MetaBUIDL Opening Ceremony - August 27

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

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   welcome to the metaverse where a total of one million dollars in prize money is up for grabs are you ready to build the meta build hackathon starts today august 27th for 17 days you will build with community members throughout the metaverse or locally via nine global hack nodes and participate in workshops from industry leaders and hack with nier and our amazing partners we'll have an expert panel of judges made up of industry-leading vcs

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   engineers and entrepreneurs we will select and announce the winners after september 12th are you ready to build let's get started please welcome the co-founder and ceo of nir protocol ilya holasuken welcome everyone i'm ilya co-founder of near and i'm excited to see everyone here in this virtual and offline events if you're at hacknodes around the world it's exciting to have this metaverse experience that we are

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   building where we actually having both global globally virtual event and actual in-person events happening around the world the murderer theme is the core of kind of what we're building it's really powering the um ownership economy it's really powering the ability for people to come together with their passion with the games and with work and really building this and we have a number of challenges from a number of really exciting partners to work on to kind of build this reality as well as if you

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   have any awesome ideas to do this uh you can find your place here all right and without further ado let's dive in into my speech about openvap and we'll review what you can build what is near near really was started to make world where all people control their money data and power of governance deep down we believe that people should have their control over this and not kind of delegate it to some other

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   parties which may mismanage it or may work in their own interests what this deep down means right is that there's a whole stack of technologies and applications that right now everybody uses that are not like this and we really need to we almost rework a lot of the entire internet to give this to people and not always you know people want this control directly what you want is to showcase how these applications are actually

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   better how these applications are kind of bring this value to the user at the end not just because they're purely decentralized or purely uh more aligned with this vision so there's been a very fun journey we started in august 18 and we have celebrated our three-year anniversary as near protocol a few weeks before we started initially with pure focus on scaling blockchain deck

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   we looked at ethereum we ourselves as developers were really excited to build on it but we realized that the limitations that they currently have does not allow us to build applications that we really wanted to do so we started with how do we scale blockchain tech how do we make sure that as a developer you don't need to think about scalability and it's been an interesting journey

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   there's a lot of research being done but in 19 we actually realized that the scaling is really a one of the pieces of puzzle right if you talk with users there's even users in ethereum ecosystem back then in 19 almost nobody used ethereum per se right and that was because the experience of using applications on ethereum was not also we saw like a number of developers was still very low back then and and

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   it's actually still very low right now and so making pretty much focus on the developer and user experience making it possible for normal people to use those technologies that we know can kind of unlock a whole new world what became our focus 19.

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    it was you know long time of building but in 2020 with community which started to grow we actually started to launch main net in through stages we launched a proof of authority we had community validators to take over the control of the of the network and then they voted to enable the token and transfers and kind of permissionless of the network and so through that we kind of seen the growth of the network starting especially in last uh four or five

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    months where number of applications started to launch right core applications like exchanges and uh kind of starting platforms nft marketplaces bridges and everything else so through this three years right we've been kind of on this journey of building infrastructure and building tech and now we have a core set of applications core set of primitives to start building really the next generation of

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    applications so i want to introduce the open lab concept right i think many of you probably are familiar with blockchain many of you are familiar with kind of this idea said this blockchain will enable new web but what does that really mean right for me open web is really a set of philosophies it's not you know it's not some technology even per se it's actually all about the philosophical way

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    of building things and working together and obviously it starts with decentralization it starts with idea that you cannot have a single party controlling something because that party will always become one way or another a gatekeeper office or it will become a sensor of this you want com composibility and hackability this comes out from the idea that as soon as we open up the applications as soon as we open up the

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    services you are able to create new things and rely that they're not going to disappear right as we go away from having a central party to control everything and we have a set of decentralized services now you can just build on something that may only have you know two people working on it and you don't need to worry about that because you rely on the kind of underlying functionality it needs to be open and permissionless right we cannot

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    have open web that is permissioned and only for a specific set of people or specific set of services it needs to be focused on user the user at the end is the one who is kind of driving all of this economy driving all of this functionality and the user should be controlling their data the user should be making decisions where and what they should they want to use right and this creates pretty much a huge um kind of on one side competition on the other side innovation that will

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    continue propelling us into the future and obviously you want markets and economy and passion economy that we will be talking about next is kind of what is a core pieces of this because it enables everyone who have interest and passion something to actually leverage this technologies leverages openvap to make their living and kind of prosper this is at a high level a kind of a vision of a lot of components that need to go in to build open web right and this is not a full picture there's a

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    lot of things missing and i'll zoom in to few of the bits but if you see a red square this is blockchain right blockchain is one of the pieces in open web it's not you know it's it is a fundamental piece because it gives sounds as properties that we talked about but at the end it actually just a one of the dependencies to build the whole ecosystem and so there's a lot of things to build this is hackathon i'll introduce some of

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    the concepts what to do but let's start with what we already have right what is blockchain and some of the other things and partners here the hackathon actually provide right first of all they have programmable ownership this is really what blockchain gives you like blockchain at the end is kind of a database which gives you a trust in that the rules are being followed but one of the core use cases for this is ownership his ability to program that i own this amount of token i own this

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    nft i own this you know claim to call this application after three hours whatever that is and you can create any kind of complex things which interact with each other we have pseudonymous identity right that's kind of what in a way bitcoin has became famous for but in general this idea that you can have multiple identities which are not linked and are used for different purposes at the same time the identity itself is capturing some kind of reputation and and over what things have

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    been interacting with you have encryption and proxy encryption which is some really cool cryptography and this ability to preserve privacy and really exchange information between parties while preserving privacy we have decentralized storage right the ability to store information in this centralized way and rely that it's going to be there and really start building kind of services that

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    that can use that the really cool stuff obviously is oracle's like yes on chain is cool you can rely on a lot of properties but there's still a huge world outside of chain that actually happening and we need to have information going back and forth right and so oracles is a way to provide this information from outside right i mean prices is probably the most known case but you can bring any other information through the oracle system so the system

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    of challenges and like smart contracts can leverage it and zero knowledge proves is you know pure magic is ability to prove things that they you know some computation some algorithm something happened and validate that unchained cheaply right so something very complex could have happened blockchain and and you can validate fully eat on chain and at the end the most exciting things that i am excited is decentralized organizations the organizations that don't belong to

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    specific country they don't need to you know have specific set of structures that the this country has defined it can be pretty much anything that a like organizers the communities a group of people who are doing it want and it still can kind of behave as an entity as an actor in this world so these are core primitives this is what you already have and like this project's kind of to leverage all those things and

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    we also have the infrastructure added backing it so we're kind of zooming in in that graph right we have scalable blockchain like here we have indexing querying from the graph to to kind of other solutions we have uh scalable storage chains like falcoin cia and few others we have economically secure oracles like chain link flux and and others and we have gateways and exchanges like the way to kind of

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    communicate the information between there's still actually a lot of pieces missing and even on those graphs there's like ideas like ads great gateway payment gateway you you may want to kind of create more smooth exchanges and or onboarding for users but kind of overall we have these pieces so why like i mentioned before that this open web is conceptually should be better than what people have

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    right now and even though you know the privacy and kind of this properties that people have and hackability is great but they are very much developer focused properties right it's something that is a developer really like we really enjoy this is why a lot more developers are joining blockchain now but as the user as end users that's not what you care about but what we do have here right because of programmable ownership is ability to create

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    incentives and kind of ownership economy that transforms how applications are built or how applications are actually run initially right when we look at kind of traditional application development right you launch an application you kind of have small amount of users and you do a lot of marketing you do a lot of kind of onboarding of the users to really bring them uh and start using to create some network effect around your application and some and obviously improve your applications while you're doing it

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    and obviously it's very expensive and it can be slow processed it's very risky a lot of applications don't succeed and there's a huge kind of mode that applications and you know kind of companies like facebook have because when they do have a lot of users launching new kind of app inside that platform becomes way easier and obviously like in the beginning they were doing it as a platform but then they closed it off and so with this new kind of open web approach

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    what you have now is ability to share the ownership share the future of this protocol app platform with the first users with the first developers was the first kind of like with the first parties who are interacting on your on your app and so this idea like there's the simplest example to use is for example a taxi right let's say you want to create a competitor to uber and if you just start kind of doing the same thing as uber right maybe in one local city you can

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    kind of out compete them on marketing but globally right they will be able to dominate but actually one application in toronto was doing this ownership economy and was able to compete uber without doing marketing and the way they did it is by giving ownership to the drivers pretty much the more drivers drove passengers the more ownership in this applications they were getting and through this ownership right they actually felt more connected they wanted to promote those applications they wanted to bring more users to it they

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    wanted to kind of create bigger network right so you're actually transforming from i build an application and then i need to get users who are going to be kind of putting value into this application to i want to create a community who will own this application as much as you know some of the developers are and they will be interested in creating bigger and bigger community and bigger and bigger

