Month: September 2021

Listen on: Spotify | Apple Podcast | Google Podcast

Background

Mint Season 2 episode 14 welcomes Jeff Marsilio and Jordan Lyall of Nifty’s, who are building the ultimate destination for creators, collectors, and curators.

In this episode, we talk about:

• Web2 social media vs. Web3
• On-chain curation
• Building social products in web3
• Art collabs via Common Canvas
• Introducing Damien Hirst and SpaceJam to NFTs
• What will eat web3?

…and so much more.

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Thank you to Season 2’s NFT sponsors!

1. Coinvise – https://coinvise.co/

2. POAP – https://poap.xyz/

3. Socialstack – https://socialstack.co/

4. Celo – https://celo.org/

5. PrimeDAO – https://www.prime.xyz/

Interested in becoming an NFT sponsor? Get in touch here!

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Jeff and Jordan, welcome to Mint. I’m so excited to have you guys on let’s just jump right into it. I want to save our time. So Jeff and Jordan, give me a quick brief about yourselves. We can start with Jeff and then and then go to.

Jeff Marsillo: Well, I’m the CEO of Nifty’s and before Jordan and I and some other co-founders started Nifty’s.

I was at the NBA for the last eight years where I was senior vice president of new media, which meant my group was responsible for things like partnerships with social media companies and app distribution and digital content strategy. And one of the areas that we were. Responsible for was you know emerging technologies and how they might impact the fan experience.

And as part of that, we created a blockchain working group that ended up creating NBA top shot with dapper labs. And of course you know, they did that for labs. I think that all the hard work and, and we also had some good luck with timing, but it ended up being a an NFT. And for me, what that meant was that I got a front row seat to NFT’s entering the main stream.

And I came to appreciate that, not only is it an extraordinary revolution in the way that people can engage with creativity, create, and, of course, own things on the internet, But it was also still pretty early and there just was still a lot of opportunity. So I met Jordan at around that time, you know, just this last winter.

And we got to talking and we came up with Nifty’s and here we are.

Give me a quick brief about yourselves. Who are you and what were you doing before crypto?

Jordan Lyall: Thanks, man. Prior to joining up with Jeff and the rest of the founding team I was at consensus, so I spent two years at consensus as the product lead for Defi. So I ran several teams that innovated in the Defi space in the early days of Defi Created several projects around risk within Defi and we issued a couple token staking platforms. Prior to that, I was a chief product officer at a Dex startup called total. I know your former employer is really close to total invested. Prior to that, I sold a web 2 startup to a company called Jib jab, a big entertainment, digital media company in LA.

So I worked on, you know, fund media, digital content for a few years. Then I was doing blockchain for three or four years. Now I’m doing fun digital content on the blockchain with NFT’s. So it’s a fun kind of career arc for me. And You know, without bearing the lead too much. More recently, about a year ago, we just celebrated one year of meme.

We launched the meme project in August of 2020, and that really led to innovation with Defi but also with NFT’s and that kicked off this project in the community and Jumped into the NFT community with both feet and got to experience the amazing community here. And it really, you know, taught me about building for not just, financial tools, but being able to have, have like creativity come into play and building maybe more some of the things that I learned in my startup and then selling to jib, jab, and working at jib jab about building consumer products for the first time on a web three stack. And then we’ve come full circle here and we’re building something with that tries to take that delicate balance of focused on new users who may not be, who may not know what a, what a private key is and introduce them to something that Changes the game, to use that phrase.

 It’s something certainly exciting. The ability to own content and own digital content for the first time and transact and provide incentives. And now for the first time, it’s like known IP as we do several big brand partnerships. So it’s super exciting. We’re having a lot of fun.

Adam Levy: You guys are two OGs in the space. And I really do respect and applaud your progress so far, which kind of leads me to this question. You’ve obviously seen a lot of the development of the NFT, the space over the few years. What’s the current state as of now, where are we seeing like, just to throw some metrics out there, we’re seeing open sea achieve a billion dollars in transaction volume in a month.I think a couple of days ago it was like a hundred million dollars. Crazy amounts of money. And also keeping in mind, a lot of these NFTs are high ticket items, which also contributes to it. Right?

So what’s the current state? I’d love to get both of your points of views.

Jordan Lyall: For me, it’s still early and we’re really experimenting..

We’re seeing a little bit of FOMO. We’re seeing people that are buying NFTs just because they think they may go up tomorrow. So there is a ton of hype, whether it’s justified or not. I think so. And then what’s super cool is that we’re seeing some of these big brands and some of these maybe more experienced and established product builders enter the space.

You know, the first couple of years it’s always developers building for developers. Now we’re actually starting to see well-funded companies. Big brands, big budgets enter the space and we’re seeing it for the consumer experience that it can be.

Jeff Marsillo: Well said, I mean, I look at some of the numbers and there’s, there’s something that’s kind of out of, out of whack in a way. There are extraordinary sales volumes though. But the numbers of individual people who are actually engaging with NFTs as a medium, whereas the technology is still really small.

So I think you’ve got a group of passionate, early adopters who are willing to, you know, put up with some of the complications and difficulties of engaging in a new space, some of the risks of engaging in a new space, but you’re seeing the average person. And frankly, the average company kind of waits on the sideline until they feel like it’s ready, the space is ready for them to enter it. And, you know, even the NBA, obviously a big brand and maybe a little less risk averse than other big brands. So relatively early in this game But with, with top shot, the numbers are in some ways extraordinary, but still relative to the billions of people in the world who are NBA fans, the number of people who are engaging with NBA top shot, I think, is pretty small.

So you know, that’s kind of where we come in. I mean, I think a big part of it is just making it a lot easier to use, removing some of the Obstacles some of the some of the jargon simplifying that, and then bringing in the opportunity to be social around it. So it’s not just about what Jordan was talking about, right.

Speculating on value. It can also be. Joining communities don’t get me wrong. Community is like the name of the game and the NFT space, but there hasn’t really been a home, a native home for that community to emerge. So we are trying to build one of those homes and really emphasize engagement, really emphasize, ease of use and invite everybody who’s on the sorta, you know, the sidelines to enter the space and have fun with everybody else who’s already here. Just being creative and engaging with this creativity.

Adam Levy: Agreed. The current state of NFTs from my point of view is it’s very, multi-platform right. You’re living across discord. You’re living across Twitter. We’ve been slowly dabbling into Instagram a little bit, but it feels very scattered because you also have to go to open sea and to all these different NFT platforms. So I think this kind of gets me to my next question here, I’d love for you to kind of build upon what is the grand vision for Nifty’s here.

I know you touched upon it and talked about more of a central hub for NFT’s, but what does that look like? What does that really mean?

Jeff Marsillo: You know essentially I kind of think about it as a difficult to analogize to current examples because currently in the world of web 2.0, we talk about marketplaces and we talk about social networks and social media companies. And really what if these want to be something like a merger of those two? So Jordan and I will often call it a social marketplace, but it is a place. And by the way, the reason, the reason being. The distinction between commerce and content is by definition blurred. When you talk about NFT’s and if these are content and commerce.

And so we believe that the complete experience that isn’t don’t get me wrong. I don’t think that in the future there’s just one NFT home and that’s it. I don’t think it’s like that. I think it’s like video or even bigger than that, where there will be many, many homes, but a really complete experience is going to need to embrace commerce and embrace, embrace social.

And that’s what we want to do. We want to be a marketplace that has a home for communities. And then as a place where the average person and the average brand can come and engage with this new media.

Adam Levy: Yeah. It’s interesting because like, you look at web 2 social media right now, they kind of, they use the user as the product, leveraging their data, promoting advertisements to them, etc. And when you’re talking about social media being web 3ified quote on quote you’re kind of like, you need to, re-imagine what that business model looks like. Right. Instead of exploiting user data, we’re seeing a lot of trends of platforms, putting users at the core of what they’re doing, giving them governance tokens, and making them core contributors to how the platforms move forward. Jordan, obviously, they have a lot of experience with that with me and kind of the rise of meme and how that started from literally a tweet. And now it’s this grandiose platform, right? So there’s a lot of history guys.

How do you guys view the business models kind of evolving for these web three or social media platforms? And you can take this either from your point of view, what you guys are doing or how platforms in the future are going to be leveraging this new form of user data.

Jeff Marsillo: I mean, I think it’s, it’s a super challenging question. I very briefly I think that we don’t know exactly how it will evolve. We have some ideas about how we’re going to approach it. But one of the things that’s just extraordinary about NFCS is they really open up the possibilities and a whole bunch of new directions that just, you know what, weren’t there with web 2.0 web 2.0, sort of inevitable that you that you end up, you know, essentially monetizing engagement through.

Because you know, the unit of media, the individual video, the individual photograph, or whatever was static and not very smart, right? Like you just, it’s just a video with NFTs. The unit of media is itself programmable, so you can put rules. That relate to how you transact with it, how you engage with it how it makes money, how it pays money out, how the rights are managed, that are just almost infinitely flexible.

So what it means then is everything is kind of possible now. And probably what you will see is you will see you know, kind of cornucopia of platforms and their means of monetizing engagement and monetize. Content for nifty is where we’re starting out is where a lot of other platforms have started out.

We monetize by by taking transaction fees because people are right now are buying and selling. Yeah. We don’t have any plans to simply monetize data. Like you suggested that just isn’t anywhere in our thinking or on our, in our roadmap. But I do think that our way means of monetization could potentially evolve beyond the simple transaction fee down the road. But I don’t know exactly where it might take us.

Adam Levy: You know, one thing that I like to think about. All user data is public, right? Everything. Now on the blockchain, it’s all like anonymized per se. But you can build interesting narratives around wallets, Based off the currencies that they hold based off past transactions that they’ve made. Like the first thing that comes to mind is, and I use them a lot in mantas friends with benefits, That’s like a social community that if you hold these tokens, like the 77 tokens. You could make an assumption that this user is part of this community, right? If you hold meme to an extent, right? So meme tokens, you can make some assumptions that that user has some involvement in the meme community. If you look at his past transactions and you see that he’s maybe used either nifty or open sea, or this platform or that platform, you can kind of build a narrative about where the expertise you’re actually able to build is like decentralized social graphs. And build narratives around users. And I see Jordan, you’re smiling and you’re nodding your head. I feel like you’ve thought about this before from a product point of view.

How do you feel about the role of on-chain data in building products?

Jordan Lyall: No, you’re hitting the nail on the head and I’m really glad you went there because you’re right. It’s public information. It’s all on the blockchain. Anyone can easily see what a wallet holds, pick any wallet and you’ll be able to just, okay, they hold these tokens, these these NFTs and you can kind of.

You can kind of find out more about their identity or identity for maybe for the first time is, is on public display. You just can’t really access it at all. One thing that’s always kind of been the through-line through everything we build is the ability to showcase your collection. Right now we’ve got a playlist where silver surfer has identified the top NFTs in his own personal collection.

We’re really starting to scratch the surface of what it means to be able to curate an NFT gallery. And it doesn’t have to just be for people like SilverSurfer with a lot of ease to burn, right? Like he’s, he’s one use case. Another one is I don’t have to collect physically own these NFTs, but I’m able to curate and put together a playlist and match up different art styles and But it all comes back to the user type.

And for the first time we can, now, when someone connects their wallets and fifties, we know a lot about them, not in a super-secret way where we’ve, we’ve been spying on them. Although there may be some education that’s needed as web two users may not be familiar with some of these practices. And we want to be as compliant and user-friendly as possible in everything we do, but you’re almost building out the.

Web three identity for everybody that connects to the site and you’re able to, Hey, I see you like space jam. We’ll have you, have you checked out tough shots or vice versa, or you’re able to identify the user before they even take an action on your platform. So I think it’s about combining kind of these, these things that we’ve been building in web to some of these Integrations and practices about really building a worthwhile product that provides a lot of value and then applying it to the unique tools that we get in web three.

Adam Levy: Yeah, you know, this moment in time really reminds me of a very iconic period in tech history. Do you guys remember that whole scene? I was really young during this time, but I kind of remember it starting to develop. Apple introduced the iTunes store and the ability to buy songs for a dollar 29, right. Or at 99 cents. And their main reasoning is that the problem they were trying to solve is one making streaming more accessible to the end-user, without them having to store it, all the songs and illegally download stuff. And they realize there’s actually a market for people who want to support artists and purchasing. And that’s obviously before streaming came out, etc. Now people just pay a one-month fee to access unlimited songs, but the point being a lot of that moment of time caught, it reminds me of where we are today with NFTs, right. The purchase and consumption of media.

Do you guys ever like have a reference point in times when you’re building out Nifty’s? And kind of reflect, like, why are people spending so much, what does this level of ownership mean to the end-user and how can we integrate that? What do you guys kind of think about that process when building it out?

Jeff Marsillo: You’re getting deep here. It’s a I think first and foremost, it’s, it’s social in the sense that all of these things have valid. Only in connection or in relation to other people, how we feel about other people, how we want other people to feel about us. Jordan was talking about how your wallet can almost be your identity.

And that’s really because NFTs are a form of self-expression, right? You’re you are, you are expressing something about your preferences and it’s not enough, frankly, on Nifty’s you can make playlists. And those playlists can showcase things that you are just interested in, things that you own, things that you created, but you don’t have to own their creative them to make a playlist.

And we think playlists are great and it got to be a great way to get into this space, but it’s not the same thing as owning an NFT because when you own the NFT, you’re saying something else you’re saying I have invested time. I’ve invested in. I’ve invested myself in this, this unit of culture that I’m now showing off.

And so that I think that investment and that sort of showing off, go hand in hand and have cultural meaning for people. I’ve got a book on my shelf over here, somewhere called culture and consumption. It’s basically, it’s basically it’s premise is that. All of our choices, all of our choices in commerce, all of our choices and you know, our commercial goings about our cultural decisions.

They’re decisions that we make about how we fit in with other people and how we express our support for other people and how we express ourselves. So, you know, look, I think that we referenced that, that point about human nature. And everything that we do, it’s really the foundation of what nifty is, is and you can look back and there are examples of this through time.

I mean, it goes back to probably the first caveman who found a shiny rock and hung it around his neck. Right. I mean, that’s it’s really not very different from that. Intrinsic need to have something valuable that says something about yourself and show it off to other people that goes back way, way earlier than.

Adam Levy: No, for sure. I think I only really liked that example because you were able to get songs for free. And now Apple came out with this concept of being able to buy them. Right. And you’re able to save pictures and in torrent videos that are technical enough to use also for free, but people see the value of owning it. Right? And it, it really causes us to really reimagine, rethink. What is value on the internet, especially for things that you can’t touch and you can’t feel, you can really only see, I mean, you can get like intimate objects and like frame your collectibles and you can technically touch them, but you know where I’m going with this, this whole movement of like digital ownership, digital scarcity, so many it’s, it’s very new.

Jeff Marsillo: Well, It’s very common and it was very common in the physical world. I mean, if you look at basketball cards or baseball cards, they’re just pictures that are commonly available on 2 cents worth of cardboard generally. But there’s something about the.

And it’s, again, it’s a social construct, something about the fact that these are the ones, these real ones are the ones that were authentically distributed by the person who was responsible for creating it right by the creator, in the sense of the NBA being the creator of basketball. So that just translates to the internet.

What what’s different now with blockchain, of course. And this goes back to, I think something Jordan said. Is ownership is now possible in a way that never was before we feel again, that we really own something on the internet now, because nobody can take it away from us, unlike iTunes or unlike Kindle, where when they shut that app down, you don’t get to take that song and bring it somewhere else.

That’s really their song. You’re borrowing it here. Now the database of ownership is distributed. Nobody can take that away from you. You can pass it onto your grandkids or do what you want with it. That’s the that’s I think the big difference here. Yeah.

Yeah. I want to pivot for a minute into your collaborations and all the projects that you guys are working on, which is super exciting and super mainstream. The first one that comes to mind is Damien Hirst. That’s like selfishly, one of my personal favorite collabs, seeing that documentary come to life, seeing that piece of art come to life and then his first experimentation in I guess dabbling with NFTs was through Nifty’s. I’d love to hear the story of how that kind of came together and what was that process like working with one of the most, I guess, famous artists of our time.

Jordan Lyall: Yeah, it was an interesting one to kind of kick off the platform with right. The Damien Hirst project was organized by Henny and they’re an investor in the fifties. It was collaborated on by consensus and their blockchain. Which is our exclusive side chain platform at the moment.

And I was really close to consensus having just left consensus to start this company. And it just all lined up perfectly that, Hey, we’ve got this, this project that we’re thinking about at the top artist, we’re going to need a secondary market and they need the marketplace. One thing led to another and it just, it just made a lot of sense.

It was an interesting solution to how it kinda came about. The Damien Hirst project was launching at the same time that NIF DS was launching at the same time the Palm network was launching. So it makes for fun stories. We’ll have to have over a beer one day, but I think it was really, it’s a really fun project.

Not just the fact that top artists, maybe the wealthiest artists, living artists chose to do something with NFTs and to in some way, partnering with nifty. But the project is innovative on its own. In a few months, everyone that holds a Damien Hirst tender as they call it, we’ll be able to decide, okay, do you keep it as an NFT or do you turn it into a physical NFT, thus burning?

The NFT. Do you turn it into a physical piece that you can receive in the mail, the choice of physical or digital? It’s a really fun project. It was something great to kind of put our brand next to those brands next to Damien Hirst. Yeah, it’s a tremendous project. And we’re excited about the future.

Jeff Marsillo: Look, I just think it’s a, I didn’t think about it this way at the moment you were asking the question, Adam, but it’s kind of the perfect. Illustration of what we were just talking about, right? Because it is this, this art project that explores and sort of teases out what we mean by ownership and what we mean by nonfungibility and fungibility, and the fact that it kind of forces this choice between physical ownership and digital ownership.

I think the hypothesis of that experiment is at least my hypothesis would be many people are going to choose digital. And when you put physical ownership against digital ownership and many people choose digital ownership, you’re kind of demonstrating, Hey, enter ownership on the internet is really here, right?

People have chosen among the two, they had an equal choice and they chose digital. I know that’s what I’m going to choose. I think that’s what’s going to be.

That factor is also super dependent on who you’re targeting, right? Because if you go more to the normie crowd and you still try to explain to them what digital ownership means, they still don’t get it, they’re not there yet. If you go to the crypto crowd, obviously they’re going to choose, you know, the digital one, or at least most. And that was actually my next question. What do you guys imagine being the outcome of this? Right? Because it’s a perfect test, a user test, right. To see what they value. And Jeff, you say they’re going to lean more towards the digital side.

Jeff Marsillo: I don’t really know if a lot of people are going to choose digital. I mean, I, I think, especially with all the excitement around NFT’s, I don’t really know. I never really speculate on these kinds of things because people surprise you. You know, I think one of the cool things about this experiment is they just made the choice available.

Now it’s up to everybody who bought one to make that choice. And we’ll see.

Jordan Lyall: To be honest, I think a majority of people will choose digital. Okay. I think just. It’s a really, really tough question. But I think with the amount of people that are crypto native crypto collectors that participated in that, I think enough people see the value.

Several people have more than one. So we may see a situation where it was like buy two and burn one. So you get one of each. But just for the benefits of like, why, why are NFTs cool where you can display them anywhere digitally there’s a market for them. I can easily sell an NFT a lot easier than I can an 8 x 10 print out, right. There may be a secondary market for the, for the actual printed thing that emerges. But just, you know, buy NFTs in general.

Jeff Marsillo: Really good point, because the way the experiment is, is designed. Everybody owns the digital version for. So you’re forced to experience all the benefits that Jordan just described.

Some period of time, you’re going to be able to show it off digitally. You’re going to have a liquid secondary market, and then you’re going to have to decide, do you want to go back to fiscal? That’s really what the decision is. Do you want to forego all those benefits of NFTs and go backward? And now I, and then I hear Jordan say it that way.

I think he’s got a great point. And I think, you know, probably most people will decide to stick with digital.

Yeah. You know, another cool project that you guys brought to life is the collaboration with space jam, which was also super cool. I know I fangirl over it. I got all the free ones and the one you can purchase too. My brother also went crazy over it being the basketball fan that he is. How was the process of bringing that to life? Two very different projects. One’s like a mainstream franchise. The other one is a very famous iconic artist. Right? How was that like, tell me the story behind that. How did that come to form?

Jeff Marsillo: Yeah, sure. Well look, one thing that I learned when I was at the MBA working on NFTs and working on top shot and all that stuff, is that yes. I mean, of course there’s this enormous opportunity for brands and companies to engage with fans in new ways, but. Even today, and this was true then, and I think still now there aren’t actually that many platforms for brands to do that.

And so, you know, you could do what we did and go work with a great, great company like dapper labs and build one, build a platform for, you know, your brand. Beyond building one yourself and all that investment and all that risk and all that time. There, there, there haven’t really been platforms to engage for brands, to engage with their audience in a large kind of scale way.

So that’s, you know, obviously been the pitch that we’ve been making to the market. Like. You could go on any number of marketplaces and you can do a drop and you can sell, you know, one of ones and you can probably make a lot of money if you’re a big brand. But what we know is this. Is that for most of these brands, a million fans is worth more than a million dollars, right?

And when you’re trying to market a movie like space jam, right, with billions of dollars behind it and multi million dollars in expectations of revenue to make a million bucks on it and selling NFTs is not your primary objective. What you really want to do is you want to get a whole community of people to engage with the brand, get excited about it.

And then there are lots of other ways that you’re going to make money, including selling tickets and maybe including selling entities. So that’s our pitch to the marketplace, you know, are these brands in the market. And that was our conversation with our friends at Warner brothers. And obviously it aligned with their interests.

They wanted to engage fans like they had already made the property and they knew their money was going to be made from the movie. How do we engage a large scale audience? So what we did. And this goes to, you know, George’s point about this sort of stack of everything we did, Palm was being created. If these were being created, Damien Hirst’s, you know, currency project was being created.

The space jam project was great at the same time and launched on the same day. And on that day we distributed about 92,000 NFT’s.

That’s actually insane, think about this for a minute or these like more crypto native users, because I know the way you guys set up your onboard and your funnel, it was super, super easy to claim one. Right? You could claim it literally in a heartbeat to connect your credit card and all that process was streaming Perfectly. Right. So were these more like mainstream users? Or Are they more crypto native users?

Jeff Marsillo: It was, it was easy when it was working really well. And so I want to just acknowledge that for most of the day, it wasn’t working very well.

It was our day, one of our platforms and, you know, a few parameters were kind of set the wrong way for that kind of scale. And then suddenly LeBron James posted on Instagram. But when it was working smoothly, when it was working the way it was supposed to be working I think it was one of the smoothest experiences for getting NFT’s.

Now, Jordan will tell you he’s not satisfied. He’s got a million ideas. But it was a pretty smooth experience relative to what you’ve seen in a lot of other places. And as such, because of that, because of our message to the world, Hey, this is going to be easy. This is an IP that everybody can get behind.

Come try it out. Many, many of our users were much more of a much more casual variety. I kind of think of them in three buckets. I think of them as. Crypto native, you know, they’re on open, see, they’re maybe using meme and they’re using some of the more advanced platforms. And then the sort of middle is the top shop.

People who are used to a relatively easy experience, but they know what NFTs are and they’re, you know, they’re they’re, they’re engaging, but, but it’s maybe not with, you know, with a metal basket, things like that. And then there’s this new group who like, read about this in variety. You know, or read about this at fortune magazine had seen it before.

I’d heard all about it in New York times and on on the news and thought, all right, maybe this is my chance to try it out. And we got a ton of those kinds of users as well.

Jordan Lyall: Also, you know, as a crypto guy, as a defy guy, thinking about this, you know yeah. We issued 92,000 and FTS in one go.

In half a day. But we, we onboarded tens of thousands of users to the world of web three in the world of defy cause whether they know it or not, when you sign up for nifty is, and you claimed your account, you were given a theory of address our Apollo address. They’re given a crypto wallet. We use a tool called magic link and we’ve created a nifty wallet for all our users.

You can also optionally add in your Medimap. But as just someone that’s interested in like growth of defiant general, I was totally geeking out about that stack about, about that stat, about how, how big a step forward in the macro level. We contributed to onboarding users, the mainstream audience into, into defined the world of web 3m, really fun

Jeff Marsillo: The day afterward. When, you know, we were stabilizing the platform and, and dealing with all this inbound interest for what we had, just what we had just done. And, and getting a ton of questions from people who had just gotten their first NFT, you know, like, Hey, what can I do with this?

You know, all these, all these interesting questions about what it now meant to own a space jam and a C and D Jordan and I we’re together. Because we were visiting San Francisco and he was up there. He and I were both visiting San Francisco for a meeting while we were launching as another thing that made it extra hectic, but we kind of turned to each other and we’re like, yeah, We’re now responsible for this space jam community, you know, like that, like, this is, this is not only tens of thousands of new people and new wallets, but it’s now it’s a community of tens of thousands of people in there and their wallets and, and and like, we just were like, we can’t let them down.

You know, like now this is a responsibility we’ve got to shepherd this, this community. So we’ve been. You know, working with w and Warner, by the way, it feels the same way. I mean, they were thrilled and just thrilled that they could reach so many new kinds of fans with something like this.

But they don’t view, you know, space jam. This has like a campaign. And then like you go and hopefully you watched them to theater and then they’re done. They want to grow a community too. So, you know, we’ve been working with them about how this transitions from a movie campaign, to a real community.

Now we’re talking. I can only imagine the airdrops and when they get sued in my wallet for getting all those NFTs this is, this is great, guys. I want to, I want to kind of pick your brains on what can we expect from Nifty’s is in the future. What’s to come, what can you share publicly? What alpha can you leak? Give it to me.

Jordan Lyall: I think he just got a little bit alpha there where this is not, not just a one and done space gen. And we’ll, we’ll have some follow-up you’ll be able to use some of these NFTs. I won’t say that utility where but you will be able to use them for additional fun experiences. I think it’s not just about NFT is about it, about experiences and the unique benefits you get by building on a crypto stack.

More ways to participate in the community. More ways to collect not with just space jam, but other properties, not just with Warner brothers, but with other big brands and organizations. We’re not forgetting the little artists or the up and coming artists. We’re going to be doing a drop here in the next couple of weeks with some really cool artists.

We’ve got the rest of the calendar year and already into 2022. With some of these big tent-pole releases planned, it’s going to be really fun. And then in addition, as, as we roll out the product and improve the products and improve the user experience and making it super easy for brand new users without crypto background, to be able to join and participate Start to see more ways to communicate more ways, to collaborate more ways for communities to reach out to their collectors or ways for artists to collaborate with other artists.

We see this as not really these like branded drops, driving the train, not the platform, driving the train, but really together. Pushing the gas here. I think it’s going to be really cool with what you’ll see in the coming months.

Jeff Marsillo: I would just, just to elaborate on two things, one you know, we Jordan and I met in the winter.

We met in February, so we brought this together really fast. We launched our company. We announced our company in March. We launched our platform and. And we kind of had a tough decision to make. I mean, we could move it forward and just get started or we could wait until it was complete and kind of you know launch it only when it was kind of tied up with.

And obviously we decided to do the former. We decided, you know, we could do enough. That was fun. That would be interesting and new and valuable to the space that nobody had done before, but it wasn’t going to be our complete vision. So when we launched on July 12th is in some ways a kind of a teaser of what’s to come in itself.

I mean, you can only. Explore nifty today and you’ll, you’ll discover some dead ends and it’s almost like, you know, there’s a sign, there’s an invisible sign there that says roadway calming, you know, like men at work. And you’ll find a bunch of those on NFTs. Where are you? Like, oh, okay. You know, when I see that there’s a road coming in here and it’s going to connect to somewhere, that’s really, really.

So, if you’re kind of interested in where we’re headed you can kind of look for some of those, those road signs on Nifty’s where you’ll find some things that are missing. I’ll just give an example, but we are really excited about this idea of NFT playlist. I mentioned. NFT playlist is an incomplete feature on niftiest.

