Bankless - What's Hot in Arbitrum? | Arbitrum Ecosystem Guide

Episode Date: January 18, 2023

In today's episode, we're talking about what’s hot on Arbitrum. Three Arbitrum experts are here to help guide us through what's new in the Arbitrum ecosystem. The Arbitrum metrics are HOT. 2022 was not the best year for crypto, but they were for L2s, and especially for Arbitrum! Tune in to learn why and how Arbitrum is shaping the future of L2s, gaming, and NFTs as we know it. ------ 📣 Crypto Tax Calculator | Free Crypto Tax Calculator https://bankless.cc/CTCpodcast  ------ JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe  ------ BANKLESS SPONSOR TOOLS: KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken  UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap  ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi  ----- Timestamps: 0:00 Intro 8:11 What is Arbitrum Doing Right? 15:20 GMX 17:03 Arbitrum Culture 24:30 Treasure's Expansion 29:30 Culture vs. Technology of Chains 31:42 The Bankless Thesis 36:00 GMX's Hooks 38:20 DeFi Activity 43:37 Community Engagement 48:00 The Nintendo of Web3 51:50 Building Along Treasure & Arbitrum 57:53 What's Holding the Ecosystem Back? 1:03:55 What is Beacon? 1:07:00 PFPs in Arbitrum 1:12:00 Token Alpha 1:13:50 Closing & Disclaimers ----- Resources: Karel Vuong - Co-Founder & COO, Treasure https://twitter.com/karelvuong  Diego Vidaurre - Co-Founder & CEO of The Beacon https://www.linkedin.com/in/diego-vidaurre-schaffer-6989a1120  Coinflipcanada - Core contributor to GMX https://mobile.twitter.com/coinflipcanada  Massive Arbitrum Acquisition!! with Steven Goldfeder & Preston Van Loon https://youtu.be/PmWeXVRPeic  How to Gain Exposure to Arbitrum https://newsletter.banklesshq.com/p/how-to-gain-exposure-to-arbitrum  ----- 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://www.bankless.com/disclosures 

Thankless Nation, we've got an excellent episode prepared for you today. What's hot on Arbitrum? That's the question. David, it feels like it's layer two season. I know we've said that a few times in the past, but this time it feels like a real bright spot in the crypto community. Layer twos are up. And among all of the layer twos that are doing things in terms of getting more transaction

volume, getting more users, deploying more applications, arbitram is kind of in the lead. And so we are doing a deep dive exploration on the arbitrariness. Arbitrum community. Why don't you tee up what's in store for us in this episode? Yeah, so we got three community leaders who are also the experts, the co-founders, the core contributors of whatever particular app on Arbitrum that they contribute to, but they're also just defy NFT power users across the broad Arbitrum landscape. And so we're going to have a panel today of three Arbitrum power users that are building on Arbitrum, that are just community members of Arbitrum, community leaders of Arbitrum, because of all things that happened in

2022, all of the down, bad things that happened in 2022, Arbitrum was not one of them. They were one of the few ecosystems that was growing throughout 2022, and you can really feel it in the energy of the community. So I want to know, why is Arbitrum so hot right now? What is Arbitrum specifically as the team? What are they doing right? And what is on Arbitrum that these NFT organizations, see if I apps are really, really leveraging. There's a, there's a bunch of energy going on, and I want to know why that energy is so high. Guys, we're going to get to the episode before we do. A few things to talk about. Number one is a crypto tax calculator. Here is Ryan Sean Adams, the tax optimizer himself,

telling you, have you done your taxes yet? Have you taken a look at them at least? I know last year was kind of a mess. You might be thinking about ignoring it. Don't make the mistake I have made a long time ago. That's why, David, it always gets on me for like, Ryan, why are you always talking about taxes? It's because I felt the pain before in not having a tax strategy ready and getting totally burnt.

There's this new tool called Crypto Tax Calculator that actually the CEO of Bankless, Rachel Cusack, let me know about. And I wish I had had this in previous years, David, because there are lots of different ways to do your taxes in crypto, but what I found is no tool covers like all of the different hard, complicated transactions, right?

Like layer twos and defy, does it support this application, in that application? What about its NFT support? Cryptotax calculator is actually the most user-friendly, comprehensive way of getting all of these integrations in there. Like, they do the hard defy, D-Gen transactions. Do you guys hear the excitement in Ryan's voice right now? I'm seriously excited about this.

And here's why I'm excited is because, is literally going to save me hundreds of hours. Right? Like you just plug in your address and boom, you get the results. You deliver that to your CPA or whatever. Do it yourself. Anyway, taxes don't actually excite me, but getting taxes done quickly excites me.

And that's what you can find at crypto tax calculator. David, I think there's a discount. There's a big discount. It's like a 30% discount. How do folks activate that? Yeah, there is a link in the show notes to activate a 30% discount for bankless listeners. But if you're a bankless premium subscriber, there's a 40% discount in the Discord.

So go find that code there. But otherwise, for you non-premium subscribers, you can go ahead and click a still healthy 30% discount in the link in the show notes. I think that the code is bank. Am I right? Bank 30 to grab that discount. I hope that's right.

Go check it out. Go check it out. All right. So Arbitrome, David, you've teed up the episode. What should listeners really be paying attention to from these three panelists? Yeah, like I frequently say on bank lists, there's always a bull market somewhere, and the energy across the layer two ecosystem is probably

at all-time highs, and that is especially true about the Arbitrum ecosystem. Ryan, did you know that the Arbitrum Bridge contract is the seventh largest holder of ETH? I did not know that. Number seven, yeah. It's also one of the largest burners of ETH. And so the energy of the Arbitrum smart contract, burning all that ether, is coming right out of the Arbitrum community. you can see them in the chat right now. Yes, I am looking at them. And so, like I said, in the intro, there is, there's, I want to explore. How did, how did Arbitrum do this? What about the builders on Arbitrum? Why do they choose Arbitrum? Arbitrum doesn't even have a token. Things like Avalanche, Solana,

like all these other Altlayer ones have had tokens, yeah, Arbitrum is lapping them in TVL and transactional volume. What is going on over in Arbitrum? So these are, this is going to be the meta of the show. these are going to be the questions that we were asking the three contributors in the Arbitrum app layer. We got a representative from the Treasure Dow. We got a representative from the GMX leverage. What do you call these things? Margin trading apps, which fun fact, Ryan, was the best token to hold throughout 2022, where everything was down like 90% GMX.

Better than stable coins? Up 20%. It was up 20%. In 2022, yeah. Uncategorically winning 2022. And then also we got a game, the beacon. And so we're going to explore defy. We're going to explore NFTs.

We're going to explore gaming because apparently you can do it all on Arbitrum. And I should say that there are disclosures that we usually, we don't have too many disclosures to disclose. But on this episode we do. I own a material amount of magic tokens and also small brains, which are the unofficial PFP of the treasure ecosystem. And the bankless fund also owns some small brains as well. Oh, and Arbitrum is also currently a bankless sponsor. So there are plenty of conflicts of interest in this.

this episode, but we've been promoting layer twos for a while to now, so this should really come as no surprise. David also owns some ETH too. We may talk about ETH here, there. I'm excited about this episode because I feel like I'm going to learn a bit more about the Arbitrum ecosystem. So guys, if you want to join us in that, then stay tuned. We'll be right back with our episode with folks at Arbitrum exploring this ecosystem.

