The Pomp Podcast - #762 Crypto Trends To Watch In 2022 w/ Graham Jenkin

Starting point is 00:00:00 what's up everyone this is anthony pompliano most of you know me as pomp you're listening to the pomp podcast simply the best podcast out there now let's kick this thing off graham jenkin is the ceo of coinlist they recently ran a survey to about 4 000 of their users and asked them all sorts of things from what technologies do you plan to use in 2022 to what are your favorite use cases for blockchain technology, and even whether you think that other countries will soon follow El Salvador's new Bitcoin adoption. I really enjoyed talking to Graham about this survey, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors.

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Starting point is 00:03:36 I hope you guys enjoy this one. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment

Starting point is 00:03:53 or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. We've got Graham from CoinList who's joining us. Graham, how are you? I'm doing awesome. Good to meet you guys. How's it going?

Starting point is 00:04:08 Absolutely. Great to see you. We got a whole bunch of stuff we're going to go through. You guys have kind of all these trends and predictions for 2022. But before we do that, maybe give us a very quick kind of overview in terms of CoinList itself, the platform, the product suite, what you guys do. Yeah, sure. So CoinList is the premier new token issuance platform, which means that we help find some of the best new emerging crypto projects, help them raise capital, help them build their communities, help them be successful in all kinds of different ways.

Starting point is 00:04:38 And we've helped projects going way back to Filecoin in 2017, Algorand, Solana, Immutable X, Mina, a bunch of others. we've helped about 25 projects launch publicly, at least on CoinList. And then maybe another 40 that we've run private sales for. And around about 20% of the top 100 crypto assets by market cap have had some kind of relationship or help from CoinList in getting there. So it's kind of that bread and butter. But over time, we've expanded into a bunch of other things. So initially, we just focused on token issuance. Then eventually, we realized that a lot of these teams needed help distributing tokens to investors. And so we ended up building out a service for that as well. And then we realized that we had a bunch of tokens on the platform and users were just

Starting point is 00:05:28 moving those tokens out to Binance or somewhere else to trade or land or stake. And so we ended up just building out those services as well. So now you can participate in token issuance on CoinList, receive your tokens here, and then trade, land, and stake all on the one platform. So it's a one-stop shop for crypto early adopters. So that's a bit about us. Amazing. When we get into the 2022 trends, I'm just going to kind of go through a bunch that seemed to have kind of bubbled up from this report. The first is that the most in-demand category for all of blockchain technology in 2022 is gaming, which I think would surprise a lot of people. Why do you think gaming, there's so much demand for it, and then how do you see that actually playing out in the market? Yeah, I think gaming is an interesting space in that I think our audience that participated in

Starting point is 00:06:20 the survey that helped us derive these predictions, it's a pretty smart audience. These are early adopter types. They've been participating in token sales for a long time. And so they've got some insight as to what may be happening down the track, maybe a little bit more than a technical analyst. So I think it's a relatively smart audience. And gaming, I think the thing about gaming is that it's it's not so much just about games themselves uh it's really more about kind of the ecosystems that are being developed by these projects uh and maybe the best way to think about that is uh you guys probably know about valve corporation the creators of uh half life and other great games so they created a marketplace called steam and steam's a marketplace

Starting point is 00:07:07 for gamers it's also a community it's it's a its own ecosystem and you know what we're seeing with some of these crypto projects that are focused on gaming is that they're essentially building steam but steam on steroids so it has the marketplace it has that community and ecosystem uh these are also they tend to be layer twos or roll ups so they address a lot of the kind of scaling and expense issues that you might ordinarily see with building directly on ethereum say and uh so uh and then on top of that they also have the financial dimensions they've got wallets uh there's a currency uh there's a financial ecosystem as well so uh that's really kind of one of the big trends that we're seeing and we we saw that with obviously you know sky

Starting point is 00:07:51 mavis has done a great job with axiom infinity but what a lot of people aren't really looking at is ronin as an ecosystem not just as a wallet but also as its own side chain and uh you know You know, we've worked most recently with Immutable Team, who put out Immutable X, which is kind of their equivalent. They're the creators of Gods Unchained and a bunch of other games. So I think that's kind of one nuance that when we talk about gaming, it's not just purely about games. It's really creating these gaming ecosystems, you know, steam on steroids, as it were. The other thing that I think people are really excited about is that, you know, crypto for the longest time, there's just been massive user experience challenges. It's been really problematic for a lot of ordinary humans to engage with crypto, not just as a technology, but as a set of services, whether it's through DeFi or other systems.

