On The Brink with Castle Island - Gabe Frank and Robert Masiello (Arcade) on the financialization of NFTs (EP.272)

Episode Date: December 27, 2021

Gabe Frank and Robert Masiello, the founders of Arcade, a financial services platform for NFTs join the show. In this episode we discuss: Gabe and Robert's origin stories in the crypto industry and the path that led them to founded Arcade The similarities in the market structures for bitcoin in the early years and NFTs today The role of MPC custody in the crypto markets How they think about the various L1 chains that will host NFTs The OTC trading landscape for NFTs Peer to peer vs. peer to pool NFT lending models How the lending market will evolve with great data / pricing functionality The product roadmap for Arcade over the next year   To learn more about Arcade visit their website. Sponsor notes: This episode is brought to you by Withum, a top 25 accounting firm with a cutting-edge Digital Currency and Blockchain Technology practice. To learn more, visit  withum.com/crypto This episode supported by Public.com. Start investing with as little as $1 and get a free slice of stock up to $50 when you join Public.com today. Visit public.com/onthebrink to download the app and sign up.  

Today's episode is brought to you by Witham and Public, more on those companies later in the episode. Today on the podcast, I sat down with Gabe Frank and Robert Masiello, the founders of Arcade. Arcade is an NFT financial services platform that facilitates loans against NFT collateral and also runs an over-the-counter trading desk for high-value NFT purchases. We're very excited to be investors in Arcade, and I think the financialization of NFTs is probably going to be among the most exciting developments in the crypto space in 2022. This was a fun episode, so without further ado, here's my conversation with Gabe and Robert. Brought down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of

market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more to Britain's ailing economy. with a new round of Clubs you do it easy. You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called a Bitcoin. All right. So Gabe and Rob, thanks so much for joining us today.

Always fun to talk about NFT financial infrastructure. So thanks for joining today on the pod. Yeah, thanks for having us on, Matt. Excited to be here. Well, want to get into what you're building with Arcade, but maybe as a background, you could just give your quick introductions and how you got into the space. Yep, sure.

So 2018, I joined BITCO as a sales rep and when I started my crypto basically career professionally. And that was right at the time that BITCO got their trust license. So they became a qualified custodian. So we were selling custody for digital assets, Bitcoin Ethereum, and probably 100 different ERC20s and other crypto assets. And we built up custody when I was there to over a billion, you know, pretty much working with every crypto vertical. So token projects, fintech, banks, ATM companies, hedge funds, venture funds, and holding digital assets in custody for those projects. So got a good kind of education on the landscape there. and built up my network, spoke to a lot of people in the industry.

Actually, where I met Robert, Robert was one of my clients. He can tell you more about that. But towards the tail in of Bitco, under Nick Carmi, they built up Biko Prime. We are also selling loans to basically like a bank, lending out deposits and working with OTC desk and market makers. We built that desk up to about 150 million in active loans. And then I got picked up by my former boss of Biko, Josh Schwartz, who had joined the startup curve at the time in 2020 and was there for eight months working with the same types of clients, basically hot wallet custody infrastructure.

The difference at Curve was that they used MPC multi-party computation. whereas BICO used multi-sib. And I was there for eight months working, started working with a lot of DFI clients as well. So DFI hedge funds. Curb developed the first institutional grade metamask, working with consensus. And so got a good introduction to the DFI world.

And during my time there is when I kind of got into NFTs by way of a project called Meme, don't buy meme.com. And then joined kind of that team that was working on the project. They were the pioneers of basically NFT farming. So stake your ERC20 token and earn these limited edition NFTs. So that was sort of my first collection that I started building up. And there I realized that these assets kind of were gaining value.