But before we do, we want to tell you the sponsors that made this episode possible, starting with our favorite, number one, recommended crypto experience. and that is Cracken. Stay tuned. Cracken has been a leader in the crypto industry for the last 12 years. Dedicated to accelerating the global adoption of crypto, Cracken puts an emphasis on security, transparency, and client support, which is why over 9 million clients have come to love Cracken's products. Whether you're a beginner or a pro, the Cracken U.S. is simple, intuitive, and frictionless,

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never lose another air drop. Ladies and gentlemen, welcome to the state of the nation, where the state of the nation is hot, because that is exactly what Harbidge from is. In the top right corner, we got Corel. Corel is the C-O-O-O-O-N co-founder of TreasureDal. Welcome to the show. So happy to be here. Thanks for having us. In the bottom left corner on your screen, we got Diego.

Diego is over at the Beacon, which is a game, I believe, inside of the Treasure ecosystem. We're going to ask about how that works. Diego, welcome to show. Hey, guys, happy to be here. I'm the CEO and co-founder of the Beacon. And then also in the bottom right corner, we got Coin Flip, Canada. And the only add-on on the stream, this is why we've got his little profile picture over the Zoom chat. Coin Flip, welcome to the show.

Thanks for having me here, David. Long-time fan of this show. Cheers. Well, it's been a while since we've had a panel up on Bankless, which is why I'm juggling both the stream and also the questions. But I think this is going to go, this is going to be pretty fun, guys, because this is exactly what the systems, these protocol systems are supposed to do. Bring people together in the app layer to allow for some interoperability and also some live. lively, healthy growth. That's what we're looking to talk about here. And so I want to start with this question, what exactly is Arbitrum doing right? Because the Arbitrum ecosystem is one of the

hottest things in Ethereum, but not just in Ethereum, in all of crypto. Like I said in the intro in 2022, crypto, like deflated in 2022, except for Arbitrum. And so I want to know why that is true. So, Corrella, I'll throw this first question to you. And from your perspective, What's going right in the world of Arbitrum? I'd say a ton of things. I mean, you know, we're coming into this from the vantage point of, you know, gaming and NFTs, of course. But, you know, I think for us, like we came into Arbitrum, you know,

late kind of 2021, you know, kind of shortly after they launched. So we were fairly early into everything. And, you know, I think the major theme and just kind of working not only with Arbitrum, but also everyone else here is that like this is a super collaborative. and it's like, you know, largely kind of community-driven sort of effort. And so working shoulder to shoulder with everyone here. I mean, they're focusing on the right things, growing organically. I mean, you kind of mentioned it and, you know, looking at, you know, one token,

which I think is a common theme across the board. But, yeah, I mean, I think there are so many different sort of game changers that have come out of this. You know, I think from a technology perspective as builders and users, I mean, that's been, you know, a huge thing for us at Treasure and all the games that we're supporting as well. So, I mean, definitely, I think, you know, there's that, that's been a huge kind of part. And, you know, I think why they're, you know, kind of playing the right cards. And, you know, I think the other part of that is everyone who's come here to build on top of the arbitrum, you know, network.

And so, you know, for us, all the games, you know, a network is kind of dead without, you know, daps and protocols and things that are coming here. And so I think, you know, there is that sort of flywheel network effect that is coming out from just having a thriving sort of ecosystem that is growing and building together. Diego, I want to throw kind of the same question. I think we're going to just take this one by one by one. Diego, from your perspective over at the beacon, and perhaps you could kind of illustrate how the beacon works on Arbitrum. Because if I understand it correctly, the beacon, the game, is built on top of Treasure Dow, which is built on top of Arbitrum. Is that how this works?

And overall, can you talk about just the network effects that you've been able to experience over there? Yeah, yeah. So to some degree, so, yes, the beacon interacts with treasure, but it's not precisely built on top of treasure. It's built, in fact, in sort of Arbishop. Like, all our contracts, or small, smart contracts are deployed in Arbishop, right?

But Treasure is like this sort of ecosystem that powers games for the most part, and the beacon has a game pretty much just stepped into Treasurer's infrastructure in order to not only will help it grow, but also as benefiting from the thriving, ecosystem that they have. But technology-wise, yeah, it's an Arbitrum project in that sense. Like, it's everything is just on the Arbitram, it's an Arbitum on the, on the, on the technical side of the equation. What I do think that they've been doing well is a few things. I mean,

Corel actually summarized it pretty well, but it's a set, it's the fact that there's like this set of interesting initiatives that are being, that have been growing in Arbitrum lately, very cool projects, and most of them are very community driven and very open towards collaboration. And I'd that that's one of the key aspects to it. But it's also the fact that for developers, and I would say that for users alike, arbitral is a fantastic experience. Like for us, when we deployed our contracts

and everything did on the arbitral layer, the experience was fantastic. It was really smooth. And from the side of our users, transactions speed is fantastic, and it's also on a very low-cost basis. So I'd say that if you add, like, all these factors together,

they really grant an experience that makes people well delighted of the experience. I'd say that that's why I'm, of the main things. Yeah, that's from my side of list. And of course, Corral and Diego are part of the NFT gaming ecosystem side of Arbitrum, but the Defi part of Arbitrum is just as hot. And so I'm going to turn now to Coinflip Canada out of the GMX ecosystem. So Coinflip, talk to us about Defy on Arbitrum. I think that's kind of where Arbitrum really started is starting with Defi apps. NFTs and Treasure Dow came not too shortly afterwards, but Arbitum really got started with

its roots in defy. Talk to us about the health of the defy ecosystem on Arbitrum. What about it is so special to you? Well, in many ways, I mean, and without it, without making it sound too grand, for me at this point, Arbitrum DeFi is Ethereum Defi. It's just become the natural home where the applications, the DAPs, the collaborations that you want to do are possible in the environment that Arbitram has built, safe, secure, secured by Ethereum, which I think has been such fundamental part of its success. The fact that so many people have been willing to come over, bringing their assets over to Arbitrum, you said, the number seven wallet in all Ethereum is Arbitrumb Bridge. It just shows that the comfort level with remaining, you know,

closely aligned within the Ethereum ecosystem has been just such a boon. But it's also been that, and again, I was probably involved in DeFi in the early days, but I wasn't involved in, let's say, in Ethereum in the early days. And you talk about it's also been that. And you're talking about, I was And you talk to a lot of people, and they say that we have that sense that it's a small community still. It's not a community that what, it's really a community where people are building. The conversation is around product. People are looking at how innovation actually applies, how it works together, how there is product market fit. I mean, I think it's just, it's, it's really interesting that it sort of runs at a pace that is very, you know, I don't know, sorry, I'm going to put it.

In crypto, nothing is human, but in a very human pace where people are actually trying to figure out how they do. sequential pieces that are not rushing to deploy things that don't work and see what happens. I don't know. There's just a real sense of sensibility over there. And coin flip, like I said in the intro, GMX is one of the few applications that ended up green on the year in terms of the token price, but also trading volumes. And I also butcher the description. I believe perhaps the correct description of what GMX is is the derivatives exchange. But for people that never have interacted with GMX before or maybe derivatives exchanges in the right name. And can you just explain a little bit more about the

Defi app, what it is and what does it do and what you can do on it? Yeah. So GMX is a Oracle-based perpetuals and spot exchange on Arbitrum and Avalanche. It basically works by aggregating the best off-chain data from large centralized exchanges and in time decentralized exchanges as their volumes grow to help create, you know, a deep liquid on-chain market. And we've really been able to try to create an environment where people have confidence that they're getting transparent pricing. Everything that happens is still executed on-chain.

You're able to verify what the market price was, what you were executed at, what you were liquidated at using chain link oracles. It's really just helped to try to bring, I think, a sex-like experience over into the on-chain experience, but most interestingly, doing so without external market makers or other participants, but instead relying on one of the great defy innovations, which is a liquidity pool. A sex-like experience, and of course you mean centralized exchange-like experience. Of course, Arbitum's... Maybe not that good.

