Bankless - Bringing DeFi to NFTs | Metaverso Panel

Episode Date: December 9, 2021

On December 7, 2021, Metaverso was held in Puerto Rico as a 1-day conference filled with leaders in crypto culture. We held a panel with Sam Cassat of Aligned Capital, Ben Lakoff of Charged Particles, Andy8052 of Fractional, and Laura Jaramillo of Upshot. In this special edition, we dive into what the conference experience really is. Spoiler: Crypto IRL is amazing. The panel explores the intersection of DeFi and NFTs—what happens when these worlds collide? There are only two types of assets—fungible and non-fungible—but we are seeing these concepts blur together in new and interesting ways. From liquidity to communities, this conversation covers how the Metaverse is bringing DeFi to NFTs. ----- 📣 METAMASK | YOUR HARDWARE WALLET'S BEST FRIEND https://bankless.cc/metamask-shows  ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini​  💧LIDO | DECENTRALIZED STAKING https://bankless.cc/Lido  👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave  🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants  ------ Topics Covered: 0:00 Intro 3:15 The Conference Experience 6:44 TradArt and NFTs 10:11 Metaverso 13:14 Crypto IRL 16:20 The Panel 19:40 FreeRoss DAO 21:38 The Panelists 24:28 The Potential of NFTs 29:00 More than Fractionalizing 33:45 Liquidity 39:33 Pricing Assets 46:50 Community 54:34 Regulatory Issues 1:00:22 Use Cases ----- Resources: Metaverso https://www.metaver.so/  FreeRossDAO https://freerossdao.com/  Sam Cassatt https://twitter.com/samcassatt?s=20  Ben Lakoff https://twitter.com/benlakoff?s=20  Andy8052 https://twitter.com/andy8052?s=20  Laura Jaramillo https://twitter.com/LauraTJD?s=20  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Hey guys, welcome to another state of the nation. This is an edition where we talk about bringing NFTs to Defi. This is a special edition as well because it's on site, on premise, at a conference. You're going to get the full conference experience in this episode. What are we talking about today, David? Yeah, this is a live episode that we recorded at the Metaverso conference about bringing NFTs to Defi, bringing Defi to NFTs. What happens when these worlds collide?

And I started off this panel with just a very quick introduction. There's only two types of tokens out in the world. There's non-fungible tokens and there's fungible tokens. That's the whole entire category. That's true in real life too, by the way. Yeah, it's also true in real life. Yeah, you got fungible or non-fungible. That's the only categories.

But then there's the also there's the intersection of these things where the lines can start to blur. And cool new things can be built out of that. And so this is a 35-minute panel that we recorded with four guests from around the Cryptosphere. And those guests are Andy A.05. You guys might remember him from a couple of NFT shows that we've had. He is the founder of Fractional. There's Ben Lackoff from charged particles. Laura Haramio from Upshot and Sam Kasott from Neptune Dow.

So those are the panelists. And we just talked all about the cool stuff that happens with when you intersect ERC 20 and ERC 721. Guys, this is going to be a double level up for you today because it's not only a level up on NFTs, it's also a level up on DFI. And this new thing, including where they both intersect. So it's a good opportunity to learn a bit more about liquidity into NFTs. Number one.

The second is how do you generate NFT communities using defy? You fractionalize NFTs? What does that look like? How does that guide in your investment decisions? And also, I think you guys are going to get into the one thing that all NFTs depend on, and that is oracles. So a lot to unpack here. Hey, guys, before we go too much further, want to let you know about MetaMask. Minamask is sponsoring this message.

They want us to let you know that. they are working hard on hardware support. Okay, MetaMask plus ledger. That's a combo I often use whenever I am using Web3. MetaMask, of course, is a fantastic Web3 in crypto wallet. And they are improving integration with the ledger. Also, MetaMask on the lattice wallet is really been amped up and actually newly released. Also, the Keystone wallet, if you're using a treasor, if you're using a lattice, if you're

using a ledger. This is the way to get into crypto while using protection. You need that protection, the hardware protection that comes with owning custody of your own key, not having private keys inside of a browser. So Metamask plus hardware wallets, a fantastic team up. And I would just encourage you. You probably have Metamask if you don't go download Metamask. If you already have Metamask, then connect your hardware wallet to it and try the experience out again.

There's been some bumps along the way with Ledger and Metamask support that some of you guys have experience, they are working to improve that. And I think the latest firmware updates on the ledger have improved that to a great degree. So check that out. We'll include a link in the show notes. David, we're to talk about the panel itself and the content of the panel. But before we do, I want just a taste of the conference. Give me the conference experience, okay? Because here I am in my office all the time. I never come out of my office, right? I don't go places. Well, we don't know that for sure. But like, you know, one day you and I will meet at a conference in real life one day soon i promise but until that time for people who

don't have the opportunity in the time to go to a conference what was the metaverso conference like yeah the miniverso conference was a one-day conference which uh i think is the first one-day conference i've been to in a really really long time and i think everyone really really appreciated that because this is also coming out on the heels of art basil which was a very long week in miami which was uh everyone was talking about how draining it was but art basil is something that it happens every single year i'm just learning about this because i didn't know about it big big art um just uh like decentralized convention of sorts there's many many many different venues and events just doing art stuff in miami uh and this year it was the running joke that it's

actually called crypto basil now because all the nfts have taken over art basil so everyone was in miami yep so there's two conferences right there's one you you went to two conferences in the space of like the last seven days or so one was art basil in miami um and the other is Metaverso in Puerto Rico. The panel we have upcoming is from Metaverso. But Art Basil, you're saying this was an art conference before NFTs. Right, totally. Okay.

And the NFT people are now like invading it? So what is the feeling there? Yeah. So like I said, there is the one canonical like Art Basil at the Miami Convention Center on Miami and Miami Beach. And even that had NFT stuff in it as well, but not too much. All the other like events, just like a different. just in installations.