And that was when the industry, you know, only had a few million in market cap. And during that time, I built up my portfolio of NFT, started also buying 101 art pieces on platforms like Super Rare, known origins and Maker's Place, and realized that if this was gonna be a new asset class, there were also gonna be credit markets that form. So tying that in with my background in pawn shops, working in my family business after college for six years with my dad,

We basically made loans on non-fungible physical assets, diamonds, high-end watches, purses, basically anything that didn't eat. And so that was when I started in consumer finance and tied that back to NFTs and that, you know, these kind of collectors and NFT whales, if this was going to grow as an asset class, then the credit markets would definitely form. and there was really no option to get liquidity in the space at the time. So, you know, brought up a spec doc with the help of a few other people paired up with Rob and we started kind of building it out from there.

That's an awesome origin story. You've seen the industry from so many different angles, so excited to go deeper on a few of the things that you said. But Rob, why don't we pop over to you and just what was your path to starting our kid with Gabe? Yeah, thanks for having us on. I got into crypto around 2016 or so, a friend introduced me to Bitcoin, and I probably was reintroduced to it, I guess I remember in college I coming across it in 2013 or so, really fell in love with it. And prior to working in the industry was doing a lot of big data and machine learning, I decided to start an analytics focused startup for trying to predict crypto, And we built a number of different solutions. We ended up getting acquired by a private equity company based in the Bay that also owned a Bitcoin mine.

And we used Bitcoin as our custodian. That's where I originally met Gabe. So we had our Bitcoin mine and basically around early 2020, we decided to divest of it. We were doing kind of a number of algorithmic trading. And I was in the Bay. Gabe and I were chatting one day and he was telling me, you know, I was telling me, you know, I was He was telling me, you know, asking me about, you know, do I know about NFTs? And I said, well, yeah, I know about NFTs. You know, is there a market for that?

I didn't realize how, you know, this is, you know, middle of 2020. So I didn't realize, well, how large the market was even then. And we started talking about, you know, you know, what was kind of needed to facilitate this from an infrastructure standpoint. And that's what we started building very early formative ideas around what arcade looks like today. And yeah, that was basically how we. We started a company, raised a seat round, and recently completed a series A. That's awesome.

That's an awesome origin story. I'm reminded of what you guys are building reminds me a lot of blockfi in the early days. I remember talking to Zach when I was still at Fidelity and him talking about this thesis that Bitcoin would be financialized and credit markets would emerge and people were going to want U.S. dollar loans against their Bitcoin collateral. And in a lot of ways, you guys are following a similar roadmap. I guess what was it initially that gave you the confidence that there was a market here in terms of these NFTs and just the underlying assets that people would want to hold? Like what was it that made it click that this would become a burgeoning market? Yeah, I think it had a lot to do with the activity that was picking up on OpenC and other marketplaces. And, you know, I started buying 101 art pieces and kind of relistening them at higher beef prices.

And they started selling. And as more and more collectors started, you know, collecting these assets, it looked a lot similar back then to what traditional art collateralization and loans might have looked like. And the art collateral markets, a huge market today, it's a $50 billion industry. Bank of America is one of the largest lenders on the asset class, other banks and non-bank lenders as well. So the idea really clicked tying it back to that loan market and realizing that as market caps would grow, there were a lot of idle assets that holders and users would probably want to unlock to use kind of as capital efficiency, either to buy more NFTs or to, you know, using protocols and earn yield.

So we kind of figured if the market cap grew and this would turn into a new asset class, that the same sort of use cases would emerge. And that's kind of what led us to start Arcade. It's fascinating because you see this market infrastructure for NFTs being built up in various different categories. So the trading landscape is changing very quickly, OTC landscape, which we'll talk more about, and obviously the lending landscape. And so where are we right now, I guess, in terms of the critical infrastructure that needs to exist

for this to be a financialized asset class? And where do you see that going just broadly in terms of the categories of infrastructure that are getting built out right now? Yeah, sure. So, you know, when we started, there was no, there was sort of no infrastructure in the space other than another platform called NiftyFi. they were making loans early on, kudos to them to kind of being first in the space.