It is pretty good. Try GMX, though, and then tell me. Coinflip, you mentioned that Arbiturate from Defi is... Ethereum Defi, which is kind of interesting take on things. I'm curious from all of our panelists, maybe starting with you again, Coinflip and we'll work the other direction. How would you describe Arbitrum culture? How is it the same? How is it different than Ethereum culture? And then GMX is also deployed on Avalanche? How is Arbitrum similar or different from an Alt-L-Layer-1 like Avalanche? Well, I think the starting point between Ethereum and Arbitrum, and obviously I think

spending so much time in Arbitrum, maybe for me, the line has become very fuzzy because I, you know, and maybe I've had the opportunity, sort of GMX has been very privileged. We've been sort of, you know, the biggest player on Arbitrum, and it's given us a chance to probably talk to so many protocols. And those conversations are always about how they can come in, how we can integrate, sort of if I take the, you know, the great idea of being able to be composable, have for Michelin's contracts. I mean, those discussions have been very central. So I think a lot of things that people were hoping to do on Ethereum,

which just, I think, just from a gas standpoint, even now with lower gases, we're not practical, settlement times. You know, I think, you know, people have sort of said, well, great, we've been able to solve that by coming over to Arbitrum and now actually sort of conceive a lot of the ideas people had a few years ago. So I think now it's really a conversation about, so how do we do it? I think my conversations, to be fair, in the Avalanche ecosystem, have probably been very similar.

I think it's, you know, I think when you actually get down to conversations with builders, there is, I think, a lot more sensibility. The markets, obviously, and the wider ecosystem gets, you know, it's noisy. But most builders have been, you know, really focusing on, you know, what piece of that deposit they can work on and how we can work together. And I think Arbitrum, I've really been, I've really appreciated working with, you know, other, other collaborative, collaborating with other protocols who've also said, look, we've got one piece of the puzzle,

and hopefully all of these pieces put together start to create a tapestry. They start to create that experience in Defi that doesn't require you to now need to move off chain for anything. Diego, how would you describe a kind of crypto gaming culture and arbitrum? And what does that look like? I mean, I remember there was a period of time where Ethereum Maynett had more crypto games.

They were very sort of primitive. but most of those have kind of now migrated. Is Arbitrum sort of an epicenter for crypto gaming right now? How would you describe that? And is Arbitrum going to be the long-term home, like Arbitrum 1? Or is there talk about like Arbitrum Nova or some of these other, you know, game-centric layer 2s as well? So it seems to be that Arbitrum is like the epicenter of L2 gaming at least.

But I would say that that's not in no... It's not a coincidence. The fact that we have treasure Dow into Arbitrum is actually one of the main, I would say, one of the core drivers of that adoption. But not only treasure, of course, the Arbitrum team is also putting serious effort and making this environment more friendly towards developers. Like, for instance, Nova is actually quite the promising approach to build games upon and for users to use it. To me, it's the fact that it would seem to be, and this is just my personal opinion, that currently the community in Arbitrum, at least in relation to games and perhaps like other projects as well, is more cohesive. It's like more united than what you would find, let's say, on the other chains, maybe, maybe on the point in a instance, if you compare the Arbitron community with the AVEX community, it would seem to be, to me at least, but maybe I could be biased because I'm building here, right?

That it's more cohesive, more driven, more welcoming. At the same time, it's like maybe because it's also the fact that Arbitrum is, let's say, I wouldn't say the new kid on the block, but it's like fairly newer to some degree than maybe like all these cool initiatives have been being built upon it, that it also brings the high thing. You know, like, people are actually quite enthusiastic about the future of Arbitrum. And the fact that it's also tied to Ethereum

makes it, let's say, makes it to be perceived as a more secure bet, right? It's like, well, you're building games, you're having games and everything, but it's also tied to Ethereum. So that sort of things add up. To me, the main feeling I derived from this is that the community is more united.

But, and I will give the ball to Karel in this one, is that it seems to me that a good portion of that is also due to the fact that Treasure Dow has been pushing this sort of ethos forward as well. So it's like it's hard to distinguish one from the other to some degree. It's very tight together. But yeah, Carrel, do you want to add to that? Yeah, Carrella, it sounds like treasure is a main reason for the gaming ecosystem really taking off on Arbitrum in the way it has.

So can you describe kind of the gaming culture and yeah, why do you think Treasure in Arbitrum are becoming the nexus for layer two gaming as as as dego says yeah absolutely thanks uh thanks for the alleyup uh diego um so so i mean i think the arbitram gaming and an nfts nfti culture i mean it's it's largely treasure culture as well and you know i think because of that and i'll give some some background maybe on treasure really quickly i'll kind of speed run through it but i mean we're effectively building you know what we like to call the decentralized nintendo so a crypto native game publisher that is is leveraging Web3 to its full of sixth extent. So breaking down wild gardens, transforming how game publishing is done in a bottom up and

community-driven manner. And all of this is tied together through interoperability, shared resources, magic as our token. And so as we think about this kind of context and, you know, I think why we sort of view this as the culture of treasure as well is, you know, I think a lot of the gaming and NFT activity, certainly from a transaction perspective, I mean, we. we really dominate the scene right now. I think we account for across all of our different games, like over 95% of related transactions on Arborchum. So, you know, kind of looking at it from that lens, you know, I think a lot of it is because of how we're approaching things. And, you know,

in the same way that, you know, you have a Nintendo, you have different cartridges, different games that you can slot in and out, you know, there's this cohesiveness that spans really the entire ecosystem. So between the games, between the, you know, different types of kind of infra and tooling that we're building out, everything is connected. And, you know, you're kind of looking at this in the, you know, sort of viewpoint of, you know, this sort of broader degree of network effects that really kind of drive both players and builders, you know, into this epicenter that is kind of forming. It's a very, I think, deep contrast to, you know, some of the other sort of L2's networks out there where in a lot of, you know, ways, any games that are kind of building there,

for the most part, anyway, we haven't necessarily seen a kind of treasure like community form quite yet, is that they're kind of building in isolation. And so really this like rising tide of sawboats ethos is, you know, is something that we live and breathe by. And, you know, it is, you know, kind of shared across, you know, all the games that we have and who, you know, we have the pleasure working with. And so is that basically Arbitrum 1, is that going to remain home for treasure? I mean, I mentioned Arbitram Nova earlier. And then we've also talked about Avalanche.

But what about Arbitrum 1 feels like home? And how would you kind of expand into other chains if you do? Yeah, absolutely. I mean, Arbitrum 1 is, you know, in a lot of ways, a relic of which has served, you know, I think, treasure quite well. but just in terms of how we migrate and moved everything over from Ethel 1, you know, onto Arbitrum, right? And so Arbitrum Nova wasn't there at the time, you know, it was a good bet on us to kind of transition there. Whereas, I guess if we think about the future of treasure and where we're going to go from here, I mean, certainly I think there are no, you know, plans to move away from Arbitrum kind of period, you know, at this point in time.