There was a big installation on a beach that people would go see and there's just one big piece of art there and people would hop around of all these different venues and events going to all, just checking out all the art and all of them were like NFT, had some sort of NFTs

about them somehow somewhere. And the industry is in, the art industry, not the NFT industry, is in some sort of like kind of in a state of very much immaturity trying to figure out how to actually display NFTs. There's a lot of just kind of like amateurish

NFT displays where like you know, you had vertical NFTs being displayed on horizontal screen so there are big black bars. There are TVs just on TV stands on tables rather than like as a frame on a wall. First year though it's going to get better. First year. Yeah, you can't really can't really knock them too hard because this is brand new. It's just happened. But there's much to be desired with like in real life NFT displays, right? Like, how do we actually show these things?

Somebody that I saw do it really, really well, had NFTs projected up on a big, big wall. So this artist, this is Nate Mueller, who's the artist that I bought my NFTs from ForeverGo. He was actually displaying those NFTs, two big projectors that were synced up. So, like, it just looked like one big thing. And he had it blown up. It looks like, I think it was like 50 feet wide by 25 feet tall on this massive wall. And so those, that was really, really well. on. But the art industry is like trying to figure out how to come to terms with appropriately

displaying this very new format of like digital art with NFTs. Are they cool with it? So you know in our podcast with Kevin Rose, he actually used the term, you know, trad art. Right. And I'm going to continue using that. So like what does the trad art world think of this new NFT thing? Is there some resistance or this is there a warm embrace like, hey, welcome to the family. This is given injected some new energy into the art scene. What's the, what's the feeling from our basil? I think the art collectors, I don't think are too different from the typical distribution of crypto skeptics to non-skeptics. They're not really any different. Like some people like crypto, some people don't. I don't think the art collectors are any meaningfully different than the average person that you would get.

Some people are, again, some people are thinking it's the future. Some people are totally skeptical. The artists love NFTs. Because specifically, it's empowering. Very much so. And it's a new cohort of artists that are now able to play in art battle because of NFTs. So it's not really the trad artist. It's a new set of artists that have come into the fold specifically because of NFTs. And then there are specifically events being spun up that are just trying to be conducive to that type of art. Kind of the very, very experimental, very much on the fringe digital art that wouldn't have really had an opportunity elsewhere. Do you know it's so wild? I feel like this is a microcosm of what's happening in every single industry, right? So you get like trad art. And then you have like this NFT thing, the crypto thing is kind of invading trad art a little bit. I mean that in a good way, injecting new energy, creating this new medium. But it's not just art. It's like every industry. This is happening in finance. This is happening in like entertainment, Hollywood, the movie industry. It's now like NFTs. This is happening in gaming. So I don't know how. many conferences and conventions you intend to go to, David, but like you could go to them every week all year around in all of the different industries and have crypto, NFTs, DFI, defy represented in some way or another. It's just really invading every single aspect of like industry. It's going on. Like we haven't even talked about music, right? I mean, I'm sure there's like music conferences

and festivals, NFTs are going to have a huge prominent display. It was also interesting to see some of the platforms having like just a cubicles or just like sections in these in these art venues. Super Rare had like just, I think they had something like 10 TVs up on a wall. And when I say TVs, these are actually good like frames that are meant for displaying art. And so Super Rare had this, their own little section of this art display, the mixed with Trad Art. And then Super Rare was also debuting, of course, they don't make art. they host art. So they were, again, hosting art, but this time in real life, rather than on their website.

So they had actual artists that they were also with them in the booths having their art displayed. And so it was kind of cool. It's like the real website of Super Rare, just being manifested in this section of the art show in real life. I thought that was kind of cool. Hash masks were also there at the same place. There was one venue that just looked like in real life, Opency.

kind of funny. It's like, oh yeah, if OpenC came and actually just like had an in real life installation that this is what it would look like. All right. So tell me a little bit, that was the Art Basel conference experience. Tell us a little bit about Metaverso for people who couldn't attend. So how did that contrast, how it was different. I know this is this is hosted by somebody who's on bank list previously, G Money, who's on a Layer Zero podcast. So what was different about this one? Yeah, this was a lot of people here were at Art Basel. and they had just hopped over from Miami to Puerto Rico. But this cohort of people were a lot closer to the core of what I would call crypto.

These are all the people that like get it and know that everyone else around them also. The crypto natives, the NFT natives. This is sort of there. There's no trad art scene at the Metaverso conference then. Yes, correct. Yeah. So there were there were, it was all digital displays showing NFTs that, you know, all the NFT collectors love.

serotonin and mohito which are a marketing and nfti advisory companies they were they were also helping set this up and that's uh amanda cassat and a few other also like crypto natives that have been with consensus for forever and now we're doing your own thing so yeah it's just a bunch of crypto natives and then all the yeah all the sponsors that you would you would expect as well and again it was just a one day thing and they did a very smart job of starting the conference at 11 rather than something crazy like eight. Yeah. So people could just like warm up their day and then get to the conference. Oh, that's right there. Yeah. It was one stage with about 200 chairs, about 400 people there. Some people were inside, outside. And just a just a great fantastic list of just topics and

conversations. And it was just what I really appreciated about it was how concentrated it was. It was like everyone could focus their energies on one day. And because all of the good stuff was happening on that one day, everyone felt FOMO about, like, not watching a panel. So the panels were decently well attended. So everyone was together. People weren't skipping panels, and there's only, like, 400 people or so. So it's fairly small and intimate. Totally.

Yeah. That's awesome. Just did a really good job. G Money, he's pseudo-anonymous. So if you, like, follow him on Twitter, he always has his ape as his, like, a VR filter. But in real life, like, no, there's no VR filter in real life, but he still goes by G-Money. So if you ever meet G Money in real life, he'll shake your hands and it's like, oh, yeah, I'm G Money, but he still doesn't tell you his name.

That's hilarious. That's great. So were there any takeaways from you for Metaversal Conference? My takeaway is that Puerto Rico is really, really cool. Yeah. Everyone really likes to be in Puerto Rico. It's a great spot to host a conference, even if it's just a one day. It was very much, it made a ton of sense to host it right in this present moment

because it was right after Arborosal, half the industry was already like knowing two and a half hours away. And it was just, it was everyone who cares deeply about NFTs for all the right reasons. There was a charity auction as well. So NFTs were being auctioned off to go to charity support Puerto Rico infrastructure, which is still needed in the wake of the hurricanes that happened last year. And it was overall just a fantastic event. So tell me this, David.

