustainability program, Juan Fernando Patino, he tells me they're interested in biodiversity credits for a couple of reasons.

For one, it's a way to kind of buy goodwill from the communities where they work. He calls it a social license. Also, they hope the credits will be worth more in the future, and companies like his could sell them at a profit later on. But if not, that's OK, too.

Other companies are a lot more reluctant. Over the course of the week, Mauricio is talking to people from a food packaging company, representatives of the construction industry, avocado farmers. But he's not closing any deals. At one point, I watched him shoot his shot with two mining companies and a Big Four accounting firm, only to get a resounding, hmm, no thanks.

How do you put it in English? They're just too new. To try to understand what Mauricio was up against, and also how to square that with all the hype, I caught up with Mark Opel. He left a private equity firm to be a conservation finance watchdog at a group called Campaign for Nature. What's going on with biodiversity credits? Why are they getting this kind of attention? And is that good?

He points to what happened to carbon credits, the voluntary ones companies buy to claim they're carbon neutral or net zero. Much like with biodiversity credits, when voluntary carbon credits were first taking off, there were some really optimistic projections about how big and important the market could become.

Mark thinks that some companies are going to buy cheap, low-quality credits and then make outsized and ambiguous claims about being nature-positive. Or they'll look at the example of the carbon market and just stay away.

So that's 2,800 square meters of land being protected for 30 years. That's it. That's like a quarter of a hectare. Or a little over half an acre. Enough habitat for like a ten thousandth of one spectacled bear?

A recent report found that only about a million dollars have been spent so far on biodiversity credits. That's way off track from the billions the World Economic Forum was projecting by the end of the decade.

What they're hoping for is some kind of new regulations or tax incentives or favorable loan conditions that would change the math and make it so that buying these biodiversity credits would become a more attractive business decision. Which is possible. even if at this point it still seems a long way off.

And I started thinking about what this all means on the ground, in a place like El Globo. I thought back to this moment where I was standing with Mauricio, looking out over the surrounding land that straddles his family's ranch. Wow. What do you see? What I see is green rolling hills. What's actually called a green desert because there's almost no biodiversity here at all.

Okay, okay. So imagine I'm the head of sustainability of Unilever. Like, what are you going to say? What's your pitch?

Avocado farms, pine plantations, and cattle ranches. Biodiversity credits haven't changed the fact that these are still the most profitable ways to use this land. With a push from government, maybe that could change?

Thank you.

This story was produced with support from the Internews Earth Journalism Network. I'm Stan Alcorn.

And do you think, is there a point in that conversation where you'll say the words biodiversity credits? Maybe. I think at the end. Biodiversity credits. This is the new product that Mauricio is here to sell. And the idea is kind of a twist on carbon credits.

But instead of producing carbon emissions, biodiversity credits are aimed at saving some of the million-plus species that are threatened with extinction. He says a lot of people have no idea how they work.

It's the head of sustainability of Unilever. Can I follow you?

Mauricio makes a beeline across the lobby, taking big strides. The Unilever guy gets in the elevator.

But just as we are about to get there, the elevator doors close. Mauricio didn't make it.

Yeah, I mean, he really is new to all of this. He studied biology. What he cares about is protecting nature. And it's honestly a little awkward for him to try and win over the companies that are destroying it.

Hello and welcome to Planet Money. I'm Alexi Horowitz-Ghazi. And I'm Stan Alcorn. Our planet is in serious trouble. And I'm not talking about global warming. There are a million species of plants and animals in danger of extinction. And the biggest cause is companies destroying their habitats today. farm food, mine minerals, all to make the stuff that you and I consume.

including one of the most charismatic megafauna in the game, star of what has been called the greatest film of all time, none other than Paddington Bear.

So my reporting partner, Tomas Suprimny, and I decided to do just that. So let's go buy a biodiversity credit. Okay. We get on the website for Mauricio's company, and there they are. For $25, we'll get a credit, basically a certificate saying we've protected a little piece of nature, 10 square meters of Andean cloud forest.

And they show some of the animals that we'll be saving, the yellow-eared parrot, the tree ocelot, and, of course... The threatened spectacle bear. The Paddington bear.

Are you ready to own our own little piece of the cloud forest? I'm ready to save Paddington. I enter my credit card details and click buy. We did it. Done. And we are now the proud owners of biodiversity credit number 0281. but it still isn't clear what exactly we've bought. So we decided to go see our 10 square meters for ourselves, see what these credits look like on the ground.