But, you know, I think with the NOVA question, you know, I think just thinking about from a even technology perspective and speed and transaction costs, I mean, it makes a ton of sense as, you know, they are really kind of, and by the I mean, Arbitrum, you know, they're positioning this as the gaming and social kind of chain for different sort of applications like that. So I think, you know, we did launch support via our marketplace for Arbitram Nova, I think, in the fall. So, could there be really a subset of games that also emerged there? I think it's very realistic. And I think there's a bigger question on liquidity front as well as we think about

this token that unifies everyone. Having that fragmented is also a big question. So it's not something we're looking at likely, but definitely considering for sure. Diego, my hearing rumors of thoughts from you? Yeah, I mean, I was just wanting to add something that Garell said to before. I mean, I don't want to throw us lower in any other chain or anything like that. I actually haven't been able to explore. I haven't been exploring the other chains for a while because, as we said on Arbitrum and Treasure,

we just like stop looking. But I could add that at some point when we were like deciding which chain to launch on, one of the key challenges that we sort of found out was that even though there was, there were initiatives for these chains to build games upon, it sort of felt like every game you had on these different chains was like a siloed operation. It sounds like there was no communication between the community. of one game with the community of another game, even though they were in the same chain, let's say, as Aevex.

Whilst, on the other hand, with treasure and an arbitrium for that manner, you sort of found that there was like this deep connection of community. And I'd say that that was like the deal breaker for us to jump in. It wasn't that those other chains didn't give you support or any of those things, but it seemed to me that the community aspect was like stronger on the Arbidium side. And for that, for us that meant that was like a deal breaker. Like community is king if you want to build a blockchain game. Coinflip, you have any thoughts?

Yeah, I echo what Diego said. The community aspect, I think, really should not be underestimated. The fact is that if I go through sort of, you know, our side chats within GMX, the dialogue actually isn't just about D5. There is a lot of conversation about Treasure, other people building game environments. There's a lot of interesting sort of gamified vaults and GameFi that's also developing out. I mean, I know Treasure is also looking at a few things within the ecosystem that are,

that we might be collaborating on. So, I mean, I think that's the interesting thing that people are sort of pulling out and testing out those different models because there's been such an interesting, you know, intersection between those two sort of areas. It'll be interesting to see how things keep developing. But the fact that people in these communities are overlapping,

it's not like we have an NFTI community and a defy community. There's really an arbitral community that sort of overarchs, and people are dabbling across that whole ecosystem. And there's a lot of crossover between defy and gaming. You mentioned Game 5, but that's really, I mean, that's been talked about a lot, but is that really happening on Arbitrum Coin Flip? Yeah. So there are platforms that are looking at, well, you know, copy trading in a sort of a social aspect.

You're looking at people doing Game 5 Vault. There's a project protocol called, I think, DSQ who's working with us. I think they're doing something with Magic as well. I know even Magic's been talking about looking at LP positions and other things to sort of back the game, their ecosystem. system. So, you know, I think there's a lot of things there where we're trying to see how do you, how do you optimize, you know, for idle capital? Because there is a lot of inefficiency that sort of lies in the system. So there's, you know, obviously, we're all a little careful because, you know, we don't want to go too quickly. But I think those conversations have happened and we see a lot of

potential for overlap. And I think, I think that if I were using an example that GMX has done very well with, you know, attracting a good amount of capital and trading activities. So off of that, you're getting a lot of people looking at, you know, well, gaming, which crosses over into gambling and a lot of other things that are sort of happening. So that, you know, I think you're going to see a lot of happening in that space. I'm actually reminded of what you were saying, Coinflip, from all the way back in Defy Summer, where we had this concept called Composable Communities, where I think this really came out after like Yams came out, where you could deposit your synthetics tokens, your Maker tokens, your AVE tokens, your, like, your DeFi Project tokens. And it was all

these communities coming together to farm yams. And it was like this great composability of all these ecosystems come together under this one defy app. And so this one brand new defy app yams was collectively owned by all these other communities. It seems to be there's a little bit of that playing through in the Arbitrum app layer. But it's interesting to me that this is not really something that is technical. This is not a protocol competing against another protocol, right? This isn't like Arbitrum going over and competing with Avalanche on their

protocol, even though I'm sure they could, but it's really something much more in the social layer that is really allowing Arbitrum to rise to what we see today. Do you think that's a fair take of it? It's actually the culture that has been created more than the protocol. Yeah, I mean, I think I'm not going to get into a technology conversation because I think every system has its own merits, but I think that what, you know, in some ways, as you said, 2020 was a very interesting experience. If I think about when Arbitram Mainnet went live, if I recall, it was basically November 1st, which of 2021. It almost kicks to like the peak of the market of the bull run. And that's when Arbitron went live. And, you know, there's no Arbitram token. There's nothing

on that front. So what happened was it did become, it did become a community that got to focus on the protocols and everything that was being built. I think, I mean, I mean, I I'll say that, you know, listen, I can take Avalanche, I can take Phantom, I can take all these other ecosystems. In some ways, as token went down, communities got, you know, their emotions got tied with the token price as opposed to what was being built. Race was being built in other spaces, but in Arbitrum, everybody got to only focus on what was being built. And I think that was, it just really helped to, you know, snowball and keep growing in the right direction for us. I got one more question for you that since you, when you hopped into the Zoom, you said that you're familiar with bankless content. And that means that you're generally familiar with a bankless thesis, which means you're generally familiar that bankless has kind of been promoting the layer two thesis much more than it has the alt layer one thesis.

And since GMX has straddled both avalanche and Arbitrum, I think you're actually in a pretty well-equipped position to give an audit as to the bankless thesis. in what ways do you think we were right, in what ways do you think we were wrong? Well, okay, so I will say, I'm a great believer that the Ethereum network from a security standpoint is the most valuable system of security, and I think that that's been a real big aspect of where, you know, from a defy standpoint, I think there's a lot of potential.

So I think that thesis is extremely strong. When it comes to L2s, and, you know, as you said, we're deployed on Avalanche, as well, and there's even governance proposals for us to go to other L-1s, I think it really comes down to what is getting built on each protocol. I mean, for something like GMX, we're a base layer, and we want to work with other people who can build on top of us, who can build liquidity under us, and it largely comes down to each ecosystem if there's an active number of builders.

So, I don't know. I mean, I'm not sure there's anything, I think the thesis is sound. I mean, I think that, you know, Ethereum will continue to snowball and grow. And for any Alt-L-1 to stand up, they will have to differentiate themselves. I'm not sure if that's in D-5, if that's in gaming or whatever area. But there's a, I mean, I don't know, black holes up there. But there's a center of gravity around Ethereum and then the L-2s that is very strong. You know what's so exciting to me about this whole conversation is how much, David,

this feels like we are exploring new lands, you know, and kind of like settling, we've called layer two the kind of the new frontier. It's moved from Ethereum and Maynet into the new frontier. And what we're seeing in Arbitrum is entirely different kind of ecosystem of players and important applications in the stack. So like treasure being incredibly important, GMX being incredibly important, this whole gaming ecosystem, that is so much different than kind of the cast of applications. And, and important ecosystem participants on Mainnet. And you might have assumed like a sterile world of, yeah, all of the big defy apps and all of the big kind of apps on Mainnet will just replicate across all the layer twos. We're not seeing that at all. It's almost like, you know, our analogy of Ethereum is kind of like a nation of states, you know, every state being kind of a different blockchain.

It's like some of these things are almost like cities. So when we look at arbitram and compare that to Opt, It's almost like looking at the difference between like New York and San Francisco. There's entirely different cities with different networks and different ecosystem participants. And sure, there's some crossover, but they're all united under this one kind of, you know, I guess, settlement assurance of a nation state. Anyway, that's very striking to me. And it's also very, very exciting because what it means is there is a whole new world of opportunity

for builders to make their mark. in new chains. And in addition to like kind of lower gas fees being a, you know, a place for innovation to sort of thrive, we have these new ecosystem participants that can try something different. And I think we'll get a lot of variety that way. Is that what you're seeing? Or like, am I off here? Because I know you've explored L2s a little bit more deeply than I have. And this is a question for you actually, David. Oh, oh, oh. Yeah. Yeah. This is absolutely what I'm saying. And so like, yeah, there's a, the different cultures in different cities, but also free transportation, free access across each one, right?