What do you get out of conferences that you don't get out of, like, in-person conferences that you don't get from like all of the Zoom meetings and all of the YouTube and podcasts that people consume in the Twitter back and forth banter and the Discord servers. What's different? Make the pitch for going to a conference. Why is it important?

Yes, first off, some people that are really, really cool and interesting just aren't there. They're not on Twitter. They're not on the Zoom meetings, right? So it's really just a matter of having surface area to a lot of people all at once. You can go and meet five people inside of 30 minutes. and the probability of one or two of those people having like long-term relationships is pretty

damn good. And so like there is no replacing real life as much as we all want to live in the metaverse just seeing faces. And like for those that are on crypto Twitter like me and Ryan like degenerately all the time, meeting someone in real life actually does impact like how I read tweets when it's coming from somebody that I know. And this is true just this is true for emails and for, you know, up for podcasts. or just once you meet the person, you know, you just get a little bit deeper, like more

introspection as to like what they are actually thinking about when they, when they write stuff and show stuff. So it's important for like community cohesion and like you're actually able to form a different type of connection in person versus all of the digital mediums that we use. Totally. Totally. And ideas can be shared just a lot faster. Just communication is a lot more lubricated. I don't know if you watched the state of the nation I did with Robbie in real life at NFT, NYC, but

having Robbie right next to me, the conversation was really fast and it moved really, really quickly because I could look at him, he could look at me, there was body language, and like we forget about these things definitely on Twitter and even on Zoom. Like, you kind of don't really get that. You and I, we don't have that problem because we've been on Zoom like... Well, I don't know. How good could it be?

If we were doing this in person. What a question. I mean, yeah. Maybe we'd be number one of the podcast starts, rather than a number four in the Apple investing category. I don't know. Yeah, it's just like everything just happens faster. And so for people like me that really also have just like fantastic enriching social experiences from these events, just more socialization per second.

And so there's just more alpha. There's more people can just say things that they're interested in at a higher tick rate. More opportunities, more alpha, better connections, guys. that that is your pitch and I feel like that pitch is coming from David to me of why I should attend a conference in 2022 but we're coming at this is why Ryan dissents me he's like he's like I get all the benefit because David just does all of this but you know yeah absolutely guys so if you're if you're looking at conference 22 schedule there's a lot of great crypto conferences coming up so budget some time plan some time to meet the people that you see in the digital world in real life

it's definitely definitely worth it and David next year is the year you and I will meet in real life. So at one of these conferences at some point or another. But okay, let's talk about your panel now, because we got to the point we're going to intro this. This is really cool. So the combo of D5 plus NFTs equals magic. I guess that's what you're talking about in the panel.

So why should folks stay tuned to this panel? What are you guys talking about? Yeah, there's a number of quick conversations that we had. And really the format of this is I proposed a question, pose a topic, and just let the panelist. take it down the line. Each one had their opportunity to share. Sometimes they built off of each other, but sometimes they just gave their thoughts. There are really important conversations with, for example, Fidenzas, very highly valued ARPlock NFTs with relatively low volume, like weeks can go by without a

Fidenza sale. And so as collateral in DFI or integrating ERC 721s into applications, you that are, if you want to use the capital that's locked inside of a Fidenza, you need, to have a secure and accurate price feed that the market can rely on. And so, like, how do you get a price feed for something that has one sale per week and it's perhaps it's a floor? How does that even actually relate to a rare Fidenza rather than a floor Fidenza? So, like, solving that problem is hard, but definitely possible. If you want to skip to the end and just, I come to the conclusion, the answer is there is no good way to do this. You have to do all of them and then combine them, which is a problem in of itself.

The other is really important thing I think is really, really cool about NFTs that we're definitely watching it happen right now, but I think it really could supercharge people that really want to lean into this, is that a fractionalized NFT can make a community. And we're already seeing this with Pleaser Dow. Pleaser Dow, they bought the OG Doge meme for $2.4 million. And it's the meme of the internet. James from Pleaser Dow likes to say it's the Mona Lisa of the internet. how like it's the Doge.

Like it is the internet's meme. And so like there's only one of those and PleaserDow owns it. But it's the internet's meme. And so they have used fractional to fractionalize it into the dog currency. So the dog token is backed by the Doge NFT. And now everyone can have a share of the Doge. And now there's a fantastic discord and Dow spun up around the dog token because it's a part of the Doge NFT.

Well, what's super interesting about that is just like economically we talk about value creation. So they bought the Doge NFT for 2.5 million, as we said, somewhere in that ballpark, right? Okay, then they tokenized it, fractionalized it, and the dog token is worth them just looking at a coin gecko, 50 million, right? Right, right. So it's like that's a 20, you know, 20x in terms of increased value creation, right? And people might debate, is that, you know, is this a meme token? Is this value? Is this real value?

Definitely a meme token. But, I mean, you can measure the value that was created from, from the, from the, you know, defy markets. So I haven't watched this panel, David. I'm really excited to dig into it because what's cool about NFTs is of course when paired with defy, they inherit all of DeFi's superpowers. All right. Traditional art doesn't get any of this, which is why I'm like kind of bearish traditional art relative to NFTs in the same way I'm bearish gold relative to like crypto assets like Ethan Bitcoin, right? Because there's so much more you can do with it. And it's just going to give all of these NFTs superpowers. David, before we get into this,

is there anything else you want to mention? Yeah, so kind of in the same vein as fractionalizing the Doge NFT, Pleaser Dow is also launching free Ross Dow. Free Ross Dow.com, so definitely check that out. It's the Constitution Dow, but instead of buying the Constitution, they're buying Ross Ulbricks NFTs that he's issuing from jail. The money that is going to Free Ross Dow to purchase his NFTs, the money that the purchase will go to is to, a combination of actually trying to free Ross and then also donating to funds that help loved ones visit their other loved ones in jail. And so free route DOS.com is again kind of the same thing as a fractionalized doge, but instead of Pleaser Dow buying this NFT and then

fractionalizing it, they are spinning up the Dow and just donating their capital into the Dow. And so this is again, Constitution Dow for freerastow.com. If you're interested in helping Ross get free. Maybe you are interested in taking part in the fractionalization of the Ross-Obruck NFT if free Ross Dow buys it from Ross. So there's that. The experiments are getting we're getting weirder, but the experiments are also getting better. So stay tuned to this panel, guys. You will find out what is next with the combination of NFTs and D5 from the following experts. We want to get right to the content. So we're just doing a quick sponsor rundown for you. These are the sponsors that made this episode possible. Go check him out.

