Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Nicolas Julia: Sorare – Marrying Fantasy Sports and NFTs

Episode Date: November 30, 2021

Sorare is a blockchain sports game which bridges fantasy football and NFT collectibles. A player collects a team of players in the form of NFTs and based on the performance of the players in the real world, scores points. At the end of the tournament, the Sorare participant is ranked and earns rewards.Nicolas Julia, Co-founder & CEO of Sorare, created the game in 2018, way before the NFT craze of 2021. He joined us to chat about fantasy sports and what convinced him of NFTs, working in the football industry and the impact of licenses, and the regulatory push backs they have faced as a company.Topics covered in this episode:Nicolas' background and how he got to into the crypto spaceHow Nicolas got into NFTs in 2018An overview of fantasy sports and SorareWhy did Sorare choose to work with licenses and how they workThe challenges of working in the football industrySorare as a Web3 productThe size and value of the Sorare communityRegulatory push backs against SorareThe motivations behind the numerous platform transitionsThe biggest entrepreneurial lessons Nicolas took away from his time at Stratumn and his vision for SorareEpisode links:Sorare websiteSorare CommunityDiscordSorare on TwitterNicolas on TwitterSponsors:Gnosis Safe: Gnosis Safe is a smart wallet for securely managing digital assets and allows you to define customized access permissions. - https://epicenter.rocks/gnosissafeThis episode is hosted by Friederike Ernst & Sebastien Couture. Show notes and listening options: epicenter.tv/420

Welcome to Epicenter, the podcast where we're interviewed crypto founders, builders, and thought leaders. I'm Sebass San Gutsu, and I'm here with my co-host, Freda Geertrne. Today, we're speaking with Nicodagh, who is co-founder and CEO of So Rare, and I couldn't be more happy to have him on. But before we talk to Nicola and get into So Rare and NFTs and the gaming industry, let's first talk about our sponsors this week. Dexes are great, but they're vulnerable to problems like MV, failed transactions, and high gas costs. Cow Swap tackles these issues head on and offers a new kind of trading experience. It's built by Gnosis. And Cow Swap is a meta-dex aggregator. I like to call it a Dex aggregator aggregator. And it fights M-EV by matching overlapping orders directly. So if no

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And we have launched a co-filiate program. So basically, if you want to learn more about how to get your friends into this and benefit both, go to cowswop.com. Great. Nicola, thanks for joining us today. I'm really excited to be here. And thanks so much, Frederic and Sebastian, for having me. Yeah, for our listeners, tell us about your background and how you got to where you are today. Just for context, Nico and I worked together at Stratom. And I still remember seeing him come into the office wide-eyed and wanting to learn about crypto.

And so it's been a really fascinating journey for you since then. So tell us a bit about that. Yeah, yeah, of course. So, yeah, I'm the co-founder and CEO of Soror, and I think that I've been very lucky a couple of years ago. I think it was the end of 2015 to meet in Paris, amazing people like you, Seb, Richard Cajano, who was the co-founder and CEO of Stratom, this company who were working together with Seb and Francois and Francois Doreen and Stefan Florcahn. And so basically you got me into this crypto. So I was before working for a company where I've been working on this blockchain use cases for four banks. And so I made you guys.

I wanted to be operational, to join a startup and do something. And so I was one of the first employees in Stratom. was like a B2B use case. So basically, you know, trying to help big corporates to better trace complex data and processes between them, leveraging the Bitcoin blockchain. So I was one of the first employees. And I spent two years and a half there, like doing sales, marketing and operations. And then it was, yeah, it was beginning of 2018.

I saw the NFTs popping up on the Ethereum blockchain. And I was like, okay, this is interesting technology. And I was already passionate about cryptocurrencies and I was like on crypto assets. And I was like, okay, maybe this could be the vehicle to bring crypto assets in general, like to hundreds of millions of people. And NFTs are going to change the way we own something digital. So, yeah, I started being, like, passionate about it. And I'm a massive sports fan. So I was like, why not, you know, bring the image of football players and clubs and fans on top of this technology.

So that it's not just a unique digital item, but it's something that you can relate to emotionally. That was the second pillar in my thinking. And then the third one was, okay, that could be massive. there's officially licensed NFTs, but I want more. I want people to engage with them every day. I want people to do something. I want a usage value,

not just collecting and trading. And that's the third pillar, the game design, the fantasy sports angle. And with this three pillars, the tech, the partnerships, so the IP, the image, and the, you know,

the usage value, the game design with my co-founder, Adrian, who's also like a next stratum employee. we started building soar into further 18. So yeah, that's the background. And that's the very early days, I would say. So you guys had this idea super early.

I mean, like we're talking about 2018 when there only been really like crypto punks and crypto kitties. And now everybody kind of gets the NFT vision. now that there's been kind of the NFT summer and NFTs are everywhere and like Snoop Dog is doing an NFT and like everyone's mom is doing an NFT. But you guys saw this like super early. Like where did this conviction come from that this was going to be huge? So that's two things I think. So the first one is that at the very beginning of an early technology, of course you don't have millions of, you know, of,

of people that know about it, but you have an early community. And from this early community, you can try to measure or to go to the level of love, the level of passion that they have for it. And, you know, I spent time in the CryptoKitties community and knew that there's all these early projects. And, I mean, I was just feeling that something was going on here.

And that was not like the normal new tech or whatever, this was like beyond that, right? And so that's one thing. I think the other thing is I've been passionate about crypto assets in general and what they can bring to the world. And every time I was explaining Bitcoin and cryptocurrencies to my friends and even my friends, some of them that are smarter than me, I was, I mean, it's hard. Like, you need to go into, you know, like, central. banks and technology and game theory and politics.

And it's really hard. And I had this huge frustration in me that, you know, I love that, but it's hard for me to expand. And yeah, it's really. And when I saw NFTs, I was like, okay, most of the properties are the same, you know, like digital scarcity, true ownership, like all those things that are shared by all the type of crypto assets are the same. but it's much easier to understand, right? And so that was a very powerful driver for me, like, to start because I was really feeling that I could, you know, I could help the broader space to expand, basically. And so that was a very powerful driver for me to get started.