Starting point is 00:08:45 And, you know, I think what's going on with gaming is that there's a recognition that the kind of UX needs that you have in creating games, not just in terms of the sort of skill or challenges that you need in order to participate in games, but just I'm just talking user interface. Like these systems need to be usable. And I think there's a recognition by our community that, you know, gaming could be the way or at least one way that we start to address a lot of these usability and UX issues in crypto more broadly. So I think that kind of the two nuances that we're seeing. Yeah, that's very, very interesting. When you think about where a lot of this stuff is going to get built, you've basically gone out to the community and said, hey, where are you guys looking? Right. Where else are people going to be building?

Starting point is 00:09:30 And so the specific question was around what blockchain beyond Ethereum that they plan to interact with most in 2022. And 56 percent of respondents said Solana, followed by Binance Smart Chain at 48.8 percent and then Polkadot at 47.9 percent. I think that those three would be the three that people would suggest. But there seems to be pretty high percentage of interest in things outside of just Bitcoin or Ethereum. How do you read into that and kind of how do you think that really manifests itself in 2022? You know, I think there's a couple of nuances on this, too. It's kind of no surprise that if folks on CoinList are going to be talking about Solana, just given that Solana is, you know, we ran the Solana auction in early 2020. And so there's quite a few happy Solana auction participants on CoinList.

Starting point is 00:10:21 So obviously, they're going to talk about Solana. You know, I think really what's happening is a couple of things. One is that the vast majority of developers are still on Ethereum, and it's an incredibly vibrant ecosystem. There's a lot of tooling that's already been created by developers on Ethereum. We don't really see that changing, but I think we're definitely seeing a lot of developers moving away, moving to Solana, moving to Algorand and other chains. And I think part of that is scalability. Ethereum's on its way to solving a lot of scalability challenges. Solana and others have definitely kind of jumped ahead there in some ways.

Starting point is 00:11:02 I think a lot of consumers are probably more excited to be participating in applications directly on Solana and other chains, mainly because gas fees are problematic on Ethereum, at least Ethereum Layer 1. And so I think that's kind of encouraging a lot of developers to move to other chains. You know, that said, I do see that Ethereum is still probably going to be where the vast majority of action is happening. And to solve a lot of these scalability problems, we've already seen quite a lot of progress. You know, the merge, the Ethereum merge is due to happen at some point, 2022, who knows, maybe 2023. But, you know, at least this year, we've started to see another aspect of scaling on Ethereum pick up a lot of steam. especially around side chains, roll-ups. We're seeing that with Obertrum, Optimism.

Starting point is 00:11:54 So there's a lot of activity on these L2s, on these roll-ups, on these side chains, and they address a lot of the scalability challenges that I think developers have had with respect to developing on Ethereum Layer 1. So there's a lot of the gas fee issues, transaction speed issues. And so I think what we're going to see

Starting point is 00:12:11 is a lot more activity on those roll-ups, on those side chains and L2s where the transactions are happening on the roll-up and then eventually settling on Ethereum Layer 1. We're definitely starting to see a lot of that. But then also more and more developers moving to other chains. I think in the long term, actually, a lot of the stuff, we should just be thinking about this as being plumbing, right?

Starting point is 00:12:34 I mean, like back in the early days of the internet, we were very obsessed with different protocols and we were obsessed with the technology. Eventually, we got to the point where we're just transacting, we're just doing e-commerce, we're just doing search. and all the protocol stuff we just ended up just viewing as plumbing. I mean, I'm really hoping that we get to that at some point soon because we're still very much obsessed with the technology,

Starting point is 00:12:56 which is actually super cool. But, you know, I think ultimately the system's meant to solve real use cases, solve real problems, as opposed to just being, you know, us just obsessing over the technology. And so hopefully that may not happen in 2022, but hopefully the next couple of years. how do you think about that right in terms of the user experience and kind of the interfaces obviously on the internet i always joke that like nobody cares what technology google uses they just