sponsors on bankless all of the time. Uniswap, apply for a grant, Uniswap Dow. Avey, get a loan without a bank, the bankless way. We also have Lido, where you can stake your ETH and get STEth in return, which accrues more ETH because that's how staking works. And of course, we have Gemini, which is the exchange that I recently bought the dip on, and that buy feels great. So buy your dips on Gemini. Thanks to the sponsors that made this episode possible. You guys rock. everyone from being here. This is actually the first ever live podcast, so that's pretty exciting. And of course, this is a recap. This is about the intersection of

NFTs and Defi, and to really get that started. I just kind of want to put this frame into people's minds as they think about this. Really, there's only two types of tokens on Ethereum. There's ERC20s and then there's ERC 721. That's kind of, it's more than that, but that's really just the gist of it. And that's what you get there. You got ERC 20s, the fungible tokens, which are defy, and then you have the non-functional tokens, which are NFTs. And so when you put those things together, that's the whole thing. And so what happens when we talk about the intersection of those two types of token standards?

And that is what we will be unpacking today on this panel. And so I want to introduce all of our panelists. If you guys want to just give your introduction and a elevator pitch as to what you do and your company, we will start with Andy here. Hi, thanks for having me. I co-founded fractional, which does NFT fractionalization. It's very high notice in the name. But yeah, I've been working in crypto and D5 for a long-down,

which is a very set in here. Awesome. Hi. My name is Laura Hadimino. I'm the lead product designer at Upshot. We do real-time, on-chain and n-tapraisals using peer prediction and machine learning and accurate price prediction once and for all. Hey guys, been there, thank God. been there.

The founder, this lead in charge partners. So we are in an MT protocol and then we can get a smart model to get a smart model to get a whole other answers. Hi, I'm Sam Kasid. I've been around for a long time. A lot of you know me probably is chief strategy after a consensus where I funded, there's a lot of stuff like Trump and Pira, Metamask, around that since the beginning. a few years, now I'm doing a number of things with founder of

something called Online. We've, in contact with the Neptune, though, which I'm afraid, we've provided the community to Defi applications and some types of things related to NFTs and a bunch of other stuff I'll be talking about soon. Alright, so let's go ahead and dive right into this. So, just let's get really, really grounded here. We have Defy, that thing is pretty damn robust. NFTs are still pretty new, but also,

extremely big. And the cool thing about crypto is it goes in all directions and lots. And it really seems to be that the intersection of DFI and NFTs is kind of like the one of the last areas that as an industry we really haven't tapped into yet. So when we open up the door and look behind the intersection of DFI NFTs, how big is this? Why does this matter? Is there something actually here? Let's talk about the potential of what happens when we actually combine these things. Very broad open-ended question. And once again, Andy, let's start with you.

All right. Yeah, I think what's interesting here is there's like, there's a lot of real-world assets that we do, like, kind of defy stuff in the real world with, like, digging out of mortgage on your house or different things like that. And you can, like, map all that really easily to, like, NFTs and defy with NFTs. But what's really exciting is it kind of unlocks this world where you do that with any asset in the entire world. And so not to, like, sound too bullish or anything, but it's kind of like the address of the market is every asset. the entire world that's worth doing D5 with, which I think is really, really exciting. It's just like unlocking opportunities for a lot of new people and new users and stuff like that. Now I'm going to build out that. The potential to tokenize literally anything in the world is astonishing for implications of like NMT's mean D5. The biggest issue right now is like how we live with these things are, the fact that we don't have any accurate price

prediction and the fact that like it doesn't matter if I, in my house on open state, if I don't have accurate price connection for that, there's no way that I can leverage it against anything. So especially like what we're working towards at Upshot, the kind of marketers as the intersection of NFTs and D5 because we're building that foundational element, which is that accurate real-time updating every 10 minutes price fee on literally every NFT suddenly things like,

I don't know, synthetics become possible. take like underwriting and underwriting your debt with NFD's becomes possible without your pressure rate rate. So I'm extremely, extremely bullish on this new azic class and this new world. But that is a foundational limit that's missing and it's around the corner. So yeah. So I mean, you're going to segmenting these things into this is the NFT world and this is the debug world.

Even within NFTs themselves, I think DIPC. itself, there's so many some categories and some sections of each of those. So eventually all of these things kind of meld into one big cryptos space. The Metaverse is surrounded by NFTs everywhere and those NFTs will have DFI-esque aspects. We will have structured products that are containerized within an MFT and it just makes sense because that whole thing is going to move out. So we'll continue to see it like melding the intersection of all of these in new innovative ways.

And we're just really beginning to scratch the surface of both things together, both individually. Agreed. Yeah, I think at a conference like this, a lot of what we think about is NFT are kind of like punks and games and profile pictures and things like that. But I think to take a step back, NFT just means non-contral token, right? It's a thing that's a unique digital object instead of a bunch of objects, like a stock or something, it's just a unique thing, right? And that can represent almost anything.

We're starting to see experiments. In that, some people try to make it with real property. It's a little bit hard to link into real property, like houses. We can imagine how something like the title to a house could be in order of T. It can also be linked to access, right? So Uniswap V3, the thing that represents your liquidity that you provided to Uniswap Exchange is an NFW. some poor gentleman in excesses, he stole it because he thought it was the present that he got from Uniswop. But if you think about it like that, all we know, you know, we have this object,

and that object can represent almost anything where you could block other objects inside of it. You can use it like a derivative where other, you know, a collection of other entities or a collection of other fungible assets is linked to that, and that thing can be traded. And you can almost imagine the hierarchical structures that exist in normal finance. We can do that in times a thousand algorithmically, because, you can almost imagine. because we have these two structures together. It's just something for fungible and something for non-fundable. So there's a ton of intersection to it.