So like you can walk, I mean, you can't really, but in theory you could walk from San Francisco to New York, right? There's nothing stopping you from doing that. And that's what it feels like layer two bridges. But what you do find in these different layer two is different cultures. And it's easier to compose inside of cities than it does across cities. So that's kind of what I'm saying there. Coinflip, I got one last question for you about specifically GMX before we turn the, the conversation into the more NFT and gaming ecosystems.

How are other DFI protocols on Arbitrum hooked into GMX? Because we all know that Defi is what it is because of composability. What's the current state of composability on the Arbitram layer two? It exists and it's growing. And so I would say that, you know, I'll just use an example that if we're doing any sort of update to our protocol at this point, I'm sending, you know, we're probably sending out updates to 50 different, you know, protocols, builders, groups who are already sort of tied into GMX in one way or the other,

and roughly an equal amount who we know are already in the process. And that's across both our existing deployment and our upcoming GMX synthetic markets, which is kind of a bit of a successor to what we've done with GMX and GLP. You have countless people building delta neutral vaults. You have people building compounding vaults. You have people building trading strategy vaults now that are utilizing GMX. You have options protocols already deployed and more who are deploying who are able to use GMX to provide capital efficient hedging strategies for being able to expand their marketplaces. So, you know, I think everybody has really looked and found value in bringing that capital efficient structure on chain and being able to ensure that you have, you know, you have transparent settlement.

You're not needing to move beyond the chain to be able to effectively add risk or offload risk. That's a nice way to say for other protocols. For traders, it's typically doing the same thing. But for protocols, I think it functions very differently. And that's continued to be a buildout. So I really do feel like 2023, you're definitely going to see a lot. You're going to see, you know, that notion of the Lego really, you know, the tower being built up with multiple protocols, you know, feeding liquidity into GMX and multiple

protocols building and utilizing that liquidity. Krellton and Diego, the way that kind of think of you guys are founders of your respective projects, but power users of the rest of Arbitrum. So that means Defy 2, I'm assuming. Do you guys use Arbitrum for all of your Defy activities? Is it like 50-50 between Arbitrum and the rest of the Ethereumyoka system? Like, I know we've said that Arbitrum is Defi at this point. But to what degree, like, is your activity, your defy activity, whatever that may be contained inside of the arbitram ecosystem? Karel, let's start with you and we'll go to Diego afterwards. Yeah, I'd say if, you know, it's fairly limited, you know, speaking from a kind of treasure lens.

But, you know, aside from sort of from a liquidity standpoint, you know, we had recently kind of made a swap from, you know, kind of gamified, like protocol on liquidity that was previously just, you know, kind of through sushi, magic. Keith kind of pools and moving that to GMX. I mean, we have initially, we haven't put that in place quite yet, but at least we got the governance proposal through. So there is that kind of crossover that is beginning to kind of take shape. But beyond that, I mean, everything is, you know, that we sort of do and interact with is all on, all on arbitraud. And Diego, what about you?

Yeah, I guess I can add to that. So I guess it's important to disclose that our project does not have a token per se, like our own token, we don't have one. may we may have one in the future when we don't have one because we pretty much rely on our treasurer's infrastructure uh economic infrastructure to be the unit of account of our game to some degree and so most of the defy part that actually sort of outsource towards treasurer or towards corral in that sense um but i do ambition that if at some point let's say we have a token we will for sure like use arbitrams infrastructure on the defy side to to fuel it right but there's no need to do that now on the personal side i do use arbitral dfi

quite a bit. And the speed and the transaction cost is quite delightful. But yeah, in the case of our project is mostly, we outsource the problem towards Karel in that sense. Yeah. And if I can, if I can out there, I mean, I think there are homegrown kind of, you know, I'd say products that, like we're in development for, you know, to kind of bring this to life as we think about just the cross-game economy. So we have something called Magic Swap, which right now, you know, is essentially just using magic as the base pair. I mean, that's similar to a lot of the other kind of protocols out there. There is an evolution of that that's kind of coming. That is, you know, more focus around, you know, how we can do this, but from an NFT perspective. And, you know, as we think about, and, you know,

I think there's, there's a big debate right now across gaming, you know, in Web3 on kind of the financialized sort of aspects of it. And the other side, which is more the intrinsic sort of value that you can kind of derive from, from, you know, essentially kind of building here. So there's a lot of that that, you know, we're kind of building up towards as well. And, you know, certainly that will sit on arbitrage. Well, I, Carl, I really want to dive down into the economics of the Treasure ecosystem. And the whole idea of Treasure as a, like a Nintendo for Web 3 with different cartridges to slot in and out. There's always been this idea in the world of crypto of composable games and composable gaming.

And up until this point, I've been kind of a skeptics, like, all right, that's a cool meme. That's a cool narrative. But it's hard to say that what Treasure Dow is doing isn't actually executing on that narrative. And so this has gone from a narrative to an actual real story. So I want to dive down into that specific part of this conversation. But first, I want to talk about a moment to talk about some of these fantastic sponsors that make this episode possible. Uniswap is the largest on-chain marketplace for self-custody digital assets. Uniswap is, of course, a decentralized exchange.

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I was still living in San Diego at the time. And the community that showed up in the chat was absolutely insane. They were the craziest, but also extremely friendly, the most friendly community that I've ever engaged with, which was really refreshing at the time because in April of 2022, I had gotten in like three fights in a row with various different frog armies, first doquans and before that, Daniel Sestas. So it was really refreshing to have all of these like small brain people coming into the chat, even though I didn't really know what the hell the E thing was. But it was just, and so like, fast forward to where we are now.

I poked in my head into the, into the Treasure ecosystem to see what's up with that community. Did they make it through 2022 or they do it all right? And, I mean, they were just as crazy and energetic as ever. So, dude, how the hell did you do that in 2022? How did you keep your community so engaged throughout one of the worst years cryptos ever happened? Like, how did you got, how did Treasurer inject so much energy into its ecosystem? Yeah, no, it's, well, one, thanks for stopping in there. We will definitely have Ryan, I think, do a big E at the end of this is my question.

What is this? But, yeah, I mean, and definitely it's a team effort. I mean, I think part of it is we've just gone, you know, I think looking back to April's 2020, and I'll bring up, like, one of the things that you kind of talked about to cap off, the last kind of call we had, which, you know, the kind of framing of, you know, we have the centralized Nintendo, but then there's also treasure as like the Web3 Nation, and it's the ecosystem made up of many network states of which, you know, those are games, they're the metaverses. And so as we think about this like GDP of the network, right, it's like the economic activity,

it's all the builders, developers, contributors of all the, you know, many games and metaverses and then, you know, of course, the players, I think that has, you know, there's just, something special about gaming, which in a lot of ways is anti-fragile to, you know, everything we're sort of doing. And certainly, I think with the pace of the, you know, just macro and market overall, where, you know, people are kind of, you know, sticky because they're here for the content and the games. And, you know, of course, like there's been a big change in a way from, you know, kind of early 2022, P to E, you know, that sort of era has, you know, I think very much sort of changed the landscape of gaming and how we kind of approach things. And so I think there's that sort of natural

just path as the treasure ecosystem at large, you know, matured. We brought more games. A lot of them also matured as well. And, you know, they went from what was much more kind of simple sort of game mechanics and game loops into something that's a lot more immersive. That's fun, you know, and it is really kind of going through that evolution. You know, you have games like the beacon coming out. And, you know, I think a lot of these, you know, I think changes and, you know, just us maturing as an ecosystem, you know, the players kind of sticking around because they're just having fun and being part of the community. You know, I think there is also just a provenance of, you know, I think being kind of early and being, you know, part of this and kind of contributing

in meaningful ways. And, you know, I think there's a cultural sort of aspect to it as well. The social kind of moat that, you know, I think can sort of emerge from that and, you know, you know, you spend time in the small brains community and, you know, we in a lot of ways view them as kind of the blue chips and, you know, and kind of the punks plus bake plus whatever you want to kind of, you know, compare them to, but in its kind of unique way and, you know, we like to call them the Mario of Treasure. And so I think there's a lot of that, that, you know, has this emotional kind of connection. But really, I mean, at the end of the day, it's. I think, you know, there are just things to do here.