Starting point is 00:13:22 know they type in a box and they get an answer it's like amazing experience right uh but there was the protocol wars uh you know during kind of the building of the internet and so it sounds like you believe that very similarly there's going to be these kind of protocol wars and debates about technological architecture and infrastructure but at the end of the day 25 years from now people are gonna be like, dude, I go to this website or I go to this, uh, you know, kind of product. I click some buttons. It does what I want. It's amazing. Those fools that had all those arguments, you know, 25 years ago, like, thank God that they had the arguments, they figured it out. But like, I couldn't tell you what the actual technology is. Is that kind of how you see the

Starting point is 00:13:56 world playing out, you know, in an overgeneralized way? Yeah, I think that's right. It's going to take a while for us to get there though. You know, I think, um, and I think there's a couple of reasons why it's going to take a while i think i think one is that uh we're really just starting to see the emergence of inter-blockchain protocols uh ibc which came out of uh cosmos is a great example of that it's it's allows uh developers to you know potentially build on solana have transactions be executed on solana but arguably you know end up being settled on ethereum and and the users just couldn't care less. And so I think the more that protocols or projects or efforts like IBC get pushed out there, the less we're really going to care about what protocol

Starting point is 00:14:46 people are developing on, et cetera. But I would kind of just put one proviso on that, which is that the fact that there are markets, there are currencies associated with each of these protocols just creates as you guys know better than anybody else like creates these tribes where people are very either rationally or irrationally obsessed with number go up with respect to that token and i think that ends up that that kind of tribalism is something that we didn't really have in the uh kind of early internet you know but we have it now and uh and it's incentivized by markets liquid markets and those liquid markets are really important they're not just fun they're really important. Like you need to have those liquid markets in order to incentivize miners

Starting point is 00:15:32 or validators to secure these networks. So it's super important, but it does create a big distraction, does create this tribalism. So I think that's going to slow us down and getting to the point where we're looking at this ecosystem as a set of applications and don't actually care about the plumbing. I think we're going to care about the plumbing for a little bit longer, but hopefully we end up getting there. Who knows when. So, John, what questions you got? Yeah, so when asked about the NFT use cases, it seems like a lot more people, 40% of them said the metaverse is interesting and they're bullish on that. And 37% said gaming, but tickets was only 5%, memberships was 4%, and crowdfunding was only 4%.

Starting point is 00:16:10 How do you think about NFTs in all those environments? Yeah, you know, I was kind of quoted earlier on this year as saying, you know, I think NFTs are a little bit overblown. So, you know, maybe I'm not the right person to ask about this stuff. But, you know, I think what we've seen happen with NFTs is that, you know, if people are talking about metaverse or other applications with respect to NFTs, I mean, what we're seeing is that NFTs are almost like a gateway into community. and uh you know all of these a lot of these uh these nft um i guess offerings on on open sea or what have you they they really end up being kind of the keys to give you access into some kind of community whether it's dao or something else and within each of these communities you're seeing lots of conversation lots of discussion lots of innovation and uh lots of alpha and uh i think

Starting point is 00:17:08 every time what what we're actually starting to see is that a lot of the a lot of the projects that we work with from a marketing standpoint they want to try to work out how do i get how do i get access to that community how do i uh market to them how do i build a relationship with them and uh you know i used to work at google i used to work in in adwords and uh you know getting was was something that we're very much obsessed about there and our customers are very obsessed with that. And I think we've just got this really unique, new, bizarre form of targeting emerging around NFT communities. And I think we're going to start to see more and more of that in 2022. I don't know if this answers your question, but just thinking about NFTs,

Starting point is 00:17:53 that's definitely one big trend that I'm seeing. Yeah, I think we could see a correction. But one thing I've always been fascinated with is NFTs is the ticket part of it. And why can't the issuing company team whatever it may be get part of that resale value if i buy a ticket i sell to anthony anthony sells it to you like why can't they get part of that instead of ticket master as the platform getting part of that money oh yeah that's super cool yeah i think and i mean same applies to artists right and uh you know i think this is definitely going to be a lot a little more of that activity uh i mean it's just been such a unleashing of creativity especially generative art. And I think we're going to see a ton more of that going into 2022. Yeah, you know, there's so