You can make a playlist today and you can showcase it, but there’s some limitation of what you can do with it. You can’t edit it. You know, there’s some limitation on what you can do, we’re going to be over time, dramatically expanding what’s possible with playlists on nifty. So that’s just, just an example of where if you mess around with playlists on Netflix today, you might’ve said, okay, this is kind of cool, but like, where are we going with this?

Well, you can see that there’s a road being paved ahead of the. The, the other, the other thing that I just want to elaborate because Jordan teased this drop was coming up in a couple of weeks. And I think it’s to just maybe elaborate a little bit about it. We haven’t said too much about it, but I don’t think it’s it’s you know, I don’t think it’s saying too much to just go into some detail here.

We are, we’re going to be doing, we’re going to be not just working with big brands, but supporting independent artists. And we’ve got something that we call common canvas. And the idea here is we work with a creator to identify a canvas. And in this case it’s a skate deck and that canvas.

We’ll be used not only by that creator, but by a number of other creators from their community that they help us to identify and kind of recruit into the project. So it’s a little bit like a group show from the art world. And you know, a little bit like an individual collection that is shared by a number of creators, but in this case it’s a skate deck and the creator that we’re working with goes by the name of Spain.

And he’s a professional skateboarder and artist. He’s helped us to recruit a bunch of really, really cool artists and skateboarders. You know, some, maybe a little better known than others, but all of them have a really, really cool kind of enthusiastic grassroots following. And we just thought like, you know, it, actually, the thought came to us from, Damien Hirst, like Damien Hirst crosses over in so many different directions.

What’s an unexpected, next thing. Next thing that we could do. And, you know, we thought about the escape backs. He had done it with Supreme, the shoes that he had done with vans. And we’re like, let’s hack into that community. You know, there’s like a bridge to be built here and let’s, let’s go, let’s go for that.

So, you know, that’s the next one, but there’ll be more of those kinds of projects, more bridges being built between different demographics who maybe haven’t wholly embraced. But have all the propensity to do so. So you know, that’s, that’s what common canvas and everything else that we do in nifty is going to be all about.

Yeah, that’s exciting. That’s really cool. I’m stoked to see that come out and hopefully by the time this episode comes out, we’ll see more information about it and more things to learn about it. But before I let you guys go, I think that’s a perfect place to wrap up before I let you go quickly plug yourselves and the project and where people can kind of find more and learn more. We can start with Jordan.

Jordan Lyall: @jordanlyall that’s where you can find me and my fun Twitter activity. That’s probably the best place to reach out to me as well. I’m on all the channels.

Jeff Marsillo: I’m @jeffmarsillo both on Instagram and on Twitter. I’ve never really gotten the bug. I’ve worked a lot in social media, but I’ve never gotten the bug to post a lot. I’m more of a lurker, I guess. So you won’t find a lot of opinions. Maybe I can learn from watching Jordan A.

Little bit, but nifty is you know, not only do we post about stuff that we’re doing, but we try to support the NFT community and the creator community. And so you’ll find some, some really good things hopefully in some useful information there. And of course That we, you know, drop information you know, about upcoming releases and projects and updates is on our social handles.The other thing we should probably mention Jordan is our discord, right?

Jordan Lyall: Yeah. it’s at Nifty’s.com and you’ll find a link in the footer to our discord.

I just joined today. So I’m in there. I’m alive and let’s get going guys. Thank you so, so much for being on and as nifty is developing, I hope to have you again in the future and kind of do a recap as we get bigger and we reach a billion users, more power.

Listen on: Spotify | Apple Podcast | Google Podcast

Background

Mint Season 2 episode 13 welcomes Rafa, a community builder, Web3 operations contributor, and an active supporter of local artisans in Puerto Rico. Currently, he’s most active in web3 communities like ForeFront and creator cabins.

In this episode, we talk about:

• The biggest recaps from MetaCartel’s MCON
• How can DAOs nurture a space for experimentation
• How to narrow the gap between passive and active contributors? 
• What DAO-related problems would he like to see tools or platforms solve? 
• His idea around Contribution Zones
• How creators should be approaching their DAOs
• Tourist tracks for DAOs

Links

Contribution Zones: https://ff.mirror.xyz/UJa9qpbbYftlN4xMOD9W3TBgeJS3gxK8ec4FKUJFhuM

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Thank you to Season 2’s NFT sponsors!

1. Coinvise – https://coinvise.co/

2. POAP – https://poap.xyz/

3. Socialstack – https://socialstack.co/

4. Celo – https://celo.org/

5. PrimeDAO – https://www.prime.xyz/

Interested in becoming an NFT sponsor? Get in touch here!

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All right, guys. Here we are MCON, we’re doing a post recap of MCON. With me, I have an OG DAO contributor who was quite active across multiple communities, including forefront, including creator, cabin. His name is Rafa. Welcome Rafa, how are you doing? 

It’s great to be here. It’s been a long week and you know, we’re in the stretch. I think it’s time to digest a little bit about all the different conversations that we’ve had at MCON this week. 

So before we get into MCON, give me a quick brief about yourself. Who the hell are you, what were you doing before crypto and DAOs and kind of where are you now?

So as you said, my name is Rafa. I’m Rafa the builder on Twitter. And I’ve actually been practicing organization design and studying organization design for the better part of the last decade. And so I worked in manufacturing for a little bit. I worked in consulting, strategy consulting and most recently in human resources technology for Web 2.0. But I’ve always been quite, I guess, dissatisfied with the type of contract that employees have and the fact that it’s mostly a model about resource management and value extraction from resources. Where I would want to be able to see something more about reciprocity and being able to create value together. And so through that conversation and through some experience and building in real life communities in London, I was looking towards the future of the creator economy and how, you know, you collaborate on Instagram nowadays. And what that future of collaboration looks like. And that ended up here in crypto and in DAO land. 

So tell me, tell me about the past communities that you built while you were in London. What do those look like and how do they kind of relate to what’s happening with DAOs right now? 

Yeah so, I met one of my good friends in London about eight years ago. And one of the things that as a young adult is you move to a new city and you want to make new friends. And What no one had told me was the fact that you can actually make friends quite consistently and you can make deep friendships and you can create a community of friends by consistently showing up and by just creating events. It sounds very obvious in retrospect you know, all you needed to do was host a couple of dinners that I learned from my friend who kind of was doing it in London, and I realized that you can build a community around people who just want to be friends together and can become a source of support for each other. So in London, we intentionally build a community of just folks who wanted to spend time together. We hosted a book club, for example, for a while, and a community group to about a group of, I’d say about 200 people. 

 Why do you think you’ve naturally drifted towards organizational design? What is it about it that kind of like gets you going?

Oh, there’s a good story here. So, my first internship my parents wanted to teach me the value of work. 

I feel like that’s like a core principle that any family tries to instill in them. 

Yeah. And, you know, coming from a family in Puerto Rico, they called my uncle who had a hardware store where they make doors and sell doors back in Puerto Rico. And they said, you know, you’re going to work there this summer for essentially minimum wage. They did pay me a little bit more than minimum wage and my job was to count screws. So what that meant was I had to spend eight hours a day taking this huge bag of screws and putting them in little baskets of a hundred screws each. And I had to do this manually. So I had to pick up the screws and I had to put them in little baggies and I’m sitting there and, you know, eight hours I’m in the basement. And I go to my uncle and I say, you know, why don’t we weigh them? You know? It’s not just an inefficient. It’s also the probability of me making a mistake is extremely high. So I could increase the accuracy and increase my speed and doing it. And my uncle is like, no, like you’re here to work and you need to learn how to work. And I like go back and I continue counting. And I’m like, How is this producing any sort of value for this company? How is this company profitable? How is my uncle making money? Because if they’re spending an entire full-time equivalent of me down here in the basement, which I also thought was a complete waste of my interest in, for example, business development. But put that aside, I was like, this doesn’t make any sense. And there was a bunch of other people on the payroll and I just kept on asking, why is this like the case? And I still can’t get that question out of my mind. So I kind of followed my nose on that. And every single job that I’ve had is continuing to understand, you know, how do humans organize and like actually create value. 

Interesting. You know, when you look back into your career and you try to piece the moments that influenced you the most. And obviously in the moment you kind of question, like how the hell does this make sense at all? But those core experiences end up making you like who you are today, you know? And you’re counting all those nails, like, how is that equivalent to organizational behavior and DAOs right? And how does that kind of pertain to how people work in a decentralized manner? Have you found those similarities? Like what is the correlation? 

I think what kind of takes you from point A to point B is that, one of the things that I realized and this is part of the book club in London and part of conversations and also just human relationships in general. If you sit back, there’s two different types of decisions that I think humans make. One type of decision is intended. This is roughly speaking and this is a false binary, but let’s go through the theoretical exercise for a second. One is intentional which means you wake up and you make a decision, right? You have another type of decision, which is script based. You’re thirsty. You go get a glass of water. You didn’t make that decision. You just went and got a glass of water, right? Similar to that, there’s a thousand other scripts in life that you can choose to follow or not, and you can choose to analyze them or not. So, getting a job and going to college is a script. It’s a community script, making sure you don’t drop out of high school is a script. Actually dropping out of high school is also a different type of script that you could follow, right? And these are tied to different cultural components and community environments that reinforce certain scripts that you have. Now where I’m going with this is that when one of the scripts that we don’t challenge enough is actually the employment script. So we have a social construct where you must get a job and you must get paid. And the majority of the value extracted in that partnership actually goes to a central institution. And that is a tax, and not in a bad way, that is a necessary tax to be able to manage transaction costs. That makes sense. And that script makes sense because as an individual, if I try to do something and I didn’t have the distribution power, or I didn’t have access to the right technology, then the probability of my failure as an individual is actually very high. So what are my options? I can go high risk, high reward, right? That’s entrepreneurship. Or I can work for another company which has already solved the transaction coordination problem. Now that script is actually outdated. And why DAOs exist today is because we’ve realized that that script, that acceptance of that specific coordination distribution tax, actually no longer is the case. As an individual, the creator economy is coming through because an individual has access to the right technology. And the transaction costs are low enough that your probability of success, of finding a niche market and monetizing, is actually much higher than most people realize. It might take 7,500 tweets to find a niche, but if you tweet enough about the same topic, you develop the audience, or you find it. Whether the audience exists or not, that transaction process happens. And then you can monetize the value that you’re actually producing. That means that me counting screws, which was a transaction cost. I’m working for an employer. If I tried to count screws by myself, I would have to find everybody that wanted their screws counted, which might take a lot of time. I might have to tell them how I’m going to count screws. And by the way, I’m going to have to charge them a lot more than minimum wage because it would cost too much to do. So all of that doesn’t work. It’s better to be on the payroll. And I might be at a loss as an individual, but overall the company might still be profitable. 

So, what is it about the decentralization part of organizations that helps kind of fit with your theory of scripts? 

So, what happens is, when you start thinking about what you can do as an alternative. There are new models that emerge, right? And you know, one potential model is actually the creator economy as a freelancer, right? The decentralization component is a new script, which is now evolving. And the script goes like this. A group of people can get together on the internet and make money. That’s it. That’s the script. That’s a new one though, that didn’t exist in the public conversation in a long time. And I would say, as we say on Twitter, it’s still early. But that script is really grabbing people’s attention. You know, there’s a bit of a hopium is how people describe it because there’s so much opportunity, people say, hold on, I have an alternative to employment. And so now employment can go under scrutiny. And decentralization, where a group of people can get together on the internet to produce value, actually becomes an attractive alternative to it. 

Talking about people getting together. MCON. First of all, how was MCON for you? I know behind the scenes you were telling me like, wow, what a conference, but tell me a little bit more. 

 So I recently quit my web 2.0 job. I wrote an article about why I made that transition. I talk a little bit about some of what we spoke about here and I aped into it. I was like, look, if I’m going to go do this, I’m just going to go full in. And so a couple of weeks back it wasn’t even a week I bought my tickets, you know, maybe. You know, two weeks, like a week before the conference. I emailed some people and I was like, I’m going to go, we’re just going to go this, full on. And the conference was so much more than what I expected it to be. And I think the driver of that kind of energy, because really it was great for the community to provide itself some validation to each other for the work and what they’ve done for so long. You know, there’s a lot of perseverance here that has gone into it. I can’t really count myself in, not yet, you know, I’m still new. But it was really wonderful. It’s something really magical to be surrounded by what I would call community stewards, who have a vision of cooperative development and have a vision of creating generational wealth across individual communities. It’s really inspiring. 

Adam: I’ll tell you my experience at MCON. I used to produce a lot of events. Many, many events like the last two years, and now I’m finding myself attending more events. And MCON was one of those gatherings where one, the selective group of people that came, was strategically done in a way where you could have like high quality caliber people. And you just felt just like the dumbest person in the room all the time. And you’re listening to these conversations and you’re listening to the people behind them, and you’re listening to how critically people are thinking about this stuff in their free time. It just makes everything fun. That’s why they called it MCON.fun. 

So what were some of the biggest takeaways for you from MCON beyond the partying? 

I just want to mention one point, you talked about the caliber of the person that was attending. I think part of that is actually the pandemic. It’s like the people who came were the people who paid the tax, the pilgrims, one might call them. And like any pilgrimage, you know, you go to burning, man, it takes effort to get there and to participate. And so I think one of the things that MCON did, I know the community is small to begin with, so you have like a group of hardcore people. But I think part of this is the pilgrims got together, right? They came together for a specific vision and they came to lend tribute to, you know, the vision and the community development that it has and it needs to be serious fun for someone to say, I will be a Pilgrim, right. It takes time. 

You know, one of the most memorable points for me, this was on day 3. So yesterday on Friday, you know, you step outside of the woods brewing company and you just see like a circle of people just sitting in the middle of the street, you know, Ideating on like DAO philosophy and talking about the future of the organization, the future of collaboration on the internet, tokenomics, mechanism design.

 Do you know how that started that circle on the floor? So a couple folks on telegram got together and since Friday didn’t have any programming it was just a group of five people on telegram that said, Hey, let’s get together at the chili pad. So Meta Cartel’s kinda like pad and let’s discuss it. But you know, when I got to the event center and I was like, I was like, why are we going to the chili pad? Like, why doesn’t everybody come here? So I texted the telegram group. It was an executive decision. We’re doing it here. So we sit down and there’s like six people there to start and we start having a conversation and then more people join. One at one at a time. And then we’re like, well, we don’t have enough space on the table. So let’s start sitting down and we sit down and more people join. And then people start crowding around and they start listening and they decide to contribute. And actually that is exactly how decentralized organizations work. It’s exactly the same way. You get a core group of people who just want to do something. But you do it in public and you’re not necessarily loud about it, but you’re consistent about it. Talk about it for a while. And other people start listening and they start contributing and you see people move through this concept of like contribution zones. We’re going to lurk. I’m watching from afar. There’s something going on there. I get a little bit closer. I decide to invest a bit of my time or resources in it. And then I might decide to contribute or to listen and maybe participate or signal as we might say, and then determine a specific course of action and actually then to get involved in production.

What would you say are like some of the biggest alpha takeaways that you think you picked up from MCON? 

 For those who are listening, I don’t know if you’ve come across this concept of what alpha is, but it’s, you know, the hot topics and like the good insight. There’s a couple of different ones. Like actually I read a Twitter thread about this this morning. I think a couple of things stood out. The first is like the level of ambition is really high, but it’s ambition from a group of people who are humble and honest about what they’re trying to actually get. That’s really impressive. And like there’s a lot of insight that actually comes from that discussion because the principles that these people are using to think about product development, to think about community development is not a, “I’m going to create wealth”. You know, you might go to a startup conference where they’re going to talk about cash flow and talk about runway and talk about, you know, how can I get a bigger multiplier on my evaluation. I didn’t hear a single conversation about valuation discussions and that’s because the valuation is not the end goal. The end goal is actually creating a movement of people who believe that there is an alternative script. An alternative way to actually produce value in the world, which is not competitive, it’s collaborative. 

How do you think we scale this movement without diluting its value? 

So during the circle yesterday, this was a very, very important topic of discussion. Because what makes the magic and what gives you the energy today is actually a fact that you have this ethos, you have these vibes, right? It’s all about vibes here. I’m mostly here for the vibes. I’m like, how do you scale vibes? Startups actually talk about this quite often. They say, how do I scale culture? At five people, I have a founding team. I’m like, tight-knit squad. You know, how do I scale culture?

And the only way to do it is with memes. 

You joke, but that is the answer. The answer is you scale it with memetic information that reinforces a specific value system. You can introduce new memes and they can introduce new metaphors. I really like thinking about the language that’s actually used. And during the circle, we talked about the importance of developing a common lexicon of vocabulary and values that we want to use. Doctrines one might say, I don’t know if anybody here is familiar with Wordly maps, but he’s another person who works on strategy and or design very, very well known and talks about doctrine. So one of the first components of any type of collective collaboration process is, we need to be able to understand each other. And with a new Dao ecosystem, or I prefer to call them digital native organizations because some are not autonomous or some are not decentralized, but they’re all like internet natives. We don’t have a common lexicon yet. Here’s an example of what I just said. Like, what is a Dao? What is all this coordination for? What is our compensation structure? What counts as a token or an NFT? Like what is a contributor? And we’re in the process of that emergence in terms of both a value system, which we’re trying to identify without locking ourselves in place, because you know, self-referential problem here. And the operational process so that people who want to participate in this process, we’re going to have a tsunami of people joining us soon enough. They are already coming. And how do we help people maintain the same conversation, the same value system using the same language and foundational processes. 

Adam: I want to pivot for a minute, because you’re a DAO contributor across multiple communities, right? Between forefront, between creator cabins, I want to kind of pivot into your time at forefront and bring up two or I guess one primary article that you recently published on behalf of forefront, talking about contribution zones, which really stood out to me. And I don’t think it got enough attention. So this is me putting it on blast and giving it more light. 

or those who don’t know what forefront is, how would you summarize forefront and like an elevator pitch?

Forefront is the port of entry to web 3.0 is how we want to describe it. I say we as, you know, forefront but the truth of the matter is, you know, this is like quite emergent. Now, what does a port of entry mean? It means that we want people to be able to go to forefront , get the right resources, be able to find the right DAO for them or the right social token or social engagement. And so forefront is kind of like a content first organization where we’re publishing doing research with regards to different organizations online and right now trying to help other social organizations partner with each other. We think all these organizations are digital native, or just as cities, right? The metaverse. 

Adam: There’s a really cool graphic that you guys put together and I’ll put it in the show notes for everyone that’s listening. Like this was the first time I got to visualize a DAO right. And do so in a way where it felt relatable from the architecture of a city. And I think you guys did this so strategically and so beautifully and the color coding makes it all. So right now, just for those who are listening, and go to Adam levy.io/blog, and you’ll be able to see the image, but there’s four colors, blue, green, yellow, and red. And blue is governmental green is space yellow is residential and red is commercial and it looks like it’s the architecture of basically a city in first off Tallahassee. This is Tallahassee. That was my first question. And second, what is going on here? 

Let’s talk more about Contribution Zones. How did you kind of come to the idea of color-coding specific areas that specific color. So give me, give me the rundown. What’s going on over here? 

So I read this book recently. Well, not right. Not recently, that’s a lie. I, I had this book, which was recommended to me by Ben Kat, who does like ribbon farm and breaking smart, and some other blogs. And I sent him a direct message and he’s like this really big guy. I love the work that he does, really forward thinker. And I said, Hey, if you were going to recommend one book on the org design or like a couple, what would you recommend? And he recommended two. He said it looked like a state and he recommended another one called images of organizations. And within that book, the author talks about how, depending on the language and the perspective that we do, we can envision organizations as different types of entities, whether machine we can say like operational effectiveness of an organization, right? If you’re thinking about a metaphor of a machine that has specific inputs and outputs, or you can think about it as a brain and talk about learning loops or as a series of other entities. That book really kind of I guess made me realize that organizations can be essentially whatever we describe them to be. And when I was thinking about digital organizations, I was thinking about this pattern of people getting together. You know, if you go to different discord channels, you know, they’ve got the chit chat channel and it feels like you’re walking around a neighborhood. And you move between discord channels into another, and people talk about teleportation, but that’s what ‘s happening. You’re teleporting yourself from one digital city to another. And so, when I was thinking about that, there was a question in forefront, which is, we need to figure out, how are we going to pay people? Like, how are we going to talk about different members? Because different members are contributing in different ways. And then these two ideas just kind of collided and said, well if the digital city has different neighborhoods, well, maybe there’s different zones that people are participating in. A commercial zone or a residential zone. And I was like, but maybe there’s different levels of commitment and engagement than that we have. And maybe each person then flows through different contribution zones in different neighborhoods. And maybe I’m a lurker, downtown, not really going anywhere, but I’m just a tourist. I’m just hanging out. That’s one level of commitment in a specific area of your digital city. Versus maybe you’re an active contributor in the suburb where your home is. You know, you’re part of the board, and you’re actually doing specific work and you’re committed for a specific amount of time or for a specific project. And so then, when we started thinking about what language we want to use to describe these digital organizations. I really wanted to stay away from thinking about them as machines with inputs and outputs, because that’s actually not how they work. They’re too complicated for that. They’re these like organisms where they react to a specific environment. But you know, we also need to be pragmatic and make it simple enough for people to understand kind of what’s happening. And I was probably lucky and inspired. And just like these ideas kind of collided. And suddenly you can see them, right. It was quite eye opening to write the article because as I was writing it, I was transforming the way that I was viewing the online landscape.

These contribution zones are very much like operating models. Right? How can DAOs kind of nurture a space for experimentation to find that right you know, contribution zone, that right operating model? How do you think about that? 

So, in forefront, what we identified was that we had three main I think contributions zones, right? You had three levels of participation. One when you’re watching one that you’re actually doing and one which you’re actually maybe enacting the community needs. So being more like a steward. And this might be common across many DAOs, but it actually might not be similar to what you’d describe. It might be different because a DAO or a digital native org that you’re working with, may actually have a command and control model. Where you have a very central group of people then delegating work to others. Maybe your organization is closed and you don’t really have lurkers, or you might be recruiting people specifically to work in the digital environment. So how do you explore your digital city and the digital city that you’re creating? Well, it’s similar to moving into a new city. What do you do when you move into a new city? You walk around. 

Like Europe, you’re more like around people. It’s different culture. I feel like I’m in LA. Ok, Meetup.com. 

You look for people, you look for things to do and similar to any type of digital city, you have different layers to it and different different meshes of environments, right? You have in, in Europe specifically, you have the tourist track, right? You have this in the states. You can go all through New York and see only the tourist stuff. Go to Times Square, Logan Square, you know, and you’re going to get overpriced, terrible merchandise, and it will be the New York experience. It’s terrible, but it’s true. That’s the tourist trap. Right? And in digital cities you have it similar, you have different layers. You have local neighborhoods. When you’re thinking about your digital city, number one, I’m not for central planning, so don’t try to design your city. You don’t do that. Similar to how cities are encouraged to grow. You can actually define specific zones of specific types of work. So you plant seeds in terms of it. I think listening for these specific signals and during a tour of your own city that you’ve been creating and reflecting on how people are engaging is the best way to actually learn. And it’s emergent, you know, New York is not the same New York it was 50 years ago. And your digital city is not going to be the same digital city next month. I mean, we’re moving at a way different pace, right?

Let’s pick apart this tourist track for a second. Because just to recap you, New York, you could take the tourist track and see all the very like low quality, but what everybody else sees. Like it’s high quality, but there’s more to New York beyond just the tourist track. Do DAOs need a tourist track? And if they do, how do you even design a tourist track for DAOs?

 That’s a great question. I don’t know. It ‘s just gut. 

Do you know what I’m imagining right now? I’m imagining myself going online and having, like in LA, and all these micro DAOs, you know, and being able to navigate through them and kind of pick apart just the higher level takeaways. That’s what I would consider like a tourist track, you know?

But what are the monuments? You want to go see the monuments? 

Yeah, exactly. You know, but what does that look like in a DAO? 

I don’t think we know yet. I mean, at MCON here, we spent like all these days and one of the hot topics was actually onboarding. And this actually relates to that type of onboarding experience, which is when you visit one of these digital cities and you’re trying to figure out where do you want to move in whatever engagement level that you would be interested in having, what information do you show and who do you want to attract? Tourist tracks attract tourists. Do you want your DAO filled with tourists? Maybe because maybe your DAO sells DAO merchandise, and maybe you want tourists to come and hang out and drop and buy an NFT and then leave. And not bother you anymore. 

It’s almost as if these DAOs will have like galleries comprised of user NFTs. And the tourist track is literally understanding the culture of each DAO and navigating through each micro museum. You know what I mean? 

That’s one of the many, many different ways that you could create a certain type of experience for a specific type of person. Or I prefer to call them agents that come into the DAO.

You know what I’m thinking right now, like what’s the Hollywood tour bus moment? Like what does it look and feel like? 

And does it provide value? And do you want it? Does your community want that type of experience? In forefront, one of the things that we’ve been talking about is there’s so many people coming into a server, but they don’t necessarily know where to go. And similar to a new city, which has buzz, you know, you got a gold rush going. And all the people are like coming in and they’re saying, I found forefront and I found the blog. I came here and it turns out that we don’t have well-paid rural roads yet. And people are like crowding in different places and asking the shopkeepers, Hey, I want to move in. And the shopkeepers are like, well, number one, do you know what you’re moving in for? Like, when they’re like, no, you haven’t told me. They’re like, yeah, we probably would just take my money. And they’re like, I just want to spend my time here. Like, what can I do to help you? And the shopkeeper is like, look, I’m really busy right now. I’m making some shoes. Like I have a lot of shoes to make for the people who are already here and you want to hang out, like, why don’t you go make some shoes? And they’re like, I don’t know how to make shoes. And they’re like, will you teach me how to make shoes? And so the shopkeepers are trying to balance now between their own internal production, but also onboarding the new people who are coming in.

It’s almost as if you need to develop micro apprenticeship programs, you know, people just like watching, like the Shoemaker making shoes right. And learning from them. And what does that look like? 

You don’t want to sacrifice. Like, there’s a big balance here between like automation and like actual human empathy and engagement and belonging. Part of the reason why digital organizations are so specialist is because people are actually finding a source of purpose in participating in this different script. And so it comes back like I help run a nonprofit in Puerto Rico, which is called Obras Del Pais and we do micro documentaries for artists. And we’ve learned a lot about how artisans also engage and bring people in and onboard them. But similar to the artisans, the people who are really full-time in DAO land. They’re like craftspeople, this is n’t automated work. This is community management and community stewardship. Takes time, you know, to take that raw material, just like a group of people and turn it into a source of value and production. You build a community in real life. You’re not going to get a community in a week, no matter how hard you try and how much hazing you do to, you know, have them bond. It takes years of consistent conversation to get to different layers of participation. 

Adam: And you know, the equivalent of entering that shop to talk to the shopkeeper who’s making the shoes is, and I would take this again. I’m looking at the contribution zone article that you wrote, and again, I’ll reference it in the show notes. Every single person that’s entering the shop starts as a casual contributor. And if they want to start helping build the shoes, then they become a core contributor. And then what if they want to open their own store? Then they become staff. 

And moving through, I think though, there’s an important distinction here. It’s easy to conflate contribution zones with a career ladder. And that’s actually not the case at all. So contribution zones are supposed to be personalized preferences. So maybe I am a casual contributor because maybe I don’t want to have my own store. I don’t want to commit over a period of time. And it’s really important to differentiate between career level, which is an old script of a traditional organization, versus what we talk about in contributors zones, which is a personalized experience within that digital city, which is for you. As an individual and your preferences and needs and opportunities. 

That makes sense. One thing that I continuously see across DAOs is there’s a lot of like active contributors and passive contributors. How do you narrow that gap? How do you get more people in the store? And how do you develop it in a way where the Shoemaker there’s a ton of them that the system welcomes and allows, you know, but also encourages, you know what I mean? I feel like it’s a fundamental problem across many digital organizations that have the token, retail is going to ultimately speculate on it. And we saw it a lot with friends with benefits recently when they did their raise, you know, and it reached to about 200 a token. Retail investors seeing the opportunity and et cetera, et cetera, even now with forefront, and they did their private quote unquote raise. You know the select raise. 