But as the market caps of these assets started growing, we figured there'd be definitely room for platforms to emerge. And today, there's other, there's other DFI protocols that are trying to tackle the same problem. But one of the issues we kind of discovered was there needed to be more infrastructure in terms of enabling secondary liquidity

and price discovery. So part of what we started building was not only this peer-to-peer marketplace that allowed both lenders and borrowers to meet borrowers, unlock liquidity, lenders to basically get on in a new source of yield. And as, you know, as the market caps grew, a lot of these collectors, most of the early guys were really these sophisticated investors and collectors. And so we started talking to a bunch, a bunch of these basically high networked individuals, realizing that they, you know, they wanted liquidity because from a capital efficiency standpoint, you know, they could use the funds in different ways. So that's when I realized that, you know, basically the infrastructure that needed to be built out was both from an appraisal standpoint, valuation standpoint, there's really, there's really very little data out there. And so aside from the marketplace, we started to tackle the appraisal and valuation side as well. And, you know, it's a peer-to-peer marketplace today, but there's these also peer-to-pool models that are starting to emerge. One of the issues with the peer-to-pool space is that there's really no on-chain mark-to-market price.

So we figured the data component of the platform would be an important piece as well. Yeah, that's a great point. I want to go a little bit deeper just on how that lending. product works. So you reference the kind of the lack of data, which probably limits your ability to do certain types of loans. But maybe one of you could just talk a bit about how that lending product works from the perspective of someone that wants to come in and get a U.S. dollar loan and then talk a little bit about the other side of that market and the types of people that would be logical market participants there. Yeah, sure. So it's a peer to peer marketplace.

place, we've basically built an asset wrapper that allows borrowers to bundle different asset, different NFT assets. You know, the standards that exist in NFTs today are ERC 721 and ERC 1155, and they have some different, there's some differences there in that ERC 1155. You can have multiple additions of the same collection. So you can have one of 100 pieces in a collection, whereas ERC 721 are more used as like one-to-one pieces for non-fundable assets. And the way the platform works now is so you can bundle different NFT assets on Ethereum, and you create what's called a WNFT. And then that WNFT is used to request a loan on chain.

You sign a message for the terms. So basically borrowers can set duration of the loan, the APR for the loan, and the funding currency. And so most of the loans that we've made today have been funded in Weth, Rapt-Etherium, and also USDC. And we've done about just over $4 million in loan volume on these WNFTs, both on art pieces, one-on art pieces from sort of these prolific,

creators like PAC and Fiuotius, really the kind of sort of blue chip NFTs in the space. And also the collections, more on the collectible side like punks and apes that are sort of these pristine blue chips assets that we thought would have staying power and would start to be used for loans and capital efficiency. If you're a regular listener of this show, you know that we take accounting and auditing pretty seriously. And that might seem a little bit strange in an industry that prides itself. on the removal of intermediaries, but we think when it comes to digital assets, trust relationships

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Visit public.com slash on the brink to download the app and sign up. That's public.com slash on the brink. This is valid for U.S. residents 18 and older, subject to account approval. See public.com slash disclosures, not investment advice. How do you think about the, just the over-the-counter market here just for trading these things? Are you seeing a big demand for folks that maybe aren't comfortable going on open sea and being active market participants, but want a more white glove service? Yeah, definitely.

And that was sort of the impetus to create, you know, what we're calling an NFT OTC desk to sort of assist the counterparties and getting loans done and settling on chain. So there's a pretty active OTC market in terms of buying and selling sort of the more high profile assets. Different groups are helping, you know, collectors, Dow's companies put, put these NFTs, on their balance sheets. You know, one of the big stories is the payments company, MoonPay, was helping, you know,

basketball players, rappers, and, you know, one of them is Snoop Dogg. And so as those started to emerge, we realized there was a need for this white glove service that, you know, users weren't, maybe weren't comfortable buying with a metamask on OpenC. So we're definitely seeing a lot of OTC activity today. It kind of reminds me of early days of Bitcoin when Mount Cox was such a large part of the market and then actually saw OTC desks emerge because people were uncomfortable dealing with the infrastructure around the Central Limit Order books that existed at the time.