I think there's a lot farther we have to go in the field because, frankly, unlike the theory of all one, gas is too expensive to move around a thing that costs a dollar or even $10, or whatever. So, you know, I'll stop there, but we have fractionalization, and then, et cetera. There's a lot of applications where we're early. So for the next question, I actually want Andy to build a mess.

So Sam, I'm going to start with you. NFTs and Defi, isn't it just, this is the devil's advocate question, isn't it just as simple as putting an ERC 20 token inside of a contract that spits out in the ERC 20 token? Isn't that the whole story? Is this really that big of a deal? Or is there more to unpack the intersection of DFI of NFTs? Why is it more than just fractionalizing ERC 721 tokens? Right.

I agree. So I think there are lots of things that are not just fractional. So there's something, for instance, using it as collateral, right? There's also kind of gradations, right? We say 721 and here say 20, but actually there's 155, right? Which is sort of somewhere in between, right? There's a series of cars. So imagine one of the biggest applications of D5 entities is in the game, the metabro's, right?

And so the met methamverso, where we are right, in the metamiverse, right? You can imagine an entire multi-trillion dollar economy is based on the existing economy of things that are like semi-fungible and that you might want to use as representing their underlying financial reality right? They may want to lend against them. They want to sell them in a series I may want to do lots of things that look like a global financial activity and so now I don't think it's just sticking in your C-20 inside of something else. It's just they're logically separate and in fact there are conditions between. Yeah. So define dates and So financialization, fractionization, this is the thing one, using as collateral. You can also, permission to trustless way lend your NFT, so rent-toe versus the

but yeah, the ability to have an NFT hold other assets and use that basket as a compound, use that basket as a trust account and transfer it to somebody. have multiple of these baskets kind of in the sub-accounts within your wallet, your address. This opens up a lot of opportunities. And if you take it down to, like, the most basic thing you could possibly do, you know, right now creating synthetic existing NFTs is something that's around the corner as well. So suddenly you don't have to necessarily own this entire NFTA to, like, benefit from its valuation of the market. you'd be able to hold a kind of arbitrary position in any NFT that you see value in over time.

I mean, I recognize that you've been on your wage on your own. Access to all of these different, beautiful, exotic mechanisms through synthetics is also going to be like a beautiful and new sort of a new horizon and bring accessibility to this space as well, which is one of the biggest, the biggest lacking points right now. Yeah, I think to use something that is interesting when you can think about, using Defi with NFTs is not to flood my own bags in my company, but I don't think everyone always wants to fractionalize every NFT to use it in Defi. But just because you fractalize an NFT doesn't mean it's immediately liquid. It doesn't mean that there's $100 million to put it in a swap

to use that as like a price oracle to do all these other things. And so I think that we really need just new creators and builders in the space thinking about unique and nominal ways to kind of support some of the things that we've done in Defi into like an NFT world where like lending with NFTs and borrowing against your NFT probably just not look the same it's not just fractionalize your NFT and borrow against those fractions it doesn't really make sense. It's been a long time trying to map that all out but like maybe you borrow against your NFT and if you get liquidated then it's fractionalized and you like pay off the liquidation fractions and you keep some fractions

and you can like start to build like more interesting more an FTE-centric you find stuff But I think it's really where this all has to go to significantly lower adoption and kind of like meet NFT collectors and users and buyers where they are. Yeah, and I think it's important. I mean, we mentioned it a few times, but we are early and there are like core infrastructure issues. It's very tough to do these things with a very small amount. And yeah, there's layer two. It's another more cheaper layer lines perhaps. But like it is early, so it's the early innings.

There's regulatory uncertainty, so it's very difficult to just, this is the innovation sandbox, and we'll go crazy and build these crazy things that we can dream up, because there are more arcade laws and more things that we have to play with. So let's talk about liquidity, because if there's one thing that Defi is really, really good at, it's liquidity. Uniswap v3, fantastically liquid on just not into my own capital. And then things like compound and obvi are just another forms. liquidity. On the other side of things, ERC 721's NFTs are inherently illiquid. That's the unique nature of these things is that the fewer, the number of them are, the harder it is so

have a market. So let's talk about how Defi can actually aid the NFT side of Ethereum in broader crypto in accessing more and more liquidity and what they can really do for bringing out the best of NFTs. Andy, why do we, why do NFTs need liquidity so badly? How can DeFi Yeah, well, so I think like kind of going back to a lot of the defy stuff, like a lot of most defy-gratives to a certain extent require liquidity to price things or liquidity or a million other different things. And what I'm excited about is thinking about potentially interesting ways to do that with order books and different ways to really be able to gauge interest in demand for any particular NFT. And a lot of different stuff like that. And I don't think we totally know what it looks like yet. I don't think that it's as simple as just, oh, uniswap AMM for NFTs.

I think you can do that to a certain extent from like NFTX or the different pools that are pulling together like four level pumps or different things like that. But I think we'll need to see some level of innovation on the orderbook and the demand side of NFTs in general. And it probably, like I know there's some interesting stuff. I know that Zero Xmon's this guy is working. on something called pseudo-swap and he's working out like an FTA on top of that.

And there's interesting stuff happening in that space and I'm really excited to see that play out. And I think that you can like kind of tie in a lot of the things that we're all working on into helping make the mold I put in those types of models. Yeah, we're, um, it's really interesting to bring up the order book situation. Something that we're working on at Upshot does the alpha, blah, blah, well, this doesn't wait here, or it does, I guess, Mr. on the like on the foundation of these appraisals

and how many's accurate prices that we can all agree on. Because it's done on chain, it is like literally, I don't know, just decentralized appraisals, decentralized price points, undisputed. Suddenly those overplex have a price.

Suddenly there's a, there is a world where you'd be able to go onto a marketplace, onto a platform, and sell your NFD for whatever the appraised price point is for this specific NFT, not listed at floor price, not listed below floor price, and don't know that some advice, know that there are people out there that see the potential of these assets and go, whatever it is, whatever the appraised price is, I want it.