And, you know, it leads to, I think, people kind of sticking around and contributing or playing. And, you know, we're hoping to have a lot more of that. Yeah, it's definitely something I learned throughout this last bull market is that, like, the attention game is really where it's at in crypto. And gaming has this edge over most other things in that, like, there are things to do. So there's always a reason to deposit your attention into a game. we've talked about the narrative of like treasure as like the Nintendo of Web3 and what that means I did not understand that that meme when I first heard it so I think

we need to take some time to explain it. Karel, can you kind of explain this vision? What does this mean to be the Nintendo of Web3 and how do game cartridges fit into this whole thing? Yeah, absolutely. So, you know, when we think about, you know, just game publishing and, you know, kind of the Nintendo, I mean, that's one really good analogy. There's also the valve and the steam and the half-life, which is also another one that you could probably use as well.

But really thinking about this from like, you know, breaking down these walled gardens, which, you know, I think is kind of looking at this in a brand new way that, you know, previously probably wouldn't have been possible in Web2 or was not, you know, feasible from a business perspective. But now, you know, enter kind of Web3, you know, and really coming at this from how kind of Treasure started. I mean, it was, you know, a derivative of loot. I won't go through all the history because we have another, you know, a pod on this already. But, you know, and kind of approaching this from just like a bottom up manner, you know, as a fair launch, free mints, you know, we distributed magic. We distributed, you know, the kind of initial NFTs that led to free mints, that led to small brains, that led to kind of bridge world and legions. And so that was our approach of, one, taking this thesis of how can we kind of create, and bridge and connect games that could share common resources,

so this interoperability thesis, but kind of do this in a way that helped to kind of show case what a proof of concept could look like. So like a Nintendo, there are first party bets and IPs that need to kind of form and that ultimately our hope is that we can create some hits from them. But at the same time, because of the nature of the space and what I think magic sort of unlocked

a lot of people was the ability for other builders and other games to come into treasure. And, you know, again, it's permissionless. Anyone can pick it up and do whatever they want with it. And but that said, it needs kind of be done in a way that the Dow can formally kind of accept and bring in, you know, one, folks who are kind of well aligned with treasure and magic and really what we're trying to accomplish and, you know, kind of build together. And so this, you know, enable this sort of like bottom up, you know, manner of building that, you know, maybe the Nintendo of, you know, kind of Web 2 probably wouldn't be able to kind of tackle it. And so we're doing this as, and, you know, my aspiration is that we no longer have to refer to this moniker of the decentralized Nintendo in a few years.

And we just call it treasure. Certainly. And I'll say my first initial reaction to that was that's a great, that's a great narrative. all web 3 gaming platforms want to have this interoperability, this, you know, just come build your game on treasure. But then my initial, like, skeptical of you. I was optimistic that we could do this. Somebody could hopefully do this.

But my initial reaction was like, well, why would you just build your game on treasure when you could just build your game independently and not be subjected to the economics of treasure? And so this is what I was really waiting for when after doing the interview back in April. And then I come back in June, I was like, oh, that's actually playing out.

for somehow they've managed their coordination incentives to actually encourage people to build on treasure rather than defect and go out and build on their own. And one of those games, I think, is the beacon. So Diego, Diego, I want to turn to you is like, why, what resources did the treasure ecosystem have to offer you and what you were building? And why did you decide to build alongside treasure instead of just forking off and building your own ecosystem? Sure. I mean, there's quite a few. I'd say that one of the things that I wanted to mention that I don't really know precisely. how treasure achieved is this culture that they have like this e kind of thing i really don't know how you recreate that i think that's impossible and when we actually found out about this community we were

like what is up with these guys like who are these people like what why how are they all like so well coordinated and so sharing like the same i don't know like ethos to some degree and yeah we quickly that was quick well so we quickly realized that we found this community that had the interest that we were looking for, which is people that are interested in the crypto space, but also highly interested and invested in the gaming side of things, much like we were. You know, like we are all gamers. We love the crypto space, but we found out that this community had like that those two interests, like very hard.

And they have built a community that was not only fun, but very contagious, right? So we quickly realized like, hey, whatever is it that this guy's built is actually quite unique, quite hard to replicate, and we don't really want to replicate it. I think that this was like the audience that we're to some degree like looking for, right? But besides like the community side, which is actually quite the big one if you're building a game, I'd say that's the hardest part, is the fact that Tresher also offers a set of, let's say, an infrastructure that is very hard to build on your own, let's say. One of the main reasons why most projects in Gameify fail is because they develop, they develop tokenomics that don't really make economic sense, or they sort of orient the game design towards a token, and usually they fail on that, right?

But what Treasure sort of grants you is a token that has utility outside of your game, while also providing you with a community that wants this token and this infrastructure to thrive, and this, let's say, this whole ecosystem to thrive, and also providing you infrastructure to build upon, like a marketplace and other stuff like that. So they sort of help you in different ways that is very hard to come by if you're building on your own. To me, one of the core aspects where games fail is because they focus on building a token first rather than just focus on building a game first. So with Tresher, we sort of realize

that we could focus on creating what's actually engaging for players, which is the game, right? We also sort of leverage the fact that Tresher impulses interoperability, right? The fact that an asset on my game can be used in another game and so on and so forth, right? Which actually adds more value to whatever exists to this ecosystem inside the ecosystem.

So let's say the treasure has like this property that the more it grows, the more it's, enticing for games to hop into, and the more games that hop into, the more it keeps on growing because sort of everyone benefits from it. And you can certainly see that the community has that in mind to some degree. That's what they've created that I say. It's very hard to replicate. It's very, very hard.

So, yeah, that's my answer, I guess. Yeah, it really seems to be that Treasurer's moat is distribution, where games could be independent if they wanted to. They could attempt to bootstrap if they wanted to. But maybe they just want to take the easy route and plug right into Treasury. and have just like these crazy e fanatics and immediately start playing their game. And that seems to be like kind of the bull case for treasure.