And, no, to get back to your concept, it's just this level of love and, passion from this early community. Plus, of course, like the fundamental properties of an NFT, like, and oh, it's fundamentally different than a traditional digital item, like through ownership, portability, digital scarcity, trustability, all those things. I was like, okay, if I apply that to all games or video games are built today, it's just like putting everything upside on and improving 10 times what exists today for the fans. And so, yeah, so I guess it's a combination of those three things.

Like the fact that it's going to reshape industries for the best, the fact that it's a way to drive, to bring crypto to a broader audience and this early passion from the early community. All these three things. They convince me that I should definitely bet my career on that and build something around that. You've alluded to all the pillars that kind of underpins so rare. but we haven't really talked about what it actually is. So maybe to get started, in a nutshell, what is Soraya? Yeah, it's a good question. I should have started by that maybe.

But, yeah, Soran is, you know, it's a fantasy sports game where you can play with officially licensed NFTs. So the high-level view of So-Han is that. and we really sit at this intersection of fantasy sports and NFT collectibles. So basically, if you start getting into the product, you would collect a couple of NFT collectibles, like a team of players. And once you own five of them, then you can feel a team. And based on the performance of the players in the physical world, like in the real pitch,

you would score points. That's the definition of fantasy. And then at the end of the tournament, we just add your points and you get ranked on leaderboards and you can earn rewards that are IS or NFTs or physical experiences or physical rewards. So there's other three type of rewards you can win.

So that's the basic functioning of the product. So maybe let me summarize this in my own words, because I think this will be key to the interview. And I am sure a lot of people don't know what fantasy sports are. And I'm including myself here. So basically, you have, you, basically it's a game where there is a collection of cards that, that represent football players. And you have to, you have to, you have to make up your own team from the cards that you own.

and you're scored on the physical performance of the individual players that make up your team basically based on the performance in the real games that they play with, you know, the real teams. And then basically you can compete against other people with also make-believe teams made up from, you know, real personas. Yeah, no, I think you're. are doing a way better job than me. That's 100% correct. That's exactly how it works. So you are competing against, you know, different managers around the globe.

We are, you know, we have managers from 170 countries around the globe. We have different game modes. So we have the global all-star where you can play with players from like Japanese League, French League, Premier League and so on. and then we have more specific game modes where you can only play with specific regions in the world. But the functioning, as you said, is this link with the real world.

You have this NFT representing a football player and based on how he is doing on the pitch, you're going to score points and progress in the game. That's really how it works. And we have this bridge between the physical world and the NFT world that is really at the core of what we are doing. and in both ways, like basically the performance of the players on the pitch impact your performance as a manager.

But the other way around, if you are doing well as a manager, you can earn prizes. Some of them could be NFTs that are tickets to go enjoy experiences in the physical world, like meet a player, enter a stadium, this kind of things. So we are doing the bridge both ways. If you kind of look back on the history of fantasy sports, This has been something that has taken a hold most in jurisdictions where gambling itself is prohibited, right? But it's kind of spread from there. Yeah.

So fantasy comes from the US. It's very popular there. You can think about fantasy. There's two popular modes of fantasy before, like the mode that we are introducing, the free to play mode, like ESPN. Fantasy, Yahoo Fantasy, Fantasy. And in Europe, we have a lot of local players in fantasy soccer that are doing very well with this free-to-play mode. And then you have the gambling mode that I guess you mentioned in our equation, which is draft kings and Fangio. So basically, you put money at stake that you can lose.

You compose your team. And if you do well, you take part of the pot, right? So that's the second model. And our third model is really different because it's this intersection between. collectible, NFT collectibles and fantasy. So you can think about it as a fantasy game with a real economy of a fantasy,

of an NFT collectible. So you own your team and you own your game in a way that is truly new. And that is different from the old models of fantasy, basically. Okay. So basically, let's talk about the NFTs that I use as playing cards here. So the players are represented through the NFTs that you guys mint.

How are these NFTs distributed to the people who play? Yeah. So we are selling the players on our marketplace through English auctions. So the starting price is the same for all the players. It only changed based on the scarcity. So every year we would put on the market one, 111 111 editions of a certain player. All players are treated the same way, basically.

So you have the unique version, for instance, of Lionel Messi, the Supera edition is 10, the rare is 100, and the limited is 1,000, right? All along the year, we put them on the market, little by little, same starting price, and then it's English option, and so basically it's the market that tells the price, basically supply and demand, of course. And then we have a secondary market where users are free to resell their NFT collectible if they want to do so. Of course, they can also move it to like third-parture marketplaces like OpenC and so on. So what's the difference between the different tiers that you mentioned?

So basically you said rare, super rare and so on. Yeah, yeah, definitely. So again, our product, our game is that, you know, this intersection of collectibles and fantasy game. And so when you think about this, two important aspects, one is the collectible. And so these different quantities, they hold different collectible value. Like the 101 of Lionel Messi, you know, like for the fans of Paris Saint-German, Lunal Messi has more value than the one that is minted at 1,000 editions, for instance. So you have a collectible value here.

And then you have some value in the fantasy game as well, because owning one of the Scancest Edition could help you enter different gamers as well. So I guess these are the two important things. Does it impact performance at all? So if you're playing with a unique card, does it somehow imply, a multiplier on the performance of the player or is it just sort of more access to certain types of games?

Yeah, you can think about it more like access than than multiplier. Yeah, it's yeah. And generally speaking, I like to think about NFTs as a way to access, you know.

So of course, you have this collectible aspect, right? And there's some projects that are really successful in that like Bronx and so on. And then when you mix it with access, I find it cool. Like, because you own an NFT, you are part of a club, and you can access this, you know, gaming experience. You can access this physical experience.

And that's a way to unlock things, right? Like, because you own this NFT, you can unlock this kind of this type of things that could be social, like gaming experiences and so on. And so that's how I like to think about it. Cool. I'd like to, there's so much here that I'd like to unpack. But I want to talk about the licenses a little bit. And I think I were talking about this earlier and what bounds you to these licenses? Why did you choose to go the license route?

And what are sort of the complexities there? Because I mean, there's NFTs out there right now. Like I think there's one called like Rocks and there's another one that just did like a bunch of sports players. And I mean, they did basically that kind of caricature art avatars of these players. I don't think they have licenses for that because it's their own artwork. Yeah, why do you choose to go this route? And what are some of the maybe complexities of working with licenses? Yeah, for sure.

