Physical Activity Economy: Earning Through Movement w Oleg Fomenko from SWEAT Economy, SWEAT Wallet

Captions as YouTube publishes them, usually machine-generated, so product and people names can be misheard.

1. 0:00

   Nothing we say here is investment advice, legal advice, life advice or representative of the views of the organization we are part of or affiliated with. See chain abstract A.com for more information. nice to you as well. one of the founders and ecosystem.

2. 0:31

   they have been doing this sort of real world application of crypto for a while. I mean, they they started so I coined in 2013, 2014 and then brought it on chain over time. So it was really interesting to see from the vision of like chain abstracted and how that works for these folks, because they're not the other way. Right.

3. 0:49

   They came from a sort of a web two based company, to launch a crypto product. It's not the other way where, you know, like, for example, their protocol is like start as in a one, and then going back and said, hey, like we need bigger, bigger, bigger audience.

4. 1:06

   so my folks are different. And I think that gives us a bit of a different perspective as to what chain abstraction means to someone. Yeah, yeah. And I think the other thing is, like, maybe I did this in the podcast too, where, you know, sweat is just saying, like, you are basically storing your physical activity into a computer and not only into a computer, but until a blockchain where you just say, hey, this is how much sweat coins I have.

5. 1:44

   Which means if you do it correctly, obviously he talked about what prevention as well, but if you do it correctly, that means how you, how you store physical energy into into a bit or a computer. Bitcoin is similar. Bitcoin is more like, you know, you're burning some electricity to do proof of work and you store that as a, as a source of as Bitcoin.

6. 2:06

   But so my point is kind of similar in the sense that rather than burning electricity, you're actually burning, sweat. There was only one blockchain back then. Bitcoin too slow, too cumbersome. No smart contracts, very hard to build on.

7. 2:51

   So spoken to Vitalik in 2015. Realized that we're going to have to wait. Launch centralized and the rest is history. By the time when blockchain technology got robust and fast enough, which was 2021 2022, we already had more than 120 million users.

8. 3:09

   And we've chosen near, as you know, after evaluating 14 different chains. And we'll probably talk about the reasons and drivers of that decision and be happy to share that. But one way the project is developing so dynamically, and why we have so many users is for two reasons.

9. 3:30

   One is great mission actually. You know, people really subscribe to making the world more physically active. Everyone knows that they need to be more physically active. Everyone gags for it. Very few people find enough motivation.

10. 3:42

    And the second thing is that we're focusing on developing beautiful stuff that is just pleasure to use. And we're focusing on the mobile. So you combine the two and you end up having a beautiful product that you know is very sticky, is very easy to join.

11. 3:57

    And therefore, you know, 90% of all of our growth has always been word of mouth because it's quite amazing. We pay you to walk. And people like, what is it? How do I join? And, you know, then they go like, look, these guys are paying you to work.

12. 4:13

    Really true. You know, go and install it. They're instantly going to go, wow, that work. And then they talk to the next person. So virality and attractiveness of the product and simplicity of it has been a major driver. And as you know, we are one of the largest projects right now building on the euro.

13. 4:31

    And actually in the whole Web3 in the upgrade are we're consistently in top three, top five projects in terms of active users. And we know that our users are not bots. So yeah, making the world more physically active and wealthier at the same time.

14. 4:47

    let's talk about your application. So you have a wallet, which I think lives is a mobile app. can you break down for us? And we can maybe go deeper into into some of the cool things that you guys are have and you guys will be building.

15. 4:59

    I know that you guys had a great, showcase in Denver in the chain abstraction, right? So let's. Let's. Right. So what we do is we track your movement. We verify it. And if it is genuine then we convert it into either Swift coins which are worked.

16. 5:24

    And a legacy point system that lives in Sweat Coin app, which is, you know, pedometer with humongous benefits. And that's why we have such a huge adoption because there are plenty of pedometers, but all they give you is number, maybe a bit of distance, maybe calories.

17. 5:40

    We, you know, offered you an opportunity to monetize and convert your steps into value. Then when we found near and realized that we can actually move into crypto, we were too late to turn with coins, which were by then already seven eight years old, into crypto.

18. 6:01

    Because the change in token economics in user experience is going to be too drastic. And I did not want to go right from yesterday to today, everything is going to change. And also in some geographies, people are not allowed to own crypto.

19. 6:21

    So all of a sudden pushing the whole world and, you know, kind of pushing people into, you know, violating law of that country because we made this decision would be really silly. So we realized that we needed to create a second currency and second application.