And for you to be able to buy that in return as well, to be able to see when something is listed below the appraised price and capture that market. Like right now, we're just sort of guessing on a market, guessing in a bubble, hopefully have a level. But it feels a little like a level without that source of truth. So I, yeah, it's, there, and this guy's the limit. Yeah. No, I mean, I also agree. I do agree that, like, you can't just take these models that work in Defy with fungible tokens, all the tokens are interchangeable, it doesn't matter if I have this one or that one, with non-fundgible tokens, which, by definition number, unique,

100. So, you know, like Andy said, you can't just do the use a lot for NFTs. It doesn't quite work like that. So we are in, people are experimenting and in plenty of real. There are for structural issues like brands that are difficult. But at the end of the day, it is a nascent market. There are inefficiencies in all nascent early markets. And these things just kind of are arbitragetable way when people come in and expect that there's a stay,

because there's a lot more going on, and that's just kind of part of it. Yeah, I agree. I think just to go back again to the generality here, right? ERC 721 can be anything, can be a house, could be my shoe, whatever. Like, what's an order work for my shoe? Doesn't make sense, right? There's going to be different idiosynocratic ways that you might want to sell or provide the thing depending on what it is, right?

And like different kinds of stuff. have different amounts of liquidity. Apartments in New York have liquidity, kind of, but the interfaces of that, the order book of that is an MLB system, it's a people that are very nicely showed to. You know, the liquidity in the house here is also pretty good now, but in some ways it might not be. You know, liquidity, your profile,

picture, NFT, maybe not so much, but like, you know, Neptune, for instance, we, that's something we've talked to a lot of groups about. Like, I've got really valuable punk or something, like we lent against it, right? So, you know, what is an order for that thing? We basically need to re-grade the financial system, again, in a way that's programmatized, and hopefully better and more efficient,

but it's gonna be completely do socratic, depending on what the asset is and how we get. What about the in the Metaverse, right? What if I've got, there are 5,000 of these shields in this game, and there's only, you know, there's 20,000 people who might want one. That I can imagine what that order would might look like, right? So it's about discrimination,

that's about the idea of secrecy. And just the point of what I'm saying is trying to think about it generally as something that could represent any asset. And then back in the answer. So continuing on this conversation with how to value an NFT when it doesn't really behave the same way as an ERC 20 token. And especially like some art blocks, for example, Fidenza, ringers, there could be weeks that go by before a sale happens.

But those sales are still big sales, right? And Fadenza will still go for hundreds of beef. And just because a wheat goes by with the meat goes by, without a sale happens, it doesn't mean that there isn't demand for these things. They can be plenty liquid even with low sales. So that brings us to the conversation of how do we appraise these things, how can we value these things when there isn't like a unisquat market for these things possibly trading. So Laura, I want to ask you this question since this has to do with that trap.

We'll start with you. Let's talk about the Oracle, the combination of oracles in NFTs rather than monitoring markets with NFTs. How can we use alternative methods to discover. the values of these NFTs that can be turned into an oracle for the rest of the defy to tap into a secure moon. So the way that we've been knowing about an upshot is using a new form of mechanism called peer prediction, where you're essentially, you have a bunch of experts, somebody you validate based on their whole thing, right? If you're, like, behind a pylinks, you probably... The process is asking experts a bunch of A-B questions, essentially, which NFT is more valuable?

AeroA, therapy. All of those answers go through a correlation, like a new type of like this design. It comes out with an honesty score for each appraiser and then pulls the value one way or another. So it isn't like one person saying that this is worth $300,000 and that's at 9M. It's like hundreds of thousands of people

pulling that price one way or another and then using machine learning to automatically update that constantly. So you have this human element feeding into machine learning, feeding back to the human element. The one piece that's missing, and I think that it's going to be the game changers, and this is finding a way to track that community owner, and finding a way to track that like, that utility as an owner. Because right now you can't necessarily speak utility into machine learning, and they say that's valuable, right?

But there is a way to look at a community, look at the Discord server, look at who's involved in the project, bring all these backers together, and come to a conclusion that, yeah, this is probably the beginning of something big. And then using peer prediction machine learning to pull that value to a price point and keep

it going relative to each other, relative to the collection. So that's the way that we're going about it. It's also because it's an launching protocol of something that can dispute afforded. You could say I don't agree with that and try yourself. I think that's another very important aspect this is that there should not be one governing human that says this is this is truth.

You should say I think this is truth and you can figure out of me think this is truth as well. That's way more essential than it's way more for one three. But right now we're spinning out price predictions for the top 200 and 15 collections every 10 minutes. And I'm so excited to bring that to the world. One of the things that I'm excited about is being able to combine that, with a lot of other on-chain stuff as well, something I think about a lot, or fractional. And like, way that we can basically help our users

who are buying a particular fit, if there's something that have a significantly more informed decision, or basically be able to even plug into automated things and say, once the appraisal on-up shot is 10% higher than the current fraction of price for this thing I want to be higher up until 5% higher, for different things like that. And then also been thinking a lot about how fractions,

and potentially help a lot more to the price of these things. And there's a lot of challenges because even a relatively rare for DENSA, the entire valuation of it's still a couple million dollars. It's not like you're gonna get some the same market for this one individual piece. But what we've been thinking about a lot lately

is potentially like having ongoing options for percentages of it. And so you can then like kind of imply of the prices and say like, okay, if we were to auction off of 1% ownership with Fidenza, and someone's willing to pay one Ethereum for it, this is probably worth around 100theterium. And if you do that long enough, like,

timerizing, like based on you say, okay, over 10 days when 1% was optioned in August, they went for between one Ethereum to two Ethereum, so it ends up that time for one and a half Ethereum or something long-to-line. You're really excited to start experimenting more kind of the mass-out-of-thing for as a protocol you have long-more control over the supply and how people are buying and interacting

and deferred price on that. I think it's important with the pricing of NFTs. I mean, we keep going back to this, but NFTs are so wrong. The utility value varies by person. So if I'm a gamer, like getting an in-game item, an FTE might have a lot more value to B versus a non-game on game on board. If I enter on the Metaverse real estate in the board,