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    usage as well and this is core of the you know of the bitcoin and the hedium of all the blockchains as well but now we're actually using the same principles and finding out what are the drivers of the value creation for specific applications and applying them almost as a pattern to this right any kind of marketplace any kind of uh kind of activity can leverage this right and d5 is doing this called liquidity farming but the concept is way more generalized so

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    i call it usage mining and it's pretty much transforms how you create networking network effects around your around the applications so what's next right what what are things that you can build now right we have a hackathon here super exciting to see what people build but if you don't have an idea yet if you're interested in exploring what to do here's just a few ideas right and obviously there's more there's challenges as well but this is kind of again from the chart

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    zooming in there are clear things like social graph right like i mentioned facebook few times facebook is owning your social graph then you go to linkedin you kind of need to build your new social graph and linkedin owns it and then you go to next social network and so right now the social network's pretty much controlling completely and like no no new social network or like social application is able to start

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    and so having social graph almost like the protocols that is uh detached from specific application but has all this ownership mining will allow pretty much to for new social applications to sprout right because they now are able to leverage existing platform existing social graphs and still uh kind of deliver the values that they try to do the other set of protocols and kind of applications on top is around music and video right and content in general

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    and i mean music and video especially have right now kind of few dominant players that are obviously work well for kind of had of the creators but there's a tale of creators that are not really benefiting from pretty much having like fans and super fans engaging with them right and there's a lot of kind of creativity that can go in and kind of how a creator can be engaging with their fans and kind of how they can be communicating how they can be creating value together so

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    i think it's really important to figure out both a protocol but then also applications that can connect these two worlds certification is another important thing right we use certification in our daily life almost constantly but the certificates half of the time are just pieces of paper and you know sometimes just something on the screen and none of that is actually really certifying much right we really kind of using just almost outdated technology at this point

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    so creating a way to certify various information from you know is this doctor actually has a degree to uh this you know elevator was actually checked like and creating kind of track record for these things would pretty much enable a lot more trust in the system and and and also like catching things that are potentially are malicious certification and reputation in some way related but reputation is actually even

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    more uh rich because this is about really kind of collecting all the information that specific identity of a person is there and and kind of synthesizing it into something that other people can rely on right and again like we moving into the world where people have multiple identities uh that are potentially not linked together that are kind of representing different parts of the personality or different parts of

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    the life of these people and the certain amy day of the blockchain is kind of an angler of this but then we still need a way to kind of combine it together and rely on it when we're doing different operations conflict resolution i think is extremely important right uh if we talk about you know identities and well when things go wrong when you know somebody kind of requested some work from another and things didn't work out how are we resolving conflicts how do i make sure that people

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    uh kind of underneath are still able to rely on things when kind of it's not about code anymore right it's about people interaction and in a way this is actually building the court system uh its ability to resolve this not written yet conflicts and kind of scheduling or gigs is another thing right like we have lots and lots of different kind of work interactions and marketplaces that are happening and having a kind of a

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    gener general work scheduling gig protocol that then connects people to do some work and then having lots of different applications that actually surface this right and allow people to you know from everything from like crowdsourcing to uh ability to call a plumber right all of this pretty much can be used in similar protocol and relying on some of the things so these are set of common protocols

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    right this is protocols that actually be used by many many applications and like they enable to create this kind of open web for users right because as a user you control your data right we're talking about social graph well the social graph belongs to you it's encrypted you when you go into a specific app allowing this app to use your social graph and performance operations right

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    it allows you to control your identity it can allow you to control your assets and so through that you can now be kind of interacting with multiple kind of multiple uh student identities and then inside that having like a whole slew of things that belong to you this i mentioned like music and video this is also something that creators want right creators want to have better monetization they want to control it they want to own their kind of assets

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    that they create and they want to engage with their community right we know this like they've been telling us about this but when we go to like centralized platforms that right now uh those creators are on these platforms don't really care about this because this is not how they're making money so enabling them to do this through this common protocol protocols and applications is a way to actually bring a next gen next wave of users to choose

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    us because they want to follow these creators so this is kind of a huge opportunity to both create something really valuable to kind of ecosystem in general to the uh end to this creators and users who want to connect and obviously like here you know we all developers it's this enables us as developers to build a new way right where before you kind of need to build a whole company to do stuff you now have a users who become your community who

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    become your marketing you who become your uh like pretty much promoters and and people who bring ideas and sometimes even help develop things right so you kind of and and and in blockchain frequently they also are your investors and and kind of so you you actually have a whole combination of things happening around the software that you build and so the software becomes really kind of a component in this whole ecosystem

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    but you can rely on a number of other components that already exist and kind of build on top so just to give some examples right this is just you know super kind of basic examples but just to show you the composibility that's possible right if you have this protocol so if you have this kind of basic things now you can combine them into applications right so you can have a social application where only people with certain reputation can

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    reach out to you or communicate to you and so this way you can pretty much set up maybe who can reach out to your code and kind of grow your network while kind of some rules are followed you can create something like uber for co-workers right because you have a protocol for creating gig so you can hire a car and then you have you know your social network with your co-workers combining that together into an app now

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    allows you to kind of create this like new combination of things one of the you know important pieces that i think being important for for a lot of people is actually permissioning and tracking control of your personal data and medical data is probably one of the most personal ones out there and again this is like encrypted encrypted data stored in decentralized storage and then with structure encryption and with

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    tracking and with identity of the applications and identity of the other parties you can actually create this history of tracking and history of um kind of who can look at which pieces of data and of course games right games is the finest way to onboard people in this ecosystem and really combine this economics and this kind of composibility and social and ownership all together and this is why our hackathon is about meta verse because well actually we're

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    building this new world where everything is in some way gamified in some way exciting in some way it's about your passion in some way it's about your work but combining it all with this kind of concepts of many worlds coming together in one ownership uh pattern and one or multiple kind of alternative identities is the way this blockchain has been manifesting to actual end user right so games i would say will be one of the first things that people experience and then

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    through that they'll learn how to kind of interact more with ownership that they can have so just to give you like few examples of what's already there right and in in this kind of more open vap pattern like not talking about like for example a lot of d5 has been very successful right so neocrowd is one of the apps that launched in april and since then been growing steadily and this is idea of a on-chain

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    crowdsourcing and so if you read one of my older posts actually when we were starting near were doing an ai startup where we were doing a lot of crowdsourcing and part of the reason why we started looking at the blockchain was to see how we can implement this and so now there's a team working on this near crowd kind of on top of near which is super exciting and they already collected over one million kind of data samples of image to text thing that they're working

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    on the exciting part is that this is truly global marketplace that is enables people around the world to really kind of work from home right now and maybe uh shelter from covet and earn good wages right there's people in philippines and russia who are kind of surviving working on this so it's not just building these marketplaces you can actually build something that is transformative to lives of people in the world the other example is dao so i mentioned

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    i mentioned dials before and i i really believe this is one of the kind of conceptually different things that like will change how people doing work will change how people organize and so we're still kind of only tapping and only trying things there's a lot more to figure out but one of the kind of annoying things dao is a very technical term and so a little bit more uh i would say

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    approaching term is digital cooperative right it's something that a group of people came together and they have a way to do a number of things right they can make decisions and govern things they can make investments they can kind of request some work to be done and they can also accept some work and do it and get paid right and the funny part is like so i'm from kind of ex-ussr we had

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    cooperatives which were you know the way that a lot of communist kind of sub-things were doing there is but these things are you know they've existed for a long time they exist in u.s exists everywhere and like that is in many ways in a better way to do work when you're kind of removing a lot of the pure hierarchy and you're replacing it with people having ownership in this cooperative and excited and interested in creating some value for it together right and

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    some of the things scale sciences don't there's a lot of experiments to do but kind of this dow tooling this infrastructure built on top of blockchain built in lab three is enabling it right in a way it's also creating this new social layer right it's something that the current social doesn't have it doesn't have a way to make decisions it doesn't have a way to uh pretty much manage money or do work or pay or get paid salaries right so now

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    we have a way to do it and it's already used by communities and kind of near guilds to coordinate their work kind of give grants make investments and we're going to see more and more communities outside of crypt as well joining this because they're starting to kind of understand with like digital cooperative concepts that they can do more things that they're doing right now is just having a

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    discord a telegram group or facebook group and they can actually be more active and engage people in in different ways and get people to do stuff so super excited if you haven't seen splitting.fun there's a lot more kind of work and a lot more concept like a lot more components to build in this world as well so i'm excited to see what you'll build and i just wanted to give you kind of a foresight on when kind of you have something there's a number of ways to get funded and kind of

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    create a startup or create a project out of this that will pretty much uh start growing from there right so one of the kind of first things obviously is near foundation brands so it's on mir.org such grants we also have a number of community funds actually managed by the sputnik taos and on our governance portal you can apply for that we have a open lab collective which is a protocol agnostic blockchain accelerator and kind of collective of founders