How do you narrow that gap between passive and active holders?

So I think you’re actually referencing here another traditional script, which is growth as a primary objective. That’s not necessarily needed. And maybe you don’t want to narrow that gap. Maybe you just want to have a bunch of low level contributors and you wanna make it hard to become core and stuff because you don’t want that many.

That’s a new perspective that I heard. 

Yeah, growth is not the end game. It’s actually just purpose and mission and tailoring and creating a community, a city that provides you a specific experience. There’s a lot of small towns that don’t want to become a city. There’s a lot of cities that don’t want to become a mega-metropolis. And like that I think we collectively, as we move into digital native organizations, we need to be quite conscious of the fact of chasing growth or capital, valued development for the sake of it. And kind of realize that maybe we don’t want any of that. Now, in most cases it looks like if you’re founding a city, you do want to get some staff and some contributors, right? So narrowing that gap is still important for specific areas. I actually think this is going to come back to pods. I mean, chase and I joke about pods and it’s a joke, pods, pods, pods. But I think the answer is that the unit of maturity actually is not from an agent perspective as an individual. It’s actually maturing via different squads or small groups of people or becoming more involved and committed together over a period of time. And you might move between one group and another. You might be part of multiple groups, but I think it’s going to be similar to the cohort-based courses and that’s what we’re seeing, and there’s this really great book about it called ” situated learning”, and a legitimate peripheral participation that talks about this. That is about getting better at contributing. And we can provide people tools to become better contributors, and we can give them new scripts to become better contributors. I think part of what we need to do right now is let that emerge a little bit because we’re not, I think there’s no hard-coded answers yet. 

One thing that I’m really excited about with the development of DAOs is the increase in development in tools and platforms that will help better organize DAOs, better communicate between peer to peer. What are some of the biggest problems that you see needing to be solved right now with tools and platforms that could be solved with tools and platforms or products, for example. Anything that comes to mind?

 I mean, I think this is such a new environment, there’s this, like, you can pick any product and go at it. So think about how much software a standard startup uses today. And they use a ton directly and even more so indirectly. Each piece of software that they use uses another hundred pieces of software in each of those hundred, like use another hundred. If you look at the marketing advertisement landscape, like HR has hundreds of products. Like the hundreds of products that are named, not even like that someone put on a map, like how many data analytics tools that you have? But I do think that there’s a common trend here. I actually had this conversation a couple of days ago with Meta dreamer and we were talking about product development for digital native organizations. And I think there is a paradigm shift that’s happening because operational tooling in web 2.0 has traditionally been much more about the input process. I’m oversimplifying this. I’m sure this isn’t true across the board. Let’s just do a mental experiment for a second. But you use Salesforce or let’s say HubSpot. And you input data into HubSpot, right? In digital native organizations, there’s something a little bit different going on, which is the software is built around the information feed, which exists. So collab land, you don’t input information to collab land. Collab land reads your wallet. So it reads your transaction feed. And I think we’re going to see a major operational change in which we’re going to have all this like a new toolkit, which is going to read the information and the conversations that we’re having, and then provide value on top of it. Kind of like how we have discord bots.

You know, the most relevant example of this startup that I met at MCON, they ‘re in FWB. I’m blanking on their product name. I see the logo in my head, but the takeaway is they’re trying to develop tooling for treasury management. They want to help DAOs identify things like, what’s an employee cost or like a member cost. What’s an expense cost, you know, what’s an overhead cost. Merely based on the snapshot proposals that get accepted. 

You’re not asking someone to come in and input the numbers in an Excel spreadsheet. That’s the previous approach. We had to input information. And like, so the new products that we’re developing, and so to get to your question before, which is what operational opportunities we have. I mean, all of them. You have all of them. You have all of the opportunities. You have opportunities for scheduling and calendar management, where it’s reading your agreements on calendars and like pinging you and telling you, Hey, by the way, you have a conflict at that time with a different discord or a different digital city. You’ve already committed to teleporting to this other digital city at that time. Would you like to delegate this to someone else? What do you like me to record the meeting and send it to you? Not reschedule. Like what type of participation would you like to have? Since you are already committed to be in person in this other environment? 

My mind is blown right now. Is that already happening by the way, do those tools exist?

I don’t think so. And if you want to have a conversation about this, like the primitives have changed. Like I tweeted this earlier, primitives always change. You know, your engagement with reality is always off. I don’t really see the world, right? I see a projection of the world as it is. But there is something really, really important, which is our foundational coordination mechanism is no longer data input. It’s actually data synthesis, the data exists and we’re producing it. And we now have an opportunity to build a completely new toolkit, and operating model, which is not based on me moving from one interface to another. But having these programs read the engagements that we’re already doing, read the chain, read the ledger, and then make recommendations and help you produce value.

That’s deep. That’s a new perspective I’ve yet to come across.

Well, and this is the, you know, when people ask me, why did you quit your job? I said, because you can’t unsee this. You can go back to building a product like Salesforce, asking salespeople to input information when you know that the future is going to be based on sales people getting nudges based on transaction profiles that are automatically generated. And, you know, every single engagement is going to be recorded. And you know, you’re going to live in these digital cities. And the salesperson is going to move from one digital city to another and create audiences of purchasing, not like single point of control decision making. Like you see this change and you’re like, am I going to wait? Am I going to build this for the next five to 10 years for an enterprise solution? By the way, they’re obviously going to make a lot of money. Like I’m sure they’re going to make a lot of money. That industry is not going to go anywhere. Web 2.0, I’m sorry, folks, hot take here, it’s going to be here forever. But we do have a new economic model, which is going to be developed in parallel. We still have traditional manufacturing. And like there’s still some farms that, you know, have people picking fruit. You can still have old models of work and maybe those aren’t good examples, but you still have old models and new models of work. The world has not been digitized completely. And in the same way that the world has not moved to digital transformation as the enterprise says we haven’t done the mobile transformation. We’ll have an AI transformation. Yeah, we’ll have collective intelligence or digital city transformation. They’ll pay McKinsey for it. 

I don’t know if McKinsey could do it. They’ll create, like graphics for what they need to know. 

They need to know the top five leadership skills, which is like the DAOist. You know, top five leadership skills. Executive retreat to learn about community stewardship, you know, the way that we had the same way that we have servant leadership. 

Is that how we know we’ve reached the top? When we see shit like that?

I mean, I don’t know, man. Like, the world is weird. I don’t think we’re going to understand when we’ve hit the top. I mean, what’s happening is a mass migration of people from one ecosystem to another one, the same way everyone went to tech. And we’re going to see a massive wave of people moving from corporate to tech and now from tech to digital cities and it will self-select. And like, yeah, it’s, it’s hard to unsee the pattern and to see the opportunity. And to say we can build something new and it doesn’t need to be exploitative. I mean, exploitation is never right. You should never do it. But we have an opportunity to, instead of extracting value from an audience to create a community value together. Grow the pie as a foundation. 

So many things unfold here, to dive deeper. I want to end off with two more questions. What we’re talking about right now is I’d argue is a bit philosophical, right? We have yet to see an organization really execute on this. How does this tie back into creators and how does this kind of tie back into them monetizing or being stripped away portion of their efforts across web 2.5 web 2.0 platforms, right? How can they adopt this next era with their communities that are inherently web 2.0?

I think, yeah, that’s a, that’s a really good question. I mean, right now we still have like a bunch of gatekeepers. Right? You pay the tax, the YouTube tax, Facebook tax, like Snapchat tax, Tik Tok, tax, all taxes. Because you still have gatekeeping. But there are different ways. I mean, you’re seeing it with the NFT landscape where people are making their entire year’s salary worth of YouTube ads in days by putting their video up on glass.xyz. I really love this. Someone told me years ago we were having a conversation, we were talking about paying for a blog. We were like, no one’s going to pay for a blog. I don’t know how long ago this was. This was like five, 10 years ago. No, one’s going to pay for a blog. It’s just words on the internet. Like, it’s your opinion. We’re going to pay for your opinion. And then the next time it was like, no, one’s going to pay for a blog post. Like who’s to pay for a blog, you have a subscription service. It’s like, one’s going to pay for it. And then Mira shows up and people are buying blog posts and the next conversation would be no one will pay for your paragraph and no one will pay for your sentence. And the reality is that they will, and they’ll get micro referenced across the board and you’ll create new network economics where I write a blog post, and I reference you in a portion of my money using, for example, splits will get reallocated and we’ll create a passive income economy where as you create online, the rewards will flow back to the sources. 

Adam: One thing that I’m really excited about and there’s a company that a project or a DAO that’s going to be on season 3, called global coin research and their whole model, and I tweeted this a while ago, it’s like, I don’t want to pay $1 subscription for a yearly access to the New York times. Like it’s a dollar, you know, like, but I just don’t want to do that. I don’t want to go through that funnel. All right, enter your first name, your last name, your email, and you’re gonna get spammed with other promotional offers. I’d rather just connect my wallet, hold the amount of tokens and get access to a flood gates of knowledge. I’d rather buy $500 of your token than pay $1 for a year.

But it’s so true. And the reality is like no one wants to input information. So going back to the product development organization we just had, right. I don’t want to put my name and my credit card and give you my personal information and have you grab my cookies. It was like, can I just sign in and kind of just like read and consume and like automatically stream, like micropayments, based on the information that I’m consuming and have a budget, whether we’re I set, and I have a product that is telling me how much budget I’m using on information consumption and make recommendations on it. And I think that is a future that is here. And the tooling is here. 

What’s going to eat web 3.0? 

I don’t know. So, like if you asked me like five years ago, what was going to eat web 2.0 I don’t think I would be able to answer it.

Adam: But the reason I ask you is because you’re already identifying pain points that’s happening in what 2.0, and like what happens when you scale those solutions on web 3.0? Is there any detriment to that? And what could that be? That might influence web 4.0. From an organizational point of view, I guess.

 It was Neal Stephenson who had wrote this book. I can’t remember what the name was, but in the book he talked about feed customization. And so I think right now we don’t have control over the information flows that we actually consume. So I think if web 1.0 is read and web 2.0 is read and write or read and create, and web 3.0 is read, create and own. Web 4.0 is probably gonna be read, create, own and curate. 

 What do you mean by curate? Elaborate on that. 

It’ll be a customization of the engagement that you have. Right now, we don’t have control over the information feeds. You join discord and you’re a part of every channel that you get assigned to. You get every piece of information and you have a lot of noise and we don’t know how to control that right now. And even the web 3.0 tooling that we’re developing is enabling ownership over the data that we’re producing, but it’s not enabling the customization of the data that you consume. So maybe that’s what comes next.

That’s a great take. Before I let you go, where can the audience find you? Where can they learn more about you? And of course I’ll reference your Twitter and all these things that we talked about. 

So you can find me on ForeFront at cabin DAO which is supporting different creators and creating a decentralized city. But for the most part, you can find me on Twitter at @rafathebuilder. And if you want to connect just send me a message, and definitely support your local artisans and your local crafters.

Listen on: Spotify | Apple Podcast | Google Podcast

Background

Mint Season 2 episode 12 welcomes founder & Builder of Shenanigan, Victor Ginelli. Shenanigan or SHE for short, is a social token issuance platform for athletes.

In this episode, we talk about:

• 2:30 – Getting Into Crypto
• 6:02 – Building a Career Beyond Sports
• 10:26 – Shenanigan DAO
• 12:07 – Working for an Algorithm
• 16:42 – Earning Through Participation 
• 20:15 – Social Tokenomics
• 26:16 – Post Mortem Social Tokens – Retroactive Earning
• 32:17 – Integrating Token Models
• 35:40 – Outro – Closing Out

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Thank you to Season 2’s NFT sponsors!

1. Coinvise – https://coinvise.co/

2. POAP – https://poap.xyz/

3. Socialstack – https://socialstack.co/

4. Celo – https://celo.org/

5. PrimeDAO – https://www.prime.xyz/

Interested in becoming an NFT sponsor? Get in touch here!

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Let’s start with: who are you? What are you building?

I’m Victor, young kid warrior on the coding realms, and I work and found and summoned shenanigan, which is a DAO for athletes. We believe that the internet is horribly set up for athletes. And we believe web 2.0 has kind of made it worse. So we have a great NFT social token DAO model. Where we set these athletes up, that is slowly in development. 

How long have you been working on SHE? 

It’s been about a year and a half now. My personal, you know, it gets a little muddled. Like I kind of picked it up, put it down. I always wanted to help people incentivize themselves over the internet. Clicks, likes views, just don’t quite do it for me. I want to touch what they actually achieve. And I think really that’s what people like gravitate to. Yeah, you can check us out and she.energy, that’s our website. Join our discord. The app will be launching in three to five months. We just had this huge decentralized restructuring. We started decentralized, but with the space of web 3.0 tech that’s come out in the last year, it’s just going to be revolutionizing how data is stored. And how data is retrieved from the blockchain. And we want to be caught up, so we did this restructuring. And then from there, it’s onto what we want to talk about today. 

What were you doing before crypto and how did you kind of make your way into it?

 Yeah. Let’s start from a little bit back into the college years. I was an athlete. I was a competitive diver. You see me here. Like 220, 6 foot, no one ever believes that I was a diver. First thoughts, like, you’re a rugby player right? I did flips, jumped off high shit and landed in water. And so from there I graduated with a physics computer science degree. And basically taught for two years while I developed, you know, apps on the side. Got a job at a small startup called rain. Five months later, the pandemic hit pretty much worked on the blockchain full-time right after that, I said, you know what, I’m gonna be at home all day, I might as well get into crypto full-time as a developer. I had known about it probably since 2017. I bought my first ETH at like $80 and then a big dip before it went to 200 and then back down and now, yeah. 

So you got started by buying some Ethereum, but how did you get so obsessed with the creator side of things? Because Shenanigans is reimagining monetization for a specific class of creators, or we can categorize them as creators, but they’re athletes. I get the athlete portion, but how did you get into the social token and NFT route?

You know, it’s a cliche that, I’m in it for the tech. I’ve always been in it for the tech. I heard about DAOs really early on. You know, I was a developer, so most of the time I spent just reading medium articles and not really talking to people at the beginning. And I was like, this is going to change everything, dude. Like the structures you can build for society is just huge. So that got me really interested in what does a company look like on the blockchain? And then that got me interested in, okay, well what does the code look like? What can I build to utilize these new companies on the blockchain? And I kind of didn’t have anything. I didn’t know what to build. And I was just like new developer budding three years ago. Not new, but not seasoned. Woke up one morning, didn’t want to get out of bed. And it was like, knowing if someone else had money on me doing this, if I had investors it would get me out of bed. I didn’t do it. But if I had money on myself, I would not. I would just stay in bed all day, but I realized that’s a great incentivization model. It’s like, well, if you have fans and you have someone else’s money on you or invested in you, you’re going to want to do a lot more. And that’s actually what athletes do right now. So it’s just a way to get me out of bed originally. 

Interesting. So what’s your motivation as an individual? 

Well, as an athlete, I’ve experienced what it’s like trying to make it past 18. You know, everyone does a sport, almost everyone for 18 years of their life and they work almost a full-time job. And then they have nothing to show for it. It’s you know, great mental fortitude, great job, now you’re gonna go pack boxes at home Depot. Or you’re gonna work at a desk job. So my motivation is like, I’ve been there. I’ve done that. And I want to incentivize people to make it pass where I did, which was college. Monetize yourself and improve at the same time. It was probably the main thing. 

Adam: So the argument here is, the reality is like people go from high school into college sports, whether it’s D1 D2, and they’re able to build really good university careers for them. And like the percentage of transfers from high school to college is already slim. And then from college to like the professional leagues is even slimmer. And when you’re an athlete in college, like you said, it’s a full-time job. And you’re taking classes you have to pass and do your shit. But like you’re betting on yourself and betting on you kind of going to that next level beyond college. At least a lot of sports people are right. A lot of athletes are.

So you’re coming from the point of view, like, whether you’re a college athlete, whether you’re a collegiate D1 or a D2, or playing in the major leagues, then this social token route is for you. And the reason is, why? 

Well, the reason is like, as an athlete, you don’t start making money until you get sponsored. There’s no structure for people to invest early in on you. Your parents paid for private practice, especially as a college athlete, especially as you have to pay for school, you know, unless you are signed in to a D one as a scholarship, which you know is great, but you’re essentially as a slave to a scholarship. And you don’t own that money, like you get injured, it’s over. And really what social tokens allow for is you to well social tokens and shenanigan platform, I should say, because I think there’s a lot more to this for athletes, but social tokens are a part of it, is make your own athletic journey on the blockchain with results and, structure it however you want. And however, your life pans out. If you have a community that supports you, it doesn’t matter if you’re injured and recovering. It doesn’t matter if you change sports. It doesn’t matter if you go on to be the next Elon Musk, and you just did sports in high school, or you did professional athleticism beforehand, right? It allows for a much more particular atomic granular support system where it’s not like, “Hey, you can dribble a basketball, let me make you a walking billboard”. 

You know, the most recent example that comes to mind with an athlete messing around with social tokens. And we were talking about this before the recording, is that UCLA basketball player, who’s also a vlogger, who also has like 220,000 subscribers on YouTube and just launched $JROCK. Right. Let me pull up his name real quick. I’m blanking out. Jaylen Clark and I’m pulling it up over here, so UCLA basketball player Jaylen Clark is releasing his own cryptocurrency called $JROCK. I’m reading this from the LA times. He is a type of individual who is like a part-time creator and part-time athlete. All of his content on YouTube is him being an athlete.

Do you think that these athletic creators need to pivot more into the vlogging route, the TikTok route, like building up that huge, hardcore fan base for this thing to work or could it work with a micro-fan base too?

Well, what I really hate, and I think that’s what I’m fighting, is we don’t want athletes going the entertainment route. Because very few athletes can do it. And it’s not built for athletes. It’s still for entertainers. You know, some people are really good entertainers and they can do both. But I really think that we should build incentive mechanisms to focus on improving what they’re already doing. Like Focus on what will make them better. What are their goals? Athletics is all . About setting goals, achieving a goal, and going to the next one, right? That’s a great model. Why are we using, you know, these web 2.0, Tik Tok Instagram when we have such a great power with web 3.0 and like earning themselves by proving themselves every day. And we’re still early on in this social token stuff, and this is definitely a huge step in the right direction. All the power to this. Like, this is cool. We have to innovate, we have to try. 

But you’re imagining it from a different angle. 

I think the future is bright for athletes on the internet, especially with Shenanigan. 

Shameless plug. So you talked about something behind the scenses, and you just plugged it. And I’ll sum it up as working for an algorithm. But you added more flavor, more context to it. And this is something, again, we talked about behind the scenes, which is why I wanted to have this conversation. Because it was a new concept, I came across how it works right now, across many platforms, there is no right or wrong way to do this, right? Everybody’s just throwing shit at the fan and seeing what sticks. I want to highlight this model because it’s a little bit different. And the way it works currently is you can mint a certain amount of tokens. Typically it’s 10 million tokens, that sit in a wallet with a multi-sig. And creators allocate funds to their fans, create utility around that, whatever it may be. But you’re approaching it kind of from a different angle. You’re talking about working for an algorithm and based off that,- I don’t want to butcher it. What’s the other side? 

You did a great job, you know. It’s funny that you’re talking about working for an algorithm because people think algorithms are this almost static unchanging, you know, input, output. But I think really, what I imagine for these social tokens is this malleable ever-growing algorithm that changes based on what you’re putting out. It’s not just one piece of code that does the same thing. It’s like we have to plug in sports athletes to this algorithm, and then an artist app algorithm. And actually like we can even go deeper, maybe a sculptor would go into this algorithm and then a music artist would go into this. Creating an algorithm that’s customizable to the person is really what we’re doing or what I’m imagining.

So, let’s talk about an example. So I’m imagining this: people working for an algorithm get rewarded based on their actions. So you have to determine what that action is and do it in a way where you can verify that action, which then triggers the smart contract to mint an x amount of tokens.

Let me give an example of what we’re talking about, what’s kind of happening in the current space, and what would it look like? So, I think the big thing, like red herring or whatever you want to call it with social tokens, is the rug pull ability. It’s not a real word, but the rug pull. If we mint 10,000, 100,000 Adam tokens, what’s stopping Adam who controls them all from just saying “You know what, I made $20,000. I’m good. I just want to pull it all out and just dump”. 

Nothing. Like technically my incentive is to not do that because I’ll fuck up my personal brand. But the reality is like, things are in place for it to happen. And it may be beyond my control too. Someone might hack and dump on top. So a hundred percent.

Right and in the world we live in, people could flip that into an entire business. So just pump it, dump it and then start another token. And I’m sure they would. And you have vesting. I hate vesting with a passion. And like, I think everyone kind of hates vesting with a passion. Sorry, if you like vesting. You should be able to do what you want with the tokens you earn and like putting it behind like a static time wall does not create much movement. It doesn’t create any like opportunity for adjustment, movement, change. It’s so boring. It’s a start though. What would be really cool, is instead of mentioning all of them at once. We start at zero. And we grow the brand over time. As the athlete or the markets or the social influencer grows, the token should grow with them. 

Let’s pause right there. And that’s a very goal-driven approach. And that goes back to actually what you’re talking about earlier, like athletes, set goals, athletes, set milestones. And a lot of us operate like that. That’s like human nature to an extent, at least certain types of individuals. Okay, continue. I’m just reflecting. 

It’s easy with athletes, right? And I think the reason why it’s easier to think about, and I want to structure this kind of conversation around athletes probably, is in the case of athletes, the athlete is the product. You can’t really get around that the physical human being is the product that they sell. So when you set the goal, the social token kind of wraps into that really well. And it falls in, like, let’s say the athlete actually goes off to become a professional NBA athlete. They don’t want to take over the NBA. We’re trying to give them a better path to get there for now. But let’s say they do that. Their social token follows them through that. So why should it not grow and move around with those things happening in their lives? Like goal-oriented, but also like social tokens will capture everything else as well. So let’s say the athlete, you know, Gets accepted to a D1 college after having one of the greatest seasons of their life. We’ll have NFTs of all the stuff you did that season. Physical proof on the blockchain, goals, bam, bam, bam. But the social token will capture everything that happens outside of that as well. So, it’s not only like, “oh, the number goes up”. It’s actually like,” Hey, I’m set to earn this token and my community is set to earn this token, and now this token just got way more valuable to earn. And you have people coming together behind this athlete. There’s like fans coming together to set it up, which gets me to my main point and I think your main point is, how do you set it to earn? You’re talking about working for an algorithm. How do you set a token up for positive incentives? I can have him be like, you know, tap this button a hundred times and then you earn a token. Probably a really bad model. But I wouldn’t think it would work well for an athlete, but maybe we can think of something like, the athlete earns a token in one way, the fans earn the token in another. The athlete has to get a goal out on the blockchain. They have to get some kind of proof. In Shenanigan, we use a live stream. And we wrap that live stream into an NFT, but let’s say we want to use live stats that we can pull from an Oracle that follows that. Or let’s say we want to use, like a blockchain game. 

Any action, any contribution that can be tracked and verified is something that can be basically rewarded. That’s very much like a play-to-earn model. That’s what it is. It’s a twist to play to earn rather than gaming. And doing what Axie is doing for example, or there’s another one I’m blanking on. That’s like a real-world example right there, because you’re like mixing the physical with the digital and gamifying that entire experience. What do you call it? 

We call it the meet space, to be a part of the Ethereum. Be a part of the smart contracts. Getting the things we do in real life to be immutably stored, retroactively searchable on the blockchain where they can never go away, it’s part history, is the goal. And I think for example, when we’re drawing these earning mechanisms, like you can start simple. Like, “Hey, we want to keep the athlete with 50% of the supply of the token”. Let’s just start with that. As he or she does the tasks at hand, the token will actually deflate until another task is minted, and then, well actually inflate, excuse me. It will inflate as the community gets it. But then the athlete will do a task and receive a reward that virtually gets it back to it’s 50%. It’s only simple like that. I should prefaced. See, this is really stuff that is still theory crap. It’s just really alpha, alpha. So coming back to the example, we keep the athlete at 50%, or you have some burning mechanism on the the community side where you say have a staking protocol and NFTs where the athlete has some sort of product in shenanigans to give them NFTs where they can stake their tokens in the NFT using a standard called ERC -998 by Nick Mudge and a couple other really smart guys. Great people, you should check it out. Staking these tokens and burning them well, they are improving their score with the athlete and giving them some DeFi rewards or, you know how it works. The opportunities could just be endless which brings me to actually another point I wanted to make. Coming back, talking about the usual blockchain historical lens. And we’re talking about working for algorithms that are ever changing and adapting. Retroactively rewarding things is what I think is so important. So social tokens and especially burn based like working for an algorithm then social tokens. We can look. Let’s say someone starts their token mints 5,000 a week. And it’s just based off of like very rudimentary metrics of like, did he put this out? Is the community buying? Boom. But let’s say down the line, an Oracle comes out or some great tech comes out or the athlete has a great idea and they want to adjust their algorithm a little bit, which you should be able to look back on all that data that already happened, and retroactively update the current percentages of each person that has tokens. And then mint tokens according to those new percentages, right. Go towards that model. So instead of having, “Hey, everything’s static, you have this much to buy more or earn more”. It’s actually like, “Hey, you have this percentage right now that you might be over or underrepresented with and we’re working towards this percentage. And as we grow your percentage changes and adapts. Does that make sense? 

Yeah, it’s a lot to wrap your head around. Yeah, it’s a variable process. Right now, many social tokens are great as how they work. It’s very static. Platforms, maintain X amount or a variable amount, depending on what the standards or details of that creator are. And there’s a treasury and people try to fund that treasury with a certain amount of capital to give that token value. And this, what you’re talking about, is more dynamic. It’s way more dynamic. We’re dynamic humans, so why aren’t our token models the same? I’m trying to think, what are the pros and cons? I know what the pros are. What are the cons of doing something like that? 

There are cons, right? I mean, nothing’s perfect. I think the main con is that it’s slow growing. You have to build. And of course, early on, that growth is going to be really slow. Cause no one’s done it before. And you don’t have an example of what a successful growth token looks like. We’re just starting with growth tokens or whatever you wanna call them. These like earn based economies with DAOs. Our DAO, Shenanigans, is earned based and we use it for various things inside the app. You can come by our discord and you do something for us you earn our token. We’re just starting with DAOs, and so it’s a slow growth. It’s not like minting 10,000 tokens matching it and then making millions. Just like humans, it’s got to grow. Just like who we are, it takes some dedication and it takes your time. 

It’s very much a long game, right? And for creators and athletes who understand the value of building something long term, it’s going to click with them. And the issue is with retail investors and many private investors that they want to see money now. Making a bet, like a five-year, ten-year bet, a 12 year bet, seeing the development of an individual over time, especially as an athlete, there’s a lot of risks about being an athlete to begin with. Like what’s the average career length for an athlete, for example? What does that look like? It’s like 3, 5 years or something? In the sport. You know, so what happens after that? Then you start your coaching league , you know, and your incentives are based off how many people you coach and how many people you get to like the NFL. You know what I mean? Like what does that kind of look like? How does that kind of carry on beyond being an athlete? So that’s one of the cons, not a con, just like a gray area of like, what’s the answer? How do we fill that answer? So the slow growth, that’s one con. What’s another con? 

I would say that’s the main con man. It’s complicated to explain maybe but, I do want to expand a little bit. When you said, like where an athlete’s career stops after, you know, five, 10 years. I don’t know if I believe that. I do think that an athlete is an athlete for the rest of the time that they are alive on this earth. It’s just how you structure your athleticism. That’s what we’re trying to change in shenanigans. It’s not about actually, if you’re a professional or not. What we’re trying to do is focus on the improvement, right? Have people invest in your improvement whether or not you are improving your field goal kicks, or you’re improving as an older athlete in a different league with your field work. You hear what I’m saying?