And so you sort of maybe see some shades of the early Bitcoin market with this NFT landscape. Yeah, definitely. And, you know, back then, spreads were quite large. And so these OTC desks were, um, were, uh, were, we're, we're, making a pretty penny and it's sort of similar today in that since it is sort of a liquid market and there's there's it's basically crypto's mainstream moment and FTs and so that you have a lot of new users coming into the space needing to download Web3 wallets and it is a challenge but you know that's why these these OTC markets started to emerge to to help more of the

high profile entrance into the space coming in and buy the assets a bit easier. One of the things that you talked about around data leads me to sort of the question around how you structure these loans. And so do you imagine a world where you can actually have margin calls against these assets at some point in the future? And I guess how would you think about what a reference rate price is for an NFT? Or is it just too immature to do that?

And for right now, you just focus on the term loans. Yeah, so mostly it's term loans today. So it's most of the loans have been three month terms. And that's because lenders really aren't comfortable with longer durations. And since there's no on-chain, basically Oracle for NFTs, it was hard to develop and build a margining system for margin calls. So the way it works on the platform today is it's a term loan three months. And if the bar doesn't come back, then the lender has an on-chain claim to the asset via a loan note that they receive. So what we're working on now is basically a good model for valuations and appraisals on certain curated collections,

the more sort of liquids, punks and apes, also getting into creator oracles, basically on the higher market cap artists. And we plan to put those on chain via Oracle. And that's when we can get into margin calls, adding more collateral to the escar contract if market prices do change. Part of the reason why margin calls today aren't so important is because the assets are so liquid. We see floor prices fluctuate quite a bit on punks. But for the most part, lenders are comfortable with more of the blue chip NFTs. today for these term loans. So on that Oracle question and kind of the data feeds,

I guess it would follow that for right now, the side of the market that's lending dollars is probably naturally long these collections anyway and maybe in a sense wants to get their hand on a crypto punk if someone were to default. Is that a good interpretation? Yeah, I think there's definitely a lender appetite that is specifically interested in

lending on the off chance that they potentially could acquire these assets in a default scenario. Yeah, which is pretty interesting. I mean, that's sort of a good way to bootstrap liquidity for a lending product to have a natural appetite on each side. Obviously, beyond the financial motivation, it's, hey, I want this specific crypto punk. And so I'm going to become very active on this platform because maybe this is a way to get it other than making a competitive bid for it. Yeah, exactly. And there's no, and because of the non-fungible nature of these assets, There is no, I mean, you for a Cryptopunk, for example, maybe there exists a Cryptopunk, you know, that's similar. That's just being sold on through Larva Labs or another, you know, you know, marketplace.

But you can't have this exact one that would be, that's potentially being listed to be borrowed against on the arcade platform. So, so that's a unique. That's just just unique to NFTs in general. Yeah, that makes sense. So when you guys look at these emerging collections, do you have a 10%? taxonomy or a way of classifying the types of collections that you guys are interested in? And how does that work? I mean, obviously, everyone who's in the NFT space is looking for the next hot collection.

You guys must be spending a lot of time just trying to figure out what's boiling up from a customer attention standpoint. Yeah, we collect a lot of data, of course, across, you know, all the different, you know, the marketplaces, on-chain transfer event history. We collect a lot of data. You know, the way we sort of categorized NFTs is across a couple different standpoints. We think about essentially one-of-one art, which is pretty self-explanatory, things that have gone through, through Christie's and Sotheby's. There are art pieces that have a token attached to them that aren't part of a larger collection, per se.

The avatar projects, of course, you know, things like Cryptopunks and Board Apes, those are, you know, those are very popular and those are great from a data standpoint because we have a lot of you know there's a lot of metadata with a crypto punk that we can try to you know point to other crypto punks that looks similar so so we can have pretty robust appraisal appraisals for those kind of assets but there's other assets too out there metaverse type assets digital land we think about quite a bit those are i think are probably the the biggest things right now you're starting to see some emergence of more multimedia focused NFTs, video and sound focused pieces out there.

