a16z Podcast - The Creator Economy: NFTs and Beyond

Episode Date: April 3, 2021

In today’s episode of the a16z Podcast, we’re talking about the Creator Economy, and how NFTs (but not just NFTS!) are making it possible for artists, musicians, videogamers, game developers, and writers to create entirely new markets to make money from their work and engage with their fans.Part of this emerging picture is social tokens, which share a crypto foundation with NFTs, but unlike NFTs (which are non-fungible tokens, in which each token is unique), social tokens are typically fungible, meaning each token has the same value. (Listen to our explainer episode "All About NFTs" with Sonal Choksi, Jesse Walden, and Linda Xie, or see our curated NFT Canon for much more info on NFTs!)This hallway-style chat features a16z General Partner and crypto investor Chris Dixon, talking with Kevin Chou, who founded Kabam, and is the founder of Rally, an open network on Ethereum where creators can launch social tokens; and Jesse Walden, the founder of MediaChain, a music rights protocol that was acquired by Spotify; he’s now the founder of crypto venture fund Variant.They’ll talk about how musicians, artists, and writers can think about NFTs and social tokens as well, and how those different types of assets can interact to create models that haven’t existed before.But Chris starts off the discussion by talking about the emergence of crypto tokens, and a look at how videogames and gamers were early to the idea of community engagement and digital assets, and how that model is beginning to spread outward. 

Welcome to the A16Z podcast. I'm Zorin. In today's episode, we're talking about the creator economy and how NFTs, but not just NFTs, are making it possible for artists, musicians, video gamers, game developers, and writers to create entirely new markets to make money from their work and engage with their fans. And part of that picture is social tokens, which share a crypto foundation with NFTs, but unlike NFTs are typically fungible, meaning each token has the same value. You can listen to our explainer episode all about NFTs hosted by Sonal or see our curated NFT Canon on A16Z.com for much more info on NFTs. But in this episode, we have a hallway style chat featuring A16Z general partner and crypto investor Chris Dixon, talking with Kevin Chu, who founded Kabam and is the founder of Raleigh, an open network on Ethereum where creators can launch social tokens. And Jesse Walden, the founder of Media Chain, a music rights protocol that was acquired by Spotify.

He's now the founder of Crypto Venture Fund variant. They'll talk about how musicians, artists, and writers can think about NFTs and social tokens and how these different types of assets can interact to create models that haven't existed before. But Chris starts off the discussion by talking about the emergence of crypto tokens and a look at how video games and gamers were early to the idea of community engagement and digital assets and how that model is beginning to spread outward. We've all, all three of us and our friends have talked about this stuff for years. I think we're starting this year to see what you could kind of call app layer mainstream kind of crypto token things happening.

And so that, of course, as a lot of people have heard about, you know, originally I think it starts with NFTs. So non-fungible tokens, but Kevin you're working on is sort of the fungible token counterpart to that, which are tokens that would be associated with communities on the internet. I kind of think of it as analogous to how modern video gaming works, where you have a game like Fortnite. and the most progressive games, the game themselves are free, but you have in-game currency in case of Fortnite it's called V-Box, and then you use that currency for various things,

including for buying digital goods, like in the case of Fortnite skins and emotes and things, which in the web world, the B-Bucks would correspond to social tokens and the virtual goods to NFTs, right? And so I think what I believe it's sort of happening now is that video games, which are the most advanced in thinking about how to engage,

people in social software in a way that both goes viral and spreads on the internet, but also makes them money, those ideas that have been developed for the last 10 years in the gaming world are now propagating out to the rest of the internet and the open internet. And that, of course, is going to have some similarities, including a lot of design overlap, I think, but also differences in the sense that these crypto blockchain concepts exist on the open internet and not within silos. That's where I feel like we are. And I think the first bit of the kind of sunlight has broken through and the NFTs and people are starting to see it, but there's a whole bunch more hopefully coming in your future.