Yea and you know where my mind is going right now? Like, how do you track these things now? Now you’re talking about IOT sensors kind of verifying. Otherwise, you’re now relying on human judgment to kind of tell or depending if it’s like a live game or if it’s like an in practice thing, are there IOT sensors now attached to balls and goals to kind of determine which ones you missed. You know what I mean? How do you automate this? So people don’t have to constantly logging their stuff or sharing it, you know what I mean? 

Yeah. There’s a lot going on in my mind about that. It probably has to do with Oracle’s and the blockchain and large systems. Like you say, IOT. Let me tell you what we do at the start of Shenanigan and how we were sharing and hosting a live stream for these athletes, right? So it’s something that can be verified with live. And then we use our DAO, which has a great version of uniqueness for the token, we use our Dao to vote on what actually happened in that live stream. And the idea is we want as many people to vote and give their opinions on what actually happened for these very simple, rudimentary questions. Did the field goal go in between the poles? What’s a real push up? Did he do 10 pushups? Did he make the cake flip satisfying enough? And it’s kind of relying on athletes to be particular with what they want to do as well. Because if they’re like, “oh, I’m going to jump off this bridge and the water”. He does five flips? It’s like, well fine. You know what I mean? It relies on them, just being creative. You have to be very specific with what you want to do and what you’re doing. But having these like general votes of what happened on the live stream is probably, it encompasses a lot. You can do a lot with that, right? So that’s how we do that. Using the DAOs and a quadratic vote. This like flattened out vote to get as many opinions that are human certifiably unique into an NFT that says, “Hey, this is what happened at this point in time in history for this individual”. And then social token just kind of fits right in there.

Wow. So is there a capped supply on these social tokens?

So with this, think earned based, there is no capped supply. You can have a capped supply. I don’t know what’s best. My DAO shenanigan, I shouldn’t call it my DAO. The DAO I summoned has no cap at the moment. Someone told me there’s nothing wrong with inflation. Like it’s a stigma, but inflation can be very, very good. But I do know other communities like one hive or other social token communities using a static model, where they just allocate a certain amount of tokens to their distribution, to that earn base. So it can be done both ways. I don’t know what’s best for social tokens. To me, my vision and stuff that I’m working on has an infinite cap. So I’ll say that.

Which makes sense for this model, because your coin is dynamic and evolves as you grow and evolve. And with that, if you cap at 10 million, you’re like 46 years old, and you’ve reached all your milestones. Like you run out, you know, what’s next? You issue a new token? Like, no, it doesn’t make sense. What happens when the athlete dies? So let’s apply this from the Kobe point of view.

Well, speculation never ends, right? I guess. Kobe with him, it was so sudden. Like, I feel like it’s almost two different things of legacy as like, if you live all like dying old and die young, right? So with Kobe’s Example, you have this, for lack of better words, this hype, that builds rarity. Like people want his stuff because he’s no longer around and the speculation doesn’t end. It just is like, it gets rarer and rarer and rarer the older it gets. So it’s almost like you’re leaving a piece of history behind. You’re leaving your legacy behind. It’s like, I guess you’re quantifying how much your athletic career was worth to people. But instead of it being a static quantification of like, “Hey, he made $200 million playing for the Lakers”. Now there are markets for it. And like, you know, your children see that and your children’s children and you have this legacy that’s immutable. And when an athlete dies I guess like, you know, it’s tragic to people’s emotions and lock into that, like collectable kind of like, the community is still there. I know people who wear Kobe shirts everywhere. 

Yeah. It’s like Queen, it’s like Freddie Mercury dying, the movie coming out around him. And like the bands meetup at the bars and like the legacy of queen continues, right. The legacy of Kobe continues. How does it tie into the speculation of a token though?

It’s interesting to think like what about undervalued athletes at a time? And then people realize, oh, they are really cool. Like they did something really cool or innovative, you know. Now when they can retroactively go back and let’s say this athlete put their stuff on the blockchain, but let’s say he was overlooked, it happens all the time. But you know, let’s say not a well-known guy innovates on like hit and swing. You can go back and say, “Hey, we have all this history, this hype, and who knows who that benefits, you know what I mean? 

Could people unlock their tokens by their past achievements? If the community comes to consensus, for example? It’s like a play to earn point of view. The more milestones you hit, the more you earn, the more tokens get up and your wallet. Could he do a pitch where like, “Alright guys, like I’m already in the middle of my career, look at all the milestones I hit, will you guys allow me to receive some of my tokens in advance”? Does that even make sense? This is just a thought.

Well, I think we talked about this a little bit. Like kind of where we’re able to retroactively adjust the weights. We can take a token model and then say, maybe Kobe’s family is like, “Hey, let’s actually like respect, you know, his greatest dunks. And so let’s weigh those higher, but let’s give it like a more meaningful collectible or it’s probably a bad example for dying to throw the dunks, but you get what I mean. It could be anything. So you could. I don’t know if the minting stops when the athlete dies. I guess you could. 

Adam: Something to think about. Which by the way, quick plug, if anybody that’s listening and has thoughts, like tweet at us. We want to continue the conversation because this is just us two, and there’s much smarter people thinking about this stuff and that can contribute. So this is the first time I hear of a model like this. That’s why I was so excited to kind of share it and put it out there, because it makes a lot of sense. And it piggybacks off a play-to-earn model that’s already being validated in the gaming side of things. But now you’re applying this into the real world. And you’re tracking and collecting and picking up on every little thing that someone does and his fans kind of get to join him for that journey, and the creator is incentivized to build long-term versus just mint 10 million tokens. Which again, there’s nothing wrong with that, right? Every single creator has their own model. Every single creator has their own way of doing things. It’s use case-dependent, not financial advice.

It’s funny when you get it, you get it. And it’s like, so there’s much power. Cause all you do is imagine what you would do with it, and if it’s something that grows with you and you’re familiar with web 3.0 tokens and how this works, you’re like, oh my gosh.

Adam: Dude, this is like me basically saying, “if I launch the Levy coin, I only get the $LEVY coin if I stick up to my posting schedule”. So when I post on Tuesday, I get airdropped. And when I post on Thursday, I get airdropped. When I post those newsletters three times per week, and it keeps me committed.

It’s keeping you away from rug pulling. It’s giving your investors a great incentive to keep investing in you and you can even bring in other variables, like certifiable likes. So, let’s say you say, “alright, I posted this Tuesday, but on this post, we got this many views, so we’re going to get, you know, less of my token this time. Because it didn’t get as many as this one. And there’s problems with that. How do you know that you’re not gaming with bots and things like that, but maybe there’s a scoring system that we can create. There’s so many variables, but just keep adding. As the tech gets better, as web 3.0 becomes more universal. Like even in the two years I’ve built shenanigan, it’s just like so many options have opened up. 

From my point of view, like I know I need to do as a podcaster to mint more tokens. How can I integrate that, like the views through my community? What can they do to enable more token printing? 

So you know, again, alpha thoughts here. We do have a blog post about this in our substack. What we do is, let me tell you what we do at shenanigan. And this is not static yet. I definitely have more to iterate on it, but the general gist is, we have a product, like an NFT that these fans can own and buy and kind of use to invest in the athlete. And then by holding the NFT, they can actually start retroactively earning these social tokens by holding and staking more social tokens in the NFT or with the NFT. Or backing it with liquidity. Things like that. The way it works is, we use, like I said, this ERC -988 model. So when the user buys the NFT, it actually doesn’t accrue any social tokens. Then they can use the social token to unlock the NFT, to start accruing at a base rate. And then what they can do is start charging that NFT by adding liquidity tokens for the social tokens. It’s a lot like that because you get it already. You can have the quiddity tokens into the NFT that will make it have a multiplier on social tokens. And then what you can do is you can take the NFTs that the athletes put out for their goals, or maybe the NFTs that they put out for your blogs. And you can actually put them into those stakeable NFTs that we’re talking about. So, if you have a full collection, you get to like a platinum NFT. And then what you can do is that burns like 10 X rewards in social tokens. You can increase the multiplier or you can increase the base rate. And then what you can do is actually go take all the social tokens, all the NFTs inside of this big NFT and sell it on Open Sea or sell it in one batch, one transaction. You’re curating, so there’s this incentive, as a fan, to increase the rarity of these NFTs. So increasing the rarity helps you make social tokens and it’s increasing the value as it generates, and then the athlete is wanting you to increase it because they will earn revenue with every sale. Every transfer they’ll earn royalties back. So both parties want the same thing. And now I’m realizing actually that you would have a great model here for a podcaster. I didn’t even put it together like that. I was more into sports.

It’s very much, very much applicable to any creator. Anybody. It’s not just for an athlete, but it makes sense for an athlete, but it makes a lot of sense for many, many other creators. Whether you’re a TikTok person, whether you’re a musician. 

Chase your drink, don’t chase the money.

And get rewarded for chasing your dream. That’s a tagline, right there. That’s shenanigan’s tagline. 

That’s what my dance teacher used to say. 

I love it. I think that’s a perfect place to end off. Really guys, anybody that’s listening to this, like hit us up DM us, contribute to the conversation. If it gets big enough, cause I think this is like a conversation that might spike a lot of interest, I’ll even open a discord channel. And we’ll just like back and forth echo and share ideas. But yeah, dude, anything you want to add before I kind of let you go? 

 I will plug Shenanigan on Twitter.

Plug anything you want. Where can we find you? 

Me, @ginelliunit. That’s my Twitter handle. Follow shenanigan, @she_dapp. We tweet fairly often and you can actually join our discord and start earning particle right away. You don’t have to do anything. Well you earn, so as much time as you want to put in, you know, you don’t have to spend any money. You just have to spend your time. And we are partnered with Bright ID. We actually developed a Bright ID discord bot for our server. It currently has 3000 users. You can look it up on a bright id.org. Get verified with Bright ID and you will actually earn the tokens that you have been accumulating in our discord. So check that out. She.Energy again.She.energy/join. 

Always do your own research.

Not investment advice. Just earn, do your own earning, right? D Y O E. 

3, 4, 5, 6 months from now a year from now, you got to come back on. We got to do a recap. I feel like from there you’ll have more actual case studies of this kind of like being implemented. We should even do a joint session with you and a creator and kind of walk through this. But yeah, man, thank you for being on. 

No, thank you. You approached me with this podcast. I actually was flattered. Thanks for having me on. And like being such a homie.

Listen on: Spotify | Apple Podcast | Google Podcast

Background

Mint Season 2 episode 11 welcomes pet3rpan, a DAO and NFT thought-leader whose work is widely known across the early-stage token investment firm 1kx. He’s also a Community organizer and summoner at MetaCartel, as well as the Co-founder & blood mage at MetaCartel Ventures. 

In this episode, we talk about:

• 1kx’s investment thesis
• Understanding the role of leadership in DAOs
• How to eliminate or prevent bad actors
• Strategies for growing decentralized communities
• His take on JPEG Summer
• His NFT investment strategy
• What will eat Web 3?

…and so much more.

Links: How To Grow Decentralized Communities + reference below for the funnel pet3rpan and I break down.

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Thank you to Season 2’s NFT sponsors!

1. Coinvise – https://coinvise.co/

2. POAP – https://poap.xyz/

3. Socialstack – https://socialstack.co/

4. Celo – https://celo.org/

5. PrimeDAO – https://www.prime.xyz/

Interested in becoming an NFT sponsor? Get in touch here!

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Give me a quick brief about yourself. Who are you and what were you doing before crypto? 

Yeah, I’m currently at 1KX investment. Yeah, we invest across all of DeFi, NFTs, social tokens really have this thesis that, you know, the key innovation in crypto is really with this idea that you can take logic out of technology and then distribute that ownership of those. And, you know, we sort of invested really early in each sort of area. So we’re not really like a general DeFi fund. We’re not an NFT fund. We really see our core competency spread across everything. Mostly like, you know, leading seed deals and series a rounds right now. Last couple of years, mostly. I worked in DAOs most notably creating sort of Moloch DAO and you know, helping foster the DAO ecosystem. There were DAOs that sort of emerged from that. Created a venture DAO or Metacartel ventures was the first investment DAO on Ethereum and really questioning how groups of people invest together. Before crypto was really just like a designer doing product design, UX design, and user research was like talking to users. Yeah, that’s really what I’ve been up to , I guess.

Do you remember the first crypto that you bought? 

Yeah, but like ETH or something in 2012/13? Well technically, the first crypto I ever touched was like in 2012 or 2013, where I was collecting Bitcoin from Bitcoin faucets, like daily. Like I had it in a separate wallet and it’s like I got $70 of Bitcoin in it. But it was like cents back then. I was just playing with it.

Where does your obsession with DAOs stem from? Did you have a bad work experience at a corporation and you were like, fuck this shit, we need to do it differently. Where did this excitement for decentralized organizations come from? 

Yeah, honestly, I didn’t like didn’t really care too much about DAOs until I wanted to join Moloch DAO and I was rejected from it. So for those that don’t know, like the first of a real DAO on Ethereum. Like there was The DAO which was created in 2016, 2015, and it was hacked right and it didn’t really exist anymore, but Moloch DAO was really the DAO that really was born in early 2019 and yeah, like created a lot of the DAO movement. Tried to join it. It builds sort of like a mini elite club of ETH insiders is I guess, rich ETH insiders who were sort of a bit popular. And I wanted to join the experiment, and I didn’t really think too much of it until I ultimately was not allowed to let in.

Do you know why they didn’t let you in?

Because I was poor and no one knew who I was. So basically a lot of the, you know, being highly sarcastic, but I mean, it was funny, like, you know, a lot of the pledges were really from ETH whales, like 100 ETH pledges at the time back then it was only 20 grand. But it still was like quite a lot of money compared to someone who was like, pretty much broke at that time. I had like, maybe like, I don’t know, maybe had like 20 -30 ETH and I was like, okay, I’m going to try to pledge like a third of like my savings in ETH into like this random DAO just to learn, right? And just aside from a meme, like no one really knew who I was and it was just too little money so they just rejected me. Like a charity DAO, you know, sort of. Amin and I had this chat afterwards. It was like, why don’t you create your own Dao fork Moloch? And I’m like, that’d be hilarious. And foster the adventure began. 

What’s the current state of the DAO that you forked. Where is it now? How many members? What do you guys do? Give me the rundown. 

Yeah, I mean, we created a Metacartel DAO the first fork of Moloch, launched in like, you know, mid to early 2019 then. Created the first. Out of that we gave grants and experiments at DAOs , created the fuss about, you know, server scaled DAO that provided services, which is like devshop And designed work. We created the first investment DAO on Ethereum, Metacartel ventures. We created some of the first experimentation on a decentralized brand economy, like decentralized brand DAOs with Meta factory. It was originally called swag DAO. We worked in like decentralized reputation systems. We worked on the first ever part DAO that was supposed to like coordinate our parties in real life. It was actually supposed to be about sponsoring events, but just quickly devolved into like let’s throw whiskey parties. You know, and that was called Orochi DAO created by the coder from kickback. So I would say like, back then, it was just like a group of like I wouldn’t be able to say how many people. a meta cartel DAO, over a hundred easily. And you’re part of the ecosystem. Probably like 200-300 people, like totally across the Meta Cartel DAO ecosystem in all. And it was just like a bunch of people who like wanted to experiment with DAOs, like back then. And this was the community where we we hung out. And hindsight, it was just like a really nice time where like, you know, nothing was worth anything. You know, no one was making money. It was just like pure experimentation for the sake of it. I think we’ve grown really close as a community.

When you were starting your DAO, how did you approach leadership? Did you run into problems in the beginning? Walk me through that. 

Yeah. I mean the whole pattern was just create more leaders. I think my mental model was just like, yeah, get more people to start things and champion them and give them more responsibility, you know? And give people responsibility that they usually would not be given. And that’s sort of like why as part of Meta Cartel’s values, one of them is, bet on each other better than others in the community. That was a heuristic that really led to I think like, or at least a set of values, that really led to this proliferation of all of these DAOs. Because like, when someone was thinking about like, Hey, should I create a DAO to like, you know create a pretty decentralized like brand? Or like create a DAO for like, you know, I don’t know services. We were basically, all in unison, like yeah, let’s do it. And we pushed the people behind them to go and experiment. I think that was a big part of. It was just like we did things, we supported each other. We really pushed this culture of experimenting and just doing. I think a lot of people were just talking about things and building infrastructure while we really want it to just like run and gun pretty much.

When you think of organizational structure, what are the core hats that need to be worn when initially starting it DAO? 

Yeah, you need leadership. I guess you need a chef in the kitchen, who’s like really directing everyone who maybe own other responsibilities, right? Like in a kitchen you have like the head chef, they manage the menu, the produce the menu. But like there’s line cooks as sous chefs. Which have responsibility over working on several of the dishes or key areas of the menu. So, you know, different people may own different pieces of responsibility, but you always need a central coordinator around that. Usually how these things scale is that, at least how we scaled, it was just like, you know, me. I was coding a lot until a group of people who like took over and that was known as like the Paladins, right. We set up like different roles within the DAO. And then Paladins ran operations and that group took over. And then, you know, with each separate DAO, it was just like, you know, pushing people to like into coordination roles. They usually set the tone of what is a DAO, collecting resources, setting goals and tasks, and then usually once they’ve created initial group of people running in the same direction, you sort of then want to basically set up processes and systems to decentralize that central point of coordination. But to bootstrap any sort of DAO community, I really do think you need that like central you know, wall effectively or seminar, right. To just drive things forward. I mean, like centralized coordination is effective and efficient. It’s fast. And I think you should definitely like rely on it when you can, because when you’re big enough, you can’t really, you know, run in the same way and operate in the same way. So I think you want to make the most of those early days. Because early on you have like all this autonomy to craft and curate. As I saw, like I saw the early stage of Meta Cartel, where it was highly important like, who was involved, who I wanted to bring in, who we wanted to bring in. And we could do it very surgically as a group, less so. And today, like I’m meeting people who are part of the Meta Cartel ecosystem who like, I’ve never met before, but like a part of radio. And it sort of walks because each group that’s spun out like has sort of maintained the overarching Meta Cartel culture. Even though DAOs are wildly different things. And it’s definitely a lot less curated, but that’s sort of how I think DAOs really get to become curated later on. It’s just well coordinated. It’s like just the fractionalization right. And the other one who, you know, as a coordinator in the beginning, you’re the one who sets a tone, like creates like the DNA. The double helix in which it spawns everything else. 

How do you think about contributor reputation with all of your experience managing and starting DAOs? 

Reputation, I guess it like allows you to trust others a lot easily, a lot more, right. It’s basically like, I guess social coordination duct tape, right? A lot of it exists, like without really it being formalized. Like early on for a lot of DAOs, it’s like, I think whoever’s coordinating is really just like a central ledger book of like reputation for each of its like contributing members. And as you grow over time, I definitely think it makes sense to like set up some sort of reputation system to account for like who did what, because as you grow as a group, you can’t really, you know, I guess it’s like sort of like Dunbar’s number, right? Like you don’t know who’s who or anymore. It’s harder to keep track of that. At least mentally. I think for Meta Cartel we never really went past that stage yet. Like we still heavily rely on like individual key community members to like vet for people. And like I guess that’s vouch for new members and new projects, right. Definitely see a lot of other communities that need sort of more formalized reputation systems, but for us, we’re just growing very slowly., And yeah, like what is Meta Cartel today? It’s more like a group of DAOs that are focusing on each have their own goals and who’s in Meta Cartel is more like a curated list of who you trust, right?

No, it makes sense. And all these people that you trust have you met all of them, or these are just all internet characters that have kind of got referrals from other people that you’ve trusted. 

Yeah. I’ve mostly met all of them over the last three, four years. Initially it was like just people who aggregated online. Online, first and offline. It’s like that’s definitely a core pattern. 

When you’re starting these DAOs, how do you think about community building? And I only ask this question because you wrote an awesome article back in June titled, “How to Grow Decentralized Communities.”

There is no recipe for the process of community building for DAOs. It depends entirely what the DAOs are for, right? What the goals of the DAO are. So like you can go from DeFi, like DAOs own like DeFi protocols all the way to like, you know DAOs that basically manage treasuries and funding, right? Or DAOs that purposely, you know are focused on services, privacy, focused on social curation as a social club. Right. And so the person in which you like basically launch it out and tell, it depends on what the DAO is doing, how it’s evolving from. Is it starting from ground zero? Is a starting for an existing product or a set of assets, right? Like, it really depends where you’re coming from. And if for each of these sort of veins, right. And all the types of DAOs, these sort of patterns that emerge with, how do you bootstrap them? How do you launch these certain networks around them? It entirely depends on the goals and sort of the state of each DAO. 

Walk me through those three tiers and share your insight as to what you kind of meant for each of those pieces. 

I guess this would be a much of an abstract. It was like a mental model.. Which I wanted to share, which is, to really create a community of stakeholders that actually really care about the project and participate in governance, participate in the network. You know, like, in all sorts of ways, right? Like effectively it’s all about sort of fostering, like to create a great community, you sort of have to foster a sense of ownership. And so ownership is like what drives governance participation outside of monetary incentives. It drives, you know, like product feedback. It drives hiring. It drives working group contributions.

You know, drives all these areas of a DAO a decentralized organization that you sort of need to like fill, right? And it’s very hard to sort of manually find community members you know, unless you are able to bootstrap this like ownership, right? And how do you get your ownership? You have to build a relationship. And before you even are able to build a relationship, you have to attract and like communicate and, you know, like find potential community members that resonate or are like a fit for the community itself. So it was really just going backwards of like, how do we foster ownership? How do we get to that position to foster ownership? And then, how do we attract the right people? And I think that roughly when we’re thinking about the whole process of like building a community, like getting to the end state what the is like a climate like a group of people, at least how I define community is really a group of people who are collaborating one-on-one in a many to many fashion on a shared set of goals and, with a set of values. You know, to get to that place, it’s like, this is sort of roughly the process you have to go through regardless of what you’re building effectively. And it is a bit abstract in the sense of like, it’s just ownership, but yeah, for each and every network, recently I would even tweak this a bit. One realization recently was that some communities might actually want to maximize community participation. Some communities might actually want to benefit from community participation in the token network itself, right? Like the governance minimization, to some extent. Different communities can leverage a network participation in different ways. For some it’s a use of de-risked platform risk. For some others it’s used to crowd source, right? Cause this means the network means the crowdsourcing of ideas or projects or in the case of say indexes. Like the development of index products. Like they might want to maximize that. So as we sort of better understand what are the different types of token networks, there are sort of these themes that emerge. So it’s not always a black and white of like, we want to build maybe the biggest community. I think it’s really about identifying, who are the stakeholders, that matter for the end success of the network. Or project and then going from that, and then just building out these sort of funnels effectively that bring people to become a community member. 

How do you build in public without giving away too much too early? So let’s give an example. Let’s say you’re building a consumer app or a web app, right? And you want to kind of take the components of DAOs in terms of how communities are involved in their ownership, but you don’t want to give up too much governance rights to these individuals. You want to keep the core product and its team somewhat centralized, but still build in production. Is there a way to mix the two? How would that work? Like how do you form a DAO without giving up all of the governance rights and exposing yourself completely. How do you keep it focused and narrowed and then expand gradually? How does that work?

What is the DAO’s end goal in general. All your decisions revolve around compromises that sort of like, I wouldn’t even start with that question. Yes when you’re putting a product that wants to be Decentralized, early on, you want to have local control over it. Especially when you need to create community participation, build it out, make quick decisions, move fast. Different projects have different levels of centralization, where they give away different levels of ownership away to the community. This is all dependent, on like what your end goals are. If you’re trying to build a hundred billion dollar financial primitive, well, you want nation states to trust you. Yeah. You know you probably want to have a fairly decentralized network, right? But if you’ll really building an application, where you want participation, to some extent. You want to, find upside. You want to decide network ownership that helps you get to the end state that you want to go for. And for some projects is going to be you know they might give away like say 30% of its tokens to community. Soome might give away 50%. And the beautiful thing is that projects are going to compete for the same customers, with their own networks. When you pick the product that gives you less tokens, more ownership. And it depends, whether which product is better? Which product or community do you resonate the most with? Maybe it’s the same all around and you just want the one that actually cares about the users or yourself the most. It really depends. A fluctuating sort of parameter that they want to find, you know, there’s no right answer.

How do you instill a sense of ownership within a community that transcends beyond the purpose of the token? So how do you encourage people not to just speculate, but to contribute?

Most projects launch a token with incentives and then try to use incentives to attract participation. Whereas you’re supposed to actually really, you know, find contributors or community members and then, find a middle ground between the intrinsic and extrinsic for them to participate. So you’re gonna start with participation and then reward that. It’s like most projects, you just get tokens that are just sold and like farmed and dumped and just like, you know, it becomes a fairly transactional environment. So yeah, like when we walk up to projects that one key aspect, really the methodology, at least approach that we take is really, you want to build a community fast, right? Find community participation or network participation. And then once you understand what the network looks like, how you will likely design it, who are the most important stakeholders, it’s really then designing like a distribution system or a token distribution plan that really rewards their most valuable network participants. Rather than going backwards from like incentive design. That doesn’t really work at least from our perspective. 

Another question I have for you is as DAOs approach more of the mainstream world, and you see more of these, again, these creators, internet personalities, Instagram influencers, whatever, building these modern day decentralized fan clubs. Is that something that excites you or worries you? Do you think that’d be good for the space or toxic for the space as you bring more of these like normies speculating on themselves and the communities? How do you feel about that? 

Yeah, whatever fraction we’ll hit, we’ll hit it anyway. I think that web 3.0 is a democratizing power that will empower communities. Participants at the same time are going to fall victim to scams and, you know, others taking advantage of people and it’s a totally new paradigm. So I think it’s inevitable. I don’t think there’s a reasonable way to approach something so powerful, so carefully. Like that’s a very naive sort of standpoint, like the internet hit society a wave,  hackers were roaming the internet fishing people you know, hacking into systems that were unsecure. People falling pray. At the same time, you know, all these internet industries emerged, all these people you know, we got like online shopping, we got all these other services. As much as I like to say, like I’m, I’m definitely excited by the emergence of like actual adoption and actual use cases there. But I think it comes into the good and bad, I guess. Yeah. It is what it is, I guess. 

You guys are one of the earliest NFT investors at 1kx. How do you make sense of what’s happening with JPEG summer? How do you wrap your head around that?

Yeah, it’s a good point. I think that I mean, there’s a lot of musical chairs of course. But I think what is happening is that, at least one case or sort of thesis around NFTs is that, we think art and collectibles were like a great initial beachhead for like, you know what it could be. And they were sort of like the obvious use cases for NFTs. But we’re much more interested in like the financialization of NFTs themselves. Like basically everything in the internet is an NFT. It just, hasn’t been introduced or minted into the web 3.0 economy. And when they do you really need protocols that unlock financial value, like the property rights of NFTs. We’re really excited about things like, NiftyFi where it’s like, you can basically take your NFT as collateral and get a loan from that. Like if you ‘re an Instagram influencer, you can’t actually go to the bank and get a loan for your Instagram posts. Because it’s not a real job, no one cares about it. But you can get your rocks, you know, whatever you want, your penguins, and you can go and get a loan for that. You might get a loan for your videos that might generate revenue, or even your token has video revenue rights or your articles. And so we think that that’s really the future and we actually overlooked a lot of the profile photos. Initially, like what’s going on? We didn’t really get it. But then we realized that we missed the musical chairs and hot potato games, we’re really playing. There was a certain section of the NFT economy, especially around profile photos where like these profile photos or like avatars actually represented the ownership. Like it represented ownership of certain communities collected by density. So I think like punks is definitely one. Bored Ape and other projects, maybe they eventually become established being like this game of, you know, a hot potato, but we sort of then sort of had this really interesting epiphany of like, “Hey, it’s actually about online ownership”. So, you know, I think that’s our explanation of that. Well, actually, we’re quite excited by this revelation. It’s like, it’s actually another take on identity that was completely different. I think a lot of people have tackled and try to solve, understanding what is identity from a very purely technical angle. Like from a standards angle. But you sort of see this as like, this is like identity being understood from a social angle, which makes a lot more sense. 

What are you guys looking at, at 1KX? Are you guys investing in profile pictures? Are you guys more on the equity investment side? What’s your investment strategy? 