But those are probably the main things right now is really around ART, the profile picture avatars, and starting to see some more around virtual property, essentially. It strikes me that some of the ideas that this industry explored back in 2016 around private blockchains and security tokens. To the extent that those things are still market relevant in the future, you could imagine a world where a lot of those are actually just NFTs as opposed to, you know, securities issued on private chains, which never really took off. So how do you see this market expanding if and when like real world assets are on chain? Do you guys see a world where that comes to pass? Yeah, I mean, we think, you know, as Rob mentioned, we think of that space as the profile picture,

the art side, and then there's a whole other world of assets that are starting to emerge on the Metaverse. So if NFTs are the assets and the digital goods and the Metaverse in terms of digital wearables, avatars, you're starting to see game, in-game assets, GameFi, as well as even there's there's a casino that popped up that that allows, you know, for poker tournaments in the Metaverse. The other verticals, you know, we're starting to see are ticketing. E&S domains are quite large. There's a lot of untapped liquidity there. And as far as physical assets, we haven't seen too much of that. But, you know, if you think about non-fungible assets, anything in the physical world can be tied to a token on a blockchain.

And so when that happens, the TAM of NFTs is in the trillions, probably bigger than cryptocurrencies. cryptocurrencies. So as we think about a lot of those assets coming on chain, there's a huge, huge opportunity to capture a lot of that untapped liquidity on chain and tokens, as everyone knows, are sort of easy, more easily transferable, more liquid in the form of a token, on chain metadata. And so you'll start to see lenders who are sort of yield hungry really be interested in this, in this new ask class for yield. I'm seeing projects that are looking at tokenizing sneakers and putting them represented on as NFTs, also tying physical artwork to actual NFTs. So it'll be interesting. I think the market that you're addressing around Bank of America being very active in the art

market, maybe that merges into the NFT market a lot faster than people think. And this just seems like a better, more transparent infrastructure to do those type of loans as opposed to going through a bank and doing a lot of manual paperwork, at least from my point of view. Yeah, and the art sort of collateral markets growing quite rapidly. I think it's 30% up year over year. And you're starting to see other non-bank lenders like Sotheby's, the auction house, getting deep into the appraisal aspect and then the lending as well. And, you know, in our market, there's L.T.E. V's loan to value ratios about 50% of the appraised value. And it's a $2 trillion market and basically privately held art.

So as that market grows, it's just a good use case. And basically, we think the NFT market will also follow. And the TAM of the NFT space will be much larger than just art because it captures more verticals. as NFTs sort of capture more assets in both the digital sort of metaverse and also physical assets. So there's massive demand for NFTs right now. There's also just massive demand for block space. And there's a massive competition at the layer one blockchain level to be the platform that becomes dominant in the NFT space.

So how do you guys handicap that race that's going on at the L1 level? And how do you make prioritization decisions on which chains that you want to support now? and in the future. Yeah, we think about this a lot. Obviously, we pay attention to developments happening across different change and then layer to solutions. Our approach is we want to support chains and we want to support assets where they live. So right now, the majority of these assets that are quote unquote kind of blue chip NFTs that

be good as part of lending products primarily exist on Ethereum. starting to see some new NFTs that are people actually own and have some actual real value on some chains like Solana, some stuff on Tesos. We sort of think about, you know, from an engineering standpoint, phasing in additional blockchain support based on really relative demand from users as well as being a collateral universe that would make sense to kind of justify kind of the engineering lift to support those those chains. But we do sort of really really, really think that, you know, there's, this is, there will be NFTs on lots of different chains. You see a lot of focus from platforms like FTX to, you know, support Solana and NFTs on Solana. So,