Kevin, maybe you could describe how you think that might evolve with the next year or two. The gaming world is a little bit unique because we created these online communities that had a deeply integrated set of social interactions and communication tools. And so, you know, before there were social media, there were these games that these nerds like me kind of hung out in and we, you know, developed our friends and communities and played these games, and we cared about what our mounts look like. We cared about what our skin look like and how we appear to the rest of the community that we had developed relationships with. And today, you don't need a game for that. You don't need World of Warcraft or EverQuest or something

like that anymore. Now you have Twitter, you've got Facebook, you've got Snapchat, you've got TikTok. The game is not just in the game anymore. It's happening across all of social media. It's happening across forums and Reddits. And I mean, it's happening everywhere. And if we could build at the blockchain layer, how do we then take that and propagate it all across the internet and not just have these things being games? Yeah, I mean, Jesse, you have a long background of music. So, like, the video game industry, I think, is something on the order of $150 billion, would it be year in revenue? And I believe the music industry is something more like 20. And for the most part, it's not really grown with the internet. And why isn't a musician with a community on YouTube or

Twitch or some other place, just kind of an MMO. Instead of shooting other cartoon characters, you're listening to music and talking to people, you know, and why can't they take advantage of all the same monization and engagement technologies that the game world has developed? Certainly, there's no lack of passion for music, you know, people are just as passionate in those environments, arguably more so than in games. Yeah, while the sort of recorded music industry hasn't grown all that much in the internet age, One thing that's interesting is, like, the live music industry has grown, like, people are definitely engaged with musicians and, you know, having...

Well, but what they're doing is that's the virtual, they're monetizing the complement, right? So they're using the internet as the free part, and the offline is the premium, right, to analogize to, like, productivity software and premium models. But there's no reason they couldn't have a scarce resource on the digital side as well, right? Exactly. And I think that's what's been missing to date is that, you know, music became free with the advent of MP3s and piracy. and then Spotify is sort of, you know, one by making accessibility super convenient. But with that, you also sort of demolish the value in the sort of scarce creative work that artists are producing. And I think NFTs have reintroduced, you know, the concept of scarcity to the digital realm and sort of given fans a new way to patronize creators, express their support,

route financial value to things that they want to see in the world. And from there, there's all kinds of interesting things you can do with them and communities you can build around them that start to get more to social tokens and the like. So one analogy I think is useful when thinking about social tokens and music is artists had fan clubs, right? And if you bought a membership into a fan club, you got maybe access to the artist, meet and greet, you know, backstage or something like that. But, you know, we haven't had a digital equivalent of that to date. And I think social tokens might be it, right? You're becoming a member of an artist or creator's community by owning their token and that probably gets you access to all kinds of new cool experiences. In crypto world,

a lot of people talk about how early they bought Bitcoin, right? It's sort of a signal of like how OG or how deep you are in the space. And I think that same behavior definitely exists. And certainly with like indie music fans, like being early to a band or whatever, now you can prove it and profit from it, which is cool. So Kevin, what does this mean in practice? So can you just kind of walk through what the user interaction is? Like, we'll more people encounter this and what will their experience be?

Yeah, I think there's a few different dimensions. So one is how easy is it for the average fan, not the, the crypto audience, but the fan, to figure out how to earn or buy or trade either an NFT or a social token. And there's a lot of different approaches there. There's a very crypto-native type of approaches where everything has to be on chain. It's going to be held in a non-custodial wallet, et cetera, to be considered real. And then on the other side of it, what we're trying to experiment with is how do we make

that on-ramp experience for the average fan pretty simple, vertically integrate as many different things as possible, have the first-time crypto experience for the average fan be something that they would expect from another internet service. Some other approaches like Wadsora and others have expressed is kind of putting up a big enough barrier so that the fans will have to figure it out. So there's all sorts of different approaches and there's no right or wrong answer and different musicians or celebrities who'll figure out what's best for their fan community and do that. The second dimension is once you own this thing, how do you actually use it? So it's great if I have an NFT in my wallet, okay, maybe I can show people the link to my

MetaMask wallet and people can look at the NFTs that I have in there. But how do I actually show this thing to the rest of the community that cares about it? And so there's a lot of work in terms of just status and reputation and be able to show off different things. But I think even more importantly is how do you actually potentially use these NFTs? There is no doubt in my mind that five years from now, maybe even sooner, your backstage pass will literally be an NFT. Somebody will stop you at the Velvet Rope.