It was not the easy road. But I think that, first, if you relate to our vision, which is like help bringing crypto assets in the hands of hundreds of millions of people, we had a choice to make early on. Like, do you want to tap into an existing audience of people and leverage it? And if the answer is yes, then it's easier to use the image of real football

or basketball or whatever type of players, right? You can then, you have another road, which is you use, like, fake player for you try, you know, to do things without this link to the real world, but we found it like maybe less powerful and less impactful in terms of relating to our vision. So when you decide to go the road of,

yes, I want to have this link with the real players and the real clubs and so on, then you have to choice. One is you don't get the license and then you can start and you can do art and so on. But at some point you're going to be in big, big trouble. I want that.

So like, because like the licensors have big legal teams that would go after you, even if you do a network of a player that is even like somewhere close to a player that exists, you're going to be in trouble, right?

And then you have the other road, which is you go to them and you just explain, it's going to take years, but you explain that you're just creating like a new market, a new product. It's going to be beneficial to them because you're going to pay them a part of your revenue and it's going to expand their brand to new audiences,

crypto-enthusiast and new markets and so on. And that's the road we decided to go. And to be honest, like, I mean, if I knew like early, like in 2008, you know, complex, you know, it was going to be. Like, I'm not sure, like, because it has been done a lot of education and time to explain that. and in order to, yeah, to really, like, yeah, explain the benefits and, you know, why it's important for them as leagues and so on. And I think, yeah, we put a lot of effort on that.

And now they get it because, you know, it's a new stream for them. Again, it's, you know, more like helping them to increase their audience and developing a cool product for the fans. So, no way are in a better place. I can I just um so I'm very much not a lawyer I'm a physicist by training um so uh bear with me can you explain um the IP background behind this a little bit because in principle the players their public figures right so basically the they they don't have a right to say you can't use my picture if you take a picture of them or if you draw a picture of them you can use it whatever way you please right and Also, the game statistics, they're also in the public domain, right? They're not, they're not IP protected. So what exactly is it you need the license for? So I understand that basically it gives you an in with the clubs

and that they can also co-promote and so on because they also have a financial interest, but you're not prohibited from, so basically if I as a private person make an NFT with Thomas Miller on it, kind of tracks to Thomas Mueller's performance this is

fine, right? Not really, but I will dive into that. So basically you, you,

you, we get two things when we deal with the league. So one thing, as you mentioned, that is, yeah,

totally right, is the marketing element, so there's no IP here. It's just, you know, having the league support us in

our mission to bring it to to, to, to, to, to, So like post an Instagram on Twitter and so on.

So that's one element. We're going to start activating these things in the coming months. And then the second element is the IP. And so for the IP, you need different things. You need the image of players. You need that is owned. So players themselves can use it independently from the clubs, but clubs can use it under a certain score.

scope. Like if you put all the players in the market, like there's certain criteria that we need to meet. So you have the image of players. Then you have the image of the club logo. This is owned by the clubs and you need the IP and the and the and the and the jazz and so on. And so to go back to your example of Thomas Mueller, like if you want to make a profit as an individual person from Thomas Mueller image, if you do it without the jazzet, basically, like, if you want to make a profit, like, like the national team jazet or the club jazet, like Thomas could go after you and tell you that you cannot profit from his individual image because you don't have the rights to do so.

If you do it with like reproduction of a jersey, even if it's not like a picture of the jazze but just a network around the jazze, you could also have the national team or the club going after you because you are using club or national team IP. So yeah, this is, yeah, this is really touchy to do so. I mean, not touchy, it's not possible actually. So, so I mean, this is kind of, that's kind of going off on a tangent, but say I'm, I'm a professional photographer.

I'm, I'm a paparazzi and I kind of follow Thomas Mueller around his village in the south of Germany, wherever he lives. and I take pictures of him and I'm allowed to do so because... You're pretty obsessed with Thomas Miller, I got to say. Sorry, I know like five players. So I can say, I go after Grisman. And so I don't know where he lives. So basically I kind of, I find out, I find out which supermarket he goes to and I take pictures of him.

And I'm allowed to do so because he's a public persona, right? And I can, I can sell these pictures to hello. people magazine or I don't know whatever. This is very different. Yeah, this is, so if if you want to use the image for

information, information, like basically for newspapers and this kind of things, this is really different. Like that's and I'm not I don't have any legal background. I'm not a legal person. So I cannot explain why it's different, but this is

because I mean, when I started the company, I was like approaching the topic the same way you are approaching it. And I was like, wait, I mean, I saw this image in the sports newspaper every day. Like, why it's different, right? But the reality is that the newspapers are not selling them. These images, they are using them for informational purposes. And so this is, yeah, this is a different setup from... Okay.

So I can take a paparazzi picture of Thomas Mueller, I can't put it on a mug and sell the mug as, you know, a Thomas Mueller mug. That's correct. Okay, I get it. Yeah. So, yeah, that's, yeah, that's, and I guess that's, it has been, there's been very few so-called games that managed to do that well at scale. So you have one example that is FIFA, published by Electronic Arts.

And then you're in the physical world, you have Panini Collective. So there are the two companies that manage to secure all these rights. But then there's very few examples of companies that manage to do it. And so that's why also it's a long process. I want to talk about FIFA in a few seconds. But I want to ask you, like, what is it like working with essentially football cartels? what are the biggest challenges for you and your team and working with massive global organizations like this? No, like I learned a lot because at the beginning you want to explain NFTs and then you realize you don't want to explain NFTs,

not because they cannot understand it just because it's not, you know, like you need to tell them the benefits, right? So, and in the beginning, I was like, they were asking a lot of questions about blockchain and so on. And then you get, you get kind of drag into something that is not the, that's not the question, right? Like, the question is, why are we doing that and what's going to bring to you? What are we bringing to you, right? And so, yeah, to answer maybe your question more directly, for them is kind of easy now because we give them money, we give them access to new. and we just ask for the IP rights and marketing support. So we tell them, look, we just need the image of the player.