you know, we're, we're cognizant of that. It's really, it's a kind of prioritization standpoint of, you know, where the NFTs live today, where would the majority of, you know, good NFTs borrow and lend against, exist. So it's, I guess you have to see where that demand is, see where the liquidity aggregates and then that that's sort of the guiding light on where you want to have a lending product ultimately is where there's a burgeoning liquidity landscape. Yeah, exactly. And for the majority, you know, the majority of NFTs right now that are worth anything or all on Ethereum, layer one. Most people haven't really corded NFTs over to, you know, layer two solutions yet either. So, so, you know, there will probably be lock and step with where marketplaces are,

as marketplaces potentially allow for ease of minting on layer two solutions, that would be a more natural way to get users to bring those assets onto more scalable solutions. We would look to support those kind of platforms when they, when they're sort of more adoption. It's a fascinating space because even within Ethereum, I mean, we're going to have different layers of NFT like habitats in the sense that you'll have Ethereum layer two. NFTs, you'll have base layer NFTs. Do you imagine that there will be a price or a value discrepancy? Like, do you imagine a world where base layer Ethereum NFTs are more valuable than the layer two NFTs just by virtue of, hey, it's very expensive to move these things and

they're more original and more prestigious? Or do you think it doesn't matter? Yeah, that's a, that's a good question. I think, you know, you're saying different minting contracts pop up. And in terms of like Sotheby's and Christie's, they're minting on the base layer. So we think, you know, most of the high value assets will be on layer on Ethereum layer one. And more of the in-game assets, game five, and sort of lower cost metabursed assets will likely move to layer two solutions. We're starting to see that now. So, you know, the more pristine assets we think will always be on layer one. it's just a more widely used layer.

In terms of gas costs, some creators are starting to move to layer two, just because it's so expensive to mend these NFTs. But for more, you know, for pieces that are, you know, 10 million, 20 million in market cap, it makes sense to put on Ethereum just because that's where, you know, most of these high in collectors like storing their assets. That makes sense. So, Gabe, you come from the custody world before,

this. And I'd be curious your view on what's happening right now with MPC custody in the industry and then how that applies to NFTs and is that a good kind of backbone to launch these financial infrastructure companies on MPC custody. And, you know, just from where I sit, it's been fascinating to see Coinbase enter the MPC custody market with buying unbound, obviously PayPal buying curve. It seems like there's a bit of an arms race to get a handle on MPC custody. And curious how that impact the NFT landscape. Yeah, you know, I think one of the reasons I join curve back then and, you know, startups like fireblocks onbound curve, we're starting to use MPC is because it's, it's a, it's a better way to store assets. You can have more signers in more of a distributed way.

So I see MPC as sort of an upgrade to multi-sig. And basically, you know, there's a race in all for, in the custody space to get assets into custody so that these lending markets, credit markets, can form. So we started to see that in 2019, 2020. And as there's better ways to store the assets than, you know, for NFTs, you know, we figured the same type of credit markets would form. And, you know, most of, you know, Metamask is the most popular wallet for Web3. But we're seeing a lot of hacks happen in NFT with collectors that are maybe not so well-versed and costing the assets. So I think, you know, as these custodians even start to support NFT and NFT standards, it's basically a race to get the good assets and to custody so that different financial

products can emerge like derivatives and other sort of more exotic products. And do you think this is maybe less of an NFT specific question, but do you imagine that the major custodians all have MPC infrastructure at some point in the next few years and that this is a, that this just wins versus multi-sig? I do. I think MPC custody is starting to capture a lot of the assets that were basically custodied in a multi-sic fashion. So, you know, 2018, 2019, you saw cold storage going to basically underground bank vaults. There were always different ways to custody assets. I think Coinbase used Faraday tents and different methods to store. But, you know, I think because we're seeing more solutions come out, MPC, I think even copper, custodian uses MPC.