They'll scan your QR code that shows that you indeed own the NFT and you've got to show it in your... An NFT, will it just be like in a digital equivalent of a backstage pass or will it... I mean, I find one of the interesting things about NFTs is that it can be multi-purpose. Like, it could be both a beautiful picture and a backstage pass and an investment opportunity, right? Is that right? There's nothing that says that an NFT can only have one use case, right? Certainly you're talking about a financial or economic dimension of the NFT having value of whatever the community or the fan, you know, gives it or what the next

highest fan would pay for it. But then you can use it as a backstage pass after the event, right? It's not like the NFT disappears. I mean, you can certainly configure it that way if you're a musician and say, hey, once you use the NFT, it burns. You can certainly do that. But in this particular case of a backstage pass, what probably makes more sense is that you still own it as a fan in it, you know, a year from now, five years from now, it's proof that

I went to this event and I was a fan from five years ago when the band was still undiscovered or whatever it was. So the NFT could be a collectible. A lot of what's happened in the gaming realm, for example, is creating sets and creating different ways that you can compose different items together. So in the MMO world, one of the primary mechanics that have evolved is taking, you got to get this leather strap, you got to get this gem, you got to get this catalyst, and you got to go get this ticket. And then you put all of them together and it gives you this new thing, right? And so what happens if you own a track from the musician? What happens if you then combine that with one of the backstage passes that show you've been to an event?

And then you combine that with something else that shows that you bought a vinyl or a hoodie. So we're going to see all sorts of different ways. You can create NFTs, you can use them. You can then as a creator say, hey, if you go collect a bunch of these other things, you can then forge a new type of thing that you only get by being a true fan of mine.

Yeah, I think the key thing that Chris and Kevin, you're both touching on is that these assets, are programmable, right? And you can sort of compose them into all kinds of new use cases. And they're also portable. And that's because, you know, you own them in the same way you own Bitcoin. It's yours. You can choose to park it somewhere like Coinbase or you can take it with you to another platform. And so because they're both programmable and portable, you can take your assets and bring them into all kinds of new experiences that developers build, they give them different utility, right? Like, it can be a fan club, backstage access pass, but a third-party developer can

can add some additional functionality to an NFT or social token that makes it useful in another context for a different purpose. Well, yeah, I think when people start to really get a tangible feel forward, it'll make a big difference. So right now, if you're buying a piece of art on foundation or something, or you're buying a basketball moment on Top Shot, you basically can use it in that context, right? But because they're blockchain objects that are portable, third parties will start creating experiences around them. I think you'll very soon see companies to get funded that let you do

games and social experiences and other things with all of these assets. And kind of the broader thing, right, is you're inverting the polarity where the earlier web was built around applications. The next, the Web 3 will be built around these user-controlled objects that are primary. And then the applications come secondary and serve them. We're talking about flow and be a top shots just absolutely exploding. And then we have OpenC and Zora and a few. others on Ethereum, and then there's emerging some of these layer two NFT, you know, sort of like purpose-built layer twos for NFTs and a few other things. And I wonder about this portability and kind of what you guys see as how portability evolves over the next year or two as this

fragmentation at the layer one and layer two things fragment more and more. So for social tokens, I think there's going to be a lot more interoperability because they're fungible tokens. They're sort of easier to port around. And it's okay that they have, fragment across the universe of various blockchains. NFTs, I struggle a little bit more to reason about because one thing that makes an NFT valuable is the fact it's unique, it's scarce, and therefore its provenance is an important attribute that people look at. And so I do wonder if there'll be more of a sort of power law winner to the place where you want to originate an NFT. It may not be the case that all NFTs originate on this sort of canonical. But couldn't you have trustless bridges across

blockchains that preserve provenance? Yeah, and I think that's ultimately the solution. So I believe in a world where literally every piece of media enters its existence as an NFT, like every photo you take on your iPhone, you know, every game asset is created as an NFT. And it probably doesn't make sense to put all of those very, very long-tail media assets on something like Ethereum, which is very expensive because it has a lot of security. Like you probably put that on a side chain. But then I think as these assets take on social value and start to command more market value, they might migrate to the chain that offers the highest security. Right. So if you have a multi-million dollar LeBron, you might not want that riding on some side chain. You might want that on flow itself.