Yeah, we generally don’t buy NFTs themselves individually as a fund. You know, we try to look for a general sort of strategy. We try to look for investments that build exposure across a broad area. So we sort of look for index bets. So we haven’t really found that yet, at least for the avatar space, but I definitely agree with you around that thesis, like at least early on in MetaCartel, when we created MetaFactory. There’s a lot of discussion around like UX being the barrier for mass adoption and, you know, technology is like abstracting away crypto, and we thought that was a part of the puzzle, but our thesis for mass adoption was that it’s actually going to happen to crypto natively. It’s sort of like hip hop, right? Hip hop was extremely niche, you know, created by really like black communities from, let’s say, you know, New York, right? Like, in fact, like it really came from a place that was so niche, so unique, had such a unique sort of identity, and that became cool. And others wanted to be part of that . Hip hop did not, you know, try to appeal to anything else it was itself and it said, fuck you to everything else. And I think like our thesis at MetaFactory was, we want to actually expose the coolest parts of web 3.0, like digital ownership, DAOs collecting NFTs ,digital property rights, royalties you know, to the rest of the world. And we sort of started with digital, physical clothing while like we had branded pieces of clothing, but they were sort of attached with rare and collectible NFTs themselves with RFID chip clothing. This thesis is definitely sort of playing out. Well, mass adoption is actually happening for the crypto native side of things. Whereas a lot of people try to solve it like, how do you do the same thing in Web 2.0 but in Web 3.0. 

Adam: What a great analogy. The comparison between the rise of hip hop to the rise of crypto. And I’ll even argue that crypto is going to be bigger than hip hop and it’s own respect and way. Obviously they’re two different components, but yeah, what a good analogy to see the rise of something that was like, so of a fuck you mentality, this is our culture. This is how we feel. And this is how we express ourselves. And if you want to be a part of us, come join us. You know, our way. Crypto is very much that level of mentality and that aggressiveness and that level of anarchy that you don’t really see in any other space as of now. So the projects that you guys are investing in. I know you mentioned the intersection between DeFi and NFTs. Obviously that’s a lot of excitement right now. People are talking about that across crypto Twitter.

What other use cases get you fired up on NFTs beyond DeFi? 

I think, so aside from financialization, like NFT financialization protocols, I think that we sort of see it as like, that’s almost like the melting block, right? All the creativity that spawns off digital assets and how they sort of become valuable, or at least how people can extract value from that. I think like the use cases are less specific to products and technologies, but rather the fact that like, NFTs and the fact that like you can permissionlessly enter this like financial economy without needing to be over 18. I remember what I was like 13 on the internet, like I was trying to like freelance and do motion design, and I couldn’t. I had to like get my parents to like sign up for a PayPal. The use case of like the NFTs I feel like, it’s like, you can create these financial assets, as a 13 year old or 12 year old and get into business, from day one if you wanted to on the side. And I think like this permission-less economy is actually the key use case that will probably lead to really cool things I think. It’s an entire platform itself, this existence of an economy. 

Adam: One thing that I’m personally excited about is all these like future consumer applications that are going to kind of stem from either the social side of NFTs or the marketplace side of NFTs or merely the portfolio management side of NFTs that we have yet to see. Right now, if you think about it, the current state of NFTs is, it’s very much desktop driven, right? There is no real mobile marketplace yet that allows people to buy and sell stuff on the go. It’s something that you have to access through your Metamask wallet. And just the user flow is really messed up. And I know you mentioned it’s not a UX thesis, it’s more of a crypto native thesis, but I’d argue something different. I’d say actually, A lot of people need to understand what a dumbed down version of this looks like. People kind of get overwhelmed still by Metamask. People still kind of get overwhelmed by open sea and all the data and the search and basically finding alpha. Understanding what JPEGs do I buy? How do I buy it, et cetera. So that’s something that I’m personally excited about.

What’s your point of view on the development of crypto-native consumer apps? Anything on your radar on that end?

Yeah, no, I definitely don’t disagree. I think that my point with that thesis was that we really needed to solve for exciting use cases first. And then once you’ve solved that, then the next limiting factor was that user experience. And I think we’re definitely at the point where, I think the future of society is like groups of people collecting NFTs together. It’s groups of people buying and trading NFTs from one another. It’s creating NFTs together as a group. It’s meeting one another in these DAOs. And I think that slowly, maybe we won’t call this sort of activity DAOs or NFT collecting, who knows what the language and how we’ll extract it. But I do think it’ll look somewhat similar to this. And this is how people meet and connect with one another nowadays, right. At least in the future. And I think that, regarding user experience, I think it’s sort of like an amount of time before someone figures out how to take the really interesting bits of the crypto native and bring it to the masses. And maybe it happens from a top down angle. Like there’s a Steve Jobs that’s like the product or maybe it’s a much more decentralized approach, where you just have different ecosystems that emerge and slowly solve for greater adoption. Because it’s not like, boom, you know, you go from zero to a million users overnight with the invention of a better interface. It’s what are you out? We’re growing, our user base for generally Web 3.0 and the NFT economy fairly quickly itself. So I think it’s just like, this expanding bubble, no pun intended, that’s just growing and growing. 

Adam: In my point of view, we’re seeing the rise of all these different innovative protocols, whether they be curation protocols, proof of attendance protocols, marketplace protocols for NFTs. And I think it’d be cool to see all these different puzzle pieces kind of come together in a nice, I don’t know, more mainstream type of way. Because users need curation. Users need to kind of create a diary of where they’ve attended and what they’ve attended, right. Users need a marketplace. And I think there’s a beauty behind working in a decentralized fashion, bringing all these different puzzle pieces and making one beautiful picture.

Just to add to the puzzle analogy. My favorite analogy is web 3.0 and crypto and DeFi and web 3.0 in general is a huge Sudoku puzzle. You’re maybe like filling in blocks a bit blindly and none of it might make too much sense until you, like, maybe you fill in the right box and suddenly you just unlock all of these other like boxes. And the Sedoku puzzle just suddenly became super, super obvious. And I think the lull and bear market that we had in like, especially in DeFi, I think like in 2019/2018, it was sort of the two boxes that we filled that really unlocked everything like lending markets and AMMs, like Compound and Uniswap. And those two financial primitives unlock, like the rest of DeFi. And for NFTs where maybe with bringing NFTs to the mass market, it’s like NBA TopShot proves that people understand collectibles. It’s like taking up these big questions. Like, do people actually understand this? I don’t know what you call this group of people who are like hardcore.

Adam: They’re the most active fans. You know, you have the people that watch on TV and then you have the people that go and attend the games, buy the jerseys, buy the cards, buy the branded cups, you know, and freaking paint their faces and shit. Those are the most active fans. You’re giving the more active fans a sense of community, a sense of ownership and the things that they love and they support already. I want to pivot into one final question. And this is something that I’m starting to ask everyone at least on season two. So I’m a big fan of the development of the internet, specifically how the transition from internet web one then from internet web two and how kind of, I guess, web 2.0 ate web 1.0. Let’s paint this picture. Web 1.0 was very much static, right? It was very much read only. You couldn’t really do much other than kind of browse information in an unorganized fashion. Web 2.0 came around, you had more advanced products like Google, like Facebook, Instagram that created more UX UI layers on top of this scattered virtual world. You had companies like Uber, a lot of mainstream centralized corporations and this whole rise of data control and data aggregation. And what that means. And now we’re seeing the development of what we like to call web 3.0, which is a decentralized version of social networks, decentralized ownership and web 2.0 ate Web 1.0. And the bet is that web 3.0 is going to eat web 2.0.

What’s going to eat web 3.0? 

I have no clue, I thought about this before. We’re probably going to be like, you know, considered the next boom ers by the time that really happens and we’re going to be like most likely blind to, you know, the next wave of what happens, right? I don’t know. It’s a really good question. You know, everyone eventually becomes a dinosaur. It’s part of the cycle. 

I think that’s a good place to end off. Everybody’s becoming a dinosaur, shout out to my dinosaurs. Peter, before I let you go, quickly plug yourself, where can we find you 1kx and everything you’re building?

Twitter is the best. You know, my username, if you search it in, you’ll find me easily. Always available for DMs.

Listen on: Spotify | Apple Podcast | Google Podcast

Background

Mint Season 2 episode 10 welcomes Erikan Obotetukudo, Founding and Managing Partner at Audacity Fund, who’s investing in Black and African-led crypto startups targeting trillion dollar markets ssworldwide. I wanted to bring her on because she’s extremely vocal about how NFTs will change Africa forever – a new perspective that sparked my attention.

In this episode, we talk about:

• Audacity Fund’s investment thesis
• Understanding JPEG Summer
• Erikan’s love for the intersection of DeFi and NFTs
• How NFTs will Revolutionize Africa
• What will eat Web 3?

…and so much more.

Links: How NFTs will Revolutionize Africa –– Forever (pt 1)

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Thank you to Season 2’s NFT sponsors!

1. Coinvise – https://coinvise.co/

2. POAP – https://poap.xyz/

3. Socialstack – https://socialstack.co/

4. Celo – https://celo.org/

5. PrimeDAO – https://www.prime.xyz/

Interested in becoming an NFT sponsor? Get in touch here!

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Erikan, welcome to Mint. How are you doing? 

What’s up? We’re good. We got the sunlight. 

Give me a brief about yourself. Who are you? What were you doing before crypto and where are you now?

So I’m Erikan, I’m from Rancho Cucamonga, California. Shout out to Etiwanda high school. Prior to crypto, I was doing a lot. 

I’m bringing myself back on the screen. Shout out to your high school. Oh my God. No, this is my favorite interview by far. I was in the green room and I was dying of laughter. Like, no one’s ever shouted out there. High school before. 

No, I mean, it’s an important part of the story. I grew up watching the internet, take my high school by school. And I went to a very multicultural high school. And so I saw like YouTube and Twitter and vine really started to like go through young black kids. And I would start to see like all the viral things that they would do. And this was before I think the word viral was a thing before influencer was a thing before being a creator on the internet was a thing. Like I just was a part of culture at my high school, that was so swagged out. So culturally relevant that we made the internet hot. And so, I shout at my school because that really put me on to like powerful market makers and demographics in the tech industry that don’t get their shine, but that actually drive a lot of what becomes popular in consumer technology and in what becomes the norm for creators. So you think about Tik TOK, you think about clubhouse, cash app, Twitter. These are a lot of companies that are obviously technology sensations, but in the United States in particular for their markets they were actually popularized by what young black kids were doing on them, that then everybody else wanted to adopt and internalize. So what was I doing before crypto? I frankly, was on a journey around the world. I eventually did 24 countries in a pretty long stretch of time, observing economic and cultural trends in different parts of the world that I knew one day would be strategically important for today, which is having an investment firm that really needs to be aware of cultural and economic trends to understand how crypto as technology can really disrupt, expand, and capture all the value.

24 different countries. Where did you start and where did you end? 

Yeah, so it wasn’t all in one batch. So I technically started in The Bahamas. So I was assigned to do history research. I was a biology student in college, but I got connected on a whim with a history professor who was like, I need somebody to go to Jamaica. No, I need somebody who’s going to Trinidad. No, I need somebody to go to The Bahamas. Literally on a Friday I was going to Trinidad Sunday morning, I had a ticket to The Bahamas and a hotel booked like it was so on a whim. She was just like, I need somebody to go to the slave archives and research and find letters that plantation owners would send to their wives back in Europe when they would land in The Bahamas. And they would have their cargo, slaves. I want you to capture the love letters that these plantation owners would send to their wives back home and old country or whatever, the UK and all that was called at the time. So my job was to literally sit in an ice cold archival historical building in The Bahamas in Nassau Bahamas and read through slave records. 

And create romanticized stories about the letters?

 I mean, I did that in my imagination when I would go to sleep. What was the communication channel between essentially a white slave master and his wife in a different continent as they’re sort of like voyaging to this part of the world where they’re going to build business and build commerce and builds like economies. So I was a biologist at the time, doing a history funded project, but looking at economics and culture at its most uncomfortable intersection. You know? So it was like, okay, these cargo are slaves from Africa, which is where I’m from proudly. And I’m seeing their names are called Bobo. Jo Joe Fu Fu, do do, Bo bo like these weird things, but I’m African as hell. So I know their name is not Bobo. It’s probably Olu-. I was like, okay, there’s something happening here. And so then the way that the records really showed the economics of creating like cotton fields and all these sorts of other sorts of things in the, in The Bahamas, it let me know and helped me understand the psychology of frankly colonizers and how 400 years ago our value is so low that like it’s, it makes sense that frankly, the value of black people is not in my opinion, fully realized, given that that was the power dynamic for so long. And all of those things influenced me to where I think there are pockets of rich economic potential that people don’t see because they don’t know that deeper history. So it kind of informs my clients. 

Hence the audacity. And we’ll get there in a moment, but I wanna kinda touch upon the 24 countries. Okay. I know you said it was over a period of time, but how long was that entire, that journey? Because that’s no joke. People don’t really travel that much right. For their entire life. So what was that timeframe?

 And then the person has done like 46 walks in the room. It’s like once you pass, like the 10 country mark, I think it’s like, okay. You’re part of a certain club. Now, so that way, I mean officially 2006 was my first time, but 2011 I’ve kind of been nonstop since 2011. I live in Brazil, proper. Like Portuguese-speaking all of that. I was up in that culture heavy 2012, and then lived in Nigeria 2013. Did a repeat, leveled up on my living experience in Nigeria in 2015, lived in Thailand 2018, and you know Latin America, Africa, and Asia. And I was doing different things each time I was living in those places. But at the end of the day, like my experience in Brazil actually ended up being one where my job was men’s health. I was focused on men’s health. Men’s health research, really understanding what are the experiences men have with their own health, their body, their care, and what are the challenges that they have in accessing care. And how does that connect to their job prospects, their mental health, their drug use, alcohol use, et cetera. So I just got in the brains of men in Brazil, in Nigeria and in South Africa. And that helped me really learn people’s challenges with accessing economic opportunities related to cultural expectations, resource limitations, et cetera. So this again helps inform my understanding of, how do you market something like crypto or other products to communities who’ve never been properly spoken to? And in this case, like Portuguese speaking, predominantly black men in Brazil.

If you could sum it up your time traveling, give me one thing you learned that you’re applying right now. 

Totally. Well, I used to work at LinkedIn. I worked there for two years. I also, while I was working at LinkedIn, I would go to Nigeria a lot and I would be very involved in the early tech ecosystem and particularly the FinTech ecosystem. And I remember sending an email to the CEO of LinkedIn at the time and also the senior vice president of sales. So like the head CRO being like, there’s this company out of Nigeria, it’s undeniably going to unlock the African continent for you. It’s payments infrastructure, and enables you to accept any kind of currency tied to USD. We need to move with them ASAP because you’ll literally be able to accept every currency across Africa, and now expand LinkedIn across Africa because people can pay for LinkedIn stuff like subscriptions and other things. And that conversation went nowhere. And so respectfully, I just was like, okay, so I can bring a lot of stats and facts. But certain people just won’t get it. We might have to edit that part out. Certain people won’t get it, and as a result, I got to just go build it. I think that was the biggest thing. I’m like, okay, there’s a demographic of people that are influencing technology and finance and just what we’re all excited about today that literally can’t even place. 

Like certain parts of Africa or certain demographics that I see billions, like walking in the streets. It’s hard to invest in those things. If you’ve never seen it, you’ve never been to those places. So two things came out of that. I knew we ,as a fund, we’d want to invest a lot in media, visual video, like going on ground and getting you the immersion in Brazil, The Bahamas, Lagos, Nigeria. So you can feel it and almost get a connection with it and be excited about it. But also I knew. We’d have to storytell the investments that we’re making and why, so you can really see that beyond what we’re used to in the United States, there are so many other layers of socioeconomic operations where money flows, trillions and billions of dollars flow that most people of a sort of developed economy mindset, don’t know to solve for. And so it just essentially said all these travels, just let me know there’s something most people can’t see and I have to believe and what I see that most people don’t and say, we’re going to make that group, the investment thesis.

How long have you been running Audacity so far? 

In terms of audacity? So went public with an announcement in June, so it’s been a few months since I decided to raise an initial fund. End of March, top of April. So it’s been a speedy process. As it would with crypto, it is naturally very fast moving. 

What’s the current state of the crypto market? 

Wow. So. Whew, that’s its own podcast, for sure. There’s a lot to say. I think the expansion of decentralized finance and open finance to me is always going to be the unsexy interesting thing. But I think what we’re starting to see is, NFTs, one regain in popularity. So that’s cool. That increases the belief that this is here to stay. Visa just acquired their first crypto punk. So all of these things are helpful in the greater narrative. Shout out to Cuy Sheffield, holding it down. So anyway, those moments are important. So I think now with that visa integration on the crypto punk side, it shows that like old money really, blends with cultural money and there’s something interesting happening there. And I think that’s really important. What I would love almost is if I could actually say the state of the market in terms of what people aren’t looking at. And that’s probably the most anyway. I think there’s still a lot to be done and thinking about how, and NFTs can be used or just your crypto assets, whether you have an NFT, maybe you have a piece of an NFT. So my Twitter profile right now is currently a crypto punk. Named Howie and I have a fractional ownership stake in that. So I think it went for like, I don’t know, 232 or something like that, 200 or 300, maybe 400 ETH. I have a piece of that, you know, I don’t own it all, but I still get to get excited about having a piece. And if you were to have your own whole NFT at a varying price point, that same asset can be leveraged for access to loans. It could be leveraged for creating new financial identities on the blockchain that allow you to kind of leap frog the limitations of your real-world environment and credit scores, and like all these other things that could get very systemic and challenging and difficult to navigate, because you participated in an aspect of culture that you really like. You can now leverage that to like level up in your sort of access to financial tools and resources and capital, which is really cool and important. And I think that’s an area that I would like to see more attention drawn to because it’s now culture is now leveraged for economic opportunity, which is like important for a regular Joe, who would one of my investors said today, you know, getting a culture crypto punk is like getting a Jordan, you know, in the sense of like, you know, there’s only one of a hundred, you know, like they go up ,they’re scarce and all those other things. So what does it look like for all the Jordan lovers out there to now add onto their sort of pandemonium access to a crypto punk, but they could leverage that for a loan to pay for their school. 

Can you give me some examples of what’s happening either in the black tech landscape or the African landscape as to, who’s moving mountains in that sector? 

Wow. There’s a lot to say there. So first of all, I just want to give a shout out to everybody who’s ever felt like this moment in the internet, this moment in history, and the moment of life is like the cumulation of all the random things we’ve ever done throughout our lives. Because I personally feel like someone who was a big AOL chat gal, you know, out here with these aliases and stuff, I feel like this is like my moment to come back and build cool things. So you want to shout out to everybody who’s using this moment to create really cool, gnarly things, especially the amazing black people that I’m inspired by every day. So first and foremost, there’s a community called crypto for black economic empowerment, which I happen to be the president of. That is a pretty good collection of a lot of amazing black people in crypto. So I mentioned Cuy as one individual who is head of cryptocurrency at visa, and very much influential in crypto acquiring a crypto punk. So that’s like at the executive level at a franchise institution, that’s trying to figure out a crypto strategy. That’s like one really cool thing in terms of like black crypto tech. And then there are companies that are tackling more of the traditional finance arena. A company called on-ramp led by a gentleman named Tyrone, Tyrone Ross. They’re essentially enabling people to provide sort of Bitcoin and other crypto assets as wealth advisors. So they deal with RIA. So people who are essentially dealing with, you know, clients that want to increase their wealth and are thinking about how should my portfolio now include Bitcoin or other assets. They’re enabling that integration to happen with that type of provider within finance. That’s really cool. 

On the NFT side, there’s a lot of amazing NFT artists from across the world that I think are going to increasingly make it cool and viral to buy an NFT as a person that isn’t typically centered in technology. So Latabo is an amazing NFT artist out of South Africa. She’s such a huge inspiration. Eyeshelles Is actually from Panama. She’s the highest grossing woman for NFT sales, she did $2 million I think in a day, or maybe a few hours. Yeah. Highest grossing. I think that was March, April. No, may. It was the first week of may. So I think highest grossing like one instance, black NFT artist as well, and then also highest grossing digital artist for Panama as a country. So, I mean, just like breaking all the records. That’s pretty cool. And beyond just the sales of NFTs, I think people that are really leading culture are certainly Firms like Andreessen Horowitz, for sure. They launched their $2.2 billion fund, which there’s people there that are really instrumental in driving culture, like Chris Lyons and Megan over at the cultural leadership fund. So those people are really cool. In terms of the Africa side, I’ll give you just some strategic market insights. Right now we’re seeing a bit of a rush to crypto exchange. So who’s going to be that Coinbase? Who’s going to be, I don’t know that people are really thinking about being the next FTX , but like who’s going to be that exchange that really the entire continent mobilizes around. And my thesis is that like, there won’t be one. 

There will be many that sort of meet the different socioeconomic classes and categories of people across Africa. So you have your elites, you have your institutions, you have your banks, you have your central banks, you have those sort of regulatory government entities, and you have like a social elite who, you know, disposable income probably want access to crypto as a part of a traditional portfolio. And then you have like the masses broken up by age ,swagger, ways that they need to be spoken to language, culture, et cetera. So crypto exchanges is one category that’s starting to formalize more and we’ll see who wins. But next is DeFi. There’s a lot more education to still happen around the DeFi side to getting increasingly more entrepreneurs and founders building there. But truthfully, I think leverage in gaming. We’re seeing gaming as an interface, or music and sports, and film as just like Dapp. A decentralized app that is the interface for consuming those very things. Sports, film, any creator related entity and having DeFi on the backend to me is like the secret sauce for building a culturally relevant business that has the potential to multiply its capital reserves and treasuries just by using DeFi tools. Yeah. So I’ll pause there. 

Do creators need to start rethinking how they create NFTs, because there’s going to be new forms of finance that allow people to monetize their art, or should they stick to the craft? What do you think? 

That’s a good question. I like the way you asked it dramatically. So I think creating an NFT inherently is creating money for yourself. So understanding how an NFT works is definitely helpful. Because you’re creating something that even if somebody just buys it for a dollar, if 300 years from now, your stuff goes up and it’s now worth a thousand dollars, that person, or that estate that holds that asset, which is kind of crazy to think. If you own crypto today, you need to think about estate planning because a lot of this stuff is going to be held into perpetuity long after you’re here. So that’s for artists, but that’s also for holders, people who are part owners with you and your assets. All in all. I think artists are naturally already starting to think about money and finance more because they not only see one NFT as a way to capitalize and make money instantly without any intermediaries on the art they would have already created and put up for free on social media. But now it’s a new way of revenue. So you can say. Hm. I think I have the potential to make 10 K on this one, NFT or a thousand dollars or $750,000 on this one NFT. But what does it look like if I did that? What does it look like if I did that weekly, what does that look like if I decide, I want to donate a portion of it to high school because it was my high school that taught me more classes? Like, you know, there’s all these new ways I think artists are now being emboldened to kind of act like banks, frankly. 

And act like financial institutions because they’re getting an influx of cash, or excuse me crypto in a short period of time that would have been hard to access before, and now it can make decisions with their money that they never had a chance to. So that means people are paying down their loans. So they’re naturally interfacing with money in ways that overcome the fear that they originally might’ve had with loans. You’re able to now help your family members. You’re able to think about donating a certain lump sum that you just got over a weekend, because there was a fire auction. You like a community that you care about. You’re thinking about maybe leveraging that asset for more loans. Like there’s all these different things that I think is inherent that people should just be smart and build supportive, helpful tools around to enable artists to just feel more confident and emboldened to do right for themselves and their community around their money.

What’s happening in Africa’s tech landscape, and more specifically, with NFTs?

So with NFTs, you can have one of one. Meaning there’s only one, there could be one of a particular number that you set, or there could be one of, you know, sort of any amount that is purchased within a period of time. And so there could be one of one, there could be one of 100 and then there could be one of 720. Also with each of those NFTs, it could be that one NFT is purchased by multiple people. So multiple people own one NFT, or as I’ve just mentioned earlier, it could be that multiple people own an NFT of a particular collection with a fixed amount. The reason why I say that is because. However it is you participate, whether you own a piece of one, or you own one of a limited few, you now have an ownership stake in the creativity of whoever it is that you love, that you’re supporting. So it’s now your money that you would have spent on a VIP at a concert or the money you would’ve spent on Donda’s new ear listening thing to get the Kanye album. They could attach the NFT to that. And now you would not only have the hardware that Donda and Kanye just released, but you’d have an NFT associated with it that could increase in value as Kanye’s legacy continues to grow. And now, you’re not just a consumer, but you’re an investor that has an asset that appreciates that you would have put your money towards anything. So you would have bought the Donda thing or you would have bought Yeezys or whatever it is. But now that same money, that 200, 300, a thousand dollars you would have put towards is actually an asset that can go to $10,000 in six years. And now you can flip it. You can hold, you can do so many different things, but you never know longterm how that asset will be valuable to you, and in this case, the consumer turns into the investor. And that consumer turns into an owner. And that is an identity change. That is super important for people. And then like economically, it’s like, you’re an asset owner. You not only are a fan of Kanye or a fan of Burna boy, you’re a fan of Adam, but you like kind of a piece of ownership of it, and you can do a few things with that. That means that everybody gets a chance to win generationally because all of it’s into perpetuity.

How do you go by educating others that there’s a value to owning a digital asset? People haven’t wrapped their heads around that yet. 

Yeah. I think it’s the same as like, wouldn’t it be nice to own a piece of Twitter, especially if you avidly tweet every day? Like your data is contributing to Twitter, making money off of that. And so like, wouldn’t it be cool if day one things that could become a Twitter, AKA really successful business, you had an ownership stake in early? And your stake was liquid in the sense that you can do things with it without having to get the approval of that same entity that allows you to have access to that ownership. So I think that we really just have to understand that traditional finance is just being made available to regular people and people have been owning things for forever. Some of the legacy American families don’t own the United States. They just said that they have a business that owns a particular industry, and now they own that industry. Meaning like the largest railroad manufacturing company, they own the largest bank in wall street. They just decide. They just decided that they were going to build something that said they’d either own it partially or wholly. And over time, we’ll allow certain people to come into that ownership by going public, et cetera.

You can think about an NFT as a micro-business saying we’re going to make ownership of this thing available to multiple people. And we’re all going to benefit from the long term growth of this revenue or micro business over time. And that is ownership. Like it’s the same concept. It doesn’t change because there are JPEGs or MP3s involved. And I think it’s crazy that people are even confused about why you would want to own a piece of the internet. When you think about how much we’re consumed and addicted to the internet.

Adam: Yeah, fair. I just think, you know, like when you tell someone yeah, but you’re buying an image. Like why would I buy that image? I could just go on Google and like, have that image. So I think with time, people are going to realize, because the way all these networks, these crypto networks are set up, they’re set to validate, they’re set to prove they’re set to be transparent. That’s just their innate nature, right? That’s just how they’re set up. That’s how they’re designed. And once more of the world kind of gets ingrained with crypto by default, with everything, everyday things that they do, they’ll realize the power they’ll realize the potential whether they like it or not. It’s coming guys, whether you like it or not we’re coming.

If it doesn’t make sense to you know, follow that discomfort and, what the hell, because what you don’t see is probably what needs to be created because it’s so early and it’s time for you to get in. Like if you get everything you’re probably too deep in your rabbit hole. You’re too Deep in your rabbit hole, cause you haven’t come up with, well, where’s this and where’s that, oh, it doesn’t exist yet. You got to go build, are you investing in it? Are you sharing that idea? And then the other part that I would tell people is NFTs are a tool. They’re not equal to JPEGs. So, an NFT is a digital certificate of ownership of anything. So if you have land, you can have an NFT that represents your digital ownership of your land and in the smart contract, AKA the code, and like instructions, it can say that you own it, here’s the terms, here’s the size kilometers, et cetera, and being like, so only when this asset changes hands does someone else on your land. So that is just literally a tool that every DMV, every registry, archives. And so it’s at that point in time, that’s great for a library. That’s great for an entity that has to keep records of hospitals, your medical records being an NFT, which is not like flashy NFT. It’s just like, oh God, thank goodness I have ready access on my phone, the last time I got my COVID vaccination, you know? So like it’s a tool. That it is popularized in art, but it’s a digital way to capture information and in most cases ownership. So how would you then want to use something like that in the worlds that you’re operating in? 