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    and it's really helping you and bringing you your idea from kind of a prototype or like first project to something successful something that can fundraise a large round and of course we have a number of vc funds who are excited to invest in this ecosystem and excited to see what kind of applications that actually will bring mass adoption to the the kind of open web right and actually build open that and we have number of them as judges at the hackathon so they will actually have a first view on

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    your project and will be able to connect with you from there so a lot of exciting ways to kind of keep keep growing your project and we'll be following up with you after the hackathon kind of this is like more structured set of options for you as well just a little bit before i go i just want to ask everyone to keep learning right uh we are near believe in gross mindset and always growing is

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    always learning and there's a lot of resources that neer puts out obviously a lot that are in the ecosystem there's just few we have like an academy we have a like year in minutes is there's a lot of resources um if you want to learn more about protocols we have a whiteboard series we have number of ways how people describing both pieces of application building and reviewing existing applications and if you want to

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    dive in into more deep kind of technical pieces of near there's a number of blog posts there but again there's a number of resources you'll receive more indian emails kind of as follow-ups as well all right thanks everyone it was exciting to kick off this hackathon i'm really looking forward to seeing what everyone builds i'll be in the chat in discord uh to answer questions and

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    help out where i can and let's transition to lee to talk about passion economy she's a founder of atelier ventures and the kind of found founding mind behind fashion economy trend in general that we've been using as kind of one of the concepts for open that so please uh welcome thanks everyone for tuning in to the opening ceremony for meta build we're going to transition to talk about passion economy with lee lee was a partner on consumer side at

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    anderson horowitz where she was looking at a lot of startups you're probably using right now and then spun out to start her own adelie adventures which is specifically focused on fashion economy i'll let lee to introduce herself italy adventures and passion economy in more detail hey everyone so i as elia mentioned i'm the founder of atelier ventures which is an early stage venture firm focused exclusively on the passion economy which i define as the

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    economy in which people are leveraging different platforms and tools in order to be able to make a living from their non-commoditized skills and talents and knowledge um i often times use the passion economy term inc and contrast the gig economy which was really about monetizing discrete commoditized tasks and services um the gig economy was definitely a step forward in terms of online work in that it gave workers a

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    lot more freedom and autonomy to work on their own hours but in a lot of ways also fell short of its promises of um having people be their own boss um decide what type of work they wanted to do um and a lot of gig economy platforms ultimately commoditized their workers and had them be very locked in to close platforms that dictated when they worked where they worked how much they were paid intermediate their customer relationships and so the passion economy is very much

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    in contrast to that where i think of it as the set of tools and platforms that um that service providers are using to start their own internet native small businesses and so ideally people are turning their skill sets and passions and knowledge and talents into a service or product that they can offer to a base of consumers who are loyal to them and who value that particular provider service

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    yeah i mean i think this is really exciting concept and i mean we met first time because we were excited even before you were kind of looking blockchain at all uh to kind of see how these two concepts making together so i'm curious how did your vision of this evolved as you were learning more and more about crypto and blockchain right yes it's definitely evolved quite a bit uh and i've only gotten more bullish about crypto since we first met um

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    essentially what i realized over um quite a long period of time is that in the web 2 world i think the passion economy will always be limited by the fact that there's this underlying tension between the workers the people who are starting their online small businesses and the platforms on which you know they're leveraging those tools so to put this concretely there will always be a tension between a shopify and a shopify merchant between

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    substack and a substance writer between instagram and an instagram creator etc etc and that tension is inherent to the fact that the platform needs to be able to extract value such that the platform and its shareholders are able to do well to be able to grow its revenue and its profit and for the company to be worth a lot of money that's in contrast to the goals of the participants on the platform who want to be able to keep as much of

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    the value that they're that they're contributing so for instance you know a shopify store owner wants to be able to keep as much of their gmv as possible and to increase their own margins versus giving it up to the platform and so what i realized was i i couldn't see a path forward for how to align those incentives in the web 2 space and that brought me to crypto and the notion that essentially that the future versions of

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    these platforms could align incentives much better if they were actually owned by the platform participants rather than a small group of founders and investors yeah for sure i think ownership economy kind of feeding together the special economy is becoming really like a strong offering that blockchain can provide to the world in a way so yeah for the hackers who are listening it would be exciting to see kind of how this plays out in your projects so

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    maybe i would be interested to hear some of the examples of things that have worked already in fashion economy that you you saw as well as maybe how uh like folks in the audience or or people who watch later can play on them in the web 3 space from your perspective yeah so in the web 2 realm a lot is happening in the passion economy there's hundreds or thousands of startups online creators are earning

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    probably billions of dollars of revenue um and then platforms are taking of that a cut for as their own platform revenue and i describe this as basically the monetization of everything like everything that can be monetized is being monetized today on the internet any type of skill or service or knowledge is being packaged and productized into something that can be sold on the internet and those transactions are being facilitated by various web 2

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    marketplaces and platforms um this ranges from writing a newsletter to packaging up a course of your knowledge and delivering that course to a bunch of students to starting an e-commerce store to starting a digital goods store etc etc there's so many different examples i think the next step forward in the evolution of these platforms is to make those platform participants more enfranchised

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    both in terms of economic ownership as well as in terms of governance and product roadmap so i'm really excited to see more founders build in that direction i think you described it really well which is the intersection of the passion economy and the ownership economy so in other words how can we not make it such that all of these workers are have this underlying tension with the platforms that they're working on but how can we actually align those incentives um another way that i often

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    talk about it is i think the current focus of a lot of these web 2 passion economy platforms is how can we get income in the hands of these creators and these workers um so they're really focused on creator monetization of all types um the focus is on generate being able to generate revenue for the creator um by monetizing everything i think beyond short-term income i think the next step to really change the way that the economy works is to help these

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    people build wealth not just give them means to earn income in the short term but really fundamentally change their financial positions through giving them access to wealth and i think in order for wealth to be more distributed we need to give them ownership so um yeah i i would really encourage everyone to explore that intersection of the passion economy and the ownership economy for sure yeah yeah i think like in general the the concept that people have been using

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    in d5 like liquidity mining but applied to any of this passion economy or or even gay economy actually to some extent as well uh concepts where people who are contributing work initially and who are create pretty much creating this platform together with developers are actually earning the portion of the governance and portion of the ownership of this platform which kind of contributes to their future wealth

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    because it appreciates this platform growth yeah it becomes really like a powerful engine as well to grow these platforms which a lot of times kind of a lot of startups that are right now starting missing out because i just don't have this like huge engine of attracting new people and we were discussing like last time we talked try to mention a lot of people are trying to build social applications now and

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    they're kind of missing on there like how how are you going to compete with existing like huge social platforms and so really like using this ownership economy as a pattern kind of across across these different types of passion as well as like connected areas is very interesting so i guess you mentioned this like some platforms that already have you know product market fit uh even though have this tension where do you see gaps in kind of this productize everything

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    or there's none left very much and everything is productized i think that is the major question i think that they can like that notion of being able offering the tools for anyone to be able to monetize anything i think that will be persisted like those tools are still needed by creators all around the world i think the white space for me is exploring how do we actually distribute the platform value more equitably to all of the

87. 42:49

    participants so i think the frontier of like gaps in the passion economy is how can we make it such that these platforms distribute ownership in the form of tokens to all of the contributors who are contributing value commensurate with the value that they're contributing so for instance today on sub stack like if i'm a really successful writer i can monetize really effectively through my own newsletter and maybe make like hundreds of thousands of dollars per year which is great but at the same time

88. 43:20

    that that's happening i'm driving readers to set stacks some of them are becoming writers and there's like a broader flywheel that i'm propelling that translates into the underlying equity value of substack as a platform and as a single writer i don't get exposure to that today like i'm driving a lot of the value for the platform but i don't get the upside of that um unless i become like an advisor and investor in the company

89. 43:53

    and i think like the opportunity is for founders to explore what it could look like to reward those writers those contributors across any sort of platform or marketplace um and i think this can actually help to have those platforms grow faster and have more powerful word-of-mouth or network effects than they otherwise would be able to have they're just like the the types of acquisition channels that web 2 platforms are using today so

90. 44:23

    potentially like i think a question is like what types of marketplaces or platforms don't exist today because they just can't pull in enough like they can't solve the chicken neg problem through the typical means and by distributing ownership earlier can get there can can overcome that cold start problem or can grow to be much bigger and be useful to both sides of the marketplace like what doesn't exist today that could exist if we were to leverage those primitives yeah yeah i mean that's that's a very

91. 44:55

    interesting question um i guess i mean just to kind of mention one example of you mentioned that marketing um like you don't need as much marketing actually if you have this ownership component there was a project in toronto that was actually in the economy ever doing a taxi app and they were distributing two drivers only the part of the ownership kind of in this platform and so the more drivers drove the more passengers they had the more kind of