Is that how you guys see it? It's, I'd say it's one part. And I'll start, Diego. I mean, I'll clip that for later and show the team because I think that was a great testimony. But yeah, I mean, I think when we think about certainly, like from the gaming and sort of builder's perspective, like we like to talk about our flywheels a lot,

but there is a bit of this like builder. flywheel where you have this like vibrant and kind of intimate ecosystem there's the community sides you know it's bootstrapping player adoption tap into that you know it's the the ease in the crowd and you know also the beacon community i mean you know they're you know i think this player base and especially as this grows like it you know there is that kind of cross-pollination that's kind of happening there's this other side of it which i think is maybe more builder-centric and in a lot of ways it's almost like a founders group you know if you kind of put your VC hat on. You know, it's a group of just like it's other entrepreneurs, other builders. And, you know, I think for us to be able to kind of curate and bring, you know,

really talented folks together who can spend time talking about very openly, you know, struggles and challenges that they have, you know, with regards to game design, tokenomics, go to market, operations. I mean, there's a chat going on right now on like generative AI and, you know, the use of that in like art production. And it's a very just like, collaborative kind of effort versus it being, you know, really kind of competitive in that certain nature. So there's a big kind of bucket around that ecosystem. So distribution, I think, is really key to that, but also kind of this kind of building side of things. You know, I think we're moving to this, you know, maturity of the network where you can have and kind of bring out just

these like more immersive kind of gaming experiences. So interop is like a really big sort of theme there. I think there's also this meta game that is emerging because everything is tied together in so many different ways. So you have this meta game that we're trying to foster that is like intergame, intra game, and then just

you know, add a kind of layer of identity as you know kind of social, the play, you know, the social graph that players can kind of, you know, tap into and then coordinate, you know, we're talking a lot about guilds that could form that could span different games and, you know, the way that

that, you know, what might have emerged in World of Warcraft, but, you know, think of having something that could have, you know, kind of, you know, take shape in multiple games, XP, identity, et cetera, et cetera. So I think there's, there's so many different parts there that we can kind of play a role to help kind of cultivate and, you know, really kind of bring this to life. Joel, I'm curious. What's holding you guys back right now? So there was a time where I might have said, yeah, GameFi is being held back by really

high transaction fees. and kind of scalability constraints of decentralized blockchains. I don't know if that's still the case. Maybe another aspect is user experience. I mean, wallets are still kind of hard. Onboarding into crypto is still kind of hard. But what would you point to? Like, what's holding treasure that entire ecosystem and GameFi in general back?

I get the impression that this is maybe in terms of number of gamers we're in the tens of thousands or so, maybe close to hundreds. of thousands, maybe. What's going to take to get to the millions? What's going to take to get to kind of the big boy numbers that the Nintendives of the world are pulling in? Yeah, absolutely. I think, I mean, my perspective is a lot of it is from that user experience. I mean, I think there's definitely a scaling and kind of cost and speed question. I mean, I think in a lot of ways, though, you know, and you're seeing more of the kind of hybrid like on-off chain sort of models emerge and you know i think there's a there's room in a place for like fully on-chain games but i

do think that there was a period of time where like that was the end goal for a lot of folks but i think we're maybe still a bit far off from that um that said though i think there's um you know that will experience the you know like i think and this may be a hot take you know i think at the end of the day you know a user and a player shouldn't even know what network they're on they shouldn't have to worry about kind of the tokens, you know. And so this is where, you know, whether it's on arbitram and hopefully it's on arbitram, but it could be anywhere else that like it's abstracted away. You know, you don't have to manage your wallet. And so we're making quite a number of strides. There's a ton of partners out there. A lot of people just working on the, really, the

picks and shovels to, you know, make that experience like, you know, much better for the end user. So I think that is maybe the biggest kind of blocker right now for us to kind of get there. I think the other side of it is just, you know, the types of games that, you know, could appeal to, you know, that kind of mainstream audience or mass market. I think we're still a bit far off from that. But, you know, I think, you know, like there's a number of them that are, you know, which I would point to with the beacon being like one that I think has like you know the ability to really kind of capture that you know that sort of audience and you know I think we had you know come from a stage where like there was a ton of games that weren't free to play you know you had to buy and

mint and nft in order to participate or and it costs you know quite a bit for you to kind of enter and you know play so I think you know there's just a bit of a shift in in terms of how games and and how builders are approaching it. But I'd love to hear Diego's perspective. Yeah, yeah, absolutely. I mean, there's plenty to touch in there. To me, I agree with Corel for the most part. I think that on ramps are quite the important part,

just make this frictionless for regular players. To me, one of Gameify's most, like, biggest problems is Gameify itself, right? The fact that you create a game that stands around a certain token and that you need to use DeFi to participate into it, I think that that's not necessary. the approach that we took on our end was to, why don't we create a game that sort of leverages the, well, the benefits of blockchain

without necessarily requiring it for you to play the game. So by doing that, we achieved to some degree to create a fun and engaging experience that also has the benefits of blockchain. And that, at least as for now, has worked well because people really want to play games in the blockchain. The only issue that you have is that you don't have that many and the way to play them is to, well, to purchase tokens and participate on this strange

economic loops. There's also, to me, like a change in some tendencies like game file, let's say a year ago was way different in the sense that there was like this notion that every aspect of the game had to be in a blockchain, everything had to be centralized, I mean decentralized, which I think that is not the case anymore. I think that to achieve mass adoption, we need a game that is like an hybrid that has the aspect, even the benefits of blockchain, but that has the technology that allows it to be a fun game. You need to have a game that's to some degree centralized in order to create an engaging experience because if everything is on the blockchain, there's just no way to do that

and create a fun game by having everything decentralized. You need like this sort of hybrid approach. And I think that we're seeing a tendency now where games are actually focusing on the fun aspect first and blockchain sort of second to some degree. And yeah, I think that that's one of the things that's going to drive adoption. If you want to appeal to the web two crowd, give them what they want, which is to have fun. And if you show them the benefits of Web 3, which are quite substantial to begin with, they will inevitably keep on using the technology.

The way I sort of ambition it to some degree is that people will be using blockchain in games without realizing that they're using blockchain games, the same way that we don't realize many of the technologies that we use nowadays. I think that's sort of the way to go. And I certainly see that happening to some degree, although we're still have the old Gameify approach, let's say, that's token-based. That's just my take, by the way. It might be wrong on this one, of course.

You're saying we don't make kind of finance the focus or the end-all be-all, right? It's got to be more than that. Yeah, I'd say. I would just say we're depending on you guys to build some really cool stuff because, I don't know if you noticed, but the gaming community kind of hates us right now. Absolutely. Hates crypto, hates NFDs, thinks it's all a Ponzi scam, and it's up to you guys, the builders, to prove that we have something really fun and engaging.

And I think we're seeing that in kind of the community, the treasure communities that's sort of stuck around and is exploring this ecosystem right now. They seem very engaged and excited. But it's up to you guys. Yeah, on that note, I think when people hear the words like Web3 gaming, they think Axi Infinity and they really understand it to be like there's a UI, there's a skin on top of this economic game. Actually, what is the beacon game? What are you doing the game? What are the objectives? Can you like pitch the game for us?

Like, how do you play the game? So the beacon is a rogue-like RPG game that leverages the social aspect of MMOs together with NFTs. So the game basically spins around two core concepts. The first concept would be a solo dungeon-crawler roguelike game that's pretty much based or inspired on games like Hades or the binding of Isaac if you experience those games like fast-paced, action-heavy, skill-required games, right? That use procedural generations so that every time you enter it's going to be a different game. experience, right? And the idea is that players as they play, the farther they get into his dungeons, the better or the more loot they can take home. And this loot could be sometimes NFTs, sometimes it's just like cosmetic items, right? That's one of the dimensions of the game.

And the second dimension of the game will be a highly social gameplay where every player just for the sake of existing owns a house, a house, right? And they can decorate this house with the items that they find during their dungeon. So you have like a character, you have your house, most of the items inside the house are NFTs. And the idea is that you can, you can't can invite people over and visit our players' houses. And it's pretty much having this sort of social experience, right? But besides that, we have the fact that characters are highly customizable as well by NFTs and by different items.

So players can have their own unique looks. And besides the housing system and the social experience, we are planning to have like this sort of open world kind of city like that mimics the experience that most MMOs have. Like most MMOs that you ever play at a town or a city that you need to go to in order to interact with the core aspects of the game, such as questing and. crafting and stuff like that. And it's usually that place where people hang around and just talk with each other. And we're planning to recreate this experience in our game. So we're basically just a mix between a Hades and Stardieu Valley that also sort of includes the social aspect of MMOs, right?