Amazing. So the number two is revenue and royalties, which you already kind of touched upon behind number one. Either owning something right in the money that comes from that and the generational wealth you can build. Anything else you would add to the revenue and royalty section?

Generational revenues, like who is mad at a royalty check 50 years after the person that’s inspired the royalties have unfortunately transitioned and a family can benefit from a check every month. Because your dad made a cool NFT four years ago, and we’re still collecting the money. And mind you to be clear the royalties come from secondary sales. So I do think it’s worth acknowledging, again, these things that have always happened in traditional finance, but now regular Joes, like you and I get to recognize that like, there’s that initial opportunity to buy something and buying means you actually have a piece of ownership, but then there’s that second chance then there’s that opportunity of like, dang, I missed it, but what’s the resell. So, and that resells that opportunity for you to jump in and still get active, it might be 3x on the money. It might be 10 X, but at least it’s still an opportunity to ride the wave as the value grows up over time. So it’s like buying Bitcoin today when you could have bought it at 5,000, but you still bought it. And if it goes to 1 million, then you’re still up. And then the other part of that is Reselling and speculating. So that’s a whole nother category that’s going to mushroom because people want access to royalties and access to revenue. So you could say I’m an NFT flipper, and that’s my part-time job and that’s my full-time job. I’m just trying to get 5X on NFTs. That’s new revenue for you. And any time it’s bought or sold, you’re getting a piece, just like the artist is getting it. 

Revenues and royalties checks, self-driving money, liquidity, collateral, and financial freedom. I feel like this also ties into DeFi a little bit. 

Yes, it does. So there’s three ways to think about having a crypto asset at minimum. One is the value of it goes up, or it goes down, two, that asset can be staked, AKA, you can get interest for just lending your crypto asset to the crypto world, and then also, three, is that that asset can go into a decentralized finance vehicle, which really just means you could leverage that asset for loans or for other financial instruments. So the self-driving money piece is like you made one action. You bought something that you loved, you bought art, you bought a NFT sneaker line. You bought whatever it is. And that one activity with maybe a complimentary gesture of a button or two can now make you more money without really doing much more work. You know what I mean? So that’s the element of, like I bought one Bitcoin, it’s now 10 X the value. And I only bought it once, but it still continues to make me money because it grows in value and I staked it. And I’m now adding it to a liquidity pool where I’m getting, you know, 300% APY. Those are three different, amazing things that could happen off of one activity of buying a Bitcoin.

And the last one, which is my personal favorite and the theme of this entire show, right, is a, they create our economy and how youth transforms global perceptions. There’s a lot to unpack here. So take it from any direction.

 Well, I think it’s kind of the same concept of diminishing the JPEG. It’s just like, you don’t take us seriously. It’s just like, what do we have to do? Like we built billion dollar business. People’s pensions are now getting invested into startups. Like we have to really understand how the world of money works and it’s just like, there’s noise. And then there’s how money works. And money goes to what people perceive as valuable. And if there are certain demographics or industries or regions of the world that are perceived more valuable, money will go there. Insert the United States of America. So people perceive the United States of America to be the creme de la creme, the top country in the entire world, economically, culturally, enterprise, Hollywood, all these things, right? Because the US has done a great job of PR and by owning one huge creator economy, AKA Hollywood, and entertainment, we can produce films and movies that broadcast to the world, whatever story you want to. Which is not always true, but it benefits us because we control the narrative because we control LA and the entertainment industry. So if you have regular Joes releasing viral art, viral films, viral fashion lines, viral music that people all over the world have ownership in. They’re going to be broadcasting their love of their thing that they captured from you in every village, hood boardroom, you know, water cooler moment, zoom call, et cetera, you know, a display profile picture on Twitter, all of these different moments or instances to evangelize . Your love of a cultural moment, an NFT artist or creator, whoever. And by being able to get more pandemonium and fandemonium because your fans are actually your investors, they’re your co-owners. You immediately have more people talking about you. And the more people that are talking about one piece of African content and another African creator and another African creator. It means like, whoa, something’s happening about Africa, because I keep hearing about these different types of African creators and all of those things help evolve and expand people’s perception of Africa. Why isn’t evolved perception of Africa important? Well, you talk to most Joes on the street and they think Africa is lions, tigers, bears, hyenas, war famine, HIV, and aids. Save the children from commercials and national geographic. I think that was a very thoughtful and comprehensive spectrum of what most people think about for Africa. Oh, black Panther, which was super important for activating a possible different narrative around Africa, which to me, I think black Panther is more accurate than it is fictional. And so all in all, imagine if Black Panther itself as a film was an NFT and imagine Black Panther made like almost $2 billion three years ago. Imagine every single person that bought a ticket now actually owns a piece of black Panther too. You know what I mean? That not only means you watch the movie, but you own that, you own a piece of that. That is not going to change the way people think about Africa, because they’re seeing the value of their NFT connected to Black Panther, triple as the movie launches, and then continue to go up as Marvel continues to integrate characters from the sequel into more Marvel pictures. All of this is raising the value of something people associate with Africa, which is important for us to challenge those narratives that kind of keep our value hidden to the masses. 

You know, it’s interesting you brought that up and I don’t know if that number is specifically true and you tell me if it’s true that they made $2 billion off that franchise? Is that number correct?

Definitely well over a billion. 

Adam: Okay. Well over a billion, whatever it may be. I would argue that if they applied web three primitives to their marketing and launch strategy, and every single movie ticket would actually be a form of ownership, a small fraction, but a form of ownership, right. Not enough to give everybody control over the movie because the director and the producers still need to bring this thing to life. I would argue that the value would be 10 X maybe only because everybody’s incentives are aligned beyond just a ticket in popcorn. Now it’s like, fuck, like I have ownership, you know, like, I can control collectively with this community what the value of this franchise may be. I got to talk about it more. I got to tell more people about it. I gotta promote it more. I got to do all this or, you know, Just the power dynamics shift. 

It shifts, and imagine like the makeup artists and like fashion designers who were seaming away right before the big scene. Like what does it look like for those people to also benefit from the upside of their craftsmanship and their work? You know what I mean? Not only just the big ticket director, executive producer, et cetera, but everybody along the value chain in the creation chain of such a big body of work like that, being able to have a stake, which is hard to do now just given the way payment structures and business models work in most industries. You kind of pay the most of the person you perceive to have the most influence and value, which isn’t always representative of who actually put in the most work or like representative work. And so you’ll say that maybe a part-time person who did seamstress work on Lupita’s outfit, may not warrant getting as much upside as like the producers. Oh, okay. Maybe, but does she just get paid for those three hours or 10 hours or a hundred hours she was on set, but not benefit from the stock potential of the success of this film? Because she made Lupita’s outfits fire in every scene. So like, I think the impact is there. So it just gives people a chance to say, if I touch this in some way, AKA, if I contributed to this success in some way, I can get a piece of that. So that’s an example. I mean, Hey, I’m working my way up to Marvel and all of them to make sure we can get this done. 

Adam: Yeah, I got you. We gotta brainstorm after this. You know, one thing that actually, as you were, as you were talking and you’re answering my last question kind of popped up into my head. There’s always been an issue of financial literacy. Of people kind of like not understanding what one money is, what credit is. Right. And what ownership is. NFTs are changing that. NFTs, their foundation is understanding the value of ownership. And you’re seeing all these creative individuals that maybe I could be wrong, I could possibly be wrong, but I would argue that focus on the creative side of things, you don’t really focus on the financial side of things they just create to create are now understanding financial primitives that are core to their success and their future representation as an artist. So it’s cool to see this happening live and it’s cool to be a part of it.

Adam: I want to wrap up with a couple of questions here. Okay. And I wanted to talk to you about creators and DAOs and the inequality and disparity of how intellectual property works with black people and Africa. There’s so many things we can talk about. So I’m going to let you pick, we got the topic of creators. We got the topic of DAOs or we have the economic and inequality disparity that comes from the intellectual property of black culture and African culture. Which one do you want to do? Cause I know this is something you’re very vocal about, right? Because I think it’s pretty evident that black culture is a core component to a lot of music, sports and so much more. And we talked about this a little bit, but you argue that they don’t see the value of that intellectual property to its fullest. And crypto can fix that. So talk to me about that. Share with me your point of view on that. 

So you could pick a lot of industries, but one of them we can think about is wall street. Wall Street was literally built off of colonizing bodies, going to West Africa, getting gold and slaves to then come to the United States to build enterprise and build commerce and build financial institutions that we now helm as the American sort of, like we regard them heavily. So that’s like labor and intelligence to build economies off of the strength of your own DNA to then build a nation that is considered the best nation in the world. Like that’s already a huge rip off in terms of like the black community not benefiting from the upside of the success of the US. That’s one example. Another example is jazz music. So jazz music predominantly comes from southern artists, Louis Armstrong and various others who eventually migrated up north and really took over Harlem and the New York scene by storm and got signed by a lot of record labels that never paid them. But the same people were sort of broadcast outside of the United States as like the beacons of American culture, Louis Armstrong was made into an ambassador and literally traveled all over Europe to promote the United States, but was like poorly treated when he came back to the United States and didn’t benefit and economically from expanding the jazz genre all over the world. But what then inspired jazz? Jazz then spawned blues. Blues then started to spawn rock and roll. Rock and roll then spawned hip hop in certain ways. All of those were driven by black characters. And oftentimes it was the business people that interacted with these black creators that benefited financially because they built the business model to benefit them, and not actually the creators of IP, which were the musicians. Every genre, same case. And so sports is a similar example. You see a lot of the trouble with what LeBron advocates for, and you see it in the NFL as well. So these are the real instances in which you’re driving a lot of the momentum, the dabbing like all of these things. You’re driving all this momentum Tik Tokers in 2020, literally from the Savage dance to all of these things, became the blueprint for what was viral during COVID around the world and respectfully, white young people kind of leverage that to create dances as well and became more popular of the creators on Tik Tok which then leads our people to get sponsorship deals, endorsements. I saw one of the top influencers, she’s now an angel investor in startups. So like you are taking dance moves from young black kids and just dancing to them, no big deal, but like that’s creating economic opportunity for you that allows you to now be an investor in an ownership of companies that can change your life and your whole legacy. Whereas that same person who created that dance gets a pat on the back and a few likes or for creating a dance that changes the world. Why is that important from an IP standpoint? It’s to say that if, for example, every Tik Tok video was instead attached to an NFT and instead of you liking it and commenting, you put a dollar towards how much you love it, and it’s automated, it’s simple, connected to a wallet. You don’t even have to think about it. Now, every single initial viral creator online gets a dollar per the equivalent of a like, and now it gets to see immediately the economic gain from that. And because they’re first to market with their respective NFT or creation, that’s connected to a dance or whatever it is that a lot of black creators create that really forms the internet. They’re able to benefit us as a first mover, have tens of thousands, if not millions of people who’ve bought into their love of that same viral moment on the internet, and everyone will be able to be proud that they have ownership of that meme that was created by X person from X place. And that meme can take on a similar sort of pandemonium as a crypto because it’s widely used in group chats and all these other things. So now this is an opportunity for someone who influences internet culture, who’s historically known for being a meme. AKA, a lot of creators, especially a lot of young black people to have an asset attached to that cultural moment, and it be something where you can only use that meme or NFT, if you are a part owner in it, which you had the opportunity to do so at the onset of launching that NFT. So these are different ways that people can capture their IP. 

Adam: You just inspired a train of thought right now where let’s say Tik TOK were to go more web three native, and these audio files that people consistently, you know, create new files, those were NFTs essentially, right? And every time they would get used, there would be a way to measure the virality and the amount of attention that’s captured through that specific trend and the ad revenue that would be captured through Tik TOK would then get equally or not equally, but proportionally redistributed to the person who initially uploaded that MP3 file. And then that got streamed and recreated thousands upon millions of times. And that’s powerful. Right? That’s powerful. Realigning incentives, realigning the distribution of wealth, realigning and rewarding those who create virality, those who bring the attention, a stake and ownership in the platform that they help make a reality.

And another way that it could work is Tik TOK launches a token. I recommend that they use roll tryroll.com. And they can launch a Tik Tok token, $TikTok ,and gift some of the founding like most viral content creators of 2020 proportionate tokens to their viral impact. And now those people have essentially a stock connected to Tik Tok, that is not exactly stock, but kinda.. And now you have an asset for all of the, like things that you did. 

What’s going to eat Web 3.0? 

Listen. I think we’re going to be eating with web three for a long time. It’s just the beginning. But I think what will eat web three is tribes, communities of people. So that goes into DAOs, but like communities of people creating their own economies. Like to me, that’s like you and the homies and a group chat should have your own economic system. Like, I just don’t even understand why, like there isn’t a wallet connected to every group chat that organizes for brunch. Just like, come on. If all of you are gearing up to go to burning man, there should be like a very simple way to economically just figure that out. And I think people walking around as financial institutions is the future. 

That’s a perfect place to end Erica. And where can we find you? Where can we learn more about Audacity Fund.

Audacity.fund, that’s the website. That’s it. @HeyErikan on Twitter, and yeah, I’m pretty active and just find me there.

Listen on: Spotify | Apple Podcast | Google Podcast

Background

Mint Season 2 episode 9 welcomes Andy Artz who’s on a mission to advance humanity by solving the world’s hardest problems by investing capital across early-stage startups at Social Capital.

He’s also a major proponent of the decentralized social media platform BitClout following his own creator coin $ARTZ.

In this episode, we talk about:

• Understanding BitClout
• Weighing the risks of creator coins
• Curation on the blockchain
• Launching $ARTZ coin
• Trading social capital
• What will eat Web 3?

…and so much more.

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Thank you to Season 2’s NFT sponsors!

1. Coinvise – https://coinvise.co/

2. POAP – https://poap.xyz/

3. Socialstack – https://socialstack.co/

4. Celo – https://celo.org/

5. PrimeDAO – https://www.prime.xyz/

Interested in becoming an NFT sponsor? Get in touch here!

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Let’s just jump right into the basics. Tell me a bit about yourself. Who are you, Andy? What were you doing before crypto? And kind of, where are you now? 

These days, I’m a social token influencer by night. By day I am a partner at social capital. I’ve been in the venture capital space for the last eight years. Before that I was a VP of analytics and finance at a gaming startup called O M G Pop. Kind of a precursor to crypto. In a way gaming communities feel very similar and very related to crypto. So it was building social games there. We had a game called draw something which was popular for a minute in March, 2012. Before that, I studied physics. So I was coming from a science background.

So you studied physics. Okay. Very far from investing, very far from gaming. How did you go from the physics route to the gaming route? And now it’s crypto? Like what was that transition like?

The transition was rough. I think all transitions are hard. There’s no such thing as a smooth transition, in my opinion. I was curious about how the world works. So I liked understanding, you know, like at the atomic level, protons, neutrons, quantum was very interesting, like a probabilistic view of the world. But going deeper into science was a different path I wasn’t ready for. So I got into finance. I had loans to pay, worked at IBM. Learned how to use Excel, learn how companies think about buying other companies. Got to see the flow of funds of who cashes out, where the values created at IBM, where this large company with a lot of loyal executives that were buying these smaller startups. And so I fell in love with that process and that’s what led me to join startups. So I reached out to a bunch of folks in my network. OMG pop got connected through a friend of a friend. And yeah, I really love the gaming space. I’ve always been a gamer, grew up playing StarCraft Diablo 2 Warcraft 3. 

So at social capital, what do you guys kind of focus on? I know you guys are a relatively big firm and I feel like you’re agnostic, but what do you, I guess, more specifically, what do you look for as an investor?

Yeah, we’re a generalist firm. We’ve got a couple of billion dollars under management across venture funds SPACs . We do private credit as well, a bunch of different asset classes. I joined with Bitcoin in mind in 2013, so Chamath and I teamed up. We started thinking through where’s crypto going. We put on a big trade back then. Which has worked out well for us. We bought a piece of digital currency group. And so I’ve always been interested in tracking the frontier of how consumer behavior is changing. We did a lot of healthcare, education, and SaaS investing in social capital. That was our mandate. But slowly I’ve been drawn back more to the crypto side from last year, I’ve been focusing full-time on this and really on the consumer angle too. Like, how is crypto gonna enable new ways of communicating new ways of interacting. I think DAOs are interesting. New ways of governance, new ways of you know, culture we’re seeing in the NFT space.

I think you called yourself a social token influencer, right? Which I think respectively on BitClout, you’re obviously one of the top-performing creators out there, if you’re measuring it by your ticket price and also your level of activity. And you’re a very big advocate of these creator coins, right? However, you want to call them. What is it about social tokens that got you so excited to begin with? 

It was new. It was different. It was weird. It was addictive. It felt like there was some new behavior that was being unlocked beyond, you know, I could go set up a Stripe account or a Shopify store, or, you know, I have Venmo and I have a PayPal account and that’s all fine and good. There’s something about the speed, the global reach, the fact that it’s crypto, it’s on a blockchain. BitClout is a layer one. And you know, this is not specific to BitClout but I think the idea of social tokens, I can’t set up a token on rally for example. I’m not a YouTube or a vine or Twitch or whatever streamer that has a huge following. So BitClout was just this very simple way for anyone in the world to go up and have a token. The simplest way in the world to issue a token right now, currently I think that’s, that’s on BitClout.com.

Have you ever thought about what a stable creator coin would look like? Does that even make sense? What do you feel about that? 

Yeah, one of the first experiments had been, a platform, I called it StableClout. People to keep a peg of my coin price at $8,888 so that if it went over, people would sell and buy. So trying to replicate an algo stable coin of sorts with the community there were no real incentives. It was just for fun. But yeah, I think it’s a great point. Like a lot of people don’t want to be exposed to volatility on the day-to-day and that affects their user experience. So I think. You know, keeping it in stable coins and then there’s diamonds on the platform, which are basically a form of tipping, which you tip in your own creator coin, which is volatile. So you know, that piece is a little weird, but I think to your point, not everybody wants to be exposed to volatility in all aspects of what they’re doing. So that’s definitely something that we’ll need to evolve with the ecosystem. 

What’s the current state of the social token market? 

We’re very early. The social token wave is yet to crest. I think you know, there was a little bit, a BitClout mania upon launch. Rally and roll had a headstart, but this is the first consumer facing platform that’s reached a million users and is available to anyone in the world. This is sort of at the Friendster, if you compare it to the social network days. Where, you know, social networks,are not yet anywhere similar to how social tokens, not yet on the tip of everyone’s tongues. But I do think it will have its moment. And I think, you know, right now you mentioned NFTs are the focus. That seems to have captured the community’s imagination and how you have this piece of ownership and then connecting that to DeFi is interesting. And then, you know, what’s happening in gaming right now is interesting. I think people are getting more and more used to the idea that there are assets other than, you know, your standard layer one tokens or layer two tokens that have value that can be transacted in interesting ways. And social tokens takes that up a notch. If you spend any amount of time on BitClout, how many different interdependencies, there are the coin price, volatility, the tipping mechanism, you managing your own coin and your own cap table of coin holders. It’s a very complicated thing. Not only intellectually or financially but also there’s a social element too which I haven’t seen before in crypto. It exist on on other platforms. 

A lot happened between the Friendster phase and the Facebook phase. What do you imagine the Facebook phase of web3 looking like?

Well, the biggest change that happened in the early 2000s was people getting wired up to the internet. So I think the similar phase where, you know, a couple, a couple hundred million users in crypto worldwide, I think people getting wired up to crypto is the biggest change that needs to happen. You, you know, BitClout was unique in that it focused on a different audience than the hardcore crypto community and some of the hardcore crypto community weren’t so impressed with the way some of the growth tactics and how it launched. So it kind of alienated some users early on, and there’s a small, very small subset of the global population that’s using this and experimenting with it. And it’s hard to onboard. It’s hard to go from USD using wire to confirm via your bank account to get a small amount of Bitcoin that, like you said, it’s a volatile asset and then convert it for BitClout and then convert to creator points. It’s like a five, six-step process. It makes no sense for your average user let alone fees too, you know, and in Nigeria as a user you’re to pay $20 a transaction fee to swap USD to Bitcoin. So there’s some barriers there. 

Share with me the process of how you came to the conclusion to invest in Bitclout.

Yeah. I guess in my limited experience, in my career, some of the biggest value creation, examples, some of the biggest start-ups that have ever been created are, are innovating around human communication. Whether it’s WhatsApp, whether it was Facebook originally, whether it’s thinking about telegram, think about Snapchat, think about Twitter, it’s always some form of changing the way we communicate. And so at the core, I think inter human communication is a big problem to solve. And so anyone that sets out to do something different there, I’m already very interested in. In the case of BitClout , there’s a problem that’s very top of mind right now around getting canceled on centralized social networks. Do you really own your account? Do you really own your data? Do you really have a platform to speak? Who controls that? I think that’s a question that the community is struggling with, right now, at large. And so BitClout saw that and had a solution to that problem. So that was very interesting. That was very timely. I don’t know if people would have been as receptive to that idea five years ago or certainly 10 years ago.

How do you see the competitive landscape of decentralized social media platforms like Bitclout evolving over time? 

No, I think a rising tide lifts all boats. I think people are just waking up to the idea that they don’t own their data . I think that’s starting to come into the consumer consciousness more. I think more examples of people trying to build this will only bring more attention and usage to these platforms. I happen to like the BitClout platform. It’s fast, it’s responsive, the developers are very committed. There’s a large treasury to support the project. It’s hard to do. I would really applaud Twitter and congratulate them if they can make it work. It’s also nice for competition to exist because then, you know, different teams can learn from each other what works. You know, copy each other, share technologies in certain ways. So I think it’s better. The more people that are working on this problem, I think the better off humanity will be. So I’m encouraged by it. I think BitClout has a first mover advantage. It’s a very smart team. They’re in pole position right now. If they keep executing the way they do over time, it’s going to be a long journey ahead. It’s speculative, but it’s, it’s also a long-term project.

How do you see curation protocols playing a role over the years and empowering platforms like BitClout or a future web three social networks?

Oh yeah. I think it’s super important. BitClout Is the data layer, the blockchain. And so the node operators are gonna have to figure out how do they engage their users and monetize. Maybe that’s one of the challenges BitClout faces is, has it encouraged a vibrant third-party developer ecosystem of node operators who will then go build consumer-facing applications that will then attract users to come and join and monetize and engage. So I think curation on that piece, the endless infinite scroll is the best part of TikTok. That sense of satisfaction that you get for completing these short videos. The dopamine hit and then the unlimited, you know, never ending scroll. Those are two powerful features. So I’m sure there will be some novel engagement tricks and techniques that will be developed by some of these node operators that we haven’t seen before. That are more crypto native, and maybe that’s, you know, you could imagine your wallet balance tops up as you engage for longer term. Think about like brave and bat, like maybe you’re benefiting from some of the ads that you consume and you’re, you’re constantly earning that way. I think, you know, with axie and the axie infinity play to earn. There could be a similar model here you know, of a scroll to earn .consume to earn, interact, or, and engaged, or, any kind of model that doesn’t really exist in a social network today.

How would that look? Like another example that comes to mind is the collaboration between Celo and Socialstack. And they implement this concept called proof of listen. So every time you would listen to a podcast episode, you basically get rewarded in whatever token. So that’s kind of like what you’re, you’re hinting at? 

Yeah, exactly. What do we call it? Proof of engagement. Proof of activity, to that extent. Yeah. 

I want to jump into your token $ARTZ. You’re publicly trading on the market. People can speculate on you as a person and the content that you push out. Off initial thought, did that scare you? Did that give you any concerns that freak you out at all? How was that process? 

Maybe it should have. You know, not financial advice, I’m not, I’m not a financial advisor. I think, the regulation aside, it was play. It was, it was pure bliss. It was really enjoyable. It was a curiosity. No one knew what to do. I created an account called a Clout Taito account where I would send people a fraction of a BitClout and ask them to keep a slice and pass it on. And the community responded. It was really cool. We talked about the stable coin, stable clout . I started doing some, you know, some lightweight versions of raffles, some bounties. I just started experimenting with everything possible that you could do with having your own token. I have my own sovereign currency now, so… 

You say you have your own sovereign currency, but in reality, I mean, technically it’s a currency, but what can you do beyond just trading? Like where does a utility come into play? How do you think about that?

Yeah, I think early on, it was a lot of speculation. I think by locking value into my coin. So I bought a bunch of my own coin. I exchanged BitClout for ARTZ coin, which then threw the bonding curve, boosted the price of ARTZ coin. So now I have this asset that I can distribute to people in fractionalized ways. I can give you a fraction of ARTZ coin. The first thing I would think about is access. I haven’t done anything with my community, but there’s some creators. Think about Craig who has a private telegram group that coin holders have access to. There was a sub stack sort of equivalent platform where you could write called sub clout where you could write a blog post and have that be pushed out to all of your coin holders. So I think at the very first, the way we, a lot of us thought about it was, it’s sort of like a CRM and your coin holders now are some your VIP users. And maybe you have followers on social media, on Instagram, who will like your content. But this is like the next level of engaged users who are actually willing to put real money in support you. And it could be a dollar, it could be a thousand dollars. You know, that the amount is that way. So that’s more about just gaining access to a creator, from a follower perspective. 

The other piece that you mentioned is financial. And so what does this asset really represent on the financial side? What’s the underlying value? I think where things are heading is tying some form of cash flows back to coin holders. The first iteration of that, the platform launch that launched NFT sales. So I can mint an NFT, I can sell it. And then a portion of the proceeds can go back to my coin holders and I can tweak that ratio. So if I’m a prolific NFT creator, there’s a real incentive for my coin holders to hold my coin, because now they’re going to be receiving some cash flows from those NFT sales.

If a creator would come to you today and they ask you Andy, like I want to get into social tokens, I love the concept of tokenizing myself, keeping my users a part of the journey,but how do I promote this to people without it feeling too sketchy? Without it feeling like a cash grab? Like how do you imagine that line of communication? 

Yeah, I think it reminds me of in the gaming world in the social gaming world, we had a concept in freemium games of a power users. We would call them whales, the users who had spent over a thousand dollars in your game. It’s usually a small fraction of the user base, less than one percent. Those are the users who drive 80% of the revenue. And so I imagine there’s a similar segmentation of a creator ‘s fan base. Who are the fans that are consuming, you know, 5, 10% of fans that are consuming 80% of the music, the content that’s put out, buying the tickets. And so I would not think about this as a product right now that’s suitable for your mass audience, but I would think about it as a product that’s suitable for sort of the upper echelon of your fans. And then the second piece is do you ask them to buy it? Do you ask them to put real money into it? Do you use it as a sort of fundraising platform for yourself for a monetization platform? Or do you think about it as more of an access platform? I, right now today think it’s better suited for access. So I would create a token. I would Boost the value of my own token myself. And then I would airdrop that to my top thousand fans, not asking them to buy anything. So now they have a piece. I’m rewarding them for, you know, in a way you think about like a cash back of sorts. Like it’s a reward for being a part of my community. And then empowering them. 

You know, a lot of creators have this huge community, but they don’t know how to tap into the intellectual capital that exists there and to mobilize that for their own benefit. You know, if there’s a developer in my community and I want to launch a website, or if there’s some clever marketing that I need help with you know, paid acquisition for some campaign I’m running. Or there’s some musician and I need some help you know, scoring one of my, my TikTok videos. All those people exist in my community, and they’re probably a few that are highly engaged. I would love to use my token to at least connect with them, have them on a register of sorts, a CRM. So I can know who they are and then engage with them in a more meaningful way. And transact and send value to them for you know, completing bounties for my community. Things that I need help with things that helping me scale. 