92. 45:27

    this ownership they earned and actually by metrics they were beating uber in the city because drivers were so involved and kind of invested into this platform they were attracting their friends to participate or kind of telling everyone to join this platform so this definitely can replace like same as in blockchain kind of the there's no like normal marketing in many cases it's a lot of a lot of it just goes into like building a community of active contributors who then kind of attract more people

93. 45:58

    like this pattern can apply to yeah to a lot of these newcoming applications that are solving people's problems yeah there's a another company similar to what you just described called the drivers cooperative based in new york city it's the worker-owned cooperative version of uber lyft or any of those ride-sharing apps where they're the company is entirely owned by all the drivers on the platform

94. 46:23

    i think like the next like the stronger version of that i think is to be a decentralized network where all of the participants not just the drivers but also the users too can become part owners in the network through holding tokens um i think like that kind of model could potentially like everyone has always raised the question of like what if uber had been able to give out equity to its drivers in the early days they weren't able to because of securities regulation for private companies but like one can

95. 47:00

    imagine that if you distributed ownership more broadly those drivers would be much more loyal your customers would be much more loyal to you and you could potentially like penetrate the really powerful network effects of the incumbents um so i think like the drivers co-op or potentially like any cooperative version um that currently exists offline could be tokenized and be made into a crypto

96. 47:22

    network yeah actually interesting completely off topic but the east denver the hackathon and kind of events they are a cooperative in colorado and they're using dao as a functioning structure but cooperative as a legal structure and they actually created a mapping between things where if you're like added at the event in one of these events and you become a member of this cooperative and then you can receive like all kinds of uh tokens and everything so there's ways definitely to bridge this like kind of

97. 47:55

    cooperative structure which has been around for i don't know in hundred years maybe and then this dow and all this like kind of digital infrastructure building and create like a comprehensive model for this so yeah definitely a lot of interesting stuff to come thankfully this is awesome to hear those fashion economy direct about passion economy directly from you as well as how you see it evolving on blockchain and uh if for anyone who's building in this domain please reach out to lee

98. 48:26

    yes i encourage everyone um who might be exploring the intersection of the fashion economy and the ownership economy to reach out to me you can just email me at lee atelierventures.com thanks so much julia thank you hello everybody my name is matt uh and i'm a new head of content here at nia i'm super excited to be joining everyone for a fireside chat with richard newhat to talk about trends in the goodreads industry how things are changing the vc's role in that and what might be coming next um before we go to richard

99. 49:06

    richard is a managing partner at fabric ventures a vc firm that specializes in helping projects in a decentralized web 3 or open web arena growing scale richard is also a council member of the near foundation which helps steer ecosystem funding and shepherds the core governance of the near protocol richard it's great to have you here matt's incredible to be here thank you very much for having me good stuff um before we jump in richard i'd love to get like a 10 000 foot view

100. 49:37

     of like what's been happening in crypto this year being in your position you know in the vc space what have you seen happening with crypto this year or even the last six months and and why do you think that is sure so i mean i think um you can sometimes feel like everything happens you know all at once and something very special happened a very short period of time but like most things in life you know

101. 50:02

     including as they say england at least in the number 11 buses um um you know it they come all at the same time but it's it's a a lot of factors that come together lead up to that point and i think um that's certainly true here so if we if from our perspective at fabric we built um a practice now around as you said the thesis of the open web or third wave of the web and we have been at it for the best part of half a decade now and that drew upon our

102. 50:34

     experience over the last decades and we very much take that long perspective on you know soft reading the world but now a new wave of software that is weaponized with something very you know special and distinct it's it's weaponized you know with the ability to deal with the concept of ownership it means that all of the world's assets have become accessible divisible programmable you know through you know software but you know not just that but it's not just any asset that is that's

103. 51:09

     uh out there be it a house or a uh an imbappy football card or um a brand new piece of digital art or you know a charlotte uh goal in a volleyball match in brazil whatev whatever asset is it's all of all of those uh that are now slightly accessible but the other force that's really driving this is the fact that a long-held dream of people in the technology business in the software business has come to fruition and that dream is of this high degree of reuse of other

104. 51:42

     people's software code and so those software assets are something now that can have been folded into the mix and you're you're getting this acceleration acceleration of a kind of combinatorial innovation as one building block within this uh web 3 or open web movement gets built and then people use that to drive a further wave of innovation and it was interesting actually it just

105. 52:07

     happened and it was probably down to youtube's fault um to watch um the moment that gil emilio introduced steve jobs uh as the new uh um effect he was about to become the new ceo of of apple but it was it was how apple was going to get out of its old os and get onto a modern os you know through the acquisition of next um and in that presentation back in 96 um they were talking about this ability to kind of reuse code and jobs was

106. 52:39

     pitching hard that this new platform was going to be distinct because 80 of code wouldn't have to be written because it would already be there and you can just reuse it and the dream remains the same uh the result perhaps wasn't you know as that wasn't completely accurate in terms of the numbers back there but you know this ability to stand on the shoulders of every single other innovator in the community

107. 53:02

     is something that i think is is coming to fruition and both of those things i think are important you know you bring them together with that element of community and and i think that's what's so exciting for entrepreneurs at you know this particular juncture that you've never had a say a flatter world from a perspective of innovation that an individual or a team anywhere um can uh can take that concept of digital ownership can take take the

108. 53:35

     you know the more rich and complex building blocks of innovation that other people have produced and anywhere in the community you go out there and build their own community around what they build um and build a startup um and so i think that is just creating this rising tide um of uh you know talent effectively and i think taking a shorter lens on it um last summer we had the kind of summer of defy and uh you know getting the maturity of some of the stable coins uh the

109. 54:07

     aggregation of different assets into you know automatically you know bundled and and unbundled um sort of funds if you will um concept of yield farming aggregation of different underlying defy elements that are generating different uh yield or paying out at different rates all of these different elements so that the programmability that combination of different elements started to mature and people saw the the potency of it and then even though the work around

110. 54:38

     attaching digital ownership to the world's assets through you know standards uh for example the ethereum ones um began you know a number of years back and one of our portfolio companies decentraland was very closely involved in that um you know and the marketplaces have been developing you know of course open sea and wearable and super rare and so forth it really obviously started coming to a head back end of last year at the beginning of this and i think now um you know we see

111. 55:08

     people understanding the applicability of that digital scarcity in digital ownership across all of those assets including business assets and business documents and understanding that they can now take a piece like an automated market maker that has been built to some level of maturity in the defy environment and then bring them together and build something entirely new perhaps in the supply chain space perhaps building a

112. 55:33

     marketplace for for data um and so i think you know maybe we're going to get that kind of hyperbole this kind of excitement this kind of opportunity um every summer um for a number of summers to come because despite all of that progress you know we're still orders of magnitude uh below mass adoption um we're still in the realms where the the users of these platforms are you know enthusiasts and speculators and technologists and just a few folks

113. 56:05

     you know from main street if you will so i think it's going to be pretty exciting for some time to come yeah no absolutely yes it seems like the kind of like the the cycles of innovation and then combining different ideas and then transforming into something new is happening much much much faster than ever before you know all the way from as you say from steve jobs day to you know the d5 summer of last year the

114. 56:30

     nfg mainly of this year like those cycles seems to be getting tighter and tighter yeah no absolutely and and so the way we look at it um maybe because it's iterative like that and instead of cyclical we see opportunity up and down the stack so we see opportunity in platforms that are really getting uh to to scale and getting network effects through the third-party development you

115. 56:55

     know on them uh we have perhaps the success of the graph we have an investment also in superfluid which is like programmable cash flows um actually investor in a immutable we've got exciting platforms like palm being built um also then on the infrastructure side you've got you know alternatives to the graph that are more centralized like like bitquery you've got aurora closely

116. 57:20

     coupled with the the neri ecosystem um and then you know you've got you say somewhat left field and orthogonal to all of this uh another another investment that we've announced which is on the red tech side you know how to do your tax and reporting and so forth around these digital assets company called blockpit um you know so i think that's you know extremely exciting and you know one area that in our

117. 57:44

     portfolio has really um taken off tremendously fast and people have probably seen is um the area of you know what is often called you know play to earth so the definition of new you know a metaverse um and i did very limited gaming probably because i liked it too much back in my my teens um i was a kind of an elite on the kind of bbc um microcomputer uh player back in the day uh but then i was around when philip

118. 58:16

     rosedale also was um back 20 years ago was building um second life uh which was obviously not sort of cryptographically enshrined but really took off to some kind of half billion market cap sounds like nothing at this point in time you know back then and people like ibm were buying pieces of that land but i think you know that's really taken off now that you can have environments

119. 58:39

     like axia infinity um you know we we do have some involvement um and you know plays like um yield guild games who actually you know can offer up loans to buy into the digital real estate of um that environment and allow people to go and you know play to earn and the critical thing is whether it be that set of token economics that that uh circular economy not in the recycling sense sadly we'll come to to how we treat those