And we're using NFTs to power most of this, like in the sense that you have limited items that you can share towards others and a highly competitive gameplay that we can leverage to, well, to have people competing against each other and stuff like that. So it's basically a game that is a game-first approach that uses the blockchain to its benefit rather than relying on the blockchain as its main source of existence, as its main motive of existence. And that's what we think that will be one of the ways to go in blockchain gaming. It's just using the power of the blockchain to leverage the assets instead of a game instead of just pursuing financialization. Although you can actually add some financialization approach into it if you want to, but it comes

with its risks, of course. That's like a brook. the explanation of the game, but I can dive deeper if you want to. No, I love that. I'm already getting excited because Rogue likes are my like bread and butter. That's my favorite kind of like casual game to hop into. Guys, this has been just a great like overall landscape overview of the Arbitrum app layer. But I want to talk about this last conversation before we wrap things up here, which is the PFP landscape of Arbitrum.

Because that's actually how I really just got like zoomed into the Arbitrome ecosystem as of recently is like trying to ask myself, what are the PFCP? PFPs worth collecting in the Arbitrum ecosystem. And so, like, what, Carl, I'll throw this one to you. Like, what are the PFPs in the Arbitrum ecosystem? Because people definitely rock them. Can you, like, kind of run us through the landscape of Arbitrump PFPs? Yeah, I mean, you already have one.

One is definitely the small brains side of things. I mean, for a backdrop, you know, the kind of genesis for it, I mean, obviously, super cute monkey, very zany, just amazing kind of pixel art. But the concept of it was, you know, it had, you know, ever kind of increasing head, you know, as you kind of staked it. By the way, you should be tossing up trove on here, not open sea. Right. You're showing your... So boom in the shape.

Your layer one, maxi, right here. Trove, okay. I'll be right back. But, you know, you would have this kind of, you know, small brain that would, you know, grow over time. And, you know, the longer you staked it, the more IQ it would. it would gain. And, you know, with that, though, the kind of collective world would also advance at the same time. So, I mean, it was definitely one of the first and, you know, a few that kind of came to Arbitram. I mean, certainly there were many that, you know, were kind of there before as

well. But, you know, this is really that kind of blue chip, you know, it's the culture icon of treasure. Is it a blue chip? How do we know that that's a fair statement to make? Is it the blue trip of Arbitram? I mean, I guess so look at it from maybe like a kind of, there's the price angle, but I think from a culture relevance as well, just in terms of, you know, kind of where it's stood overall sort of volume. I don't know what that translates to in terms of hard numbers, but it's on quite a bit. But certainly I think, you know, but the hope is that there are going to be many more. So, you know, we just announced another kind of, and I mean, there's certainly the beacon, you know, I see a lot of people representing their beacon. characters on Twitter and Discord and all that as well. We just announced a partnership with a game called Carrero before the holidays, which is effectively a Pokemon of kind of Web3. And so they're building an ecosystem and they'll have a PFP collection as well, which I'm super excited for.

Maybe I'll bump it to CoinFlip because I know that they also have one in the GMX community as well. Thank you. Carol, thanks for that shout out. Yeah, no. GBC's are the GMX Blueberry Club, which I guess depending on, if I'm talking or not, you might see on the screen. Yeah. It was a real fun part of our community.

It's actually, well, again, we are very much, you know, a defy protocol, but, you know, early in early last year as, you know, the bear was setting in and people wanted to really focus on, you know, how they were appreciating and enjoy the community. actually, a few community members came together and created DBC, which has, you know, has also grown and, you know, you'll find them all over Twitter and it's a great way for people to show the support for the protocol. But it's created this interesting community because we, we kind of in a very different way, I remember part of the dialogue, it was that we just wanted to show a happy friendly place. And that was kind of a hard thing of Arbitrum and GMX and everybody coming into our community. So, you know, GBCs are happy. They're, they sort of, you know, it just,

and again, I think it became a very nice way for people to just show their, their loyalty, respect, however you want to determine it for this community that was being built out. And I think everybody's very proud of that. And I think that's one of the good things with PFPs. It doesn't need to be, you know, it doesn't always need to be about signaling, you know, status and anything else. It's just about being part of a community.

I'm loving the synergies here between DFI, which is. of course what GMX is and NFT PFPs, which means it's just kind of showing the case that like, it doesn't matter if you're a defy app, you can also have a PFP as well. And I do appreciate the happy go lucky, like vibes of this, of this collection. And also, if you and told me in 2017 that I would be having a podcast where we talk about blueberry profile pictures, I would have thought the crypto went off into some weird niche territory, but turns out this is actually how we scale us out to the masses. It's interesting enough, one of the most uniting aspects of the whole technology.

People really just put the PFPs of the projects that they like, and they sort of identify with them. Yeah, I mean, it's big. Yeah, we're all looking for our tribe. Absolutely. Well, guys, this has been a fantastic exploration. And I know none of you guys are the actual Arbitrum team, but I have to raise the topic of the question of the token.

You guys know anything about the token? Because they are not telling me anything. You guys got any alpha? What token? The arbitram token. I wish I did. I'm sure it's like the first, second, third, and hundredth question they get. Yeah.

But you know what? I mean, jokes aside, I actually appreciate the fact that that's not their phone. It's right. It really has ended up being one of the big uniting factors for building out this community. People, as you said, instead, what are people done? They've come across to Arbitram because everybody has heard of it. And they've gone and looked into the magic community. They've looked within GMX and our extended ecosystem.

They've gone into dope X's ecosystem. You know, there's all these decks that are coming across now and opening, you know, like Trader Joe's come across, Camelot, Swap Fish. I mean, it's just like, you know, and everybody's, instead focusing on projects and protocols, not a token. But yes, when token. Sounds like y'all all share that sentiment. Yeah, nevertheless, we were all very, very excited for what we hope to be

is an eventual token drop some way, somehow, in some mechanism. I'm sure the Arbitrum team is listening right now, chuckling a little bit. So I got one last question. This one's actually for Ryan. Ryan, what is the letter that comes after D in the alphabet? Are you talking about E, David? Yeah, can you say a little louder? I'm just talking about E is a letter.

Nothing to do with any PFP ecosystem. It's just the letter E, A, B, C, D, E. Well, they're going to love that one. Ryan, you want to close us out here? Yeah, guys, it's been a lot of fun. Look, thanks for making crypto fun again and weird again. I feel like we got sidetracked in 2022, but the Arbacheem community is really delivering some cool stuff.

So I want to thank all of our panelists for this. Appreciate you and message to the bankless nation. It's a bear market, but it's time to explore. This is kind of the most fulfilling time. I think you can be on your crypto journey because there's a lot less noise. There's a lot more builders. The communities are much cooler. There's much more signal and less noise.

So go check out the Treasury ecosystem today. We'll have a link in the show notes. You can just Google it. You can figure this out. Also, go play Beacon, the game. It sounds really cool. dungeon crawler mixed with crypto economics. Very cool. Go check out GMX as well. We'll also include in the show notes a link to some of our Arbitrum guides that we've published on the bankless

newsletter. So you can get started with this. But most of the tools you're familiar with on Ethereum and other places in the ecosystem will work here. So. But I think the first point of Alpha I say is on treasure use Trove, not OpenC. That is one of the first things that I learned. There you go. I just learned that now. So guys. We're all living up together. Risks and disclaimers, of course. Gotta let you know that arbitrium is risky. So is all of crypto.

Defy is as well. You could definitely lose what you put in. But we are headed west towards the frontier. It's not for everyone. We're glad you're with us on the bankless journey. Thanks a lot.