We need the rights, of course, and we need your marketing support, but we're going to provide all the assets, right? We're not going to do anything. So now I would say that it's, no, it's really smooth. At the very beginning, it was hard to convince the first one. You know, it's always the same. Like the first deal, you know, always the first thing is the most difficult, right? And then little by little, there's a kind of reinsurance effects where you have, oh, okay, this big club is coming into soar.

So maybe, and then this second one and then, you know, they get reinsured because they see that, you know, all the big names are coming. You as a company, you are growing. You have, like, investors backing you that are known and blah, blah, blah. And so then then it gets easier. And then, yeah, in the model, again, it's smooth because it's not, yeah, it's simple for them, right? we will try to make the life really simple. Did it help that Andre Schurler is one of the early investors? Yeah, Andre Schoerle is an early investor.

In Germany, we also have Oliver Bierhoff, who's the manager of the national team. And, yeah, we have, like, many Socor players that are invested in the company. We really try to be inclusive of the best in the sports world, like the Socor players, the leagues, the clubs, also in the crypto world, having, you know, like some some key people helping us and in the gaming. So basically there's free pylance, like gaming, crypto and sports.

We try to be to be inclusive and having the, you know, some of the best minds helping us to develop the company. So, yeah, I mean, regarding licenses, do the assets have perpetual licenses? Because like if so rare ceases to exist, I mean, these, not that it will at this point. But if Sauri ceases to exist in some distant universe and the assets continue to exist on the Ethereum blockchain, the licenses are they perpetual for those NFTs? And yeah, how does that like fit into your business model? No, it's a good question. So two level of fans are.

So first of all, one of the big progress, I guess, we made for the fans and for the gamers is that they can. use the game item, the NFT, the player, across the seasons. So if you think about the existing video games, you buy an item that you don't own at all, actually. You can use it during a specific season, and then the next season you need to buy again, right? So basically, you kind of leave the right to use something, but you cannot resell it, you cannot choose it next season, you cannot move it, blah, blah, blah. So you don't own it, right? And so we did a lot of work to explain leagues that that's not normal. You should use a digital item the same way that you use a physical one, meaning that you truly own it.

And if you want to do it right, you need to have an NFT. So that's the first part of dancer. And then the second part is maybe more related to your question is, yes, you truly own it, independently from the league, independently from the company. And so I think that's, yeah, that's creating a connection with the fans that is new. that is different because they own part of the game, right? And they own this digital item the same way they would own something physical. So the entire crypto angle kind of hinges on the collectability of those NFTs, right?

So can you tell us about people and their collections and what they do with them and whether they display them and so on? So basically how is that leveraged? How, what value add is it to the players that this is a Web 3 and not a Web 2 company? Yeah, yeah. So I think that first of all, you have the digital scarcity component. So you can tell with certainty then, okay, we're going to mint 100 edition of this player, this scarcity. It cannot be one more. This is backed, you know, by the technology.

So this is a first big thing. like just the fact that you can trust the technology for the digital scarcity is huge for collectors. And then on how you can use it as a collector. So first, yeah, we are seeing a lot of really fun behaviors. Like we have people, you know, collecting all the several numbers with a specific number, like number seven out of ten, this kind of thing. So we have all these kind of behaviors that are really cool to see on the platform. And we also have new behaviors. because one of the cool features of NFTs is that you can track the digital, like the audit trail of ownership.

We have some users that, you know, like pay a premium to own an NFT that has been owned by a public figure, like Antoine Grisman or Oliver Beehaw or so on. And this is kind of new because in the physical, collectible world, this is not as simple to leverage this kind of thing. And in the NFT world, it's much easier to do it. And so we find this, yeah, this really cool. And then in the way, like another, you know, like powerful psychological reason why we collect is showing off, like the social status thing. And this is something that is more at the beginning for us.

Like we have people that are proud of, you know, buying or winning some of their NFTs of players they love. And then they show it on social networks. we don't have yet you know like very strong ways to do it but we are coming to it hopefully at some point you would put your profile like the NFC you want in your Twitter

profile picture and so on and we know there's some initiatives around it I guess that would increase the collectible value of our ecosystem at some point maybe you could move your crypto punk to be your profile picture in the solar ecosystem as well in the other way around

and so yeah there's all all this all these things so maybe to sum it up the digital scarcity all the collectible attributes like several numbers design and so on and then showing off your NFT on like social network or virtual words this kind of things

there were rumors that Twitter was was adding a feature that verifies whether you actually own an NFT that you use as your profile picture, right? Kind of like the blue checkmark, kind of that you get checkmark. So basically I could take my Thomas Mueller NFD and put it as my face on Twitter and be an NFT verified. Correct. That's what I was mentioning in the answer.

And this is something that, of course, we are really excited. about like because it's it's all about uh portability and and and and showing uh your your NFTs to your friends people you care and you know just showing who you are uh in the external world and and yeah this is this is something we are we are very very excited very excited about um there there's also a way uh to show your NFTs it's not the collectible but it's also the usage value uh outside of of our fantasy games. So part of our vision is

really to be this platform for sports fan and not only they can use and have fun in our fantasy but also in different games that are built on top of us. And so there's already many of them that are being built

by gaming giants like Ubisoft or smaller, you know, like organizations, two or three engineers and designers. And this is really cool because, you know, it proves the portability effect of these NFTs, the fact that you can move them away, and it increases the usage value

for the fund. So that's also really powerful. So there's voices that kind of speak of a new business model in that context, so basically status as a service. How do you feel about this? Do you think this is something that is going to carry? Or do you think this is something that is a fad and will kind of? kind of die down.

You mean the fact that NFTs are like a kind of status thing? You mean? Yes. Yeah. I mean, I think that, you know, it is something that we care as human beings, right? And if you look back like last century, it's like showing who you own because of what you own in the physical one is a thing. I mean, you may like or not like it, but that's that's a thing, right?

And now if you believe that and all the metrics show that we are spending more and more time in the digital world, then, I mean, it's going to be the same. You want, like, people are going to want to show who they are in this world. So I guess that's, yes, it's going to be a thing. Yeah. So I want to come back to this idea that, like, people are building stuff on top of so rare. because I think that's really fascinating. And I think we should definitely get into how NFTs kind of turn the gaming business model on its head.