there are you know it's just a better distributed way to hold the assets so so on those lines do you I mean do you imagine that right now the key value proposition is just if I'm an exchange or a custodian I want to get up and running fast on a new chain it's just obvious that mpc is the way to go and so from an engineering resource that's what's driving a lot of this adoption and m&A interest yeah definitely you know as as the custodians move to an mpc model. It's just a better way than taking the assets offline. I think most of the MPC models are in a mixed cold and hot wallet structure where, you know, hedge funds and market makers and prop desk can access the assets more easily. And for the exchanges and custodians, it's not an easy

lift to support new blockchains. But with MPC, you can integrate new chains. much easier as far as custody infrastructure, hot wallets, and cold storage for easier access. So I want to bring it back to Arcade here as we wrap up. What's on the horizon for you guys on the product side of the host? What do the next 12 months look like? Yeah, I can take that. And then Rob, if you want to add more stuff there. Basically, on the peer-to-peer side, we're building out an installment loan type product

that will allow lenders to underwrite kind of longer-term. So now it's the three month term loan. But with installments, you can get into, you know, streaming payments, monthly payments, bi-weekly payments. And, you know, the use case that these bars are utilizing, basically they never want to pay off the loans. Similar to traditional art, they just want to service the debt, pay the interest, or in an advertised fashion,

and continue to use the funds to do other things. to do other things. A lot of these guys are entrepreneurs. They're sticking the funds in their, in their businesses, or just trying to earn more in their assets. So I think, you know, the use cases will look a lot similar to what's happening, new financial products and a more capital efficient sort of way to unlock these assets. Yeah. And just to figure back off of that, you know, one of the big pigs, we're building a lot of, you know, sort of primitive technology for, for NFTA, from an infrastructure standpoint, as we kind of mentioned earlier, just a lot of that just doesn't exist yet with Oracle's price discovery and appraisal technology. And we really kind of want

people to be able to use NFTs, very similar to how they use crypto in a defy way today. It's very simple to take out a loan against your Ethereum or your wrapped Bitcoin on, you know, a number of different lending platforms out there using liquidity pools. We want to be able to support something, a very similar experience. Now, that does entail a lot of, you know, a lot of appraisal technology and bringing that all about on chain, kind of come to your earlier question, Matt, around, you know, how can we do a, you know, a liquidation essentially. Well, we have to have a market market price on a daily basis of what your NFT is worth if you're trying to borrow against it. But that's something that we're, we've been working on for some time now. And we expect in the, you know,

coming year to be able to roll out later in the year once then that'll be kind of a complimentary product to our pure to peer lending product as well. That's fascinating. So one of the things that Gabe you started to mention was just around the customer demand to not like ever pay back the loan. Do you imagine that revolving credit here will be a staple of this market in the years to come? Yeah. You know, the product today looks a lot like a revolver.

and that once we appraised the assets and the bars take out a loan, you know, we'll always do a reappraisal on the assets when they want to roll over or just service the debt and pay the interest only. One of the products that we developed that was kind of created by our VP protocol, Kevin Kinnis, was basically a flash loan rollover that allows a borrower in our product today to just service the debt and not have to take their funds to pay. pay off the loan in full out of these yield farms or out of their, you know, businesses and use cases. So the flash loan rollover is pretty interesting. It's definitely an interesting way to use flash loan rollovers in a real use case. And what that is, is basically a flash loan from ABE that allows a user to pay the, to pay off the loan in the same block. And then right away, get another loan and the lenders, you know, keep the interest so they can service the debt. So that product's live today. But with the installments, borrowers have more sort of flexibility in their loan

products. Yeah. That's great. Well, I'm excited about that. Well, this has been great, guys. Really excited to have you on. Where can we send people to learn more about Arcade? If people are interested from the customer perspective, where should they go? Yeah, we have Arcade.X,X, XYZ is our website. We have a pretty active Twitter as well with the growing follower account. And we're also on Discord and Telegram. And then Rob and I and the team are always active in all those channels. We have a community manager that basically covers all those channels as well.

So pretty easy to get in touch with us. Twitter is sort of the main platform to learn about the industry and learn about a lot of these other protocols coming out. So definitely a lot of channels to reach out. Awesome. Well, super exciting stuff. We're really excited to be investors. Appreciate you guys coming on the podcast.

Thanks for having us, man.