20. 6:38

    So now the user chooses to they work for sweat coins, centralized, you know, marketplace. You know, there's a lot of gamification around that. Or they walk into crypto. And this is exactly how I will use this. Crypto users describe us. You know, you can literally walk into crypto.

21. 6:57

    You move your feet, you get free up and all of a sudden you start earning by being physically active. And that app is sweat wallet. When you earn sweat, that's where sweat comes and that's where utility of sweat resides. So what can you do with sweat? You can win rewards. We already had two Teslas.

22. 7:20

    One, we had a lot of, you know, basically more than several hundred thousand, 200,000 plus rewards have been given. And how you participate in those rewards is based on the amount of sweat that you stake. Then there is staking, and I'm using this vocabulary because, you know, the audience here is going to be crypto native or familiar with the lingo, but the way we describe it to our users grow jars.

23. 7:49

    Because frankly, staking is not a, you know, kind of a word that intuitively describes what it is, which is kind of a savings account or, you know, something that pays, you yield. People put sweat into a jar and it grows amazing. So we have more than a million people that have created jars.

24. 8:08

    The more you stake, the more you earn and bigger rewards you can win. And we've been consistently experimenting with gamify as well. So we have sweat hero trivia. We have spin and win because we realize that actually gamification and games is an incredibly valuable tool to engage young audience, which is where we're focusing, but also give them an opportunity to do something when they're not necessarily moving.

25. 8:37

    So when you're moving, it's great. It works because you monetize your physical activity. But if you're sitting there and you looked at your balance, what else can you do? You know, how else can you engage these people and remind them the movement has value so they don't forget about you and they don't forget to walk more.

26. 8:54

    So that's basically you know, Canada in a nutshell. It and this is what we have. Of course we're going to be talking about the roadmap. And you know you mentioned chain abstraction. And I have a question there. So, you mentioned, like, accounts being genuine. How do you guys do that?

27. 9:16

    So I, I know that Jared runs a Jared is like, post this link online, and everybody just gets like, hey, we want to claim this NFT, through Sha dog. Right? Like, what's the what's the mechanism there that you guys use? But fundamentally, when we started the project, the first thing that we realized is as soon as you start paying people to walk, first thing they do is shake the phone.

28. 10:02

    They put phone on the dog. They put the phone in the dishwasher. People put phone on the rope and rotate it over their head. They put on the drill metronome. I mean, the countless, countless use cases is just absolutely phenomenal.

29. 10:15

    There is even a website that's called Unfit bits.com that teaches you how to screw with your wearables and with your phone to believe that you physically active. So we've done all of that and then quite a lot more. And the way we addressed it is, I mean, we have three levels of sort of defense.

30. 10:35

    And in broad terms it is securing the data, securing data in the state, securing data in transition. And also a very, very sophisticated model that analyzes all the data arriving. And the reason why the whole thing works is because we know that you cannot solve this problem fundamentally and for forever.

31. 11:00

    So it's a race. We have a fraud team. So in banks 14 is about, you know, people trying to defraud money. Our of is busy to make sure that there is no threat given without users sweating. So they focus on the data indicating the movement being genuine.

32. 11:23

    And how it works is, you know, kind of with 160, 54 million users that we have right now in ten years of history, you can imagine that we have an incredible sort of training sample, and if there is an anomaly doesn't go through, anomalies are getting flagged and we analyze them.

33. 11:42

    And it used to be even me. Sometimes I would kind of go, look, you know, dear user, you know, we're seeing something really, really strange how, you know, kind of how do we interpret this data, what's going on here? And then depending on the outcome and the analysis and the kind of human intervention, then we decide, okay, this is rejected. This is going through.

34. 12:02

    So we know that there is always a small percentage of people that are inventing funky ways of checking their phones. But on the very fundamental level, we had to make a decision that the amount of physical activity that we accept per day needs to be capped, because you wouldn't want somebody to jump up and can go, oh, right, I'm going to get rich by walking.

35. 12:27

    And all of a sudden, you know, they jump up from the sofa and go and take 100,000 steps and end up in the hospital. You know, you don't want that outcome right? So you actually want to keep it at a healthy level. And we kept to the 10,000 steps, which is universally accepted.

36. 12:43

    Really, really good active day. If you're in premium level, you can push it to 20, which is also a very, very reasonable and accepted level. That is not. And overexertion and after that we simply don't accept the data. There is no motivation.

37. 13:01

    And what does it mean for fraud, Sybil attack and analysis that it doesn't make freaking sense Look at what.

38. 14:13

    Yeah. 154 million users and counting. But. Yeah. Okay. Oh! Yeah. Yeah. Yeah. Work.