And similarly, you know, a photo that starts as inconsequential, but becomes very important, will maybe migrate to Ethereum for security. I guess the way I think of it is you'd have different blockchains with different tradeoffs, right? So like right now, Ethereum is clearly, the non-Bitcoin programmable blockchains is clearly the highest security blockchain, right? But you pay for it. You pay, you know, $10, if not much more, to do stuff, right? On a per transaction for gas fees. So you could imagine a world where the actual game activity is happening on rally or flow

or something else, but then as it appreciates, you put it in the quote vault on Ethereum, right? And I would also say, like, I think that a lot of times people frame this as either or, like Ethereum versus Flow. So if you look at every computing resource of history, so internet bandwidth, you know, PC, CPU power, just go through them all. Like demand outstripped supply by 10x. And right now, you could imagine a world where tomorrow you snap your fingers. Ethereum has sharding, proof of stake, all the good stuff. Optimism launches, you know, all the other layer two launches. And then application developers would come up with some new clever stuff. And you'd very quickly be back up to not $10 gas fees, $5 gas fees, right? I mean, look, you just pay all the above. You pay an inherent overhead for a blockchain, right? The game theoretic consensus mechanism just makes it slower than, you know, traditional centralized system. I think the specifics is you've raised Jesse, like, you know, how do you preserve provenance across chain is really interesting.

I think you're going to see, I think there's a lot of entrepreneurial opportunity for abstraction layers. So like a stripe for minting NFTs, seems like a no-brainer idea, like stripe for NFTs, whatever you want, for minting and read-write and it extracts away the underlying blockchain, you know. taking care of the metadata properly. There's a whole bunch of any more entrepreneurs because there's so many great low-hanging-thruid ideas. Maybe we could talk about interesting intersections between NFTs and social tokens. So an author minted a blog post as an NFT on Mirror,

and they also crowdfunded the creation of that blog post, which is sort of like a long-form piece. And they said, look, like, if you want to see me write this investigative piece, back me to do it. And the way that that crowdfunding happened was through crypto. And what the crowdfunders got was not just a piece out there on the internet, but also ownership in the piece itself,

meaning they were able to get fractional ownership of the NFT. And that was in the form of a fungible token called the essay token. And what's really cool is that essay token then became a social token for this author in that, you know, he started using it for gated access to a discord. And he started layering on all kinds of other utility where if you had this token, you could talk to him about his next piece, for example. So that's one. an interesting example where the social token is sort of a derivative of the NFT. And then as we talked about already, there's all this sort of like additional utility programmed onto it. And I wonder if you've seen people doing stuff maybe the other way

around or different configurations. Yeah, you know, I think it's really funny. I think we start with fungible tokens, Bitcoin, Ethereum, et cetera. And then we create NFTs as a new building block. And then, of course, then we take the non-fungible token and we fractionalize it and make the fractions fungible. Funny world. Look, I think we come up with some of these weirdnesses, especially here in the United States, because of the regulatory gray areas. And so I think if you can sort of wave a magic wand and say, hey, like, there's clear boundaries and let's just say we can talk about all the things that we want to talk about from a utility and so forth without triggering any other things. I think a lot of people would start with fungible tokens. It's just a lot easier to think about how do you create a community around something that's more fungible and can be more easily exchanged.

I don't totally agree, Kevin. I think it depends on the community. I think there's a lot of people. I think we all come from technical financial backgrounds. I just find people like that just kind of have a natural affinity for fungible tokens. I think a lot of the world isn't like that. I think a lot of the NFT appeal is just that like it's a picture. It's a movie. It's accessible. And it's interesting. And it touches on culture and not just kind of numbers. Yeah. I totally agree with you. I'm certainly not suggesting that fungible tokens are greater in any way than non-fungible tokens. I'm specifically talking about. about once you take a non-fungible token and you fractionalize it into a fungible mechanism, I think once you start playing with that, like once you start going into that. My counterargument is like Cryptopunks. Like that's a great way to organize a community, right? And so it's 10,000 punts. They look different. But it gives it this character and this, right?

I mean, I think for a lot of people, that kind of metaphor is a better way to organize 10,000 people than 10,000, you know, indistinguishable, boring. It's YouTube versus Excel or something. Right. But what I think that Cryptopunks represents those is that each one of those are unique and different, right? And the characteristics and traits of them really matter. Those crypto punks are not fungible in my mind, right? Each of them are a unique piece of art.