Starting point is 00:18:32 much weird, bizarre, easy to write off activity going in off in the NFT space. But it's definitely something that's going to continue to be a rich source of innovation in crypto. I agree. Graham, we obviously saw El Salvador kind of plug their entire country into Bitcoin and the network, the Lightning Network, and also the Bitcoin network. They've done everything from buy Bitcoin. They've made it legal tender. They've built out a whole network of ATMs. They're helping to facilitate their citizens with remittances, etc. One of the survey questions was all around, do you expect other countries to go ahead and do this as well? And a large portion of respondents said yes. What's your take on El Salvador, Bitcoin and like other countries

Starting point is 00:19:13 potentially following suit? Yeah, El Salvador is an interesting one. I mean, it's hard to It's hard to think that El Salvador is necessarily going to be kind of the pinup nation that all other nations are going to follow in a Bitcoin. But I think the principles hold, which is that it's a great recognition of the quality of what the Bitcoin network represents. You're talking about a very secure network. You're talking about transparent activity on that network. I mean, there are going to be more and more nations that eventually do this. I don't know if they're necessarily going to say that they're just following El Salvador, but I think it's definitely going to happen. And, you know, one of the interesting movements that is going on in the U.S., I think, is just to name one project.

Starting point is 00:20:08 I don't like to name individual projects, but one project that I think is super interesting is Citicoin, which is allowing municipalities to issue cryptocurrency and then benefit from transactions with respect to those networks. And that earns them revenue, which they're very excited about. So it's almost kind of like this backdoor way of getting broader governmental ecosystems and communities engaged in crypto. And, you know, I think I think the more that happens, I think that's it's almost kind of like the bottoms up way of getting communities addicted to and engaged in in the set of technologies. And so, yeah, you're going to have more more countries saying, OK, top down, we're going to adopt this currency. But I think you're also going to see bottoms up adoption from a municipality standpoint, from a local government standpoint, looking forward to seeing how that plays out. Grim, how do you evaluate new projects and tokens? Yeah, you know, we kind of view it as it's almost like an early stage venture fund.

Starting point is 00:21:16 So we get we get referred projects from our investor community. And, you know, when we when we take a look at those projects, you know, we're going to look at the same set of dimensions as you might if you're just looking at an early stage, any early stage company. So we're going to look at the team, who are the founders, what have they done before, what's their background, what schools do they go to, what have they built before. So that's number one. Number two is the product itself. So what does the product do? Is it a DAP? Is it a protocol? What market is it tackling? Is it tackling a market that's going to be of interest to our community? So that's kind of the second thing. The third thing is traction. So what have they built already? Have they already launched testnet?

Starting point is 00:22:02 How many users are in their Telegram channel or the Discord servers? So that's kind of the third piece, traction. And then the fourth piece would be social proof. So who's invested, who's advising, all that stuff. So that ends up being kind of another strong signal too. And so we take those four different dimensions and then you kind of get a mosaic. could get an aggregate picture of the team, what they're doing. And we run investment committee or

Starting point is 00:22:33 the equivalent of investment committee on Mondays. And folks on the team are writing up investment memos. We review the memos and we thumbs up, thumbs down. So it's similar to an early stage venture firm. And we try to keep that quality about high. Nice. That's a great way to look at it. What's been the biggest surprise of 2021? Let me look back for the year. The biggest surprise is really the bull market, which was just ferocious with respect to new token issuance. We saw toward the end of last year, actually, maybe just to throw some numbers out there, toward the end of last year, we had about 150,000 28-day actives. Now, we're at about 5 million 28-day actives. And a lot of that has really been driven by what we've seen in

Starting point is 00:23:24 the new token issuance market. We weren't expecting the kind of volumes that we've seen. We weren't expecting the kind of growth that we've been seeing in new token issuance. It's just ferocious appetite for new token issuance. And it's obviously not just on CoinList, it's industry-wide. So that kind of demand definitely took us by surprise. Uh, we've had to take some drastic measures to try to scale up and, uh, still got a lot of work to do there. And, uh, but you know, we're eventually getting on top of it, but that, that ferocious demand is something that we just, we're not expecting.