39. 15:22

    know, even before we went into Web3, we were profitable for a number of years. And this was a bit of a shock to a lot of investors that we spoken to early, like 2014, 2015, 2016, when a lot of them said, it's a charity, you're going to pay people to work.

40. 15:40

    You know, what kind of businesses that. So by 2019, we became profitable. And there are three models that work really, really well in Web3. One is partnerships, because you'd be surprised how many brands want to get in front of physically active people, or those that are becoming physically active and just starting the journey.

41. 16:05

    And if you're sports, health, fitness, nutrition, healthy food, dog accessories brand, we give you a wonderful opportunity to talk to users that are, you know, kind of you're just gold dust. They, you know, your target audience alternative is to go through Facebook or Google, but even they're all, you know, is like this of or if user likes certain brands, but do they like Adidas or Nike because they do sport word?

42. 16:35

    Do they just use them as a lifestyle brand? So with us, you can target ultramarathon runners with one. Or for those that are very, very active with another and those that are starting their journey with a third. So anything that is associated with shape, and that also results in mind and body and spirit.

43. 16:58

    So fashion brands, for example, are having absolutely amazing time on sweat coin. So that's one revenue stream. The other revenue stream is advertising. And we have, you know, and I hate advertising. I block advertising absolutely everywhere.

44. 17:14

    But we actually figured out how to do advertising in such a way that our premium users that will get to use more or which more advertising than those that are on free, which is normally primary reason why buy premium subscription.

45. 17:30

    So we restricted the amount of ads or content that people can get exposed to. And in order to unlock the next ad, you actually have to walk, which is almost counterintuitive, but that resulted in, first of all, a lot of interaction.

46. 17:47

    Second, very serious engagement with this content and our clicks, thrus and engagement is one of the best in the industry. And we earn a lot of money through that channel. And of course, third one is premium subscriptions. Now, Web3 added a whole plethora of additional revenue stream transactions, fees, swap fees, etc., etc.

47. 18:10

    because we have our own financial asset and now we're doing it to revenue in fiat, in tokens, but also in sweat. So Web3 business model long term is even more robust, even though in Web3 we are not yet profitable because this is a very nascent industry, you know, quite a lot of business models are not yet recognized.

48. 18:32

    And, you know, people are still kind of going like, what, you know, can I can acquire users through you. I can attract users through to my project. Oh, you know, how does it work? And there is no established price points. But we know that the Web3 business model is even more robust than Web2 in the long run.

49. 18:59

    Oh no, no, no, we didn't come to web three for the business model. That's the icing on the cake. Yeah, yeah. No, absolutely. When we started the you know, there are a lot of people out there that always think how are they screwing me.

50. 19:30

    You know, kind of how are they making money. That must be something kind of negative right. And it took a long time to explain to people that, you know, what? We never sold data. We don't sell data. We never sell. We never will sell data.

51. 19:44

    Actually, one of the reasons why we reside in Europe and why our servers are located in Europe, and all the data kept on them is governed by GDPR, is because we want to make sure that no matter what angle you take or can, whatever assumptions you make, that you know that we are compliant with the problem with draconian privacy protection laws in the world.

52. 20:08

    And frankly, you know, it's my personal belief that if you're trying to make the world more physically active, selling data is going to be the last thing that you want to do, because you are going to limit the number of people that will come to you.

53. 20:22

    Selling data is ugly business. You know, it's not as bad as form. Oh, you know, some people probably would argue that it's worse because, you know, it's stealing something that is inherently private, that belongs to people and putting, you know, earning money from it and not sharing it any further.

54. 20:45

    So this has always been our ethos. And, you know, as I told you, we have three business models. They work extremely well. We don't really need to screw with data because of ethics, but also from a legal perspective. So, you know, can we have double whammy there?

55. 21:03

    What we do realize is this data is extremely valuable when lockdowns happen. We saw that Spain, for example, have had one of the most draconian lockdowns in the world, lost 85% of all physical activity in a period of 24 hours. And if you really think about it, you can recalculate that into extra kilos of fat into extra health care costs.

56. 21:27

    This was the data that was extremely interesting. We got on TV in Turkey, actually in televised debates where they had an argument over did we have lockdowns or shouldn't we have lockdown? And they used our published data to basically substantiate that, you know, do we really want to cause so much damage to people, you know, because of this thing?

57. 21:51

    it was really funky time. But what it gave us, it gave us an understanding that the data is extremely valuable and what we are looking for is in the long run, we will partner with one of the major data unions that we've already spoken to, and we know that they can provide that middle layer that would allow you, the user, the owner of the data to flip the switch and basically liberate the data that is right now invisible to anyone and make it analyzable.