For sure, they're not functional, but they create a community of 10,000 people that feel an affinity from one another. You're either in the punk community or not, right? So, yeah. I was pushing back on your point that it's because of regulatory constraints and things that people tilt towards NFTs. I think there's a bunch of reasons. I think one of the really interesting things that goes on with social token, right is that there are multiple uses so you could want a token for your favorite band to get backstage access you could want it to be able to buy nfts and make donations just pay in the

kind of economic life for the community right or completely different motive you could want it because you see yourself as a modern day a and r person who is going to predict the next band and make money off it right and it's the fact that the very same token has those multiple purposes is very important, right? Because then you have the possibility for people to, the A&R folks, the people that find these early bands come in. They kind of bid up the price. That in turn, in your model, right, funds the actual musician to make music, right? Which in turn feeds the fandom, right? So the investment kind of activity and the fan activity and the creator activity have this really nice kind of triangular feedback loop. And it's the very fact that they're the same thing.

as opposed to kind of, you know, the old school model where you have sort of the investor comes in, gives money to the musician, buys up copyrights, then sells a different thing to the fans, right? The fact of the same kind of, you know what I'm saying? That's right. Do you mean, that's a very big difference from the old world and a very powerful difference. Yeah, we've always talked about the internet as kind of this disintermediating sort of mechanism. And I think crypto does it even more at the economic layer of things. And I think what we're starting to see is, we'll stay on musicians for a little while with like starting with, like, starting with Chance to Rappers, I like the most prominent example of an artist that just wants to own all of his own rights.

And more and more artists are realizing that they get their power from their fans. And that the more that they're just wholly focused on serving their fans, the more successful they become. And this weird layer of rights ownership and labels and publishers that then distort that versus just how do you get your fans to support you to create the music that you love? When the fans have skin in the game, the fans become evangelist. And instead of doing all these old school things of like advertisements and other sorts of things, promotions and all the things that would do in the old days to promote various kinds of creations,

now the fans become the promoters, right? That's right. Because they have skin in the game. That's one of the remarkable things about crypto. You know, tokens over a trillion dollars in value, lots of successful companies, you know, exchanges and such. And no one ever spends money on paid marketing because it's all just done through kind of skin in the game, peer to peer marketing, right? So now musicians can tap into that.

that musicians, creators can tap into that energy, right? Yeah, it means that fans become part of the creative process to degree, right? Not only do they have a willingness to pay for the creative work, but they're also essentially, you know, investors in the work itself, and artists or creators that lean into that will find a whole new way to create stuff, right, because they can do it as a community. And not just a community that's communicating with one another, but a community that's actually pulling resources with one another to achieve things together.

Right. So it sort of blurs the line between creator and audience. So I think that's a big opportunity that we haven't seen a whole lot of yet, but is coming. Yeah. Well, I think Blow started experimenting with this, where he sort of sold the first track on his next album as something that would give you creative direction on that track, as well as original ownership of that track. The best thing about working with creatives, whether it's a musician or a visual artist or a gaming streamer or entertainer, is that these are naturally creative people that once they get their heads wrapped around how a tool, or a crypto system works, I think we're just seeing the very, very tip of the iceberg in terms of the use cases,

because the technical challenges there will get solved, the friction will get removed more and more. There'll be a lot of different approaches to this. But I think the most exciting thing is getting these tools into the hands of creatives that then try all these new ways to create that alignment and community with their fans and disintermediate the folks that haven't been aligned with

serving that community. But I think the coolest thing that's happening is that we're, creating kind of an integrated way that creators can very simply create all different types of NFTs and denominate it in their social token. And we just think that those are such natural parents, right? So today with just social tokens, we see our artists do things like you have to hold X number of our tokens to get access to the trove of music that's here or to get access to an AMA event or a virtual concert that we're putting on or a virtual hangout that we see some of our artists are doing.

And when NFTs come out, it's just be much more simple to say, okay, you'll hold X number of tokens, you're part of the fan club, but to get access to this event, here's the NFT that represents that event access. And then so there's a lot more granular things you can do. We're starting to see artists experiment with things like creating physical representations and then digital representations and linking the two things together through their NFTs and social tokens. We're working with an artist that sell sneakers and other physical merchandise.