But just before, can you give us some numbers? How big is the so rare community? How many, what's the dollar value of the assets that you guys have minted? Give us a sense of like how much value there is here. Totally. So to date, the Soa community is roughly half. a million users. Out of them,

roughly 50,000 are active paying users so that they bought real NFTs and not playing with the free to play version when you don't have NFTs. We did that

without any paid marketing so far. It has only been organic gross. Friends talking to France and so on. And this year we're going to end up, yeah, I noticed that was a good, good start. And, you know, like this organic thing is really what I was looking for.

Because in the early days, if you buy the users, I mean, you can do it. And many companies are successful anyway. But I wanted something organic before, like, starting doing some paid marketing. And, yeah, we're going to end up the year with $250 million in overall sales on the primary and secondary market. So there's a lot of engagement. and maybe the most important and for us at least and most exciting metric is retention. Like we have retention metrics that are very high.

It's above 70% atmosphere. So it's equivalent comparable to what Netflix has. And that's what we really try to do well, like the game design and having this call loop working well and having people not only collect but play the game. It's still like very old days and very rough. in terms of gameplay, but we have something, a cold loop that is working very well. So, yeah, that's for some metrics.

And on the club side, we have more than 200 clubs, soccer clubs on board. And, yeah, we want to onboard all the top 20 leagues in the coming weeks. So we made some good progress here, too. Cool. And so, you know, there's a couple of startups, I think, that are building the products on top of Solera. So those are like solar data. And then there's

other games being built on top of Sororan. I'd like to kind of separate those two because I think the games is like that's like the game and market I think evolving. But with regards to like the like Sorare data types, do you have any plans to

you know, fund some of these initiative, like fund some of these companies or perhaps even acquire them at some point because it seems like having all this information, all this data and like all these services built into the company would be valuable. No, totally. So what we want to do is incentivize the creation of this ecosystem because it brings value to the fans and there's a lot of this initiatives that we cannot execute with the highest level of quality right now because the company needs to be laser focused on improving the

current product and I know onboarding these leagues and so on and so on and so on and like oh are we going to incentivize the creation of this ecosystem so it has been organic so far with all this applications like Saur data and side games and so on for sure we're going to we're going to invest in in some of them and actually we already did with Saur data so they raised a CEDRRANs And so are the company was part of it. So we are minority investor in SORA data. We definitely, you know, like we'll explore other of this minority investments. We want to help them also with resources, like, you know, having a team in the company,

helping them from a technical standpoint, from a product standpoint, and so on. So this is also something we're going to. going to do. And, yeah, that's definitely part of our vision, like helping, you know, the creation, development of this ecosystem. And, you know, it goes beyond even side applications, like Zara data or side games. It's also all the content creators. Like, you know, there's dozens of YouTube content creators and Twitch creators and so on. And that's also part of. for our plans, like, you know, helping them to develop and to, you know, to bring fun and to bring usage value to our community.

That's cool. So, yeah, I'd like to take a step back now and, like, talk about the gaming industry because there's so much to discuss here. And, you know, shout out to my buddy Sergio, who works at Ubisoft, who's my go-to guy, whenever I have anything that asks about gaming, I call him. And so, you know, all of the big gaming companies, like Ubisoft and 2,000, and EA, like, they're all, they're all getting into the NFD space in one way or another. Like, Ubisoft, just down the road from here, like, they have a blockchain lab,

which I think you guys were part of, like, early on or somehow, like, affiliated with. And, you know, they're all entering the space. I, the way I see things is, like, if you look back in history, if you look back at, like, the disruption that's happened in the, you know, that the internet has brought over the last 20 or 30 years, whether it's, you know, publishing, video distribution, taxis, you know, hospitality, all these disruptions happened from startups and basically like, you know,

either annihilated or like very much, you know, damaged existing industries or disrupted them if you, if you will, if you want to be nicer about it. Do you think that, like, the gaming industry is next on the chopping block with regards to disruption that like these big companies that are immensely powerful I mean like EA

with their FIFA license like I mean they're immensely powerful and they're huge profit generating companies do you think that in like 10 15 years from now perhaps even less

that these companies will still be so powerful it's a very interesting question I'm not sure it's a zero sum game so there's a wall where we coexist right and we just create a new market like a new way of building games well you know like gamers have you know truly skin in the game and truly own their game so what is for sure is that

we are doing everything differently and if you take you know all the business model the way we build product, the way gamers own the gam items, like everything is down upside down. Like, if you look, yeah, if you look at the, the current games, when you buy a game item being skin or whatever,

you cannot resell it for real money. You cannot move it to a different game. You cannot use it next season. You don't truly own it. So if the game disappears, you lose everything, all your money at the time, the motion that you invested. So, and it's basically

everything. think we are doing it differently. And it's so radically different that, yeah, you know, I, in the, we may have a world where like traditional game studios and, and blockchain-based or NFT-based game studio coexist. But again, what is for sure is that we are, we are doing everything different. My take, of course, is that we are doing it to the benefit of the gamers because, no, they can truly own the game items and do whatever they like. with it, with, you know, total control and freedom, which was not possible before.

So that's totally, yeah, it's total shifts in terms of this relationship that you have with your community. The way that I'm starting to sort of form my thinking around this is the following. So, you know, before games were constructed around, like, strong game design, of course, like that's super important if you want engagement. But then also there's like the IP around the game and the protections there. So you can't use it like seasons over seasons and it's like all these restrictions. Maybe you can't sell a license or whatever.

But I think that where NFTs kind of shift this model, it's games will be asset-centric. So what's valuable is the asset. And then you'll have game designers sort of competing over, competing for dominance over. were essentially interfaces to interact with these assets. And we had Jerome of Cometh on a couple weeks ago, and you can kind of see this there where all of the underlying infrastructure that exists in the Comuth ecosystem, it's mostly all like D5 primitives.