58. 22:23

    And that will cost money. Effectively running queries or taking chunks of data from the database will have to be paid in sweat, and those that open the data will be earning the bulk of it. The rest will go to all token holders and effectively adding token utility to sweat and increasing its value.

59. 22:47

    Oh, this is quite interesting. I mean, we we don't talk to. Well, we don't talk to as many apps as we should, so that's one, I guess. Like we talked here, actually, the second one is like, we don't talk to that many apps that make money in crypto.

60. 23:02

    So that's that's nice. That's nice to talk to. Like about it. I had a bit of a lingering question from the the time that we discussed at the product side. you guys have decided to go build an application on an owl. Pretty much an owl one. Right? Growing out one. in, in 2021, 2022.

61. 23:22

    And now as well, there's this other sort of trend where you see apps like yours trying to launch their own chain. So what do you think about that decision as it if you were to launch it today, like, do you think it makes sense for you as an app or is just like, I don't really care.

62. 23:38

    I care about more my users. And, you know, how do you think about that in general? is a big question, and there is a lot to unpack there. when I was in Dubai, there were three major, you know, kind of well known characters that, you know, capital allocators that told me that you should consider launching your own, layer one.

63. 24:05

    And the reason for it is because it's actually this narrative allows you, allows you to really quickly raise money because from capital allocators perspective, infrastructure layer one way to layer three, bridging etc. is the area that, you know, historically has been making money. I love it, it.

64. 24:31

    And I'll explain why. Because last week I was at the party, 20 people, you know, very, very senior founders or, you know, kind of very senior people in large Web3 organizations, four out of 20 building layer ones that have not hit the market.

65. 24:50

    And if you start digging into it, there's no real narrative, there is no real niche, but you can raise money to build there one layer to what does it tell you? It tells you that we are in a significant bubble of infrastructure investment.

66. 25:10

    And if you start drawing parallels with any other industry that you can come up with right now. You would realize that every industry, when it emerges, goes through a cycle of infrastructure investment. But then something happens and infrastructure stops again, being the focus.

67. 25:32

    More than that, infrastructure is barely making any money. Let's look at internet until about 2000. All the money and all the glory was some Microsystems Silicon Graphics data centers, cables, fiber, etc. around year 2000, capital allocators went and they changed success metric to active users that gave birth to Google in 2003, Facebook in 2007.

68. 26:02

    And notice what is big tech and where money are made or returns on investments are made. And infrastructure right now is getting paid. What front ends and those that control relationship with users give them? There is no chance that infrastructure is the crux and the center point of capital allocation.

69. 26:30

    Now let's go back to where did TV start. Towers, cables, TV sets, all the investments. When that black to color amazing. Now what is made on TV is right now they are those leaders for hardware manufacturers. Where is money made in TV content channels? Engagement, advertising, radio? Same thing.

70. 26:58

    You go all the way back to probably the best industry that we have. Some understanding of industrial revolution. If you look at Industrial revolution first few tens of years, everything virtually everything went into railways. UK had hundreds of railway companies that connected absolutely everything until in 1900s, they kind of looked at it and realized that 30% of them are not getting any usage whatsoever.

71. 27:31

    Now, how much money is made in railways right now? They're subsidized. Industrial revolution started with infrastructure investment. Then it flipped on its head and it became consumer goods, etc., etc. we are at the brink of going through exactly the same thing.

72. 27:50

    Infrastructure investment is going to stutter, is not going to give you returns. And frankly, if you build so many fucking railways, you need trains and you need carriages and you need people using them because why would you have it otherwise?

73. 28:05

    How are you going to make money on this? Right. So that's my thesis. I can see that infrastructure is continuing to attract investment. I see Chinese building their own layer one. I see other apps doing their own layer one, to be honest. You know, it's a huge mistake because world doesn't need more rails right now.

74. 28:29

    We need trains and carriages and beautiful products that are starting to use infrastructure already built. Is it going to happen within six months? Is going to happen within 12 months? That I don't know. I don't have a crystal ball, but that it will happen is inevitable.

75. 28:47

    And the only infrastructure projects or layer ones that will survive in the long run Well, that's a great. I think also, VCs need to change how they value companies, right? If you think about it. Like you go with an L1, L2, they're like, well, this is this is 200 million FTV for you versus I have a very good friend who's like, you know, building something really interesting on the NFTs has a lot of users in TVL. And they're like, well we got a value at 20, right. It's like so that is probably that will shift in the future.

76. 29:25

    And that's that. That's actually a great segue into chain abstraction pretty much. Right. Like thinking about all all of being abstracted. I'd love to take your view on first what's chain abstraction for sweat. What does that mean? Right. Started with NEAR. Now like, I guess focusing on that with the NEAR ecosystem. How do you see it yourself?