And the ground in this case is also the land that first turned Mauricio Serna into a conservationist.

These days, it takes a plane and a bus and a motorcycle to get there. Are we in El Globo now? Like, this is all part of... Yeah, this is El Globo right now. El Globo is a big plot of land, more than 800 acres situated on a mountain. There are rivers and wetlands, but Mauricio directs our attention up toward the mountaintop.

But over the 20th century, more and more of the region was steadily cleared for cattle ranching. That's what Mauricio's grandfather did back in the 60s when his family bought the land.

Nothing but grass. That's beauty to a cattle rancher. The more land you clear, the more cattle you can graze, and the more money you can make. That simple economic logic has shaped this landscape for a century.

Mauricio says he really started thinking about all of this about a decade ago. He was at the university studying biology when he started to fall in love with the natural world and understand just how much of it had been destroyed by things like cattle ranching. And he says it was one class in particular that got him thinking about his family's land in the tropical Andes.

Mauricio takes on this new challenge, how to restore the land to a more natural state while also generating a profit. He looks into ecotourism, which could be lucrative in theory, but Oglobo is kind of remote. He starts up a beekeeping operation to try to make that honey money. But it isn't quite enough.

So he forges ahead. Here, Mauricio catches what seems like a little break. He finds an organization that offers to plant 60,000 native trees on his land for free, doing a lot of the work he might otherwise have to pay for. So he decides to sign up.

We actually ran into one as we were walking around El Globo.

And Mauricio got so mad, he started cursing at it. So the tree planting was a failure. But it was around this time that Mauricio stumbled on the company that would eventually help create the biodiversity credits that we bought.

Terrazos was pioneering a model for funding conservation in Colombia called Habitat Banks. The way it works is there's a law in Colombia that says if you cut down trees for certain kinds of big projects, like dams and mines, you have to compensate for that. So if you mess up an acre of Andean cloud forest, you need to conserve at least an acre of that same forest.

And one way you could do that is to pay terrazos to protect some of the land in one of their habitat banks.

And then one day, after a few years of working there, Mauricio and his colleagues are throwing around ideas for how to set up a habitat bank system in places like El Globo, when they come up with a potential model. It was kind of a mix between Terrazzo's old model and what others had done with carbon credits.

The new idea that Mauricio and others had was maybe they could do something like those voluntary carbon credits, but for biodiversity. So they'd sell a credit that promises long-term protection of land rich with species, and companies would buy them so they could make claims about being nature-positive or something like that.

And for local levee districts like Wendell's, those changes meant that building new additions to their levees would cost way more money. Dirt is still dirt cheap.

Elevation is the salvation to inundation. In other words, Wendell felt an almost religious conviction that he needed to build as high as he could as quickly as possible. Because every year they weren't adding height to the levee, they were taking on more and more risk.

But Wendell also knew all of the red tape that would entail. He'd have to ask for a study, wait at least three years. And even if Congress approved the funding, given the Corps' new standards, it might just be too expensive.

So Wendell cooked up a second option, a way to start adding elevation faster and cheaper. The South Lafourche Levee District could build the levees higher themselves using the old standards. They could build their own elevation for their own salvation and avoid the Army Corps' red tape and high costs.

But Wendell faced a big obstacle right out of the starting gate. Without the Army Corps' backing, he would no longer have access to those sweet, sweet federal dollars. So he needed to figure out a way to fund all that new construction. And the strategy that he came up with was kind of controversial.

He wanted to convince the citizens of South Lafourche to pass a new 1% sales tax in a place, he says, where people do not generally like new taxes.

Vote yes. Yes for your protection. And when it finally came to the day of the vote, Wendell's no-nonsense approach appeared to have done its job. When the tally came in, the new tax had passed by 82%. And with that new funding, plus some money from the state, Wendell had enough financial fuel to begin elevating the levy.

Wendell did not get approval, and in the late 2000s, he and his team started building their levees higher anyway. And the Army Corps was not exactly happy with this. They wanted to make sure this piece of federal infrastructure was working as it should. The integrity of their whole system depended on it.

They worried that Wendell's obsession with elevation might make his levees vulnerable to toppling over. They told him that if he kept building higher without permission from the Corps, they would have to remove his levee system from a program that covers the cost of repairs if they're damaged by hurricanes. At one point, they sent a cease-and-desist letter.