And then they're creating NFTs of those designs. And owning the NFT, they are now starting to say, well, if you own the NFT, you could trade that NFT in for the physical. We're starting to see more experimentations with how does the physical and the digital sort of coexist? And the beauty of all this is that when you denominate it in the social token, there's so many other different economic activities that can happen. We talk a lot about music and some video games. What about other, like, Jesse, you mentioned writing.

Yeah, the writing one is interesting because it sort of illustrates how this expands in all directions and eventually we'll touch all creative services. So if you think about how big ideas come into the world very often, they come into the world through blog posts or writing, right? Think about like Elon Musk's secret master plan for Tesla, right? Like that's sort of a canonical blog post. And certainly someone might want to own that blog post as sort of a representation of all the value that Tesla's creating the world.

And it's an investment in Tesla success that's separate from Tesla's stock price, potentially, right? Owning that blog post is sort of like owning a kind of signed copy of the blog post, so to speak. It's the cryptographically guaranteed one. Maybe kind of analogous, you know, if I don't know, Thomas Edison had a, I don't know if they have it, but like his original notebook, that type of artifact, right? Right, exactly.

So the idea here is like owning Ewan Musk's secret master plan as an NFT could be valuable. Jack's first tweet as an NFT is valuable. It represents the sort of inception of these huge networks. You can imagine in the future that the next Elon Musk or the next Jack brings their big idea into the world as a blog post that is an NFT and supporters of them as founders or, you know, people want to see that idea happen in the world, crowdfund to buy that NFT from the author. And potentially that crowdfunding is actually used to finance the creation of that big idea. So, you know, what starts out looking like, oh, people are just buying essays could actually disrupt

the way that new creative things enter the world and are financed. I guess something we don't know is like, will the economics work? I guess one counter argument would be this such an exceptional blog post be worth blog. lot, but the average stuff won't be. I guess the counter argument is the average person doesn't usually need that much money. It's sort of the substack effect, I think of it as, whereas, like, you know, if you take a writer with a million Twitter followers who is getting paid X amount per year and they go on substack and they get a thousand people who are really excited, they can make 10x per year,

even if it's not all some famous artifact, like if it's enough to fund the writing, that could just be enough to transform that industry and the creative activities there. Yeah, and I think, I mean, maybe an analogy is, you know, startup, funding, right? Like, startups don't raise many millions of dollars in their first round. They raise a little bit just enough to hire the team and get going, right? Sort of staged NFT sales. Yeah, yeah, exactly. I think you just need, I think to your point, you just need a little bit to get going, right, and to raise money to make the creative work you want to see. And then from there, if you can build a bigger audience around that, you can sort of move up the ladder and raise

subsequent rounds of funding. And hopefully, as you perform better in the market, you're able to double down and reinvest to keep doing that. I think, Kevin, in your model, that would be, both NFTs and also a writer could just sell their coins as well, right? We think of tokens and NFTs all operating together in a singular economy. This is just something that certainly comes from the video game industry where you would expect that you go into a video game. As we're just using the Fortnite example of, you know, you get the V-Bucks, the V-Bucks and allow you to buy all sorts of different things in the game.

And when we talk about things like backstage passes or that essay or something else, those things are best as an NFT. But then what do you do to transact with that NFT? What if you as an artist, let's say that your first creative work sells for $10,000, but let's say at that point you create your social token and you denominate your NFTs in your social token, well, now you have a way for people to say, okay, great, that creatives first work, you know, let's say was worth $10,000, their second work, the audience value did that $20,000, their third work was $30,000.

The social tokens should then capture what the market, thinks about the sort of total value of what that economic output will look like over time. And so I think there's really interesting economic forces between how you create your NFTs and what does that represent and what does your social tokens represent. And how do they all work together in a singular economy that you as the creative, you control, you own 100%. And I think that's a really powerful way to both give like all forms of fans and community members and crypto members, kind of a way to participate in these economies, you may want to, you know,

buy that NFT because you're a true fan and you just love it. You may want to buy that NFT because you're an ARR and you want to speculate on, you know, what these things could potentially be worth in the future. Or you could just participate in the social token in all sorts of different ways. And I think we're going to be on the forefront of experimenting with how these things are intertwined and all put into the control of the hands of a creative. I think I think the role of the large tech platforms will be in this. world. Well, I'm pretty passionate about this. I've tried to build businesses in the past, you know, certainly that have been at the mercy of some of these big tech platforms. I look at