77. 29:48

    continuing what I was saying before, if there is a flip from infrastructure, what is that going to flip to? And looking at every other industry, it ends up being products that engage and solve problems of end users. Right? Web3 inherently is about ownership and control of assets that either did not exist before or were in trusted management of a party, the bank, you know, but we just didn't have mechanisms that could ensure your ownership and control of assets.

78. 30:34

    And if we think about it, that means that it will flip into consumer crypto. And if you look at analogies with internet, the flip to consumer crypto is going to happen faster and will be even more pronounced because keys control assets, humans control keys.

79. 30:59

    So the interface that gives you the best experience to store your keys, have complete view of your portfolio, and complete freedom to manage that portfolio is going to be the product that will control all the future value, that will have an opportunity to charge fee here.

80. 31:21

    See there. And with a plethora of infrastructure projects and layer ones, it's going to be such an oversupply of rails that you can channel your assets through that it is going to be the game of survival of the fittest and consolidation ultimately in the future.

81. 31:42

    Users, unlike now are not going to live on Solana Island or on Ethereum Island, or on an island. They will have assets and they wouldn't even know what chains those assets reside on. As long as I have control over the those assets and they secure, why would I care when I use an app right now, I can't give a flying fuck if it's billed on AWS or on GCP or on Azure.

82. 32:12

    As long as it works, why do we think that it's going to be any different with the underlying technology that actually just powers transition and movement of assets we want? What you care about is security and ease of the interface that holds your keys and gives you full control over the assets that you have on whatever chain.

83. 32:37

    You can clearly see where I'm driving with this and where chain signature is, coming from. If we are thinking that front end and end user products, consumer crypto is going to be the focal point of next investment cycle and next innovation wave, then those that control keys and those that build beautiful products and on the mobile.

84. 33:03

    Because you know what? So few people in the world have laptop level on desktop that we just need to acknowledge that unless we build on mobile, we are not building for mass market. You are not growing a pie. You're appealing to the same group of people that probably already has liquidity in another protocol.

85. 33:23

    So gene signatures is ten times better than MPC is an approach, because rather than having multiple keys on the front end managing multiple accounts on different chains, it gives you one key that manages all of that. And from security perspective, I need to worry about one key and one key only. Everything else is hidden and secure.

86. 33:57

    That gives us an opportunity to develop an incredible and very, very simple user interface. Because if everything is managed through one key, then there's a unified way of pulling the data and pushing the data out, which means that I wouldn't have to kind of jump through hoops and present you various different screens depending on what chain your assets are on.

87. 34:22

    And the third thing that I find incredibly valuable here is that it basically turns we're not into an infrastructure play, not being in the bloodbath with everybody else fighting for the cheapest or the fastest chain, but it gives an incredible role in powering front end.

88. 34:44

    Front end place. So we're one of them. But I'm sure that there will be plenty others that will realize remotely, you know, why don't we build a near when it gives me out of the box cross-chain and multichain functionality, and our users need to think about one key rather than a gazillion of them.

89. 35:03

    So that's why we already integrated BNB or BSE chain. It hasn't been rolled out just for one simple reason. It's a big thing. And your team, your technical team is going through audit. And they they would feel a lot more comfortable for us to push the button and roll it out 100% when that is complete. And this is a question of weeks, we ready.

90. 35:26

    And I just can't wait to, you know, enable this. And you know, get the first ball rolling and let the world know this is this is the way future looks. People call everyone's rails. Rails need trains. I can give you some illustrations of that. riffing?

91. 36:26

    Okay, so near account structure is incredible because you can have an unlimited number of keys on the front. So you have to count abstraction that, you know, you can even world requires an additional product bolt on that you need to build, etc..

92. 36:43

    Here it comes out of the box. What does it enable? It enables, you know, kind of from the crypto curious person perspective. Like a simple product. I can issue you cards straight in the wallet that will go into your Apple Pay, but in the background, all that will happen is that an additional key with limited characteristics are going to be issued.

93. 37:09

    So you say, you know, ten grand a month, not more than 50, dollars per transaction. You know, all of those parameters that you determined in the card that just describes a key that is issued to that smart contract, and all of a sudden you can use your crypto without having to put so converted into stablecoins, put it in a different account, which is a deposit, which is really annoying because basically you say spend two grand to be able to spend it on the card, like, why do I have to spend two grand?

94. 37:46

    I just want to, you know, have debit card, I tap money that I have, goes out and I don't want to bother what currency or tokens I'm keeping them. And so the account structure and unlimited number of keys gives that as a product that you can build out of the box.