A while back, I went down to southern Louisiana, just a few minutes drive from the Gulf Coast, to meet up with a guy named Wendell Curon. Howdy, howdy. Randall. Good to meet you. Alexi. Where's home again? Santa Fe, New Mexico. Santa Fe, yeah.

And then FEMA, the Federal Emergency Management Agency, announced they would be decertifying the South Lafourche levee district. That meant that flood insurance premiums throughout the community could rise.

Still, Wendell kept building like he was in a race against time.

You have to act like it's a tiger. By the end of 2020, Wendell and his colleagues had managed to build their levees as high as 18 feet in some places, though there was still this central question hanging over the whole project. would it actually hold up under hurricane force pressure? Would elevation really prove to be the salvation to inundation?

Or would deviating from the Army Corps' regulations turn out to be a disastrous gamble?

Do you remember when you first caught wind of this storm that seemed like it might be a big problem?

As the storm picked up steam and started heading for the coast, Wendell did what he often does in the hours before a hurricane, making preparations and checking the TV, hoping to hear the storm wasn't headed to Lafourche Parish.

Wendell says they spent hours hunkered down, listening to the wind ripping across the hospital roof and wondering whether his levees would be a match for the rising waters.

Wendell's in his mid-70s, got a shock of white hair and twinkly green eyes. He was born and raised here in Cajun country. Grew up in a French-speaking household of shrimp fishermen and oil rig workers. And hearing him talk, it's clear how proud he is to be from this place.

The storm surge had risen several feet above where Wendell's original levees had stood. In some places, the waves seemed to have reached within just a foot of spilling over the mounds, even at their new height of 18 feet. If Wendell hadn't rushed their construction the way he had, he says it's likely the whole community would have sustained major flooding.

How did it feel to hear that? What I expected. It was unexpected, he says. Wendell still gets choked up thinking about this moment, even a few years later.

How do you think about that kind of trade-off that he made by going rogue in this way?

The Army Corps' risk analysis, Heath says, just has to keep this much bigger picture in mind. There are hundreds of Wendells working in their system. And the best way to fulfill their mandate of protecting lives and property is to make sure they adhere to the best of their ability to the designs the Corps' engineers have determined to be the safest.

As for Wendell Kural himself, he is retired now, though he still visits the levee from time to time. He still proselytizes the need to build higher, still believes that elevation is the salvation to inundation.

But he is clear-eyed that everything he and the Army Corps have done is fundamentally a temporary fix to a problem that only seems likely to get worse as southern Louisiana continues sinking back into the Gulf — and as bigger, more powerful storms come ashore.

Sorry, Milwaukee. But delicious as it is, Wendell explains, this part of the country is also in the middle of this kind of slow-moving existential crisis of biblical proportions because of where it sits on the edge of the ocean. Wendell and I are standing on the spine of a massive grassy ridgeline, a kind of fortress wall dividing the land from the water.

Special thanks to Ricky Boyette, Josh Howe, and Rachel Rode. And a huge shout-out to journalist Katie Thornton, who wrote an excellent piece about Wendell Kural in The Guardian, where we first learned about this story. I'm Alexi Horowitz-Ghazi.

On one side, we can see little houses in neat rows. There are gumbo restaurants and shacks by the side of the road selling fresh shrimp.

On the other side, open water stretches to the horizon. It's speckled with little tufts of land and marsh, a few far-off oil tanks. Wendell tells me it's a watery no-man's land and a war between the open ocean and the people who live on Louisiana's southern coast.

Because this part of the country, he says, was formed over the course of thousands of years by sediment carried here on the Mississippi River. But man-made engineering over the last century has changed the river so much that sediment isn't building up anymore. And southern Louisiana is actually sinking back into the Gulf.

And Wendell says that is putting the people who live here closer and closer to the front lines of hurricanes.

Now, the reason I came to visit Wendell is because he has spent almost his entire professional life, over 40 years, working with the federal government to build the thing we are standing on. To build a system of levees. A last line of defense against those hurricane force waves. We're standing on a kind of like grassy knoll mound here.

A typical levee is a very intentionally constructed pile of dirt covered in grass or gravel that holds the water out. Wendell's levee, as it's come to be known in these parts, is basically a giant ring, 48 miles long, protecting this community of over 10,000 people. Now, a levee can seem like a deceptively simple piece of technology.