120. 59:11

     assets better in the future but you know how those circular economies where you know by operating either as a good citizen or as an effective player in that environment you improve your chances um of the outcomes uh within that environment that are at least somewhat influenced by by luck or you know or by a ballot but you can improve your chances and therefore um you get this self-reinforcing loop that you you play more try harder you know build out your

121. 59:43

     environment you know burrito axes and so forth um and i think that kind of game mechanics you know applied to gaming is is phenomenally interesting and creates really a kind of petri dish of experimentation of game studios developing games and gameplay and gamers working out what they like and then this vast array of data being you know generated and then analyzed on a decentralized basis um that that kind of conv can optimize in a

122. 1:00:15

     sense the kind of studio development model that has often been developed in the media business in particular to deal with the kind of the fact that predicting the hit is so very hard but i like to think actually that that uh that push is something that that that model is something that can be used not just to find out you know what is a great game and to and to to generate a hit not that

123. 1:00:39

     it's it's not important to have hit games and hit songs and hit movies and so forth but actually perhaps other forms of kind of um you know higher cognitive function activities perhaps in the healthcare space or you know you know it's it affected what it is it's a way of harnessing people's activity at very large scale very very decentralized basis against tasks and i know it's actually happening to some degree within the near eq system around

124. 1:01:09

     labeling uh for the purposes of serving the needs of ai algorithms data labeling so so i think you know i'm optimistic that we'll see we must see through the experimentation go on you know all sorts of things that come out of that um and maybe it's a topic we can come back to you but i i do think that there's there's there's something almost philosophical about um the fact that if

125. 1:01:32

     we can give individuals uh a stake in the all the environment they operate in perhaps all of the assets that exist within you know their community their city you know that their country um something at stake but an ability to to um to benefit also from uh you know the the value of those those assets that that ownership you know the financial state that ownership in a kind of more emotional sense is is fundamental to good citizenship and it's fundamental to i think better

126. 1:02:04

     functioning society um actually actually and um there's a book by iron rand the virtue of selfishness which i think speaks a little bit a little bit to this so so i think it's pretty exciting from that perspective and hopefully although um we have not seen it yet it's something that can be extended as i mentioned in passing to you know the world of protecting the natural assets

127. 1:02:28

     um of you know that around us how do we account effectively for the impact of the environment and make sure that that accounting uh that we're in that responsibility and that you know the actions that will preserve the environment over the you know short medium and long term um are enforced through that not so much profit but more kind of you know sense of ownership uh motivation that that i

128. 1:02:52

     think that this perhaps can can can bring but again it's so it's one of those interesting challenges and i think about the opportunity that exists right now we're talking about it happening ever every summer maybe more frequently you know happening out there in a very flat way anywhere in the community anybody in the world can leap up and and understand a problem with you know deep conviction and to find degree of

129. 1:03:17

     granularity locally and then apply technology in the right the right way um you know i think um you can also innovate i mean this is the critical thing when we're looking at these opportunities to to very be very sharply focused in the kind of the pain that you're going to address if you will with the product and super smart with the way in which you take it to market um and so i think

130. 1:03:42

     you know that that's always the challenge it's actually a very little bit of um uh kindling can start a kind of inferno of demand in the marketplace um um and that's that phrase which i'm actually slightly borrowed from something that at least was on the sequoia website um uh a while ago um i think is is a good way for entrepreneurs to think and it again lowers the barrier for entrepreneurs to come into this space um and to really um you know build something fantastic quite fast from

131. 1:04:13

     anywhere in the world yeah so yeah there was a sort of an excellent job of skipping across sort of the pandora's box of opportunity that really is presenting itself here in this industry and something i'd like to sort of stay around to you for the people watching this who are maybe early stage themselves maybe kind of looking at like it's various toolkits that have been released by different protocols and places and

132. 1:04:38

     thinking about what what can i do to combine this you sort of touch on this idea of taking sort of the kind of mechanics of what was essentially a game and then piling in ownership control customization accountability responsibility i'm wondering if in your view like you know for people who are still sat here watching this and going like what is it that that you know is getting you guys

133. 1:05:02

     excited and what is it and where is you know to coin the kind of cliched where's the puck really going in this space what is it is it do you see you see this sort of like hyper combining and transforming almost away from like gaming or away from pure finance out into these sort of i guess bigger existential questions like the environment and democracy and citizenship and all that sort of thing is that where you see it going or do you think there's there's steps before that i mean i certainly do think that it's

134. 1:05:33

     where it's it's going one way we think about it is i referred earlier to you know this wave of the web being you know weaponized the ability to kind of um handle digital ownership or kind of to make and keep financial commitments but where we see that going is essentially to a world of um zero finance not not kind of decentralized finance or open finance but actually zero finance and

135. 1:05:59

     what i mean by that is that it becomes invisibly embedded in all of our activities and at the end of the day um you know you have a passion for a particular type of content on in youtube and and that's what someone will will mobilize an individual or community to go and you know take action you you care about preserving a particular part of the environment you know that will um you know what will

136. 1:06:23

     galvanize with you uh you have a supply chain and you need to optimize a part of it because it's critical survival for your your competitiveness of your business that's what you'll do finance should be in service of all of those uh activities and it should like invisibly just like you know tuck under those activities and service them and that's the way in my mind's eye that's what i see these

137. 1:06:47

     building blocks you know being capable of doing because you know there's this you know white heat of innovation around all the different possible combinations and lego roots you might need to just bolt into the activity you want and and then not just bought kind of a function that both kind of a a marketplace replete with not just data but you know customers themselves behind it i think you know that's that's incredibly powerful and so

138. 1:07:12

     manifestations of that that we see out there would be i think an increasingly mature increasing maturity of social tokens so you see um you know social you know movements either um you know around you know media um or other social movements um that that are becoming maybe indistinguishable from you know financial opportunities in some senses um that that we'll see uh more and more ip deals being done to bring that on chain and think thoughtfully about um how that is you know

139. 1:07:45

     made accessible and usable in a way that optimizes the value of the ip for the ip owners um you know would be it sports which we mentioned uh obviously be it art you know many different activities will be your your day-to-day life perhaps um the data sort of exhaust you leave behind you that might be of interest in the healthcare you know companies um and existing real world assets people are going to be shifting um uh on chain um

140. 1:08:17

     we have a portfolio company centrifuges doing a great job of that and you know thinking very has been working for a number of years now on how to do that and to to to tokenize you know at the heart of it invoices um and then uh thinking about which are the uh sectors because it's not enough to just apply the technology and tokenizing invoices not enough to do that elegantly and do it with a solution

141. 1:08:42

     that is you know that uses the existing ecosystems like you know make dao um uh stable coin ecosystem in their case you also and actually they're sitting on the kind of polkadot side of things as as it currently sounds so you know they're standing on all those shoulders but you also got to think about the sector you go after you know where is it necessary where is it where is it possible

142. 1:09:06

     for people to make the case to um move from their existing way of doing things to to optimizing their supply chain and their supply chain finance using you know this fresh approach and so you have to really get close to the customer and the particular sectors and the and the verticals to to understand where that might be the case and you know we've looked at a number of folks building different parts of the next

143. 1:09:31

     phase of decentralized media you know obviously uh you could look at um things in the kind of twitter-like space or the youtube space and different parts of that stack from the video encoding um up to the you know distribution and the kind of the the ip um and clearly there may be an opportunity to give more of the long tail of creators a chance to participate in the success of these platforms that's that makes sense that economics makes sense but there's also an opportunity um

144. 1:10:02

     to think about you know which particular creators just couldn't operate without this so it's got to be a more binary question and i think that's where the entrepreneurial you know um hard work the entrepreneurial struggle has to come in to really get close or luck frankly to see that opportunity and and or and then have the now the smarts to say hmm i can see that really would make a

145. 1:10:26

     binary difference that particular segment however small it is let me use that as my beach shed let's build something that works super well for that outfit and let me get going with that and then you can probably build up the kind of the momentum in the flywheel to to build a great project out of it yeah so this is something that reminded me of was yeah when i first got into into crypto many years ago there was sort of crypto was sort of going after every

146. 1:10:49

     industry and saying the solution was just crypto it's just blockchain a fire and it'd be great and obviously there were dozens of projects that went after supply chains and went after loads of big mega industries and realized that the slowness and the transaction costs were the solution wasn't the technology they fundamentally misunderstood you know the things that we're going after right so it sounds like what you're saying is

147. 1:11:14

     the the kind of the defy intensity and the of innovation around there is creating a bit of a kind of like a melting pot whereby some of these ideas or some of these like toolkits and come out with them really start to go after other industries and disrupt them in more meaningful ways rather than just shouting blockchain everything and hoping somebody buys it yeah there's many more tools in the in the in the toolbox for sure already and i think we see derivatives and things like interest rate swaps you know um

148. 1:11:45

     being built on the d5 side of things we see you know more complex and sophisticated approaches to creating a synthetic digital assets and you you know takes it at stable coins um you know all of these will be you know super useful to um entrepreneurs who who are close to a particular vertical and go on um want to go and solve those those problems i mean the the way we see it at at fabric is we we