and I want to buy a whole knot, like that has a different value me versus somebody who doesn't stay in some of the years. And then as we continue to add a layer in the utility value so I can rent off my land plot in the metterose. I can rent on this in-game asset to somebody else. I can rent my kid a pump to somebody that wants to go to a pump's only party. This changes the value of these things drastically. For me, I don't have a problem, but if I do, I know I was renting it,

then that adds value to me a bit because I can monetize it and rent it out. rent it out. But to somebody that booms and doesn't want to rent it, doesn't diminish the value because then the guy didn't rent it to come to a party. So all of these additional utilities also impact pricing significantly in the kind of ways that we haven't really thought now or will continue to play and think out. But looking at other more in liquid alternative asset markets like art or food estate, these all have varying levels of liquidity. And in pricing, even though a transaction happens more in frequently than the liquid with the problem.

Yeah, I mean, perfect liquidity and perfect price discovery would be the whole big right out all market out of all markets, right? It's going to have to be different depending on what asset it is, right, in the future where you know, an NFT is actually a roll-up 5,000 other NFTs and 25 of them are priced by Moody's or rated by Moody's and some of them are rated by Moody's 2050 or whatever the next upshot is, you know, that has upshot evolve in the stuff that, you know, is going to replace those dinosaurs like that. We're going to have so many different pricing techniques and hopefully we'll be long-chain

algorithmic and much more efficient and we don't have things like, you know, 2008 happened because actually it's more transparent. It's most whole lot of inside different layers of these things. But, yes, price discovery would be great. I think we need a whole bunch of effort in each particular asset class, how to do it, Sting through the fall to the point hopefully better than we have. We have the topic of community here, because I think if there's one thing that we've learned that's a universal truth with crypto, if it doesn't have a community, it's not going to make it.

And one of the reasons probably why white punts made it through the bear market was that is because the Discord was a fun place to be in the bare market as a shared place of absorbing all the pain with down the prices for two years. So I want to talk about like when we combine NFTs and DFI, how can that be a tool for community generations? How could that be a community school handing? Yeah, I think we've seen some really, really cool stuff recently with just random years of people raising funds to buy stuff between like Constitution Dow and now we have the free-moss Dow which is really exciting. You know, while raising funds to

participate in a Dow isn't like explicitly defy it starts to really walk into that whole territory. And I think in general, the ability for communities that are out around people in their NFTs or different groups to also turn it into like this monetary group where they're able to build their own micro-economies and do all this stuff inside of their shared interest group is just like really really interesting and exciting. I think it has potential also to help a lot of people who like otherwise cannot do this in either the country they live in or use type of assets that they're able to own and all that. So yeah, I don't think we're going to have to be able to onboard these and just rank

you're going to buy and stuff. And there's some people defying their smaller communities and the classes that they know. Shout out free rostow.com. Is the Constitution Dow for Russell for NFT. Oh man, I mean like thinking about the implications of like what you can do with energy in community building, like just supposed to take this on the music ministry for a second, like being able to track your fan base and they're to try and

actions with your work, with your NMT's, with your music, with your concerts, all on chain, suddenly you have a way more personalized way of communicating with these fans and figure out who they are, why they are, what they're doing. That's so much value suddenly not only to every single output of, like, a creator's into the world, but also value to that community of being a part of it. And having these like MOT passports suddenly that bring you into this world. And FWB we like to say that access is better than you. access is better value. Like, what world are you unlocking with these MOTES?

I've been throwing around the idea of starting like an activism down for Puerto Rico and using NMTs as a way to probably probably for specific initiatives. Yes, like, yeah, right, really. And even, like, honestly, just the NGOS phase, like, oh wow, they got it going. going. The NMT is such a more accessible entry point for most people. It's such a beautiful way to rally.

People be on the cause. Like at the NMT, community, it can be an end of it, whatever it is, but it is a unifying limited asset. And at the end of the day, that is essentially if you're able to be in that.

We'll talk more about that deal later. Yeah, definitely. I mean, humans are social creatures and this virtual world is not as well that we're living in. It's nice to have this shared you from the sense of community. And we all have this P&E and that makes us you need. We're all popping this token and that's what brings us together. We have a group chat that spins up its own down structure and we're all part of this together. So I think a free in general really balanced communities to be much more autonomous or discriminating.

in all these unique fun ways. But then like NFTs and Defi, what we're doing in charge articles, you can take this NFT that you own and love that's part of your community, your hoarding, and then you can use it with Defi, plugging into the AVE protocol and bringing a little bit of you all containerized within your board A.

And then the potential of maybe that interest equates to something, but then the Discord makes you've seen so much AVE into your hoarding. You're never going to sell. You have so much money and walk into your name that gives you a little extra something that you get in that community. So, maybe for these things to work together, and you can move together.

It's something that I'm really looking for to over the use. So I think something has happened. It's pretty remarkable in the last few years, which is the version of this, like, concept of sociality and brands and financial assets. And I think it's a generational thing. And if you look at the way that teenagers behave

versus the way that my parents' generation behaves, for instance, financial interactions a lot more like something that you care about online. Like, look at, obviously, I'm a few certain example, look at GameStop and the community around overgrading, right? There's something democratizing happening, and there's something that is sort of not gonna make it you don't have energy around it.