But Wendell explains that building and maintaining them in the right way is essential. For decades, Wendell headed up a local government agency. He worked hand-in-hand with the federal government in order to build this levee to very specific standards — Because if waves spill over the top, they can erode the levee from behind.

If wild hogs root around in them, they can create places for the waters to break through.

And the resilience of the levee is really at the heart of this story. After Hurricane Katrina hit Louisiana nearly two decades ago, it caused a massive rethinking of how these levee systems should be built. And in the wake of that, Wendell decided to take a gamble. A gamble that put him at odds with his partners in the federal government.

He decided that the best thing he could do to protect his community was to go rogue.

Hello and welcome to Planet Money. I'm Alexi Horowitz-Ghazi.

today on the show, what the story of Wendell's Levee can teach us about how the federal government calculates and manages the risk of natural disasters, and how those calculations can look a lot different to the people staring straight into the eye of the storm.

Wendell Cural was fresh out of college back in the late 70s when he first started thinking about what kinds of fortifications it might take to protect South Lafourche Parish, the place he calls home.

So when he heard about a job leading the South Lafourche Levee District, it felt like a way to serve the place that he loved. The Levee District was this local office with a mandate to help the federal government build hurricane protection around the community.

The Army Corps is part of the U.S. military, and it oversees this very specific system, partnering with local communities in order to build the country's defenses against hurricanes. There are hundreds of people like Wendell all around the country working to build not only levees, but also flood walls and pump stations, all sorts of infrastructure meant to mitigate natural disasters.

Keith says the Army Corps of Engineers was founded to help build forts during the Revolutionary War.

Yes, and because for a long time the Corps trained the majority of the country's engineers, by the late 1800s, they were tasked with helping to clear and tame the Mississippi River.

The Great Mississippi Flood killed hundreds of people and caused an estimated billion dollars in damage, nearly a third of the entire federal budget at the time. It became clear that some sort of national system was needed to try to prevent these disasters. So Congress put the Army Corps in charge of preventing floods along the Mississippi.

By the mid-1960s, a series of devastating hurricanes pushed Congress to expand the Army Corps' mandate to include hurricane flood protection. And that is how we got the system that Wendell was walking into when he first took the job.

So they've come up with this system that basically sets out to answer this one fundamental question. Will it cost the federal government more to try to prevent flooding in this specific area? Or will it cost more to try to deal with the damages after the fact?

So what the Army Corps has to figure out first is how much the damages in this particular area would be if it were hit by a major storm.

The court then compares the estimated cost of repairing damages to houses and businesses, against the cost of a slate of potential engineering solutions.

And at the end of all of this, if the Army Corps determines that the costs of one of those solutions would generate a positive return on investment, meaning if the cost of prevention would be less than the cost of repairs and response, they will often propose that solution to Congress.

Congress approved the plan, they appropriated the funds. By the mid-70s, ground was broken on the levees. And in 1980, Wendell Cural accepted the job as general manager of the levee district, where he immediately threw himself into learning as much as he could.

So Wendell lobbied the state legislature for funds. He convinced big landowners to donate their land. And occasionally, he had to appropriate private property in the name of the public good. People were not always happy. He was sued by angry landowners and companies.

And then, a few years later, a storm hit the Gulf Coast that changed the way almost everybody had been thinking about the levee system. We're talking, of course, about Hurricane Katrina.

In the aftermath, the Army Corps decided to do a major rehaul of all their levy construction requirements, focused on beefing up their structural integrity.

So Katrina, the kind of levee failures that happened during Katrina... Changed the way the Corps office worked.

The latest meme coin craze was really enabled by this new trading platform called Pump.Fun that made creating a meme coin a point and click experience. And more than 5 million coins have been created in like the year that it's existed.

Yes, definitely.

I know. It seems like something that only a child could enjoy. Yeah.

I think there's a lot of kids on there.

I'm looking at their most recent coins and you know, there's, uh, what if we all hold 27 seconds ago, doge night, 46 seconds ago, leader of hats one hour ago.

Like some of these ones just sort of become like classics and they keep trading. Like doge coin is still top dog. I'm sorry.

Shiba Inu, which is like a Dogecoin ripoff, is very high up there. Pepe. Dogwith Hat has proven to have some staying power. But I think Fartcoin is the hottest meme coin right now.