95. 38:06

    Other chains simply can't do that. It's impossible to build this product on EVM. So now on the flip side, having an ability to have unlimited number of smart contracts hanging off that account gives you an opportunity to, you know, basically build a portfolio of things starting from access to other chain.

96. 38:30

    But if you're starting to think about the merger of blockchain and a AI and assets, you starting to think about personal agents that, you know, kind of have access or ability to manipulate financial assets. So, you know, kind of it's it is absolutely incredible.

97. 38:53

    And, you know, it's a blessing that NEAR came slightly later and have already picked up, you know, signals and pulled them together. Because if you start looking in aggregate, you know, NEAR product is so phenomenally strong and has the highest chance of actually delivering that vision, that is inevitable.

98. 39:15

    You know, the question of flipping from infrastructure to consumer crypto is not a question. If it's a question when. And then most layer ones and layer twos are going to have nothing to offer, and they will just have to compete or buy each other or consolidate or just drive the innovation to absolute bare bones optimization to drive costs down to increase speed.

99. 39:43

    Neres got an incredible reason to basically go up and provide the top layer that abstracts all other chains and provides good user experience to the end users, and power all of these different wallets and apps that will be, you know, controlling those keys and managing those assets for humans over the world.

100. 40:22

     Yeah, but there is one thing that is not. There is focus on the mobile. Because we know that in order to build, in order to build products for the next billion people, you have to think mobile, mobile, mobile, mobile, mobile and web doesn't even factor in because people around the world, every single one of them.

101. 40:47

     I traveled through Africa, you know, remote part of Tanzania and, you know, kind the local cattle herders, they have cheap android in their village. They have one big solar panel and everyone charges their phones. They don't have electricity in their houses, but they have cheap Android and they prefer apps to mobile web.

102. 41:11

     So you know, if we want to bring next billion people, it has to be mobile, mobile, mobile. Absolutely. And another thing that we really need is, is like with internet, we need capital allocators to realize that the reason why we're not progressing as fast as we want is because of one seemingly stupid thing that everyone focuses on TVL as a metric, right?

103. 41:37

     If and I've seen a lot of features if you're building products for the next billion people, but your success metric is TVL, I know that you're going to fail on your first step on your mission. Why? Because you start building a product, and then you realize that you can hit the TVL target.

104. 41:54

     But making five phone calls, and then you need a product that would cater to those five people that can bring that TVL target. And guess what? They already have their TVL on other protocols. And what they want is a copy of the protocol just high yield, and then you end up replicating all that legacy shit and drag it into the future, and then you're trying to attract more people, but they can't even understand what the hell it is, because it's catering to five people that's been doing it for years and years.

105. 42:29

     So if you focus on TVL, you can't build products of the future. In order to build products of the future, you need to focus on active users. And that is a big shift that hasn't happened yet. And when it happens and when more people are starting to think that way, we will have more founders not giving you a pitch deck that I'll build another layer, one with some God knows what differentiation and the purpose, but they'll start thinking, okay, what can I build using this infrastructure that will attract billion people?

106. 43:03

     And right now nobody's doing that, because even if I had that business plan, I can't raise money because people like, you know, if you were to bring me layer one business one, I'll give you money. But you know, that fucked up shit, you know it just pie in the sky. No. Yeah. So, you know, it's capital allocators when that will.

107. 43:21

     You know when that which goes, that's will, you know, that's when we're going to start seeing innovation and real explosion of new consumer crypto products. And our mission and our goal is to make sure that we are advanced enough and at scale.

108. 43:38

     That will automatically put us at the crest of that wave to be beneficiaries of all of that capital that will undoubtedly come into this let's wrap our head around, like, how does that future look like for for sweat, I guess you have the users, you have the active users.

109. 43:55

     Now you're building this thing with BNB. If you were to look at sweat in two years, like, why do you want to be as the sweat economy grows? Great question. as I said, my thesis is that the key thing is to build beautiful, usable, secure products that give humans a way to control assets no matter what chain they're on.

110. 44:23

     And this is where we're going with sweat wallet. The wallets market right now is extremely difficult because if you actually look deep into differentiation between wallets, there is very, very little that they can offer. Right.

111. 44:42

     And therefore the first mover like MetaMask or Trust Wallet are kind of having control over the market. Now where we have a very interesting proposition. Is that, okay, that's your asset management tool. But what wallet gives you an opportunity to tokenize and monetize your physical activity.