And you could just build games sort of interacting with these different primitives. And like with soccer NFTs, it's like a little bit different, but it still hints at the same trend, I think. Totally. Yeah, it's a very clever way to look at it, like games becoming asset-centric. And I think it doesn't mean that you don't want to be exceptional at gameplay. And I think that the companies that will be true to this DNA of being asset-centric and bringing power back to the gamers in the form of NFTs, but at the same time we'll deliver a super strong gameplay

will be the big winners, right? But yeah, I totally share this analysis. And I think that the collectible aspect is also super important for us because of if you are moving to a world where the assets is central, then you know, you want to take care of it in a different way and you want to, you want to, you want to, you want to, you want to collect it in a different way and that's where we sit like at this intersection of there's an FTC collectibles at the center of the game and the fantasy or the gameplay run

the fantasy right can I ask whether this kind of how this fits in with the way that you've chosen your investors so basically you've done a series A a while ago and the VCs that backed you were by and large blockchain VCs and And you've done a series B earlier this year at a post-money valuation of 4.4.3 billion. Congratulations. That's a huge success. And the lead investor this time was SoftBank, who basically SoftBank is not known for its role in the blockchain space. So how does that fit into the overall strategy in terms of where?

where you want to take, Sora? I see it as, you know, like, first of all, like, for the very first, the precede round, only crypto people could make a bet on such a crazy idea. So it was not like a deliberate choice from me, like going after like crypto business angels and not like they were the only belief, let's be honest, right? Because, you know, the very early days, the early community, there was people that got understood, like, at a deep level of technology and why it's going to be important for the future of digital ownership and gaming and so on.

And so we got them first, like the crypto people. And then when we raised the second rounds, we were like, okay, we sit at this intersection of crypto, gaming, and sports. So we have some of the sum of. the brightest minds in the world of crypto, how do we get the support of the best in the world of gaming and sports? And so that's how I built the investor base that we have today, trying to be inclusive of all these people.

And also having people helping us build companies that can reach like a big, big scale. That's also where our soft bank, you know, sits. But not only that, but also the fact that, you know, the person that we have at the board from soft bank, Marcelo Clauroy, who runs softback international, is a massive soccer fan. He owns free soccer clubs. And so he was, like, bringing more than money, like basically connections and an understanding of the world of sport business, which is very important for us. and yeah so it's it's you know different different things that you need at different stages of your company I would say

just before we we move on to the next topic because I want to talk a little bit about the regulatory aspect here yeah I know yeah I know that's that's you're going to like that you know we talked about FIFA a little bit earlier the licensing model here seems to be shifting a little bit. So I think you're probably familiar with the whole like FIFA EA renegotiation right now where, as I understand, essentially FIFA, EA had exclusive license for like any sort of like gaming thing that had to do with with FIFA. So like exclusive license across all of the gaming industry. and now Pifa wants to renegotiate that license so that it no longer has exclusivity, which is the case already in other sports like, I think, like the NBA, for instance, there's like several gaming manufacturers or gaming developers that make NBA games.

What do you think this comes from? And do you think that it reflects sort of a general shift in the gaming industry where, you know, we used to have very sort of like monolithic places where people had went to game. It was either like console or PC. And now there's mobile gaming, there's NFTs, there's like all these different ways that people interact with brands through gaming. Yeah, what's your general kind of feeling on how this is heading? No, totally. I think that you can look at it with two different angles.

The first one is for the fans. I think it's a positive because, you know, when you have only one player at some point, I mean, one company publishing games of a certain category, maybe at some point, you know, the innovation is not that here anymore because you have this kind of monopolist position and I'm not sure that's the best for the fans. And then you can look at it from a business perspective for, like, so you mentioned, FIFA as an organization.

And so maybe they are thinking, look, we could have three or four different partners and the addition of this licensing fees or partnership fees could be higher than what we get today with one partner. So, I mean, I don't have any insider info about it, but you could imagine that they are thinking this way. And so if it's of benefits for the fans and if it's of the benefits of the FIFA members, then maybe that's a reason why they want to expand to several providers.

As you mentioned, that's already the case for existing leagues, like the NBA and so on. Yeah, I think that's, yeah, I think it's true that it does, it is better for the players and for the fans, like for the game players, like the fans. Yeah, for the fans, for the fans, for sure, because they, I mean, it's just more, more opportunities. And again, like, you stimulate innovation, like, if you don't have a monopolist in the place. Right.

Are you going to stimulate innovation by encouraging other gaming platforms to use, use your NFTs and like, you know, like if, I don't know, EA decides that like they want to plop so rare, like give so rare NFT holders an advantage in the game. I mean, I don't, I don't think you can really prevent them from doing that technically. Is this something you would encourage? Yeah. I mean, again, I'm big on this platform vision. I think that's one of the, you know, the key aspects of NFTs, like this portability thing. And we're going to. going to incentivize the development of this ecosystem. We're going to invest in it.

That's for sure. I mean, you put it very in a very smart way. It's becoming asset-centric, right? So game item-centric. So if we create these assets and if there's more usage value because, you know, there's different ways you can collect them and show them different ways you can use them. I mean, it's also good for us, let's be honest, it's good for us as a company.

So the interests are well aligned here. Like you would have an ecosystem of organizations that are leveraging our audience, our IP, and that's also for the benefits of the fans, and that's to the benefits of us as a company. So I think that you are well aligned here. So let's talk about the fun regulatory stuff because there's some interesting things here,

I think that I'd like to do. get your your thoughts on. So you guys sort of came under fire in the UK recently and, you know, there were some, I think the gambling regulator was saying that you guys should, you know, should be qualified as gambling. And like, you know, you've always maintained that So Rare isn't gambling. I think you've done a really good job at defending why it isn't gambling. I know that you've also, I think you've also been in touch with the gambling regulator here in France. And I've heard whispers that the French financial markets regulator has you in their sights. You know, I personally think that Surwear isn't gambling.

I think it's pretty clear. But I think that regulators will make the case that play to earn, you know, it's existed for years. I mean, people have been selling gain assets for years. but NFTs just makes it more open and liquid and accessible to a much broader audience. Do you think that there will be sort of a regulatory crackdown on play-to-earn type games because it entails people like spending money on assets and there is an expectation of, say, future returns because like these assets can appreciate value. And financial regulators will frame it as like we need people protected,

you know, especially like kids because like kids are into football and all this, like, or into sports. Do you think that there's going to be a crackdown at some point here? Because I think there is. I think that, you know, when you are creating a new market or a new category, and really like you don't fit into, you know, anything from a radiation standpoint, I think that you have two ways. You have one way where, you know,

you are the build-dozer, right, and you keep on developing and you don't take care of it, right? And you have another way which is proactive where you get in touch with the regulator. So you mention some of them, you get in touch with them, and you explain what you are doing, you explain what you are, what you are not, and then you try to be constructive, right? You try to open a dialogue and to see, okay, what's the best, what's the balanced approach for our kind of product, as you said, to protect the consumers. So I think that's exactly where we are in terms of philosophy, I would say, and also in terms of approach.