Yeah. I mean, fart coin to me, it's like, how is this even funny? And so I was asking my favorite meme coin trader source about this. I was like, do you think it's funny? And he said, sometimes the fact that they're not funny is what's funny.

Yeah.

Should we make a coin and find out?

What do you think? Should it be a cute animal?

Oh, where can I get this squirrel? I brought a picture of my cat, but we can use a squirrel.

Uh, it's this, it's got a martini.

Wow. This seems like it has a lot of meme coin potential.

So what should we call it?

PM squirrel coin. Okay. So the ticker will be PMSC. Naturally. For the description, this is the planet money squirrel. Does that sound good?

Just so you know, you can never take it back.

It's very easy to create the coin, but what's hard is attracting attention for it.

So Pumped Out Fun had like a built-in feature where the creators of the tokens could live stream themselves to promote their coins. And this went downhill fast. People were doing like really gross things to try to get attention. There was someone claiming that they had kidnapped the developer of the coin and would torture them.

Somebody killed a chicken. Dark. Somebody held a gun to a fish. A kid had his mom flash the live stream. One that was a little sillier. This kid created a coin. He was live streaming. While he was streaming, he took the money and then gave the camera double middle fingers and said, thanks for the 20 bandos in a high-pitched voice.

And we've mostly seen kind of like C-listers do this. Iggy Azalea launched a coin on Pump.fun. And that one, for a long time, I was seeing people, I guess maybe mostly Iggy Azalea herself, tweeting about her mother coin. Caitlyn Jenner had one.

And if these influencers start talking about a coin... Their followers will start to buy because these people have a track record of talking about coins kind of early on and the coins going on to attract even more attention.

meme is so fire it's gonna burn the internet down guys i think this meme coin could pull some crazy numbers and now today this coin is already about to hit 800k market cap and break through a mill and in crypto these influential people are called kols which stands for key opinion leader and those people are often paid to promote the coins

And some people will tell their followers, I'm getting paid to promote this coin. And other people will not.

What is really ideal is if Elon Musk will talk about whatever the coin is about.

But it's not just Dogecoin. A lot of the most successful coins have had some connection to Elon Musk.

Yes, because the people who are trading these are watching patterns. And they're saying, hey, last time Elon Musk talked about something, the coin went up. So maybe it'll happen this time. And then that kind of becomes a self-fulfilling prophecy.

Something like 99% of coins are dead on arrival.

Right. Like, I bet you a lot of them never sell a single token.

Right. And Pump.Fun, this platform, in just a year or so, Dune Analytics, which is a blockchain analysis company, says that it's made $400 million in fees.

What everyone wants is that next one that's going to go up 10x, 100x, 1000x. And there are the stories of people who really have made a million bucks because they bought dog with hat early. And when somebody hears that, it's pretty powerful, creates this sense of FOMO. But Dune Analytics studied blockchain data and found that only 3% of traders on Pumped Up Fun ever made $1,000.

I mean, I definitely would say this is just gambling. Everyone involved would agree with that, I think. But it's a really weird form of gambling. And oftentimes, by the time that you or I hear about any coin, you know, the insiders have probably accumulated a big supply at a low price.

And they're just waiting for losers like us to hear about it and buy some so that they can sell theirs and get real money.

No, I think that most of the people who buy this, like they're not being fooled by the coins. They just think that, hey, I am not the last person who's going to buy this coin. Someone else will come along later and buy this coin for more.

I guarantee that they have.

Wait, what?

I've got three little kids, so I like to hang out with them. And I hope they never get into meme coins.

This was the time when people were still really pitching blockchain as like the solution to all the world's problems. So in general, these ICOs were like, it's the blockchain for dentists, or this is going to be the blockchain that helps track agriculture.

But people are basically trading them just on hype. And studies afterwards found that something like three quarters of all the ICO's initial coin offerings were scams or fraud.

During that huge crypto bubble of like 2021, 22, there certainly was some meme coin trading, but it was not the focus of cryptocurrency traders.

In winter 2022, FTX collapses, and that's like the nadir of the crypto market.

Yeah.

Dogecoin, you'll remember, was first invented as a cheeky response to the wave of sketchy Bitcoin copycats. And you can think of the current memecoin moment as a sort of like doubling down on the joke.

And early last year, that sort of nihilistic feeling fused with yet another technological leap forward. Zeke Fox says, this time in the form of a new website.