149. 1:12:11

     think about the open web open finance open media open healthcare and then over even work or kind of learning and learning and we feel like the first three have happened to some reasonably significant degree uh we think the next two are kind of you know uh coming to pass but we see all of them iterating there's still more infrastructure being built there's still be more more being built

150. 1:12:33

     on the open finance space there's still um you know a lot of work obviously in the media space before we can shift away a world from away from the world dominated by ad revenues and and today sort of web you know to take titans um you know i was i had the opportunity to have lunch with a policy maker in that in in that space you know it's a major interesting concern to to government

151. 1:12:57

     um how to deal with the the market power the concentration of market power in you know the web to tech titans and um i guess you know we ended by kind of wondering well agreeing that probably we'll just have to meet in the middle we're trying to tackle that challenge in a different way they're going to tackle them in their own way um it's going to take a little while but that little while it's going to take is is an opportunity for entrepreneurs out there

152. 1:13:21

     um yeah yeah so something you mentioned that kind of came to mind was this idea like it was would you yeah if i was to ask for a piece of advice from you if i was starting something for myself would it with a fair piece of advice would be to sort of the the culture of this space which is to build on top of what's already there rather than trying to completely reinvent the wheel let's say so would a good piece of advice be like to sort of see this as a collaborative opportunity to

153. 1:13:51

     to work with other teams and projects in this space to build some of what they've done rather than i guess what the sort of the web 2 world did which was get very siloed very quickly and trying to build high walls between projects is crypto's kind of the answer to that to going to be much more collaborative in nature do you think i mean i think it is definitely intrinsically much more like that and i think we we refer to you know crypto the open web as the the

154. 1:14:16

     fourth and golden age of open source development and not just that it kind of gives a business a model for uh open source um i mean i i can remember first using open source and the products that we took to market in the mid 90s and people thinking we were crazy um to to actually um try to use open source in a kind of an industrial enterprise little and sort of carry grade environment and of course

155. 1:14:41

     it's proven to be the case that open source is exactly the right software for doing that and now we're taking the principles of open source which is openness and collaboration and applying it much more broadly um you know there's i think there's all this opportunity around dow decentralized autonomous organization infrastructure that's being built and you know that is a very complex problem um not just not the software just but

156. 1:15:04

     obviously the very essence of human decision making individually let alone you know collectively um but i think it's very you know in solving it in particular particular use cases you know even to a to some degree is incredibly valuable and potent and and i think you know uh it's interesting to speculate what this next wave will bring you know we we're had in 2013 you know quite a kind of bull market associated with you know bitcoin and a few alt coins but you know and centralized exchanges i think predominantly um then

157. 1:15:38

     we had obviously the the ico and the rise of an alternative to you know utxo chains and um and and and at least move towards smart contract capability with ethereum in 2017 and that was uh the powerful and then following on from that the development of a lot of eth eth 2.0 competitors let's call them killers i think this can be room for quite a few players um and but you know people contemplating at least some new blockchains for every many many many different you know use cases and again

158. 1:16:10

     we'll be talking about the d5 primitives that i think have been fueling this next shift and then um you know of course we've been talking about nfts i think you know dows are definitely a candidate um in maybe in combination with social tokens um and our infrastructure for opportunities in this next wave we're already over uh you know back over 2 trillion in in the market cap here um there's a lot of

159. 1:16:35

     irrational exuberance in there that's in the nature of venture though that's in the nature of um building out infrastructure that means that not every dollar in there is going to be a sound investment because not all of them can be winners in the short term uh but in the medium and long term i am 100 confident um that you know we will have a software environment and a set of applications and transformed industries and businesses and lifestyles that will be unrecognizable in the

160. 1:17:05

     10-year time frame um and we're seeing you know 100 200 ix uplifts in sales on the kind of non-fundable token side or the revenues in these play-to-earn platforms um or in the monthly volumes on the decentralized exchanges in automated market makers you know that that's that shift not just in revenues but also in terms of the users combined with all of these building blocks that are out there once again does something dispels a fantastic opportunity for anybody anywhere who has

161. 1:17:39

     an insight into you know a precise insight into a problem that should be solved and can really you know think boldly about how big that could become over time if you then take it to to market it kind of in a smart way and probably in a very community uh driven way indeed yeah it's fascinating and i could i could talk to you all day on this sort of thing and just sort of like to to bring things to a close what do you see you know this this year's been a

162. 1:18:10

     one this would have been a big ball cycle sort of semi-bear cycle can we call it and it seems things seem to be returning back to you know the balls what do you see you know happening over the next 12 months in terms of the broader market i mean i've learned never to try and predict these things although i did do a quite a good job at ethereal uh tel aviv um of calling something close to 50 000 for um for ethereum i said um that it would happen by kind of the back end of

163. 1:18:41

     uh well last year so we kind of almost got there and um um so what i do know that it will go up and it will go down with the market fluctuations and that's important with each wave you know that washes on the shore we bring you know more people um you know into this this domain with a better understanding and we learn from them and they learn from from those who already part of it

164. 1:19:06

     um and you know and that's a good thing um i think you know i've been through a few different ways so we try and keep um my sport was rowing and trying to keep your eyes on the boat and just think of you know who are the great teams out there um you know what are the problems that really deserve to be solved what what are the super smart approaches to doing it who who who the folks that when you really dig deep into the technology have got a fundamental you know edge

165. 1:19:31

     and you know that that's what we focus from on from our perspective and i think the mirror side of that is what entrepreneurs should focus on um you know i think you know we've never had a technology market that's turbocharged by this direct link between the technology and the you know the ticker if you will um and and so that's both a blessing and a curse um i think there's you know

166. 1:19:54

     organizations that have done well be it apple or some others i won't mention by name but in our market really encouraging you know folks on the team not to look at the stock price the ticker you know is to you know focus in on what you need to do one foot after after another that's what i would urge that that we do um but if you're talking about the emotions of markets and and so forth it feels like there's a little way to run but at

167. 1:20:18

     some point it'll run out of steam and we'll you know come back down again and and we'll go and repeat so that's the there is an extra challenge we haven't talked about that much i've been alluding to it i guess uh if venture firms you know that are kind of come from a set of accountants and um and sit in ivory towers and and don't you know you know beat the street and get out there and be part of the community i think if

168. 1:20:42

     we would struggle particularly at the early stage um to operate within these markets and and i think you know there is clearly a an additional interesting challenge and opportunity because if you're investing in um a project that then produces a token and that token becomes liquid because that's intrinsic to building the community around that token and that network then you know you have to wrestle on behalf

169. 1:21:08

     of your investors with the question of when's the right time for you as a community financial backer in that space even if you're involved in many other ways to to also to to take liquidity for your investors um you know that's an additional skill and challenge um i would say and that's where some of the market fluctuations do do come in but fundamentally at fabric you know we've got a uh actually a brand new 130 million

170. 1:21:31

     dollar fund and we're you know we're focused on the 5 10 15 year you know time horizons uh for the projects we're we're backing and just working very closely with the founders to be as supportive as we possibly can sounding advice indeed richard alexa thank you very much for your time today and uh enjoy the rest of your day thank you matt thanks for having me everyone my name is brady dale and i'm a reporter at the defiance uh i'm here today with maria shen of electric

171. 1:22:08

     capital to talk about nfts and where nfts fit in the broader economy and crypto economy hey maria how are you today hi i'm doing great how are you i'm great thanks for being here thanks for having me so um yeah i guess the first question is just really uh what is electric capital so for those who don't know electric capital cpc firm been around for a while pretty well regarded um

172. 1:22:31

     what's you all's take on nfts and uh the nft economy yeah so i've just been personally fascinated with uh nfts for a really long time um i started exploring the nft space back in um 2018 really started with crypto voxels i'd heard about cryptokitties played around with it um but really really started getting into it actually with cryptovoxels um always been a fan of metaversus huge fan of snow crash um and so when i discovered crypto voxels i spent a long time just walking

173. 1:23:05

     through the world like looking at the buildings that people are creating um and crypto voxels was really early in integrating with nft marketplaces so they had a lot of nft art just hanging in the buildings and i would just kind of click through and explore and that's really what piqued my interest in the beginning um maybe it would be worth just just in case someone doesn't know like saying what cryptovoxels is really quickly and also i'm curious i'm curious what you what do you do now that you've explored a bit like what are you doing in there

174. 1:23:37

     so crypto voxels is this metaverse um built by a developer named ben nolan who spent a long time just really fascinated with graphics um and meta versus and kind of how to improve the experience and how to have real um you know how to how to how to bring like a digital world to life like one we can actually spend time in um so within crypto voxels you get dropped in as an avatar and you build with voxels right so basically it looks like minecraft almost where you have these little blocks um