There's no regulation as long as I know anywhere in the world, like what we say, let's say NFTs should be under this or that, you know, like constraints. Probably there will be some in the coming years. which one, to be honest, I don't know. But as you said, yes, it's going to take shape in certain form all over the world. I expected that response from you. It's a, your approach to building things constructively with regulators, I think, is, it's really a philosophy.

And you got to know me a bit personally as well. So I guess it's also a personality trait, right? And I think that's, yeah, that's all we build things here. Like, that's how we interact with human beings. That's, yeah, it's just opening a dialogue. I mean, sometimes we're not going to agree. And sometimes they're going to be friction, maybe. But I think, yeah, the process should be a dialogue, right?

And we are in the middle of it. And, yeah, let's see what, what's the outcome? Nico, I know that you're not the technology person, that's so rare. Am I permitted to ask one technology question, though? Yeah, yeah, yeah. I would try to be as precise as possible, right? Cool. Fantastic.

So rare in the early days was built on LUM, and then you move to Ethereum Mainnet. And, I mean, then you move to the ZK roll-up from Starkware, stock X. Can you talk about the motivation behind each of these moves and what you were looking for on the platform you build on? Because, I mean, obviously moving your application over to a different platform, this sounds easy. But as someone who builds, I know this really is really painful.

It's very painful, yeah. Yeah. So can you talk? about the drivers behind these moves? Yeah, of course. So you, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, um, um, um, uh, uh, uh, uh, because there's always trade-offs, right? Uh, uh, and, um, between use experience and what you want, uh, for the, for the, for the fans, uh, and security and

decentralization and so on. And so we started with LUM because, you know, we found it as, you know, a good scaling solution on top of Ethereum. And so we started down. Then it ended up, I guess, for them as a team, as a company, not doing so well. So that was very painful for us because, I mean, we, yeah, to be to be, to be candid here, We knew about their decision not to keep on running, like really a matter of weeks and days before.

And so we had to really move down to Ethereum very quickly. So we did that. It was painful. And then so we stayed in Ethereum for a while. And it was at some point, you know, we were paying literally like millions. of euros a month because one of our key decisions and I fought hard for this with the investors as well was to pay gas fees like all gases we always sponsored on the platform and because

I wanted a smooth experience for the for the new commerce that come from a non-crypto world but at some point like it became really crazy for us and so we started a I think nine months ago, you know, looking at other potential solutions. So we had a look at other layer one solutions. We had a look at several layer two solutions with the aim of finding a solution that is scalable, that is sustainable, and that, you know, it could help us, you know, fit the needs we have in terms of use experience. And so we went into this analysis that is maybe close to what a lot, you know,

or an investor look at the company, what is the best team, what is the best technology, what is the best vision, what is the best traction, like who is live, who is not live. All those things.

And what are the tradeoffs for the main criteria like decentralization, security, use experience and so on. And so we are at the end, I think the short list was optimistic roleups and ZK rollups.

and so we found that for optimistic roll-ups, like the user experience was not that good when you move from layer one and layer two for NFTs, like, you know, I think seven days or something like that. So a couple of things in terms of UX we were not really happy. Good fit for DFI projects, probably, but not that much for an NFT projects at this stage of the technology. Zicu roll-ups, Beton, and then we had to look at different,

companies building with that. And so we ended up with StarQuare. And yeah, we are happy with it. We are happy to, you know, stay in the Ethereum ecosystem for many, many reasons. Not maximalist at all, like pretty much diagnostic again, like what's the best for the users. At this stage, yeah, probably it was the best decision. And yeah, let's see for the future. So, yeah.

Yeah, that makes perfect sense. And I think actually StackX was a really good choice on your part. Thanks. Will you bridge to other blockchains? Do you think that you'll have like a Salana bridge at some point or something like that? I love to. For me, the ultimate, so, you know, true ownership is a key feature of NFTs. And when you think about true ownership in this world, like in this blockchain world,

like bringing your asset from, you know, Solana to Ethereum to other blockchains is what through ownership is. You can really move it in different worlds and maybe you're going to have different experiences built in different blockchains. Is it for, you know, like short-term, I'm not sure. I'm not even sure the technology is here to, you know, to make it in a smooth way. Is it something I'm excited about for the future? Yes.

What's the like DeFi play here? And like, what do you make of, you know, funds that are now holding NFTs like Blackpool? And how does that play into the kind of long-term strategy for So rare? It's a very interesting product and strategy question for us. You can think about what we are building with, you know, this. You could very much move into, like, something financial. And at the opposite of the spectrum, you could, go after the gaming and the fun and the usage play, right?

And the decision we made is to be more, like, to build a lot of features and to develop a product in a way that is more fun, that we develop the collectible element, that the progression in the game is, again, more fun, and that we add more social features so that you can chat with your friends and mean new friends within the platform. So that's more the direction we have. There's plenty of features that we could have developed around lending,

around, you know, like some kind of features that X Infinity is doing, like basically giving your account to some people that play for you, this kind of stuff. But that's not part of our short temporities. We believe, you know, like the right way to really penetrate sports fan. and go big with them is to provide to them more fun and to provide them more social features, and that's what we're going to try to do in the coming ones.

Cool. Yeah, I could spend another 30, 40 minutes just talking about this one thing. But, you know, I'm very grateful for all the time you spent with us today. And I want to close this with like, I want to come back to your entrepreneurial journey and I want to know if we, I want to try to get like a five-minute master. class.