But like brands are realizing this right now. Brand has reason why brands, you work for brands, are all over in the TV, and stuff like that, because they realize that if you're an asset or you're a public or never, you don't have that social element to it. It wasn't possible for me because we didn't the social media to be the administrative player

of that. You didn't have the ability to be connecting that way. Maybe you go once a year in the shareholders, be a senior buddy from the club or whatever. now you can't be able to know every day all day and those people heard from you to what's an asset class how does we care about this asset and i think as this human minds evolve with uh you know with with phones and pen and those communities around them were with what is the community and what is an asset that's what we're seeing right now is going to be pretty pretty important in our case and this

I got everyone last thing to say, especially for artists. I think something that's missing from this conversation is like how an artist can incentivize secondary market action through their entity collection. I think every artist should take a look at the OG Crystal's collection that, you know, that first meant, it's a terennial geode, and then programmatically inside the smart-grant truck every time it resells, like another piece of that crystal grows out of it, and suddenly like those crystals being more and more valuable and then floor crystals suddenly more and more valuable and that encouraged for me so that like daisy chain of people wanting to discover it's on the

other side of that sale like that's something that's not necessary to do with with D-I but it does have to do with like incentive by finance and send by sales something that any artist can do get created over your smart contracts contact the facility that we know and use that creative problem-solving lines and play with it because there's so much potential beyond just like minting the piece you made last year. Like this is a new playground. There are a lot of DGens and D5 rows here, but getting artists and musicians in here

and tackling that landscape, which is the contract itself, I think is where we're going to see the next genesis of these incredible financial tools that are beyond us trying to retrofit energies into D5 growth plus, and instead of building it into the contract itself. So go out there and send it with us like very ideas. This conversation between the screened

grossing and I actually have no clue how much time we have left, so I'm just going to keep on going to someone stops me in. So there's been a lot of use cases and a lot of potential that I think it's a ton of fun here and I think we have too much fun regulators come. And so I'm starting to stay and we're going to work our way backwards. It's kind of holding back the intersection of NFT fracturalization or the seeking up of defied entities. What about the SEC or CFTC is relevant to this conversation and what's perhaps we used as an industry to be held in the industry to go forward? Well, tough question. So I think

it's relevant to answer that part of the question is there are two approaches that regulators seem to have to what is going on the industry. There's either use pink amongst of laws that were written in the 1930s. try to apply it to what we're going now. Or, and sometimes that doesn't make sense, actually. Something that's really that makes sense. Or you look at these property what we're doing, saying this is something we're going to do with

the machine comes up. There's always going to be a tension between those things. And the definitions are shifting that too. A pump seems like a piece apart. Pretty sure it's going to be treated away to be apart. In my opinion, some regulators don't understand why, but then there's something that maybe an NFT.

and then it does have properties like something like that you're and then what do you do? So it's a blurry line I think to the extent that Reagan leaders will provide clarity is the extent of which you know the United States or whatever jurisdiction

we're talking about can excel in that domain and we look at the history of like consensus for instance at you know the beginning of a period of my lot of it was in jurisdictions that you know the other to the technology, right? And so it's at the extent that our,

our regulatory bodies understand the technology and look at it very closely, because the extent to which your jurisdiction as a regulator is going to excel, so I hope that you do that. Yeah, I would just give the broad caveat of the lawyers not legal about you, certainly not particularly not particularly a lawyer over the state, but I guess I completely agree

of all these. These are calls for like we're in the 1930s, 1940s, 1940s. I mean, down with more than 100 members with no people into date. It's a general partnership and over 100 people, it's a security company, but in the 1940s security. So these are, these are the ones of serious issues and even though I'm a big fan, like I don't believe that these things are, but like they do, and if they're real worlds and aim out and between that, these are real issues. I go to jail for a long, long time. So even though like I would have I've heard innovators in space to find a lawyer and you just work with these.

This is like all things should be a SAM of regulatory unknowns right now, just pretty much grade, but like you can do things in a more structured and get away and just chew with yourself a little bit. But the key is like if you're operating with in this case you are taking a little bit of with some amount of business so you have to know where that line in the sand is not much risk for to take big because if you don't want to take any potential regulatory. This is like totally even continuity here. That's the only important and unfortunately,

but it is very regulatory. Where is you're making new killing right now? Most of the ones that can't be found a right language to say what you want to do when they can have the name legal. Even for our team, I agree it's that it's not charged very scary, but slowly maturely society is catching up. I think we're slowly figuring out what this is all about. We're extremely here with she and be in this room and have some of the seven months of what this is.

Most people in regulation have no idea what's going on. They're like, Bitcoin. This is all some sort of Bitcoin is then. It's absolutely not. So if there are any awesome things up there and we're listening to this podcast, get vocal to educate your peers. Because as much as we might like to keep the playground to ourselves, things are going to be big because we can't do this in the shadows anymore and it's better to

have people understand in there working on these great intentions and all those guys people make me want to know. Yeah I probably go what everyone said but I don't agree. I think in general it's really hard and community like that's very hard for all this stuff in general because there's so long like regularity in a lot of things a lot of stuff for the nettees like conversations around road maps and, you know, token missions and stuff, it's so new and so unknown. It's a lot to me, like, in 2017, all this kind of coming out, and every single one was called security, and maybe some of the more, some of the more we don't really know, but, like, we still don't know. And it's just, it's a very frustrating thing, but, like,

I also understand, like, the regulatory bodies that are doing and stuff are always so big, and they're not all, like, crypto nerds. of this is we can't expect them to see some weird new old game project that comes out and then it would be like actually you guys that's good that's good and so it's just like it's going to take long time and it's going to talk to lawyers super smart than I have but yeah it just takes a long time it's not right guys last question let's think about something that you personally would

love to use in the intersection of the defy and what you're on them to use to lend out your phone with a cloud realising. I don't know, but what use case could be built that it's not built yet that you are looking forward to that will actually through your personal box. For the way, you'll get that one way to. Anya to start with you. Okay, I really want to use a lending,

really like a manager-dap style, there's a standard point that is basically paid to the floor price of particular profile picture project or where you can basically borrow against them, going to fix the workouts and not have to write out. Not admission to be around any choice. I don't know. I want to make like a curated synthetics album. Like choose every NMptian space and I think it's going to make it

like a future floor and then make the synthetic based on that and give people like unlimited access to the same, like, bottom floor line and that's that for me as would be incredible. I'd like to see some of the use charge particles to create a virtual geocathing in the meta. So you have the entity that you hide and you put a bunch of interest bearing assets in it. Whoever finds them first, just collects the interest and you don't sacrifice it. It's a cool way to engage people, get them to your property in the universe. I would like to have a way to, you know, essentially like a more weight of the metaphors

and have it be run by really awesome people. I've been invested. Awesome. Thank you guys so much for me on. Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a bankless premium subscriber to get the most out of your bankless experience.

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