175. 1:24:10

     and if you own a parcel of land the parcel of land is an nft if you own this nft parcel then you have the right to build on top of it um and the really cool thing is people have built these like just mind-blowing fantastical things these buildings um some of which allows you to teleport from from room to room um some of which are almost mazes with secret rooms that you can discover it's it's just like a really really cool experience and then of course there's endless amounts of art on the walls for

176. 1:24:42

     you to look at as well um so yeah so so that's how i got started do you do it uh in a vr helmet or do you just do it on the laptop i've tried it with um i've tried it with an oculus it was pretty fun it was a little bit hard to navigate but i also did that you know six months ago and i bet the the team six months to a year ago i have no concept of time in the crypto world but um um time moved so differently but it was it was fine it was a little hard to navigate um but you can see the the

177. 1:25:15

     promise um but normally i usually just actually use it in a web browser um but you you were asking me what i do now in crypto voxels so yeah um you know i bought parcels um really early at the time it felt like i can't believe i'm spending money on pieces of digital land but i think that's the that's the interesting thing with nfts right where it's like you almost feel this compulsion and it it seems like why

178. 1:25:40

     you know why am i doing this um but i think that that like desire to to actually own and purchase um and create on top of it is is like worth digging into and i think that's what makes nfts this really emotional um this really community driven financial product but regardless i bought parcels um right now my parcel i guess funny story one of the guilds from near called human guild built their headquarters on top of my parcel so i've

179. 1:26:16

     basically uh loaned out my parcel of land um they are they paying you rent i wish once that functionality kicks in or once a protocol allows me to do that i'll definitely be charging but right now it's for free um they've built their headquarters on top of my parcel um they meet there every friday it's always a fun time um i joined them too and uh and then we you know we and in the beginning we weren't really sure who or how to build something really

180. 1:26:48

     cool and so we we kind of asked around and we got a voxel artist to build the the entire structure which is this really beautiful floating mermaid in kind of like the shape of a flame um we got her to build the entire structure for free because in exchange she's using the parcel as a place to showcase her nft art so she's using it as a gallery and she brings buyers into the gallery to show her art so it's just this really interesting collaborative environment now

181. 1:27:19

     cool great um and so you have friends you meet up with inside crypto voxels that's like the whole thing yeah so it's a whole thing wow all right i've i've done a little bit of experiments with that and it it hurt my head too much uh but i probably should try it some more um the experience is not great but it's it's like you can see the beginnings of something really cool um it's it's honestly it's you know it's kind of how i felt about crypto in the beginning where it's like wow this user experience is rough

182. 1:27:51

     um but it's the beginning of something really cool and really special right great okay and then um what's uh i know like i remember when electric capital launched uh you know i talked to about one of your i don't know if he's the founder of a co-founder but he's who i talk to the most often there and um his whole thing at the time was it was all about uh money on the internet sort of the larger idea of money on the internet so connect that to nfts for us if you don't mind yeah yeah yeah absolutely so

183. 1:28:24

     avitrel garg and curtis fencer they're the founders of electric um the electric thesis always was around you know crypto and and we were founded back in you know back in 2018 so remember that crypto wasn't really all about money before right it was like oh you could be you know a supply chain infrastructure you could be a database like you know there was a lot of debate around what crypto could evolve into

184. 1:28:49

     um now i think people are pretty like honed in on the financial use case but it really really was not the case before but our thesis from the very beginning was crypto could be used in certainly in a variety of ways as a distributed database perhaps if you wanted to but the the asymmetric opportunity here um especially for a fund would be to invest in the financial use case which would be

185. 1:29:13

     by far the biggest market and in fact there's this possibility that we could build a financial parallel financial infrastructure rebuild our entire financial infrastructure in a crypto native in an internet native way with crypto with blockchain um so we were always very very honed in on financial products we invested in a lot of later ones and defy um because crypto is programmable money and

186. 1:29:38

     nfts to us is actually it's they're they're programmable assets right they're digital native crypto native assets um and assets are inherently financial you have in the real world you have real estate as assets you have music masters as assets um you have certain rights um you have you know you have movie rights you have different things as assets and all of these are at the end of the day financial products yeah and once you have a property that has some kind of

187. 1:30:09

     established value then you can you can do finance around that right like you can you can lend i mean the easiest thing is you can like lend against it right yeah exactly exactly yeah uh yeah i like to think of it as nifty phi i feel like nifty phi is sort of like the next uh the next way i like that yeah i like that name um you know when i first got into crypto it seemed so obvious to me that defy was going to go mainstream i was

188. 1:30:36

     like wow we have such high yields you can take out a loan in a decentralized way um without any sort of intermediary you're just you know you're interacting with the contract everyone's going to be on this everyone's going to start participating um and i just kept waiting for the crowds to come in and it just never it never came and we we had defy summer right we had a lot of like crypto people or finance people start being really attracted to these products and certainly we saw a lot of engagement

189. 1:31:05

     and you know like uniswap does almost as much as coinbase and volume now so so there you know absolutely there is some adoption um but it didn't really reach the mainstream the way that nfts did and i think you know it's really like nfts really put the emotional aspect on top of on top of financial products right it's it's really you you are finding you are emotionally attached to the assets that you own to to in this case sometimes the jpegs that you own in a way that you can't be

190. 1:31:37

     emotionally attached to erc20s did you mess around with like meme or rope last year during the yield farming boom do you remember them no i don't remember this one meme like meme started as a joke it was pretty funny um and but then it sort of turned into a thing but yeah that was like one of the first nft d5 things because they created this token meme and then they created farms for it where if you staked meme you would get nfts um and their empties were pretty cool

191. 1:32:07

     yeah oh i never heard about that that's so cool yeah yeah and i feel like that you nifty is still kind of playing around with like farming ideas so um so that's still out there but it seems like today more of the nft defy marriages are more kind of starting more from the basics of finance like lending or fractional ownership i don't know if there's anything in those spaces that you've been interested in or excited by

192. 1:32:37

     are those topics you like yeah no i mean absolutely i think there's there's one really really big obstacle in the nfc space before it can really take off i think the special thing about nfts is that um you know communities natural naturally aggregate around them um you have these huge discord servers with thousands and thousands of people waiting for drops and that that's like a very common phenomenon um and the other really kind of superpower for nfts

193. 1:33:09

     is that they can is that there there's there exists a defy stack that they can theoretically plug into right we have all the infrastructure for swaps we have all of the infrastructure for lending but there's kind of this like this middle thing that's missing there's like a step two that's kind of missing um and it's the that thing is really that there's no liquidity or it's very very

194. 1:33:35

     difficult to get liquidity for nfts um crypto punks you know has has probably the most liquidity um and then some of these top collections like board apes or you know cool cats or gutter cats or you know all of these collections like have some liquidity but at the end of the day i've heard that um i've heard art blocks and auto glyphs are really good liquidity right wise you know but yeah yeah but your broader point is 100

195. 1:34:02

     correct it's like it's there needs to be more things moving right right and i think fractionalization um well liquidity and pricing are kind of two sides of the same coin right if if you have more liquidity you can price these assets if you can price these assets you have more liquidity and fractionalization is probably the best solution so far that we come to to really solve this problem i'm not

196. 1:34:26

     sure if it's 100 there i'm not sure if there's some tweaking of the mechanism that we need but effectively we take something that's non-fungible by design which is nfts we make it fungible through fractionalization and then turning it into erc20s and then these er c20s can can theoretically seamlessly plug it into the d5 stack right um but i think still the problem is that pricing the underlying asset is very difficult and so um you know i i think there's still some

197. 1:34:56

     stuff to be figured out there but but i i think you know your question around do i think interesting stuff is happening around fractionalization you know the answer is absolutely i think that's one of the key unlocks that we need to develop in order for for nfts to i i don't i think we're still like everyone feels like nfts have taken off everyone feels like we're like already riding this huge wave i think once we unlock the pricing and

198. 1:35:21

     liquidity stuff um it's like we haven't even seen what nft can do yet yeah i talked to the nftx founder this just this week about some of this actually because i was doing some similar reporting and for folks who don't know how how that works is um they create indexes for nfts um and so you stick an nft in like say a basic it has to be like a basic crypto punk just like nothing like the most the least rare well you don't you don't have to do that but it wouldn't be smart to not do that and so you drop it in there

199. 1:35:51

     and you'll get one punk token back and then yeah like you said punk punk is trading right now on uniswap so there's always a price for the most basic punk um you know and so that's great because there's you have an ert20 price it's up to the minute you know you can look when the last trade for anything was and so they've got it but is but as he explained to me he was like look we like our products but uh it really is only good for floors it's only good for the

200. 1:36:16

     most common stuff right now they're they're working on derivatives that would that would make it more sophisticated and they're excited about that but but yeah he would agree with you he he's psyched about um a marriage of an ft g5 and he feels like he can feel it but you know and i quoted him this morning in a story i wrote he's just it's not quite here yet but you know he sort of feels it coming was his take yeah yeah i think everyone is kind of circling around different solutions that