So I know that you left Stratum with lots of sort of lessons, right, and like important learnings. And, you know, I keep telling myself that you must have like had this list of like things not to do ever again if you were to start a company. I will open soft data company. I would. You should make it into an NFT. I'd love

Yeah, I do something Yeah, I mean, I'd love to see it And maybe we could cross You know, we could we could share like what we're You know See if there's any overlap there But, you know, what were the biggest Entrepreneural lessons for you like

After leaving stratum And what are the things that like You really set out not to reproduce And not to do again and one of the things that you really felt that you know really important. This is kind of a personal question. I don't know if it makes sense to our listeners, but yeah. No, no, it's, I mean, for me, like, let's say the main three points, right?

So one is hiring. How do you hire? What, like, what, you know, what is, how do you think about hiring? What are your processes? so that hiring is something that is not subjective, like, okay, I like this person, but something that you can rationalize a bit. Okay, I'm not making a decision because this person is close to me from a cultural standpoint or share the same background.

Like, you know, how do you try to build a team where you have diversity and you hire, you know, like on objective criteria and not subjective criteria? This is something that I think is really important, that I personally did some mistakes in the past because lack of process, lack of method. And now I try to be, yeah, you know, really focused and precise in the way we are, like having a process, like having a way to evaluate the candidates, you know, all those things are really important because your company is only worth the quality

of the people you're going to hire. Like, it's just a human thing, right? So if you do a single mistake on the five to ten first hires that you make, you kill your company, right? So because if you hire someone that ends up being toxic for the company or, you know, like you kill the company, right? So this is, this is one very important thing to me. The second one is about, you know, product and listening to the community.

and trying to be really, really close to them and to iterate based on what they say, right? And again, trying to be objective here. Listen to your users and, okay, maybe they don't have the solutions, but they know the problem they have. So you're going to imagine the solution, but listen to them and iterate on what they say every day. I say it's really important.

And the third point is focus. because again at the beginning is you know like very few people in the company the only thing that matters is hiring building product and growing the community and if you don't have the focus in the way you ship product then you end up a lot of stuff

that are not exceptional but yeah for me the only way to to build something massive is to have this absolute focus, this is the priority. This is the priority. And also, like, having this shift between this is the priority for the next three years and then being able to go down to this is the priority for next month and next week and next day.

So, you know, having this link between the big vision and the smaller task that you need to achieve and being ultra-focused is, I think it's really important. So, yeah, there's all, yeah, three points where I think I did some mistakes in the past in terms of hiring, in terms of listening to the community and in terms of being focused. And, well, yeah, now I try to just do better. I jump on this bandwagon of entrepreneurial advice. So there's a bunch of companies in the crypto ecosystem that are successful. in the crypto ecosystem, but that are kind of hitting a wall when trying to grow with their products out of the crypto niche into the mainstream.

What's your advice for them? Asking for a friend. No, I think that first of all, and I've been advocating that to investants for a while, I think that the crypto niche at some point won't be a crypto niche, but would be like a movement, right? So like and I mean we see it growing right so So so because you know when I was raising money at the beginning you know All the investors were them yeah but you know you are targeting crypto rich and blah blah

And I was like yes okay but I mean this is going to be big at some point right and and and It's it's not bad you know to target these people right I mean they have needs as well and so on so So that I mean that's first point And then the second part is like moving then from crypto niche to, I mean, crypto audience, I would say, to non-cryotients. One mistake I did at the beginning was to try to educate, like explaining what is the technology, explain what is the philosophy and so on. And when I moved from, okay, I want to teach to, I want to show them the benefits without explaining what's behind, then that was the click, right?

So show them digital scorncity by telling stories and design and copywriting. Show them portability by having, you know, cool side experiences on top of the game. So basically show them the benefits of NFTs, what they bring to this gaming industry in general by have them fill them rather than having it somewhere in the FAQ, where you explain that an NFT is digital, is chaos and blah, blah, blah, that nobody cares, nobody read the FAQs, nobody is going to listen to that. They want to feel it, right? And so when I realized that, then, you know, I moved from, like, yeah, trying to, you know, like, tweak the walls to make it work to, okay, build the right product, the right product, and make them feel that. So, hide the right product designers, hide the right copyrights, how the right, blah, blah, blah, so that they can feel it.

So, yeah, that's why I've been thinking about it. Cool. This has been so terrific, Nico. I mean, thanks so much for spending the time here. No, but I mean, I know you're very focused and you choose your interviews as well. And so I'm honored that we could be on your priority list. So, you know, before we wrap up here, you know, what are you going to do with all this money? What's on the roadmap?

And what's your sort of like five to ten year vision? No, build, build, build. So, you know, like it's, I want to make it big. I want to put crypto assets in the hands of, you know, hundreds of millions of people. So it's very early here. With this money, we're going to hire the best, hopefully, in, you know, all the domains, marketing, product design, and hiring and so. one, we're going to acquire more rights and go after more sports.

So this is costly because we created this new market and now we inflated the price of the stuff we buy. So this is a second big thing. And then, yes, we're going to keep building product and improving it, making it more simple, more accessible in terms of price as well. and shipping a mobile app. So yeah, we have so much to do, you know, to raise the product experience to the level we want.

So I guess these are the main areas of focus hiring, licensing, and more rights and improving drastically the product experience. Fantastic. Well, thanks again for being on. Hopefully we'll have you on. After your next big milestone, maybe once you've raised like $2 billion or something in a couple of years. Yeah, it's been terrific.

And, you know, just, you know, I, Richard and I are still close friends. And, you know, and we often sort of see, see you know, succeeding. And we're just always very much, like, very pleased and very proud of, like, what you've accomplished. So, yeah, I just want you to know that, like, we're very happy to see the Strata Mafia succeeding. Thank you so much. I have been, you have been like instrumental in my, you know, like just helping me get this world and, you know, like, elevate me to, to this world. And so, yeah, I'm forever grateful for that and everything I learned at your side.

So again, like, absolute pleasure. And thank you, Frederick, for the amazing conversation too. It was great to be here. Thank you, Nico. Where can people go to find out more about, So I guess that our community is really active on Twitter. So I will handle this so rare, very simple. We have a very active discount community as well.

So yeah, there's all today the two main places where the communities. Perfect. Thank you so much for joining us. And good success over the coming years. Same for you. Thank you so much. Thank you for joining us on this week's episode. We release new episodes every week. You can find and subscribe to the show on iTunes, Spotify, YouTube, SoundCloud,

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