Starting point is 00:23:59 That was definitely the biggest surprise for us. Yeah. The other thing that I think is really interesting too, is as more and more people become, uh, interested and educated in this industry, more and more of them are choosing to store the majority of their wealth or their funds, uh, in digital assets, whether that's stable coins, Bitcoin, something else, whatever. We've seen study after study that highlights that. How does that change some of that investor demand from what you guys are seeing? Yeah. I mean, I think it just boosts it dramatically. You know, there's a lot of

Starting point is 00:24:27 folks out there have done really well just holding Bitcoin and that's been really profitable for a lot of people. But then I think there's a lot of folks out there that just recognize that, okay, I've got to take a portion of that and try to make some earlier stage bets. And, you know, But I think that's something that we're definitely seeing. And, you know, I think there's almost an aspect of portfolio philosophy or portfolio strategy with respect to crypto holdings. I think a while ago, people were saying, you know, you should have X percent of your net worth in U.S. equities and X percent of your net worth in bonds, if people still do that. And then maybe 5 percent in crypto. And, you know, I think now what we're seeing is that it's shifted a little bit.

Starting point is 00:25:16 So a lot of folks that are on our platform are like, OK, well, I'm 100% in crypto. But it's portfolio strategy that just zooms specifically into crypto, where I might have the vast majority of my holdings in Bitcoin. I'm going to have a chunk of my holdings in kind of newer assets, a chunk of stuff that's in pre-launch assets. and uh and so i think that ends up playing out in terms of the kind of demand that we're seeing on coin list yeah that makes makes a ton of sense uh last thing i'll say is uh the community there's tons and tons of questions about the coin list community here how do you think about uh interacting with them managing them uh you know good actors bad actors spam like there's all these things that i think uh happen in large communities like this especially when uh money and investing is involved

Starting point is 00:26:02 Uh, just any thoughts there in terms of like how, as the community has grown, you guys have, uh, have looked at the policies or the way that you interact with, uh, with the community. Yeah. Uh, yeah, it's been, it's definitely been challenging this year, uh, just given the kind of growth that we've seen. But, uh, you know, one of the things that we've, we've tried to do is, um, you know, give our users, uh, some kind of quality score as it were, like to what extent you as a community member on CoinList contributing to the success of projects. And the way that we express that

Starting point is 00:26:37 is through a program that we call Karma, CoinList Karma. It's essentially, it looks like a loyalty program, but you end up scoring points based on those contributions. So if you're a validator or a miner, you get a chunk of points. If you have demonstrated a long-term commitment to projects through token sales, or if you're a developer, you get another chunk. If you're more likely to stake assets instead of dump them, then you're going to get some additional points. And so that gives us an aggregate view of the kind of contributions that community members on CoinList are able to make to projects. And I'm really excited about this program. And if you think about, say, what Vitalik has been saying a little bit just around

Starting point is 00:27:21 governance and the fact that it's really just kind of the large coin holders who get the vast majority of waiting in terms of the vote. And, you know, that's an okay system, but it's somewhat imperfect because it doesn't really measure the contributions that team members are making or individuals are making of these projects. And it means that, you know, the VCs and the early team members have kind of all of the waiting in terms of voting. So, you know, what we're excited about with Comma is that that kind of balances that out a little bit. It means that it's not just the size of the assets that you're holding that determines your value to a community. It's the contributions you're making are you a developer you're committing code are you running nodes uh

Starting point is 00:28:02 and that ends up um being weighted pretty heavily too so so yes the common is a big part of the way that we're trying to you know address issues of how we manage community and uh you know we're rewarding folks to have high karma by giving them access or easier access into the projects we'll see on the platform so uh and that's working out pretty well so far yeah it's uh it's fascinating when you start to think about, um, kind of how that's evolving, uh, where can we send people to, uh, follow you on the internet or to learn more about coin list or, or, uh, sign up coin list.co is the place. And, uh, I'm Graham Jenkins on Twitter and, uh, you know, we're also on Twitter, obviously. So coin list on Twitter is great. Um, but yeah, coin list.co is the place.

Starting point is 00:28:46 That's me. Awesome, man. Well, listen, thank you so much for taking the time to do this. The survey was, uh, was super interesting to kind of see what everyone's thinking about. and we'll definitely have to do it again if you guys run it next year. Yeah, absolutely. And next year I'll be wearing one of your holiday sweaters. I bought one this morning.

Starting point is 00:29:00 Let's go. Let's go. I love it, man. All right, well, you have a great holidays and then we'll talk in the new year.

The Pomp Podcast - #762 Crypto Trends To Watch In 2022 w/ Graham Jenkin

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