112. 45:06

     And people view it as a separate app that they're happy to have, because it's a free application that tokenize your physical activity and gives it value. And I can build all these different things around it. In the process, they discover that this is a fully fledged, extremely easy to use and secure, non-custodial wallet.

113. 45:33

     And all of a sudden like, why would I have complexity? Why would I be managing my liquidity here? They're everywhere and managing a lot of keys and a lot of wallets when I can actually consolidate my liquidity. So the vision that I have is that will be a significant player in the non-custodial wallet space, because we know how to build those apps, we know how to make them secure, and chain signatures

114. 46:07

     help to do it inherently more secure by giving you just one key, as opposed to mechanisms by which you managing plethora of keys. And ultimately, I believe that if the promise and the vision of Ilya and Alex Smith and their kind of original start of this business as AI comes to fruition, I see an incredible value for anybody who's got liquidity on any chain to start consolidating it, either on their or

115. 46:45

     keeping it on the chain, but under the key of NEAR, because you can see humongous efficiencies that can be derived from I and advanced and very fast analysis of on chain data that have not been implemented. And one click deployment, complex deployment of liquidity in that scenario is going to be extremely easy, and NEAR is the only chain that will be able to recommend liquidity deployment on other chains.

116. 47:27

     Because if you are arbitrary, we are not going to go, oh, there is a, you know, airdrop opportunity on Solana. You'd be crazy to recommend that NEAR can easily do that because, you know, with chain signatures. Yes, the TVL will reside on a different chain, but if the TVL is controlled by NEAR key, who studio is that where would be counted?

117. 47:50

     And ultimately we need to stop worrying about TVL, as I said, because it's actually wrong metric. It is the amount of activity and amount of active users that will be determining the kind of who's going to be making money and having a viable business in the future, and who won't.

118. 48:10

     Probably to. Yes. There as well. Like total value secured. There is an interesting metric to have as well. Probably. So Sweat economy is the name for a Web3 business that includes sweat token and sweat wallet. We spend a lot of time talking about sweat wallet, but for us, it's actually a tool in the vehicle to create utility and value for sweat.

119. 48:59

     Because this is where the real magic is, and this is the story that is a little bit harder to tell. But fundamentally, we borrowed the page from the book of Attention Economy. That is a $7 trillion economy, and it is built around you paying attention and we realize that you paying attention and you being physically active are extremely similar, both beneficial to you, both have third parties that benefit from it and are willing to pay for it, and both are cars.

120. 49:35

     And if attention or paying attention is an asset that we manage to build $7 trillion economy around, then why on earth don't we have a multitrillion dollar economy around being physically active? And this is such a simple and easy thing to understand. And then you go like, oh, it will exist.

121. 49:59

     But what our interest is, is to make sure that it's not as screwed up as attention economy, because in attention economy, Google takes your attention, sells it to the highest bidder, pockets all the money and all you get is two gigs, three with your Gmail.

122. 50:15

     That's not an economy, that's a freaking robbery. But if we tokenize physical activity with our validation and verification protocol and we give you the value, then that changes your behavior more. That creates more movement, that creates bigger external wages and it pushes value, created a heck of a lot greater.

123. 50:37

     And you don't end up building big tech, which is, you know, kind of right now it's kind of an issue because, you know, they have their own agendas. They have, you know, kind of country sized budgets. And, you know, arguably some of the decisions and some of the things that are driving are not necessarily for the betterment of humanity.

124. 51:21

     Yeah, yeah. And sweat wallet is the mechanism to create utility and value. But we when we went live, we have committed that at least 50% of all profits we make go into token purchases on the open market. And we want to funnel more and more of this value in because that's going to make token more valuable, that's going to make more people go, oh shit, I definitely need to move.

125. 51:52

     That creates a lot of value because, look, your insurer is extremely happy. The amount of value created there is phenomenal. Health care providers already have contract with the NHS in the UK. That pays us for people who diagnosed with diabetes syndrome to become more active, because that prevents them from falling into diabetes, state takes on life expectancy, saves on health span, saves on health care costs, you know, because insulin, etc., etc.

126. 52:22

     then if you start thinking of employers, employers understand very well absenteeism, productivity, morale in the office, mental health, better off with more active employees. And a lot of them are investing into that already. Ultimately, being active extends your health span by 5 to 7 years. That means you're going to be economically active for longer.

127. 52:44

     That means you're going to pay more taxes. Even in the most cynical financial sense. It is actually good business for countries to invest in the physical activity of their citizens, because they will get that back over a longer economic life span of that human.

128. 53:01

     So sweat. Sweat economy is a derivative of how many know how much people walk in the world. So if you have a thesis about whether people are going to walk or not, you you can actually position yourself and this fit. But it's kind of funny.