And the idea behind the platform was basically to demolish the barrier to entry for people making new meme coins, to create a place where people could launch and then promote their own coins as a sort of social media experience. Let's go to Pump.fun. Will you give us a little safari?

Zeke took us on a little tour of the Pump.Fun website. It looks a bit like a throwback to the Flash websites of the 90s. All bright neon text and JPEGs of memes.

Maybe a man-child.

Some who've made a lot of money. Pump.fun has made it so incredibly easy to make new meme coins that the homepage is just constantly updating with images of coins that have just been born. Coin after coin after coin.

That was completely inevitable.

Because you can think of Pump.Fun as this hyper-literal attention economy. If a coin creator can't generate enough excitement around their meme coin, they won't be able to ensnare enough buyers to get it to take off.

That, of course, is the precocious and a little devious 13-year-old from the beginning of our story.

So that's the first group, the people without much clout who have to find some way to grab attention for their meme coin. Now, there's a second group of meme coin creators, and their big strategy is to already be famous.

But the third and final group of meme coin creators are the real power players. These are the shadowy groups of well-resourced insiders who know how to play the game.

Like, one of the big reasons Dogecoin is still the most valuable meme coin is because Elon Musk started tweeting about it in 2019.

And if they can get enough price liftoff, their coins will graduate from Pump.Fun to bigger platforms with whole new groups of potential buyers. Like one platform aptly named Moonshot to the biggest exchanges like Binance and Coinbase.

But regardless of whether a coin dies on the launchpad or makes it to the moon, there's one group that makes money no matter what. Because pump.fun gets a 1% cut of every trade made on the platform.

Which raises the enormous question, why do so many people continue to invest in a system that feels so clearly rigged against them? Why do people still invest in meme coins?

But instead of people promising financial gains based on some underlying value, these days, many meme coin boosters are just promising that there will be enough other chumps out there to cash you out when the time comes. Call it a chump and dump.

No, no, no, no, no, no, no, no. No, bro.

Hello, Alexi. Hello. Yes. Over the past few months, you and I have been on a deep dive into the world of meme coins. We've been spelunking in the crypto mines. We've been getting lost in them because over the past decade, meme coins have gone from a one-off joke to a speculative frenzy worth tens of billions of dollars.

Bitcoin was launched in 2009 and it was pitched as a sort of utopian alternative to government backed currencies. It was a way for people to pay each other without having to rely on the existing financial system.

And this was the seedy state of crypto that inspired what is widely considered to be the first meme coin, Dogecoin.

Here's how it would work. Some programmers would create a new coin. They'd hype it up as the next Bitcoin, maybe do some sketchy stuff to fake demand, and get people to buy in, all to pump up the price. And when enough money had flowed in, they would sell off all their coins. They would dump their holdings. The price would collapse, leaving everyone who'd bought in holding the bag.

Palmer and a friend coded up a new coin, and in doing so, they married the world of memes with the world of crypto.

And pretty quickly, fraudsters started to use Dogecoin in the kind of pump and dumps it was meant to critique, which was exactly the opposite of what Palmer had intended.

And to understand how that barrier to entry started to change, we called up Zeke Fox. Zeke is an investigative journalist at Bloomberg and author of the book Number Go Up, Inside Crypto's Wild Rise and Staggering Fall.

So a blockchain is basically a ledger that everyone can see, and it keeps track of how many tokens someone has of a given cryptocurrency. It used to be that in order to make a new cryptocurrency, you had to code up a new blockchain. So Bitcoin had its own blockchain. Dogecoin had a different one. But Ethereum made it so that you could keep track of multiple cryptocurrencies on the same blockchain.

You could just create a new coin right on top of Ethereum's underlying infrastructure.

Yet, Zeke says, this round of crypto speculation was also limited in its impact because the majority of investors just did not understand the basics of transacting on the blockchain, like how to set up your own crypto wallet or trade coins.

The technological part was the rise of mainstream crypto exchanges like FTX and Coinbase. These platforms made it easier for retail investors to buy and sell cryptocurrencies, and that helped swell the market to new heights.

The rise of the meme coin was still to come. Most crypto bros were still focused on mainstream cryptocurrencies like Bitcoin and Ether. And the most radical speculators were obsessing over things like non-fungible tokens or NFTs, like those weirdly expensive Bored Ape cartoons people were buying. Apes together strong. Planet of the speculative ape investments.