201. 1:36:41

     can happen because everyone is super excited about what happens when nfts truly truly merge with d phi in that in that way that we want it to um yeah crypto pumps have have definitely the most uh the crypt of punk floor has definitely the most liquidity it's really funny i i was just noticing that for months now the cheapest crypto punk has always been uh like a crypto punk dude with a creepy mustache um and like no one wants it right because he has a creepy mustache like he looks

202. 1:37:13

     extremely creepy but actually he might be the most desirable crypto punk because he's the most liquid crypto punk that exists right it's like it's it's really funny that like we've we've kind of unlocked the floor for certain collections um but yeah i mean how do you sell how do you find liquidity for like a four million dollar crypto punk you really can't you just have to hope

203. 1:37:38

     that someone buys it from you or you can you you can fractionalize it you know as well and i think that's what that's what that's what's super interesting about fractionalization yeah totally um and so um yeah are there any other uh fractionalization projects out there that that you think have been interesting or important um no but i've spoken to um a lot of teams that are thinking about different ways or different mechanisms for fractionalization and different improvements um so i think you know more coming for

204. 1:38:10

     sure yeah i saw an interesting project just last night actually um and i think this is kind of early and i think they've been around for a little bit but there just hasn't been exactly a use case but renft and it's uh you can rent nfts from people um have you heard about this it would it would um no i don't think so yeah it would make sense for something like you know stoner cats which opens up certain ip you know um if it works for that i think it might work for i don't know if it

205. 1:38:42

     would i know axes actually infinity the game kind of has a funky setup so i i don't like it they have a whole way in which people can borrow nfts and that works well for them and that's huge but i don't know if because of the way they did that setup if reynolds would work but you could imagine a world in which it would make sense to rent a game character yeah absolutely no it it makes total sense and i think stoner catches your land

206. 1:39:06

     yeah exactly exactly no yeah and stoner cats is honestly a great example where like you might actually want a short-term loan on a stoner cat just to watch the video um i know people who are like you know i are participants in dows and like the dow owns a bunch of stoner cats and then no one can watch it because it you know it's just locked in place um so so yeah i mean i think that that ability would be super interesting i've i'm actually i've had two instances now where one

207. 1:39:38

     instance where someone lent me something so i you know earlier this year i kind of i lost my board ape someone from the board ape community actually was like here let me loan you my ape um until you find a new one and they just sent it to me right and that was like a that was very like very much like a good faith transaction i could very well just never give that back and so and then more recently i sent someone the three axes that i own so that they could get started playing

208. 1:40:09

     um and again that was also like a good faith transaction where i'm just hoping that they they bring it back and they probably will but you know it it means that you can't rent things on at scale and so i i absolutely agree i think something that allows you to rent it um would would unlock this kind of behavior at scale with axes doesn't i just make sure the way it works though is if they play and

209. 1:40:34

     they earn a bunch of funds you'll still don't you still control the funds whether that's how it set up the account no so there's um there's kind of the way that like like yield guild does it and kind of like oxy does it through through these sort of programs like these scholarships where you can um they lend you axes and then you earn yield guild for example like you know any anything that you are in any slp and access that you earn you retain seventy percent um your community lead takes twenty percent

210. 1:41:08

     yield guild takes ten percent um but uh i'm it's it's an interesting question i'm actually not sure what mechanism they do to kind of ensure that the automatic kind of transfer what i thought what i what i thought they told me was because they have this funny setup you can give someone your axey but you still get the money and that's why owners are able to guarantee that people give their axes back because they're like yes i will pay you your cut but if you refuse to give me my axes back then i won't you know i

211. 1:41:38

     won't send it to you so sorry that's just a minor aside um the thing go ahead sorry oh no i'm saying yeah totally i mean they would need to have some some sort of setup like that because they give out loans at scale for for my case it was just one person who i knew who wanted to play axle infinity um so instead of kind of like a you know trying to trying to make it a more complex setup i just set the axes to him um the thing i think is interesting about lending to me

212. 1:42:09

     i feel like you know we went through this big cycle where people got really into nfts and the price went up a lot and then there was a lull in the market and uh of course mainstream started making fun of it of course this bubble popped it was never real anyway and now you know it's back in a big way but to me when lending really becomes big and people hold things as collateral for a

213. 1:42:33

     while that's when it really becomes hard for the mainstream to argue that this value isn't real because you've got someone who's willing to take risk over time against it you know you're generating cash flow yeah yeah yeah well and also a a lender is like i trust that this thing will still be worth enough to back my loan in three months or whatever you know yeah yeah totally yeah that's a great observation yeah um so uh and i feel like we were talking

214. 1:43:03

     earlier about um and i didn't actually understand this as well uh but the the party dow story like that is uh could you explain sort of how that worked for folks because i feel like dows are big now and i think that'll interest you yeah that that actually really ties into your questions about fractionalization as well so um partydao is kind of this you know they're a group of developers

215. 1:43:28

     and um they created a product called party bid and partybid allows people to um bid on nfts um as a collective so rather than you know so the the thing that really went viral was um a zombie punk which would have gone for millions of dollars right so it's you know it tradition traditionally um you know you would have to have rich individuals or rich dows come in and say hey here's you know here's a million dollars and then everyone bids up um but party dow basically asks the question you know how can everyone participate

216. 1:44:09

     what if we all pull our money together and participate in this bid um so they created this really cool ui where you know when you hop in like you can see everyone else's cursor so it really feels like you're in this like crowded chaotic room um and you lock your funds so you connect your wallet and you connect you you lock your eth and and anything that gets used in the auction obviously that eth is gone any ease that's beyond the auction price gets returned to you um but effectively

217. 1:44:41

     what it does is it just bids on on the asset um so you create like a party so party of the living dead was the party that was created around this zombie punk there were many different parties this one this one kind of gained the most momentum um and there was a little bit of drama as well because while the bid was happening um uh you know someone else came in with with like another individual came in with a really high bid and then for a while it seemed unlikely that party this party

218. 1:45:14

     party of the living dead would actually win it because they would need a lot more east to come in but you know everyone was tweeting about it everyone was trying to grab other people to come in and contribute um and they were finally able to win it just uh i think the final bid was just a little bit over three million dollars across few like 400 something odd people which is i mean you know insane i don't know when else we've seen

219. 1:45:41

     400 complete strangers come together decide to lock three million dollars to bid on a jpeg like that's like that's actually insane behavior um and the the cool thing though is that now that this party party of the living dead owns it um how do you allocate the the ownership of the punk so they actually connect with fractional.art um to fractionalize the punk and then all the party members own kind of dead

220. 1:46:10

     tokens um like dead capital dat tokens um which now there's you know you can swap you can go in and you can buy and sell these tokens they're just kind of regular erc20s okay there are c20s all right cool cool yeah that's great oh that's a fascinating story so okay so um yeah i mean hopefully anyone watching this is convinced that uh financialization and nfts are a match made in heaven nifty fi is going to be huge um what's your prognosis for the space

221. 1:46:41

     where do you where do you think it's headed and i don't know the next it's crazy to talk too far out in crypto so like you know by the end of the year sort of what are you looking for what are you looking forward to happen yeah um i think there's going to be maybe like um you know three big questions one is how do you associate rights with nfts um right now if you own commercial rights

222. 1:47:06

     uh for example with board apes you own commercial rights and that's just something that the website says you're like oh okay i own commercial rights but like how do you actually represent that on chain right so i think there's some question around that and as soon as you unlock that you can unlock revenue sharing and derivative products in in a skilled way so i think that's super cool um i think the liquidity versus price um

223. 1:47:29

     thing that we discussed earlier which is like how do you price uh how do you price tail assets and how do you create liquidity around them i think we're going to see some really innovative and creative solutions around that and then the third thing is you know how do nfts actually start connecting with the real real world and i think it's not just going to be um it's not going to be kind of like houses as nfts in the beginning but um uh yeah

224. 1:47:59

     but i'm sure like collectibles marketplaces like 4k for example is connecting really sought after rolexes and sought after sneakers with nfts and that creates more liquidity for the already desirable collectibles market and so i think we're going to see more connections with nfts in the physical world as well okay well thanks a ton maria i'm sure we've convinced everyone uh that nifty phi is the next huge thing and uh it was great to be here talking to you today thanks a ton

225. 1:48:31

     likewise thank you so much for chatting with me i really appreciate all the questions peace everyone have a great one bye awesome well thanks everyone for tuning in into the opening ceremony of the metabill hackathon it's exciting again to to i'm super excited and i'm waiting to see what you guys are going to build um we're going to transition off if you are online to start to hacking and if you're offline to gather the heck note to local team to guide you through this experience i want to thank all our

226. 1:49:07

     partners and everyone who supported this hackathon coming together and all the hacknow teams to for organizing amazing experiences let's do it so

227. 1:50:16

     so oh

228. 1:52:10

     you