129. 53:17

     you know, it's like Bitcoin is like how you store when you were like running you electricity in a computer. This is how you store your movement in a computer, which is kind of interesting way to think about it. But Sweat is an app that, on the surface, seems like a pedometer, but it's so much more and so much deeper and a gateway to to what is a new sort of unlock, which is physical activity economy.

130. 53:42

     And you've done a ton of work for decade making sure this is safe, protected, accurate and mobile friendly and straight up beautiful. It is a very like I I've used it. It's a very it's one of the top. And you have over 150 million users and 54 million or some wild may on the number and it's growing all the time.

131. 54:06

     I think I'm editing a video of you currently, and I have to keep changing the numbers on it. And then and so that's sort of the base you're using NEAR to add to your business model. And the A the wallet allows you to do chain structure.

132. 54:23

     NEAR allows you to do champ structure, which opens up a whole new world that will allow people to Yeah. Yeah. It's a tiny little sort of commentary around the edges. The web to business. A web to app is sweat going and despite the name, it's not crypto.

133. 54:52

     And the objective of that is track and verify your steps. And then this data flows into the movement verification oracle. And if it is genuine and verified then it pushes an instruction into smart contract to issue you sweat on the basis of constantly rising minting difficulty.

134. 55:17

     So every next sweat requires more steps to walk than the one before. And everyone is in a competitive situation, which means that the earlier you walk and the more you walk, the better return on movement. You get. On the flip side, from economics perspective, what it does is like Bitcoin halving, but that one is every four years.

135. 55:40

     Here is just a really slow and gradual in real time that increases marginal cost of production. When you have an increase in marginal cost of production, ultimately that results in appreciation of that asset value. That's why we have it there, right?

136. 55:57

     Typical tokens in Web3 have focused on utility and how you use them, or what benefit they give you or, you know, can what can you derive out of them? We of course have that. And that's why we have rewards, why we have growth jars, why we have games.

137. 56:18

     And we're constantly innovating and pushing more and more utility out there. But there is one very interesting difference in sweat versus pretty much all of the tokens, which is you have an emotional relationship with it because it's your sweat tokenized, and that means that, you know, but at no point does user think that this asset can be zero because it didn't come to you through AirDrop, it didn't come to you just miraculously appearing somebody send it to me or, you know, can it just appeared out of thin air.

138. 56:55

     That makes people kind of go magic money? No, I sweated over it. I know it cannot be zero. And that's the reason why we have this humongous advantage over a lot of other assets, where our users know that it is valuable, and that's why majority of them are holding it and storing it because they know that they are not active for what, $0.01, which is a current price.

139. 57:21

     And you know what? My mission is to make sure that they're more active. And in order for that to happen, we need to raise awareness of the real value of physical activity and understand that 30 years ago, we would have had very similar conversation about potential.

140. 57:39

     Now, nobody really doubts that attention has tangible and very, very high financial value. So we're about 30 years behind attention. But we also have humongous technological advantage that we don't have to build this convoluted structures of tracking and exchanging and building products that give you value change for attention.

141. 58:00

     We can just tokenize it and make it into a liquid asset, and everyone can participate in this economy and drive adoption a heck of a lot faster. To draw this home and to help people understand the value of it, we just engage three different universities that are known for their work in the health space and physical activity space, and the impact of physical activity on longevity, productivity, mental health, etc.

142. 58:26

     and we went to them and we said, so if we ask you a question, how much would you be able to answer it? And the kind of one nobody asked us before. But yeah, so we allocated academic grants to them. And these guys are working right now on basically coming up with arm's length estimates.

143. 58:48

     What is the value of 10,000 steps to individual. What is the value of 10,000 steps to businesses? Corporates. You know, basically commercial enterprises. What is the value to health care providers. What is the value to governments.

144. 59:03

     Because it's you know, if we want to kick it off, we cannot come up with estimates. But when it's completely unbiased, you know, kind of ethical, you know, entities that are doing their own independent research, you know, that's going to be a heck of a lot more interesting.

145. 59:19

     We just want to kick it off by saying, look, these are the numbers that we're going to get to. Are we going to get there in six months, in a year or in two years? We don't know. But the only question is how long. And there is another element which is the value of attention.

146. 59:35

     Over the last ten years has been going up and up and up and up and whatever estimate we're coming with right now, in ten years time, when we actually build a lot more economic exchange around it, it is going to be higher than this.

147. 59:53

     So I just want to build an asset that can power these exchanges and then convince more and more parties to start participating and accepting it as a consideration for information, services, products. Thank you. Thank you. Mission accomplished. Absolutely.