what Epic is doing right now, and I know Jesse, you're at Spotify for a while. There's very public emerging battles between big tech and some of these, you know, traditionally have been more application-focused developers. And I love what this does to the world. As I was thinking about building a new company or building a new project and thinking about building a out on Ethereum was so liberating. Because I've been building on Apple, Google, Facebook platforms for, you know, decade plus as a game developer. And there's a ton of benefits and value that comes to it.

But there's a lot of headache, too. That comes with building on these other platforms where the policies are changing all the time. The fees are changing. The rules are unclear. Maybe the platform ends up competing with you in the case of music or some other categories. So it's tough.

This is what I'm so in love with crypto as a builder because building on Ethereum, I don't need to worry that Ethereum is going to try to go public someday. They're going to change the way that the rules work or the fee structure works so that they can meet their numbers for the next quarter or whatever it is. There's not even a company. There's not a CEO that runs it. The idea that this thing is a permissionless blockchain that anybody can build on top of, it was such a game changer for me as a builder.

And I think our approach to rally was to do a lot of hard work so that we can make the same promises and commitments to the creatives that we work with. that look, you're going to build, you know, if we work with you to help you build your business and represent your brand, you're a fan audience, your community through tokens, both fungible and non-fungible, you own this. You set the rules. You know, we do things at the protocol level to ensure that all people can participate equally and fairly with transparent rules, but we want to make sure that you as the creative, you truly own this thing. Yeah, what's happening in crypto definitely flies in the face of the way like sort of big tech

platforms work right now. And I think another lens to look at it from is just a complete inversion of their business model. And that's because, like, you know, traditional big social media platforms, they own all the content that users post on it. And that's because somewhere along the way in terms of service, users agreed to upload content to the platform for the platform to monetize it as they see fit. So to be clear, I'm not talking about traditional copyright, like the creator still retains that, but you are transferring some rights to the platform to monetize content that you upload however they want to do it. And with NFTs and with social tokens, the amazing new thing enabled by Web3 and crypto is that creators can just monetize directly. When you create an

NFT, you're sort of like uploading your work to the blockchain directly and then developers can build on top of that content. In other words, the blockchain becomes this sort of universal library of media that any developer can build a social feed on top of or a content feed on top of. But the creator retains ownership of their work and thus can monetize it without a third party taking a large cut. And so these platforms traditionally, they've relied on being able to monetize creators work on their terms. And now creators get to set the terms and monetize directly. And if you start with that kernel of the creators create the content and then developers build interesting metadata and usage around that content, is that then becomes the social graph

itself, right? So think about how for big tech platforms that rely on marketing and advertising, yes, they create a simple platform for users to share and create content and build an audience and following. But it's really a lot of the metadata around that content, who's following you, who's liked what in the past. I think what's going to invert now is once you start with the content being on chain, who owns that content, who's owned it in the past? What are all the other metadata that's associated with that? If you can see all of that and that exists at the public blockchain layer, you then take it away from being this treasure trove that an advertising-based company

can, like, uniquely have as their advantage. And you open it up for the whole world. Anybody can look at that data. Anybody can look at that social graph and interest data and then figure out how to build unique new applications and services on it. Yeah, right now on social media, everything is sort of in 2D, right? You have an image and it's just a rectangle on your screen and then you have some metadata associated with it. But if I like copy paste that image and put it somewhere else, it loses all its connection to the creator, its history, what it's about.

And now all that metadata can live on chain. Any developer can access it. So as a result, you know, this image goes from being a two-dimensional box to taking on some of a Z access where you can like, you know, peruse through its entire history online and to put all the context on display. in new areas where that image is shared. Through that same channel, that information is being surfaced, value can also flow. So there's this cool thing you can do with NFTs

where you can impose royalties that flow back to the creator every time the asset changes hands, right? So that's an example of through the same channel that information on who owned this thing in the past, well, value can also flow through that same channel. Awesome. Thank you both, Kevin and just. Great talk.

Thanks for having us. Yeah, thanks. Thank you.