BitClout will let me say, Hey, here’s my top thousand followers. And I would need something on top of that. If the user chooses to remain anonymous or pseudonymous I would need something on top of that to stitch their email to their BitClout account or their phone number, and I could ask them. We invested a company called Moonbounce which is stitching those together so that a creator can say, Hey, you know, go to this site and put your email, your phone number, join your BitClout handles, so I know who you are. Sort of, you know, a lightweight KYC of sorts for creators so they can have their contact details of their top fans. 

Since you launched ARTZ coin, what are some like major things you learned that you didn’t expect you’d find out along the way?

Yeah, I guess, you know, I realized I was really impressed by the Goodwill of the community. I thought going in that it would be like you know, the equivalent of like a stock price that people would rapaciously, buy and sell and looking at it from a profiteering motive. I’ve actually made some really good friends from folks who are coin holders, Douglas being one of them. It’s a pseudonymous account. We met up in person and we both hold each other’s coin. We saw each other’s activity on this and I made some great friends on the platform and it’s sort of transcended the financial aspect. It’s almost in a way, you know, I don’t want to go too far, but it’s almost as if how you think about treating family with finances. it’s not really business in a way. And so there’s that element where you’re aligning individuals you’re holding their coins. 

I’ve seen these really long-term coin mutual coin holder sort of handshake agreements emerge where people want to be invested in each other and support each other. That’s another piece. There’s a psychological component to it. When you own a piece of someone, of their token, it changes how you interact with them. You want them to succeed. I’m much more generous with my time than I would be otherwise in the BitClout community. Partially because I hold these tokens and I think there’s a psychological hack in a way that where my brain says, these are my allies, these people are part of my tribe now, in a way that, you know, someone just hits me up in email and says, Hey, can we chat about this? I might be more reluctant to do so. 

How do you feel about a Black Mirror scenario unfolding where everyone is tokenized and we judge each other by our price. Do you see that idea becoming a reality? If so, how do you feel about that? Is that scary to you? Does it excite you?

Well I think it’s up for grabs. It’s up to us to decide how we want to fashion that. I believe we have agency in shaping this. The interesting thing about crypto is we have an opportunity to refashion the world and the power structures in a way that don’t exist in the analog world. If we do nothing, you know, maybe they just map over one for one. Billionaires today, have plenty of power and status. And so if you’re saying someone with a billion-dollar coin price has power and status and it’s tokenized and maybe a billionaire controls, a publicly-traded company, and now they have their social token. That’s totally, you know, kind of analogous. There’s not a lot of difference. It’s different than the social media influencer that has a bunch of followers and maybe doesn’t generate income. I love the fact that things are a lot more transparent. I like the idea that everything you do is visible and you have to be accountable for your actions now. And those can be discoverable by anybody who has access to the chain and knows how to use a database or knows how to read the block Explorer. I like that a lot. And people can still obfuscate what they’re doing and hide it through other accounts and, you know, send it through tumblers. That’s always possible, but I like being myself on the chain. When I post a picture of my six-month-old baby it’s embedded on the chain and now everyone can see it and hackers and allies and foes and enemies. Everyone has access to that image now. It’s just cool that you’re kind of putting all your cards out there.

What’s going to eat web three? What do you think? Web two ate web 1.0 web 3.0 , the bet is going to be eating web 2.0. What do you think will be eating web three? 

Hmm. Good question. What’s next, next. Well I think the arrow of time is pointing to the rise of the sovereign individual. And I think going from web one to web two to web three has given more and pushed for more power down to the individual to use technology, to interact with their world and their lives. I mean the first thing that pops into mind is the metaverse. I think there’s a lot of talk about that, but it’s the very, very early innings. And so the thing that would eat web three is if web three allows all of us to have an economic presence and the build out of these economic blocks online, where you know, the financialization of everything that we do, the crypto vocation of everything we do online, I think that allows us now a different way of interacting exchange of value, a seamless exchange of value. And what follows from that would be. Yeah, I suppose you would see more and more people setting up I guess building their lives increasingly online, more so than they’re already doing today. Today, we kind of think about the internet as the remote control for our real life. But maybe that flips and you know, we’re spending the majority of our time earning our incomes, our livings through these platforms. You know, if you think about breeding horses that run, maybe that’s just a joke today. Maybe that’s the tip of the iceberg where you know, these DAOs and these communities of people to economically be productive. That’s a hard question.

Web3 question continued…let’s say everything is on-chain. Is that a good thing or a bad thing? And why? 

Well, everything already is on-chain in the sense that, you know, our interactions. Like if you think about the universe is the chain we’re already living on chain. It’s just such a computer that we don’t-. It’s a giant atomic computer, we don’t have the ability to calculate. So this is just dumbing, everything down and saying, okay let’s, you know, embed everything you know, on a chain we can actually read. I think that’s really cool because now it opens up a new possibility to have this third brain of sorts that we don’t have today. That is, you know, you could, on the one hand, you could fearmonger and say, oh, it’s this hyper surveillance police state that we’ll be living in. 

On the other hand, you could say, oh, it’s, you know, all these apps that can augment my daily life that we can create based on the data that we couldn’t have before. So I I’m in that camp. You know, I want to put all my life on-chain. Think about all the biometric data. Tell me what to do. Here’s all the data. I love that idea.

Before I let you go quickly, plug yourself and where we can find you in the various projects you’re involved with.

Yeah. I’m Andy Artz. You can find me on Twitter as ArtzAndy, or on BitClout as ARTZ. Yeah, thanks so much, Adam.

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Background

Mint Season 2 episode 8 welcomes Maria Shen who’s a partner at Electric Capital. Prior to Electric, Maria was CTO and co-founder of a startup that helped SMBs easily create their supply chains with manufacturers around the world. Prior to that, she worked on search technology at Microsoft, with her features shipped to more than 1 billion devices.

In this episode, we talk about:

• Her NFT collection strategy
• Undercollateralized social lending in NFT communities
• Favorite NFT use cases
• The intersection of DeFi and NFTs
• How creators should be thinking about the metaverse
• The frenzy behind Bored Ape Yacht Club
• Lessons learned working in this space

…and so much more.

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Thank you to Season 2’s NFT sponsors!

1. Coinvise – https://coinvise.co/

2. POAP – https://poap.xyz/

3. Socialstack – https://socialstack.co/

4. Celo – https://celo.org/

5. PrimeDAO – https://www.prime.xyz/

Interested in becoming an NFT sponsor? Get in touch here!

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You’re making a lot of noise on crypto Twitter with your love for bored apes and your love for NFTs. So I’m excited to dive in. Let’s just get right into it. Give me a quick brief about yourself. Who are you? What were you doing before crypto? And like, where are you now? 

Yeah, sure. So right now I am an investment partner-focused VC firm called electric capital. Where I, as you see from my Twitter, I’m super focused on NFTs and we can totally talk about how I got into NFTs in the first place. But prior to electric, I was co-founder and CTO of a supply chain startup. Before that I was getting my masters in computer science. I spent some time at Microsoft on search tech as a PM. Graduated from Harvard, studied political science and computer science. So yeah, I mean, my background mainly is in product and engineering being an entrepreneur and now investing.

How did you go from the supply chain to crypto? Cause that’s like that’s night and day. I know there’s a lot of overlap with blockchain technology and supply chain, but NFTs and supply chain?

I didn’t jump from supply to hang to NFTs, but I did jump from supply chains to crypto. So you know, kind of the backstory here. I started my company back in like 2015, 2016 . So if you take yourself back to that time that was when direct to consumer products really rose to prominence, right? This is your Casper. This is your Warby Parker. This is people realizing all of a sudden, oh, you know, I don’t need to go work for Nike or Lulu lemon. Like I can actually market my products directly to people through Instagram. And be able to actually reach a very wide audience. And so a lot of these small businesses were great at creating products, thinking through who their users were, but not so great at their supply chain at kind of actually creating the products and mass where we’re in many cases, even prototyping the products. And so my company at the time was effectively a supply chain backend for these small businesses. And so I worked with you know, I would say maybe about 300 manufacturers across Asia, South America, Eastern Europe and then thousands of small businesses use this system. And one of the really interesting problems that I kept seeing over and over again, payments. So specifically a lot of my small business customers were in the U S you can Canada. And so in order to pay a manufacturer overseas, like, you know, obviously you have the problems that you can imagine, like foreign exchange is difficult. Wiring is difficult. But actually the really painful problem is a lack of trust. These are small businesses that have never interacted with these manufacturers before, and these manufacturers have never interacted with these small businesses. It’s not like H & M coming in and saying, you know, Hey, give me credit. I’m H & M like, you know, I’m good for it. For these manufacturers I’m not so sure, and then small businesses are also unsure. So the kind of industry standard that was established is 30% upfront or something like that, about 30% upfront and about 75, 70% when you receive the goods. This made zero people happy. Right? So small business was like, what, like I’m paying 30%, who knows what I’m getting. And then the manufacturer is like, okay, I’m getting 30%, but I’m making a hundred percent of the goods. So like, how does that make any sense? And so there’s just like always this tension around payments. And so I thought back to when I was getting my masters in computer science, there was this one guy in my program who was very into Ethereum, like to the point where he was doing sessions for the rest of the class.

Just like on his own about smart contracts. So he’s like, listen to me guys, like smart contracts are the future. And at the time I was really focused on things like big data and machine learning and I was like, oh yeah, you know, smart contracts. Cool. You can put rules on top of money, but like, you know, not what I’m interested in AI is the future. And then, you know, once I kind of saw this problem with my customers in the manufacturers, I kind of thought back to smart contracts and it was like, oh, well, you know, actually if you can write rules on top of value, you just be able to do a really lightweight business escrow. And that would solve problems for both of these parties. It could be a really cheap and programmatic way to introduce escrow into the payment flow. And you would solve a lot of the like foreign transaction friction in terms of just moving money over, across borders. So I was like, cool. Okay, I’m going to integrate with an API. Someone’s got this. And I looked into it and it was like, no, the infrastructure was not ready. Fiat on-ramps and off-ramps were all over the place. KYC and AML, if you’re trying to form some sort of cohesive experience, especially across borders, like that’s just not going to happen. Manufacturers are like, you know, we’re barely using email. And so trying to get them to understand like, custody of the token, like, you know, there’s no chance. Zero chance. So I was like, okay, well this was a cool thought experiment, but like infrastructure isn’t ready. But that is what got me down the crypto rabbit hole. Cause I was like, well, you know, I mean, infrastructure can be built, right. But if the technology is there, then you know that’s real. And so, after I stopped working on my company, that’s really what I focused on was crypto. And I knew I really wanted to get into the industry. And so kind of here I am. 

That’s awesome. You know, I got started in crypto also like your friend, just teaching classes on the weekends or my free time, like I used to write in Facebook groups, I read the Bitcoin white paper. If anybody wants to learn about how peer-to-peer transactions work, I rented this room on the university campus on Saturday at this time. Hit me up. And like, there’s something really like it about me, but there’s something really about something special about your friend. Cause imagine the amount of inspiration that he kind of shared from his passionate expressing and explaining something that he believed in so much and how that kind of trickled down to the rest of the people in that room.

No. I mean, absolutely. I think in retrospect, that’s when everyone should have seen that crypto is going to be big. Right. It’s like when you, when you kind of inspire that kind of fervor and people go out of their way to educate other people yeah. You know, it’s like this kind of religious fervor, right and anything that kind of inspires that is actually. Incredible and worth studying and worth looking into. 

When did you make your transition into VC?

 So once I decided I wanted to get into crypto. I really was not considering VC at all. I was really looking at, you know, Hey, should I join a crypto startups? Should I do something out of proxy? Should I start my own company in the crypto space? And so this was 2018 at this point and I met a Avichal Garg and Curtis Spencer, who are the founders of electric capital. And what I realized about being in crypto VC, that maybe a lot of people don’t realize is that there’s actually a lot of building that you have to do inside. I mean, as a, you know, just a very kind of elementary example. If you’re a traditional VC, you don’t have to worry about custody, right? Your custody is your bank. You just put the money in the bank. Period like that, you know, that’s it. As a crypto VC, it’s as you know, not so simple, right? Like what are you going to do? Hold millions of dollars on a USB stick? Like probably not. And so just things that you really take for granted that third party providers exist for at least in 2018, either didn’t exist or was very under supported. And I mean today, right. Still very under supported. 

So you’re telling me you wouldn’t wear your fund around your neck as you wouldn’t wear 25 million around your neck? Pimp it out like you would with a gold chain?

You know, that actually might be the play is like, instead of like a Rolex, like watch, it should be a diamond studded USB or something. I think that’s awesome. Yeah. I mean, there’s just so much infrastructure to build. Right. And that’s just like internally, but then externally. I mean, the industry is moving in real time. Like things are being discovered in real time. And so any contribution you make in the space is almost just like putting something down in a history book. Right. And that kind of excitement, especially on the VC side, I have this privilege of being able to look across the board at what’s happening in crypto at large. And there’s always so many interesting things happening that honestly, I had trouble really focusing on like, you know, working on one specific idea was going to be very difficult for me. And so kind of this, this marriage between being able to look at a bunch of things and also being able to build so a lot of us at electric actually write a lot of code as well. And so like being able to actually exercise that muscle it was just the, you know, the right combination for me personally.

You know, you talk about as you ship something, it becomes a part of history. Right? Show me another industry that’s like that, that it’s so fresh. So early, there’s a lack of like talent, real, genuine talent. And we’re seeing this happen live. The best example that comes to mind is obviously party bid, right? And, and the, the beautiful social interactions that they created from like a multi-player bidding platform. Right. Another great example is fractional. Right. And really solving, tangible use cases and seeing the sheer market validation that comes with that is inspiring. And a lot of the reason why I entered crypto is even if I could just contribute with a grain of salt, I know that grain of salt would be tasty because in the grand scheme of things, like it’s so early, so fresh and just get in there and just build something. I love your story so far. That’s fascinating.

No, I think you’re absolutely right. I mean, Really any topic and crypto can be an area of study. Right. And I think it will be like, I think they’re like in colleges, in the future, people will be studying crypto-economics as like, as its own field. You know, there’ll be countless Ph.D. theses, written on this topic. And that’s just one of, I don’t know, hundreds if not thousands of different topics, right? The game theory of creating incentive mechanisms even just like the depth of the tech that exists, like really any direction you look in Is something new being created. And I mean, to your point earlier, I really don’t know another industry where this is.

Let’s pivot into the topic of NFTs. Okay. I know you love NFTs and I want to hear why, like, what is it about these, whether there’ll be 721s 1159s future standards to come. Why are you so attached to these cool collectibles? What is it about it for you? 

You know, it’s funny, you should ask that because I’ve never been a collectibles person, but I think that’s actually, what’s really cool about NFTs is: just because you’re in NFTs doesn’t mean you’re a collectibles person. So I mean, I was first exposed to NFTs with like CryptoKitties, right. CryptoKitties came and I was like, oh, this is cool. Played around with it. I bought a few crypto kitties bred, a few crypto kitties and I was like, okay, cool. But how I kind of really really fell in was back in 2018. Crypto voxels was around and I’m a huge kind of Sci-Fi reader as is a lot of people in crypto, I think. And I’m a huge fan of snow crash. And so this idea of the metaverse is just like insanely cool to me. And crypto voxels is a metaverse right, is, is kind of this digital world where your avatar gets dropped inside and you can just walk around and the land itself, these parcels are NFTs and you can own parcels. And if you own a parcel, you can build on top of that and build all sorts of creative buildings. People create all sorts of amazing architecture on top of their own parcels. And so that’s really what I first did was like, I just walked around and I was like, oh, this is cool. Like, this is the metaverse. And what was funny is that crypto voxels were really early in integrating with NFT marketplaces and platforms so people could embed their own NFTs within their crypto voxel architecture, effectively turning the entire crypto voxel metaverse into one gigantic gallery or like one gigantic museum. And so I would literally spend all of this time walking around, looking at art, like clicking through the walls and being like, oh, what’s this and that’s how, you know, that’s kind of how I first kind of fell into it. Through the metaverse angle more than anything.

Were you buying plots of land yourself and like building on top of them? Do you remember how much the first plot of land you bought was for?

I think I spent something like $200 and this was after like, so what happened is I kept watching this land. I’m sure. I was like, I should buy one. And I’m like, that’s nonsense. Why would I buy digital land? It’s worthless. And then I was like, I just like, couldn’t help myself. Which again, I think when you have that kind of feeling like there’s something kind of interesting happening there. And I was just watching the prices go up and I was like, no, I have to $200 is like an insane amount of money to be spending on digital land, but I’m just, I’m just going to go for it. It’s going to be a total loss, whatever I’m willing to take it. And so, yeah, so that was, I think, around the prices and when I first started buying some parcels you know, I think they’re like over a thousand. I actually don’t check the prices that often, but yeah. 

Can we talk about the addiction of spending ETH for a minute? I would rather pay a thousand dollars in gas fees than pay $300 for a flight. Like, I don’t know why what’s up with the psychology behind that, but it’s so much easier spending my ETH than it is spending my US dollars. 

Absolutely. I mean, this is very embarrassing to admit, but like when I go to Chipotle I don’t get the guac cause I’m like, I’m not going to spend, this is a scam. I’m not spending $2. I remember one time, was like during the height of the NFT craze, right? Like I did something and this was when gas fees were atrocious like hundreds of dollars. I did something and the gas fee was like 60 bucks. I’m like, oh my gosh, what a steal! I think it’s very, well-documented like, not officially, but so many people have talked about this feeling where it’s like, you know, like I would never spend 20 bucks on this, like very normal, reasonable thing. But $2,000 on a JPEG, like yeah. Yeah, that’s right. That’s it. So that’s like practically free. 

It’s the behavior that makes it absolutely insane. I mean, and you brought up part of it, right? Like all the behaviors from the outside looking in, it is nuts. Like party bid with like the zombie punk auction, right? Like party of the living dead brought in 400 plus complete internet strangers to lock $3 million into like more than $3 million to bid collectively on a picture. Like it’s the whole thing. Like if you try to tell that story to someone who’s not in crypto, It’s just mind-blowing.

I think there’s something culturally really interesting about NFTs that people didn’t foresee which is originally like, you know, the promise of blockchain and the promise of crypto is like, oh you do everything on the blockchain. You’re basically doing everything in public. And that brings transparency. Right. And transparency brings trust. But I think what people forget is like, we’re all like still very primitive monkeys. Like we actually, when we actually do things in public, like we do it for the status. Like, you know, we’re like doing with a flex and we’re doing it to actually signal publicly, like who we’re aligned with what we’re aligned with, like what our ideology is when we purchase something. And that something is effectively broadcast across the entire internet. Like, you know, back to this point about collectibles and NFTs, not really being collectibles, like if I were to purchase a beanie baby, you know, I would have to, it’s kind of like a push model of like, I have to tell people otherwise, who knows, you know, I just bought it in private. But, NFTs are public by default. Like it’s broadcast by default. Right. And so like, you’re really living like and broadcasting your digital life all the time. And that sort of social interaction is something kind of beyond which we’ve seen before.

What’s the current state of the NFT market?

I mean OpenSea is saying I think it’s made more than a billion dollars in transactions in the last 30 days. 100k registered users, which if you do the math, it’s like the average JPEG is like $10,000, which is insane in USD terms. So I would say there’s a couple different categories of NFT art that’s going on. Right. There’s kind of the profile picture lead where it’s not really about profile pictures. It’s really, you’re buying club memberships, right? You’re spending like thousands of dollars to be part of the club. You know, and that’s why you have people out here being like Hey, I joined bored apes like follow me, right. This is a community. Not to mention, it’s also a distribution channel. Like if you look at the hundreds, which is doing just like street wear. So they’re going to be dropping apparel for I mean just bored ape apparel, right? You don’t have to be in this bored ape yacht club to actually access it, but that’s actually a distribution channel. Like there’s actually, you know, real monetary value in this community. So, I would say the first bucket is a kind of community based NFTs where everyone coalesces around some kind of common identity.

I think there’s also a lot of stuff happening in the kind of generative art space, like art blocks and you know, kind of creating almost like accidental art, but still, I think there’s this kind of like community aspect with generative art, which is interesting. And then there’s kind of like the one-on-ones there’s the art community there. I feel like this broadly is, you know, one is like community-based and one is like artists based or like creator based. And I think that there’s another thing that’s kind of coming along, which is how do NFTs really get plugged into DeFi. Like NFTs at the end of the day, you know, they may be art, they may be collectibles. They may be whatever. They may be pieces of writing on a mirror. But they’re assets, right. They’re financial products. And so there’s kind of this category of things that are looking at NFTs as assets, kind of like fractional which you talked about before. And how can we actually introduce liquidity? How can we introduce better pricing models for rare or kind of tail NFT assets and how can these things be then plugged back into the DeFi ecosystem? I think that’s probably what I would say is like this really interesting unlock that’s going to be happening where, I mean, for the longest time you’ve had kind of two parallel tracks. You’ve had the DeFi community and you’ve had the NFT community and there’s been, there’s definitely been like cross-collaboration. Like I think that’s maybe what made Axie infinity very interesting is I remember. You know, back when Uniswap, did the retroactive draw of their uni tokens. Some Axie players actually ended up getting uni tokens because they inadvertently interacted with Uniswap through playing Axie infinity through, you know, kind of just like earning SLP swapping SLP. Like that’s that super cool right there. There’s that kind of thing that’s going on. I think like, you know, yield Guild for example, is looking at how can we actually loan out the NFT assets that we own and then these NFT assets actually have like a cashflow attached to them through these play, to earn games. And then how do we kind of capture some of that cash flow? So there’s, there’s been kind of stuff. Interactions, but I think the true unlocking kind of this like real marriage between DeFi and NFTs hasn’t really happened yet. And I think fractional and like you know, kind of that category of things is really leading the way. But we really haven’t seen that true unlocking.

Yeah, I want to touch upon the first point that you brought up of Bored Ape yacht club, doing a collab with the hundreds, doing a merch drop specifically for their community. And I know you mentioned for whatever reason I saw online that you have to be a member. BAYC to get t-shirts. 

I’m not sure. So there was like a Bored Ape merch drop that was separate where it’s like, you know literally token gated. Where you have to prove, and then you can purchase. I thought the hundreds was open to everyone, but I actually could be wrong on that. 

Do you see creator passes in the form of NFTs coming into fruition down the line?

 Oh, yeah, absolutely. I mean, it, I think it’s absolutely going to happen. I’m very opinionated on actually how these communities form and I think what you mentioned is almost like a social token, right? Where it’s like highly sort of social token. It could be a ERC 20, or maybe she launches on another chain. But I actually think the reason why NFT communities are so passionate and so special is because it’s not a token. Like I mean, it is a token obviously, but it’s a unique asset with like an image that you can kind of emotionally resonate with, which you can’t do with an ERC 20 token. So I actually feel like the way that creators are going to be able to leverage their communities is through like, Some sort of badges or some sort of NFT based thing. And I think there’s kind of two aspects. There’s like, how do you enrich your community and your fans? And then kind of like, how do you really engage with them? I think on the enriching part, you know, I feel like what’s going to happen is you’re going to have musicians, for example, creating their music, masters as NFTs. Fractionalizing that right? And then people who own fractionalized shards of this music master may be able to generate streaming revenue or, you know, it doesn’t have to be music, right? Maybe it’s the commercial rights to a specific ape or to you know, maybe a Kylie Jenner, cartoon character that might be option for a movie. Right. And what if that were fractionalized and you actually get revenue based on how this IP is used? Yeah, I think that would be super, super interesting. And then I think there’s kind of this community aspect or engagement aspect where right now most NFTs are pretty static. And this is where I think async art has done a really amazing job and not getting a ton of recognition. They definitely get some recognition, but they invented this concept. I mean, correct me if I’m wrong. My understanding is they invented this concept of layering for NFTs, where a certain NFT can have multiple layers. So you can imagine for an album cover, for example. Let’s say Drake is going to create a new album, his album cover has like a background and a foreground. You know, maybe the background is like you know, like this beautiful nature scenery. And then the foreground is like some cartoon characters. What if every single aspect of that was actually an NFT and so like layered together, it creates a cohesive whole. And if you owned the background, you can change it from night to day. You can change it from New York to Tokyo, you can change it, you know, like you have the power to actually lose this album cover in some way. So I feel like this, like there’s still a lot of play and experimentation we can do.

That’s like, that’s the only token standard, right? Stacking collectibles, and basically non fungible tokens on top of one another, whether they be eyeglasses, right. Or whether they be rings or whether they. That are interchangeable, but okay continue.

 I think that can be applied to the community as a whole, as well. Right. Where it’s like, let’s say you’re the oldest followers of a certain celebrity. Like maybe that means you get accessorized in a special way that the NFT that you have actually grows and develops as kind of the community grows. And I think those are all sorts of really interesting things where fans can get recognized for the contribution that they make. And that can happen, you know, that can happen through NFTs and I think there’s no real way for that to happen at scale today for creators and their fan bases.

That’s actually a very practical use case of applying what these cartoon drops are doing to a real life example. Being able to interchange different components of an album cover, issuing those as NFTs and having unique components, unique traits to the album cover. And even if you would take it one step further and do like extended versions of songs, you know, on some ensemble drops versus non. Like which one’s explicit, which one’s not explicit. Now we’re going down a rabbit hole that the possibilities are endless, but here’s the issue. Like creators they’re not thinking like that just yet. You’re seeing founders innovate. And I recall talking to like four projects that are working on the element of tokenizing musicians and tokenizing their albums, basically. And figuring out the whole fractionalization of royalties, bringing that off-chain payment on-chain. But again, creators don’t get this. Creators typically want to focus on the creative they want to focus on drawing and they have their managerial team that kind of handles the rest. So how do we kind of get more managers, and more artists related with what’s happening in the space to be more ballsy, right? To be more risk-taking. What do you think is the right solution for that? And part two is what do you think is stifling that? 

That’s such an interesting question. And I agree. Because right now, like in order to really design well some of these mechanisms that we talked about, it’s almost a piece of performance art in itself, right? It’s kind of a full-time thing to be able to design that. And if your full-time thing is actually photography or your full-time thing is actually music, like. Designing the community interactions, designing the incentive layer, designing the reward, you know, the reward mechanisms. That is a very, very heavy lift. . I wonder if, what will actually happen is some creators will experiment and achieve kind of like the playbook for how this is done. You know, I know Justin Blau, for example, has done a lot for his music NFTs . He tweeted out kind of enigmatically that his NFT holders can kind of get rights to it in some way. So, you know, I think some artists are going to end up pushing the boundary and proving out certain models. And I think those models will become the playbook. And then once the playbook is established everyone else probably will just be able to adopt it right in that here’s five playbooks. And so whoever ends up writing one of these playbooks early, will win asymmetrically, but everyone else who follows that playbook would obviously also benefit. But yeah, I do think it is a big lift and it means veering off the creative path a little bit, or whatever, kind of, you know, art or creation that you’re doing to think in a very specialized and deep way about game theory and incentives which is a big ask.

If porn stars started issuing their own social tokens, how does that intertwine into DeFi. Are they going to start issuing like lending and borrowing pools on Aave, you know, for whatever?

Every single kind of technological advancement we’ve had like video streaming, like, you know, kind of like the internet, like a lot of this is pushed by honestly, the porn industry, like they’ve always been on the cutting edge of technology. Like, ads are delivered through videos.

I’m curious to see what happens with that use case. I want to talk about what are some of your favorite NFT use cases that extend beyond land, like digital land music and art? Like what are some of the more experimentative things that you’ve seen, either creators communities dabble with and make a lot of noise behind?

I think there’s going to be a lot of power in collective storytelling. So I think Aku is a really good example of this, where the Aku character is a ten-year-old boy he dreams of being an astronaut. And there, the idea is that there can be a community DAO behind deciding storylines for what Aku ends up doing. And I think that’s going to be, you know, incredibly interesting for storytelling and for media going forward, there was another idea that was tweeted. Earlier I want to cite him correctly. Maybe we can tag it afterwards or something, cause I want to make sure it’s actually attributed to the right person. He had this idea of what if we had this, you know, manga series where every single character is an NFT and and, and fans can kind of coalesce around these characters and then you can kind of create narratives around them. I think it’s, you know, I actually feel like this sort of community created content is going to change the way that media works in the future. Like it’s going to change the way you know, Netflix and Hulu and Amazon and all of these, these platforms work and the way that we consume. Like think of the fervor around game of Thrones, right? Like if you actually had like, maybe through staking, like game of Thrones, tokens against certain characters in battles , right? Like, you know, there was this battle of the night or, you know, there’s like all these epic battles in game of Thrones. And what if you could stake tokens against who would be the winner or like stake tokens to give them special weapons to use during the show like that would be really interesting.

Imagine you could do that live with the WWE. Like that, that just came to mind. Imagine basically stake tokens, and then men fight. You will determine whether or not the dude hits the other dude or girl with a chair. 

I think actually, like you want to do item drops, right? Where it’s like, if you take enough tokens, like this guy gets a banana. I think this sort of participation is just going to change the way like content is created. 

I love that. That’s a good point of view. I want to dive into something you’re really excited about. You kind of talked about it briefly scattered throughout, but I want to bring it up. So you talked about the intersection of DeFi and NFTs. So I want to pull up the tweet that you wrote. So this is from August 8th , 3:40 PM. I’ll shoot it alike, like as well, boost it a little, give it some love. The next thing in NFTs, plus in DeFi will be under collateralized social lending in NFT communities. Social lending works in emerging markets without robust credit scoring systems but didn’t work in crypto because of the lack of on-chain communities. And then below that, you put dead, which is the dead punk that was through party bid. And then you tag Bored Ape yacht club and then you mention communities like that. Can you talk a little bit about what you’re kind of referring to more in-depth from that tweet? 

Yeah. I have never had anyone pull up a tweet during a conversation. This is actually really cool. So. Let’s think about what credit is, right? Like credit is basically trusted. Credit is saying, I trust you to give me this money back plus something else. Give me my original money back, plus some. And the way that trust is established today, like in, you know, for example, in the United States, is through credit systems and credit scores and you do that through repeated purchasing history and kind of repeated activity, whether you’re renting an apartment or whatever. And all of that gets logged on chain or logged in a database somewhere. And the reason why you can even accumulate this score is that you have one identity, right? Like you can only ever have like one social security number. So you’re tied to that identity and that identity can be tied to a scoring system that effectively, you know, it’s flawed in many ways, but the aim of such a system is to tell people how trustworthy you are in this credit and lending system. And in emerging economies where you may not have such a robust you know, in the United States, our entire industry is dedicated to the credit score, you know, and in other emerging economies, you may not have entire industries dedicated to credit. And so you actually have small-scale communities doing community-based lending and saying that like, Hey, I’m a member of this community. You’re a member of this community. We live in the same village. I know you’re not going to up and move. I’m going to lend you some money cause I know you’re good for it. Because we’re attached in some way. And in crypto lending just has a really hard time taking off because there is no identity. I can make as many wallets as I want. And each wallet can have a different set of actions that I’ve taken on-chain and I can abandon any wallet anytime that I want. And so they can’t tie it down to one identity. That makes credit scoring incredibly difficult. So barring that, I think the flip side is like, okay, so then can you do community-based lending. And there’s been some really early I’m struggling to think of the name, but there was definitely like a really early example of this, I think back in 2018 where it was literally a network where, you know, I would pull someone in and I would say, I’m going to underwrite him. Like, I know he’s good for it. And if he doesn’t pay it back, then I also get slashed. Like there was, there’s like basically some incentive system, but it didn’t really take off for whatever reason. And I think the problem is that, like, I would still have to know that person in real life in some way. And like, I still need to like have some sort of relationship. So is there actually some sort of decentralized trustless way of establishing a community to say to someone, Hey, like you’re good for it without even knowing identity. Like it’s actually a really, really tough problem. And so that’s, you know, that’s why it’s been really hard to have under collateralized lending or credit in crypto. But I think the emergent property of these communities like Bored Apes, as silly as it is. The Bored Ape community is very cohesive. Your identity is determined by the ape that you own in your wallet. And I wonder if there’s some way to say like, Hey, if you’ve held your ape for a year or you haven’t touched this wallet can, you know can actually receive some sort of loan from someone else in the Bored Ape community. Or like if you hold debt tokens for a certain amount of time and you can kind of mix and match conditions, right. You can say, okay, what if you, you own a Bored Ape and you’re a big liquidity provider on, you know, Uniswap or something. And you’re an active governance participant in this DAO then like you are able to receive a loan in some way. So I think there’s something interesting about now that you’ve formed identities actually around cartoon characters that there actually might be a way to do lending within these communities.

Do you think people are starting to realize the potential behind DeFi and NFTs? I know there are a few startups already exploring it, but do you think more of the more inner circle crypto community has started realizing what this could become? Or do you think people have yet to experience that aha moment?

I think we’re somewhere in the middle. I think there’s a really healthy contingent of people who are like, oh yeah, this is big. Like once DeFi and NFTs merge, we’re looking at like the most viral financial product we’ve ever seen in the history of humanity. But I think there are also a lot of people in crypto who have been in crypto for years, who are like the OGs, were actually quite skeptical of NFTs. So I think that that’s obviously contingent. So even within the crypto community, I don’t think people, all people agree that NFTs are interesting or worth their consideration. And then outside of NFTs, obviously there are a lot of skeptics. I think we’re still early, but what will happen is I think there’s enough of a contingent of people who are true believers in this merging of NFTs and DeFi to start pushing the envelope on experiments, like party DAO, right? Again, a great example, party bid, like a great example of that happening, where you merged NFTs with DeFi to create some things super interesting that no one’s ever seen before. And I think as more and more of those experiments come to be, I think people will learn through example.

What’s going to eat web 3?

Yeah. I think this is such an interesting question. I think what web three fundamentally solves is how can we create a functioning incentive layer at scale in a potentially adversarial environment, right? So whether all sorts of adversaries it can weather distrust. Like it doesn’t really matter. This incentive system will hold. I think that’s what web three is all about. And once you have this incentive system, you can do revenue sharing, right. And that’s how you can kind of unbundle YouTube and you can kind of topple Facebook and you can kind of topple all of these kinds of more extractive platforms that really profited off of creators, while the creators didn’t really profit off of it. I think web four might be, you know, everyone’s kind of living in some sort of multi-verse and everyone is living their lives digitally. And I think, I really, I think the reason why this question is a good one is because, it’s really hard to imagine what the problems might look like when that is the case, right? When we live our entire lives digitally, when we transact digitally and the relationships we form are kind of at scale and we can have multiple identities as well, and multiple different kind of personas that we live out really full and enriching lives online. This kind of makes me think that, I think it was like in ancient Greece or something where someone was writing you know, kind of like the ancient Greek version of like scifi, right. Where it’s like, okay, what if some sort of being we’ve never met before, like how can we travel to their land? And we’ll travel to their lands through like ships.

Because that was like the longest mode of transportation that they could have foreseen. Like they obviously couldn’t have foreseen planes. Right. It wouldn’t be like flying. It would just definitely be like, we would travel to other worlds for ships. And I think it’s a little bit hard to see into the future and even anticipate what sort of problems we would have once that happens. I do think though, that pendulum kind of swings back and forth between centralization and decentralization and the trade-off is that centralization is efficient, but decentralization allows for trustless transactions to happen. And we’re effectively trading off efficiency for you know, for the ability to interact with strangers. For 400 strangers, to be able to lock up $3 million. Like we did that probably in kind of an inefficient way, but it made it possible. And so right now the pendulum has kind of swinging into the decentralization camp because a lot of the institutions that we’ve trusted for a really long time, turn out to be extractive or turn out to be like, if you look at like the way government functions today, like, you know, it feels like it’s a little slower. It feels like it’s not meeting certain needs. Or colleges where people feel like, wow, I’m paying all these heavy tuitions, but like, what am I getting out of it? So I think there’s just been this like a little bit of a crumbling of trust in centralization. So now, we’re kind of swinging into decentralization. And I wonder when once we’re completely decentralized, I wonder if people are going to be like, wait, this is very inefficient. Wouldn’t it be more efficient if we centralize things? And so I wonder if we’re going to swing back the other way and just swing back, you know, it’s like that’s why history rhymes, right? Like it’s because we’re living in cycles effectively.

Maria, before I let you go, thank you so much for being on what an awesome conversation quickly plug yourself and where we can find you in the projects you ‘re working on. 

So I invest in crypto projects, especially NFT projects, especially things looking at creators and looking at these new social communities and looking at the intersection of NFTs and DeFi . So I’m very actively investing in that in a firm called electric capital. You can DM me on Twitter. My DMS are open I’m at @MariaShen. Or my email is maria@electriccapital.com.

Listen on: Spotify | Apple Podcast | Google Podcast

Background

Mint Season 2 episode 7 welcomes Jonathan Dunlap, Founder and CEO at MintGate. He and his team are building tools for creators to experiment with token-gated content via NFT access passes and generative secret links for events, videos, music, websites, and blogs, to name a few. 

I’m a big believer in the power of token-gated content and how it will upgrade your communities – so this session is a special listen. 

In this episode, we talk about:

• Why should creators care about token-gated content? 
• Most notable token-gating use cases 
• How you the creator can start integrating token-gated access into your community 
• The biggest challenges stifling token-gated content

…and so much more.

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Thank you to Season 2’s NFT sponsors!

1. Coinvise – https://coinvise.co/

2. POAP – https://poap.xyz/

3. Socialstack – https://socialstack.co/

4. Celo – https://celo.org/

5. PrimeDAO – https://www.prime.xyz/

Interested in becoming an NFT sponsor? Get in touch here!

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Jonathan, welcome to Mint. How are you doing, man?

I’m doing wonderful. Thank you for asking Adam. Thanks for having me on the show. 

Let’s just get started, give me a quick background about yourself. What were you doing before crypto? And kind of like, where are you now?

 Before crypto? I worked in a variety of different industries. I worked in online gaming for a variety of time. I built everything from massively online multiplayer games to mobile games. And then coming out from that, I worked in a variety of different startups being myself familiar with different financial technology. But one of the things that really resonated with me, particularly working at Adobe, I was building tooling that help creators create a community around their content. You know, one of the things I really learned, like working with the Photoshop team and the Dreamweaver team is, a lot of the successful new creators that we were helping at that time were really getting themselves bootstrapped by building a community around their artwork or around the videos that they were creating. So this led up until about two maybe three years now. I went to ETH Denver and was able to witness what was happening within the crypto space for all these DAOs that were starting. And to me, this was the big light bulb that has kind of went off in my head, like DAOs can change the world and how they operate they allow communities to self-organize the resources together and actually build a community around the value production that the community is producing. So this is kind of like the context that brought me in originally. 

You know, you come from an interesting background, clearly having worked with creators and building specific tools for creative creators, right? Creators could be classified as people who play sports, musicians. It’s creators is a very big general term when you’re building tools at MintGate, how do you guys define creators? What does that look like from your point of view? 

That’s a very complicated question because there’s so many different types of creators on MintGate today. We have video creators. We have music creators. We have people doing machine learning models and token gating like very specific tuned machine learning data on the gate. There’s such a wide variety of different tools that we’re seeing with different types of creators. In fact, I’m kind of hard-pressed to tell you what’s the main type of creator on MintGate today, because it is so diverse. This technology to leverage crypto to fuel creating a creator economy around their value production really lends itself to any kind of creator that can get bootstrapped. You know, one thing that we see that I think out of, out of all of these categories, the most popular one that we’re seeing is video content creators. Look, video creators looking at NFTs, seeing how much value is being generated around artists with NFTs and looking to take that same step of how can I take my video content and transform that into a NFT that users can buy and then gain access to my content as well as opening up the door to allow those tokens to be resold. And I’ll talk more about that later. 

I think what’s interesting behind this whole point of view of token gated content is, would you say it’s industry specific? For example, if you were to create token gated music and we’ll talk more about that, like deep dive in the use cases, but one would argue that music is supposed to be enjoyed by the masses. Right? So creating token gated walls around music consumption. Would that be a good use case, for example for MintGate for creators? How do you kind of view that? How do you differentiate what’s supposed to be token gated versus not? 

I think we’re still figuring that out. Honestly, the industry is really young around token gating. A lot of the creators that we’ve talked to, who’ve been in crypto for the last like five years who are just starting to, to leverage token gating are still kind of going through this journey of figuring out what that means to release some content that you just buy the NFT, and this NFT represents like my social signal that I have bought and claimed your artwork versus exclusive content that in order to actually view and enjoy this piece of entertainment, you need to buy it and then that gives you exclusive access to watch or to download, or do see a set of like behind the scenes makings of. Backing up one of the things that we saw that’s kind of interesting is a lot of artists taking their NFTs and recording a behind-the-scenes video of them making the NFT and then releasing that on, on MintGate. So that when you buy that piece of NFT artwork, you alone are then able to watch the behind-the-scenes makings of that NFT or at least the set of NFTs and a collection. Only those users are able to see the behind-the-scenes content. 

When you guys were building out the initial version of MintGate, how did you kind of discover product-market fit at the time? Were there already initial use cases that you kinda got that you saw and that you got inspired by. That you realized, okay, they weren’t doing something right that you guys could come in and kind of improve, like talk to me more about that process of finding that product-market fit.

 Well, we worked with a lot of users that had expressed that they wanted to take their token, like we worked with Harrison First to actually token gate his entire website, which has a variety of different music and media that he posts related to his music creation. And that’s I mean, work with users like Harrison First to to develop a set of technologies that lends itself to being very simple and straightforward, to take any kind of token on any token type and being able to take any type of online content. And token gate. Again, the way that we have specifically tried to build MintGate is to be universal from the start. You know, a lot of startups that are happening in crypto, they’ll take a very narrow, vertical. Like, you know, we’re just going to do music NFTs or we’re just going to do video NFTs, or we’re just going to do such and such, but we’ve tried kind of position ourselves to be more like the CloudFlare of crypto or the Bitly of crypto. Where we built this universal technology that allows you to functionally take any kind of token on any of the blockchains that we support today, which we support nearly 70 different blockchains and gates, any kind of internet resource. You know, any type of digital bits that can be streamed. We have a general-purpose internet gateway that allows to relay and proxy that data to the end user. So in our earliest stages, but going back, working with users we were seeking out users that simply wanted to bring value to the tokens that they were already minting and working with a handful of them to bring utility to those tokens. Because that’s where we saw the opportunity when we started MintGate 12 months ago was that there was a lot of creators creating their own token, but not being able to do anything with their own token, like you have the token, but like, what can you do with that token? You know? And we want to provide this kind of universal drop-in engine for these creators where they can take however they want to monetize their content effectively. They, have a completely flexible engine to monetize their way and however they want. 

So when you talk with these creators, how do you kind of explain to them the difference as to what they should be using what for? 

So, you know, one is, again, I hate to give this as a general answer, but like this industry is so young, we’re still figuring this stuff out. Where we use social tokens, where we use NFTs is still being experimented on which one is a better medium. What I currently see, and then what we’ve built with MintGate is we support both. So you can token gate videos and music with either, or even token gate a video with both an ERC 20 and an NFT or a set of NFTs. So you can mix and match however you need it. Where you would use one or the other between social tokens and NFTs is a really complicated question. On one hand NFTs lend themselves as being a convenient and elegant solution as an alternative to tickets. So if you buy, you know, an NFT could represent my access pass to a piece of content or a set of content or a tier of content. You know this is kind of similar to Patreon where you buy into a certain model, a certain tier and a creator, and then you just gain access to all that content that’s in that tier. 

Even though social tokens came about earlier than NFTs, they have more flexibility to them in that they can be divided and, and fractionalized. But it is more complexity to work with social tokens. You have to think about, you know, there’s complexity in just the conceptual model of no longer having this idea in the end user’s mind that if I have this NFT, I gain access to this video. With social tokens you now have to have this abstraction between amounts and what that amount grants you access to. And like this seems trivial. The end user that has to go out and acquire these tokens or gain access to the content. There’s this ambiguity of like, all right, well, I w I suddenly clicked on this link and it was thrown to some website to swap tokens to access your content. Wait, how many tokens do I need to access this video? Like I have to go back and check, you know, like, 37 tokens access this video. And NFTs have a much simpler story of like, okay, I just need one of these and then I get access. The second thing about the complexity between the two is the legal complexity, particularly in the United States. There’s much more I guess, legal scrutiny over social tokens, than there is for NFTs as NFTs are more easily defined as being utility tools. While social tokens can be looked at as a security.

It seems like that’s how things are shaping out right now in the ecosystem. I agree with that. That seems like the natural overlay of these concepts. Like starting with NFTs makes things simpler because just NFTs can act as general labels. You know, you were here from the beginning. So here is your NFT that gives you the status of you were here from the beginning. And I think whenever you’re a new community or starting a community, ultimately what people are concerned about is just the simple status of being in a community, you know, like where are you an original member or not? Did you participate in some meaningful way? Did you help this community in a meaningful way? Here’s a badge for that. These are important signals that help bind a community together. And I think as a DAO and these crypto communities and mature, overlaying on top of these labels, a social token, where then you could have these points for good behavior or idealized behavior that are aligned to the DAO or the community can then lend itself to then having your own economy within that community. 

Another thing I want to clarify and get your point of view on is how do you kind of think about token-based content versus token gated content? For example, a more recent current event is this rapper, his name is Tory Lanez. He just released an album as an NFT. He did a million NFTs for a dollar each and whoever bought that NFT could get access to his album. So I like to think about that as token-based content. But then on the other hand, he could also create token gated content from that. How do you kind of think about that in terms of a use case?

Can you give me an example of token-based content? 

Another record that came out the Kings of Leon NFT album, right? That’s token-based content, right. That’s a token attached to an album, a series of songs in a certain order, right. That people can consume and enjoy. But then, people who own the Kings of Leon NFT album, this token-based content can now create token gated content around it. So many different buzzwords. How do you kind of think about it beyond music albums, for example? 

 These are the things that I dream about. I dream in tokens. I mean, I think right now it’s like, like we think there’s so much happening in this space right now, but I mean, where you could really go with all these tools is almost like imagination’s the limit. Like the fact that like Kings of Leon could release an album that’s only a certain number of these NFTs are produced and buying these NFTs allows you to say, well, you know, I own, you know, the cover image of Forbes magazine or the album cover of Kings of Leon. But then you could take those NFTs and add token gated content to the NFT without the permission of the original creator of the NFT. And then this gets into like a, a very strange situation where you could, you know, a creator creates an NFT to represent an element of their community that you’re buying into the social signal, but then the NFT because whoever owns that entity could then add additional token gated content to that NFT, the NMT itself kind of takes on its own life. It can take on its own community. People could use that NFT then to token gate, a forum where only other people with that NFT are able to communicate and have their own social network amongst each other. 

So you can imagine, you know, the top fans of Kings of Leon are able to come together and share content you know, maybe even communicate with members of the band through these private channels. It really leads to what we call it, what we’ve seen in like the web two space where we said these network effects. There’s a whole other level, like this is like network effects on top of network effects, you know. I’m really excited to see what this time next year is going to look like for social networks that are based around tokens, particularly NFTs. I think social tokens will be more towards point systems that become economies for large communities, but I think NFTs are here to stay for the long run. Like I don’t think NFTs are a fad they’re going to fade out and transform to something else. I think NFTs are really pivotal piece of technology that represents a sort of like membership or a concrete asset of some kind that’s held by a community.

What do you think are the biggest challenges right now kind of stifling the token adoption side of it? 

Well, there are many dimensions to this. One is there’s a lot of incentive for solutions that are outside of crypto, mainly because like, you know, Subify can be financially either invested in by different creators or investors that have their own network that they can leverage to bring onboard other creators. It’s challenging starting out in crypto and building a startup in crypto because you’re inherently saying we’re going to build a platform that primarily gives control to the creator, you know, at the end of the day, like. What my aim is with MintGate is to develop us into a form of a protocol where we’re an open standards technology. That’s my objective. This is very difficult to get off of the ground from the get go because you know, companies like Subify are basically the same model as Instagram. It’s the same structure as always existing social networks that , you know, eventually Subify is going to get to a certain level where the relationship is no longer in favor of creators. So a hard challenge is trying to get ahead of that, and building a system that works on crypto and decentralizes the technology as maximally as you can, so that creators ultimately have control over their audience. You know, another challenge outside of the business landscape, there’s just a challenge of, of crypto still being very young for creators. The DeFi landscape is massive, but for creators, you know, coming in creating their own token is still such a new novel concept. I’ve talked to people that have been in DeFi for like, since the beginning of defy that are creators, and it’s still really strange for them to conceptualize what it looks like to generate value through issuing NFTs that gates private content. It’s just a new model that, you know, like NFTs didn’t take off the moment that they were invented. It took someone to show it by example, in the marketplace, that it had a certain level of traction before you could prove to the market that this is a way that creators can sustainably generate value. This is a way that art creators can sustainably generate lots. I mean, now you’ll get how much money people are actually making off of NFTs. And that’s incredible, but you know, you only go back 12, maybe 14 months ago. And there was an unthinkable that like at NFTs could generate the market size as it is today. I think really the challenge is just the lack of initial momentum. That we’re starting out here building up the snowball effect and as it gets a little easier day by day, but it’s just a lot of effort, but you got to put it into it. 

It’s unimaginable. And before crypto kittens, it was unimaginable that ERC -721s were going to be this massive industry boom. Like the people inside the crypto conferences you know, and so what I’m trying to convey is if people in the industry are working with technology that, you know, helped contribute at the ERC -721 couldn’t even imagine how valuable of a technology, it could be to creators, creators only have that much more difficulty conceptualizing the use of the technology to empower their content creation. You see what I’m saying? It’s like telling a creator to use the internet before you know, even the people laying out the internet lines know that the internet is valuable. So a lot of our challenge really is just the process of making connections out to creators, working with them and kind of hand holding them through the process of thinking about how to take the content that they’re creating and building an economy around it. Run some experiments where you release this amount of content free and open, but you need these NFTs to access content that requires this amount of effort and work that you put into that content in order to access it. And it’s finding that balance between the effort it takes to put into the creative medium that is going to require the use of token gating to drive value to that token sale that ultimately the creator gets compensated for their hard labor that goes into some digital medium. 

You speak about this stuff very passionately. Like I see the fire in eyes and you obviously, from what I’m picking up is you have this clear vision of what you want this to become. Can you share with me, paint me that picture? What does that look like from your point of view, the future of token gated content? How do you imagine that kind of unfolding five to 10 years from now?

Well, five years, I have no idea in five years. Good Lord. But I could say maybe in a year or two from now, I can tell you what’s going to happen. I mean, things change quickly. So like I imagine that in the next year or two private access unlockable access to content is going to become as ubiquitous as NFTs are today. We’re going to see video creators saying, you know, if I can bring my audience directly to my own website or my own Twitter feed or Instagram, whatever medium that they’re using, and be able to market and sell my content directly to my audience, that’s the route that a, it makes me feel that I have more of a connection with my end users, and two, it allows users to take part of this big vision. And I haven’t really touched on this yet, I believe that token royalties are going to play a huge factor in rebooting the creator economy. And this is one of the features that we have launched with our platform. Is that any NFT that’s you mint on MintGate, you define your own royalties on that token. That means that anyone that buys that token you get the sale from it, but if that user decides to turn around and resell that token to another marketplace, you as the greeter always receive that royalty that you set on the token. So as a creator, you get to kind of tune your economy. If you turn up the royalties too high users may not be incentivized to turn around and shill your content and resell your content. And as an early creator, you have a high incentive to incentivize your audience to buy your NFTs, to buy your access passes to your content and act as your representative to the greater community to sell those access passes. You are basically crowdsourcing the outreach to your closest fans. That’s the big idea here, I think ultimately. Like why, cause why use tokens for any of this stuff? Like why not just, why not just sell your content on YouTube? Why not just sell your content on Patreon ? Why use tokens? And I think royalties are really the biggest reason to use crypto for monetization. Because it allows you to always be part of the value production of the access passes to your content. And because they are limited in edition , you can always let the market price your token for the value of your content which just, you know, in a way it’s like hyper capitalism. It’s taking the best elements of market dynamics, which is price point discovery, and baking that into as a content creator into how you’re delivering your content to your end users. Not a crazy idea. I think I thought about it, as a content creator, you could give out your access tokens for free to your closest fans. And say, all right, you’re my closest fans. You get access to my premium content because you’re the OGs you’ve been with me since the very beginning. You just get access and I’m going to rely on you to resell my access tokens and to be my ambassadors as a creator to sell my content.

It makes a lot of sense. You’re preaching to the choir here. Like you’re actually preaching to the choir, but the reality is a lot of these creators still don’t understand what Bitcoin and Ethereum is, let alone social tokens and let alone launching their own currencies, let alone, they just see NFTs as art that people are spending a lot of money for online. And many of them lack the rationale as to what this could become for their own creator community. And I think that comes with time. I think that comes with education. I think that comes with experience and tinkering and experimentation. And I think definitely in a few years from now, it’s going to get much better. Like you can obviously argue that with time as, as technology gets better. And the software in these tools that require creator onboarding and user onboarding, they improve. User onboarding for Metamask has drastically improved, I’d argue, since I got started in 2017. Opening up a Coinbase, like all these things they come with progress. So I think definitely down the line for sure, I agree with your vision. And let’s kind of talk about the other side of that. What do you think would prevent that from becoming a reality? 

Well, maybe just to touch on your point on like still how young this industry is. I’m out here in Los Angeles and I was talking to a video creator, a very prominent video creator in Beverly Hills.And they were telling me that they own Ethereum. They own Bitcoin. They bought into Matic they’re very savvy crypto users and they produce video content. And I was talking to them about NFTs . And they told me that they just don’t understand NFTs. Like, what’s the point like to them, what’s the point of NFTs. It seems like there’s a lot of noise. And this piece of feedback was really interesting to me cause here is someone that’s in crypto. They actively trade in crypto. There are content producers, you know, they’re active in the community and yet they don’t even understand what NFTs could be used for as a way for just selling artwork. Like, so we’re very much like this kind of very new bleeding edge side of the market that still has a long way to go to raise awareness over what tokens can do for content creators. So going back to your question-

You painted your vision of what this could become in one year or two years. Right? I guess my question was like, what would prevent that from happening? What barriers would be in place. What would prevent that from happening essentially? 

Well, I think a very topical point is regulation. If new regulation gets put in a place that is too heavy handed on the industry where it would basically hamper the user experience of such platforms, one of the things I’m concerned about is if regulation will come down to require every NFT marketplace to do a KYC application on every single user that wants to buy a $1 NFT that is greatly concerning to me. Now currently, it looks like, and this is changing day by day, at least here in the, in the U S is, it seems like the regulation is leaning towards only requiring KYC up until a certain dollar amount, before that KYC process is required. But again, it’s still too early to see how this shapes out in Washington. So that’s a big factor, right? Regulations are a huge, huge factor. I think, what are regulations there for? Regulations are ultimately to protect users you know, in the best spirit of the law, protecting users from scams, online scams, user scams and any abusive behavior that might take value from an end-user. And I think that’s another thing that could slow down this trend. If we start seeing, you know, other startups happening that are looking to do scammy things with NFTs. Even if regulations are moderate when they’re rolled out, if there’s a lot of bad actors that come into the market and start giving NFTs and crypto a bad name, Because they’re doing user abusive behaviors ,that will also slow down the rate in which users feel comfortable with buying an NFT of their favorite artist.

Before I let you go, give me a quick shout out. Where can we find you? Where can we learn more about MintGate and all the great things you guys are doing?

 Wonderful. Well, Adam, thank you so much for having me on it’s a pleasure connecting with you in your community. You can find me at @jadbox on Twitter. You can also reach our MintGate Twitter handle at @MintGate_IO, or go to mintgate.io for our main website. And right now we are particularly looking for users that are video creators, looking for a new way of monetizing their videos around NFTs. So if this is when it gets interesting to you, please give us a shout-out. We’d love to work with you one-on-one to help you be successful with getting into NFTs.