The Pomp Podcast - Eyal Hertzog, Co-founder and Product Architect at Bancor: The Coming Changes to Bancor

Episode Date: September 9, 2019

Eyal Hertzog is creator of Bancor. In this conversation, Eyal and Anthony Pompliano discuss his background, how he got into crypto so early, what Bancor is and how it works, and a couple of new announcements of things changing within the project. CRYPTO.COM-----Crypto.com is a pioneering payment and cryptocurrency platform that seeks to accelerate the world's transition to cryptocurrency. With the vision of "cryptocurrency in every wallet", the Crypto.com App offers a full range of financial products with competitive pricing, well designed UX and high security. It is the best place to buy, sell and pay with crypto. COINMINE-----The Coinmine One is like an Xbox that turns your electricity into Bitcoin. You just plug it in, connect to wifi, and tap on the crypto you want. It’s so easy anyone can do it. Everything is controlled from the Coinmine mobile app and the Coinmine keeps getting better with over the air updates that add new coins, features and services to your Coinmine.  Visit coinmine.com/pomp to get a Coinmine and earn crypto for powering a new world. BLOCKFI-----BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it.

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Eyal Herzog is the creator of Bancor and creator.eco. In this conversation, we discuss his background, how he got into crypto so early, what Bancor is, how it works, and a couple of new announcements that are changing within the project i really enjoyed this conversation and i hope you do as well want to know who has the best url crypto.com that's right crypto.com they're a crypto platform with one goal motherf***ing mass adoption that's why we're all here we're trying to get crypto in every wallet crypto.com is helping people do that through buying earning

lending and card payment. Everything you could want at Crypto.com. Go help your boy out. Tell him Pomp sent you. Download the app or visit Crypto.com. Pomp's got you always. Ever wanted to get into mining and didn't know how? Don't worry. Your boy Pomp's got you. Everybody got some electricity and Wi-Fi. All you got to do is go to CoinMine.com. You buy a CoinMine. It's like an Xbox or a PlayStation that helps you turn your electricity into Bitcoin. That's right. You purchase it it shows up at your doorstep you pull it out of the box you plug it in connect to your wi-fi five minutes or less you're mining bitcoin all you have to do is control it from the mobile app they provide and then you receive over-the-air updates that add new coins and new features on a

consistent basis kind of like how tesla does over-the-air updates and updates the car software just you're updating your coin mine consumer mining made easy that's right go to coinmine.com Tell them Pomp sent you and thank me later. As many of you know, crypto investors store their digital assets on exchanges or in cold storage for long-term safekeeping. However, this strategy doesn't help them grow their investment holdings or build overall wealth. With the new BlockFi interest account,

users can now securely store their Bitcoin or Ether at BlockFi and receive 6% annual interest paid monthly in cryptocurrency. 6% is an absurdly high rate. It's the best rate in the industry. I highly suggest you go check out BlockFi.com slash Pomp. Again, that's BlockFi.com slash Pomp to sign up and start earning crypto today. an expression of his opinion this podcast is for informational purposes only all right guys bang bang i am here with aol uh thank you so much for taking the time to uh to record this oh thank you

for having me sure let's uh let's jump right into uh your background you've been building technology for a long time maybe just you know help us understand where uh where it all started yeah Well, it all started when I was seven years old on an Apple II machine. I was 81, and, you know, I fell in love immediately. I was, you know, a programmer as a kid and, you know, even doing some business software when I was 16. And I was essentially located to the Israeli intelligence, to the same program that years later, Yoni Asya from eTorrent,

that was also a guest of yours, was joining. It's the PC Boys, a special program. They take just kids that know how to build software and just drop tasks on them with absolute no training. And I spent there four years, and that was for me, you know, maybe the defining four years of my career. I got exposed to large systems, to databases, to, you know, I was running a network with over 1,000 computers at some point.

So I learned a lot. And, you know, everyone that is released from that unit is immediately grabbed into some tech startup. So when I left, it was 97. I joined a startup. It was sold to Cisco after 18 months. It was building internet protocols. And at the same time, I was using kind of the first stuff that was on the internet.

It was like, you know, email and point casts, like old software. And ICQ was like the big thing, the growing ecosystem of, you know, growing community of users. And I was using that and it was three Israelis that built that. And I was like, I was so amazed by their success. And all of a sudden, you know, the startup was sold to AOL for $400 million on 98. And I was like, whoa, this is amazing. And I was so inspired. And I decided to actually leave all my unvested shares at Cisco.

And, you know, in general, I didn't like the whole idea of big company. And I started my first company in 98. It was contacts.com. It was one of the first social networks. it was using a desktop application it wasn't even a web app because there were no web apps at 98 and that was a big hit and we got money from mitch kapoor the founder of lotus from excel ventures and you know i was like the the israeli internet star at the time and it all ended in april 2000 when the market just crashed like completely i was you know going around with bc's trying to raise

you know the next round for my internet startup and no one wanted even to hear about anything has to do with the internet at that time even even that it was a social network with real identities that was personal and professional anyway we had to shut down the company that was very hard but we did that but i still believe that the internet was like a big deal so i was trying to get money to my other idea that that that i was you know having which was essentially user-generated content i always thought that was fascinating because i got all those viral videos in email and i thought to myself this is a new kind of media and in 2003 I was actually able to raise $50,000 on valuation of zero, if you can believe that.

The only reason I got shares is because I put $20,000 out of those for a company that I started called MedicaFair. MedicaFair was one of the first video sharing sites online. I think probably it was the first. And it also started as a desktop application because bandwidth was too expensive in 2003, and we actually had to move the video files peer-to-peer between the different machines. And the prices went down in 2004 and 2005

and we released our website and it just exploded. We went from 4,000 to 5,000 users every day to like a million users every day within six months. It just exploded. And it was bigger than YouTube at the time. and for us it was like you know a very uh challenging experience because you know to scale those kind of um i would say environment the the lamp stack linux and and and my sql there was no one in israel that knew even how to build on those technologies because everyone in israel

used microsoft at the time it was the first internet startup that actually made it uh to you know to the top 100 website in the world according to alexa and as we were dealing with all that it's just youtube like took off like crazy and was acquired by google and you know we saw their number just exploding so much faster i mean we thought we were big but we we didn't even realize that that there was so much potential and for me you know one one of the biggest lessons from that time was, I have no way to say it, but it was my miss that I didn't figure out that online video is really going to be very different

than television in the sense that it's not going to be about the hits. You know, when we watched TV, it was like, what's the best movies, the best TV series? It was always about the hits. But it's nothing like that with online video. With online video, the hits, you can find them on Reddit videos.

Well, that's not very interesting and not getting many views i mean 99.9 percent of the engagement is in the long tail the concept that didn't really exist on 2003 when we started metacafe but you know came out and i i kind of realized uh what's happening a bit too late at that time and and and that was my big miss the long tail so i i started to dig into that and to kind of research that in 2010 after seven years at metacafe and it was obvious that youtube was winning it's you know we were second but it's a winner takes it all game so i actually moved back to israel i lived like three years in the united states at the peak of metacafe i moved back to israel and i actually started to use the technology that i helped create

creating i started to watch videos like all day long and kind of expanding my mind i would say exposing myself to so to the long tail if you will and which was very defining experience as well for me i learned a lot i changed a lot of my views about many things but but the thing that hit me the most is that in may 2011 in one of the blogs i was following i saw a one hour long episode about bitcoin and my mind was blown i was like oh my god i couldn't stop researching that thing for a whole month i sent an email to everyone in my contact list i said take a look at this thing this is amazing buy it it's going to be great it was six dollars and you know just go and buy it this is going to take over the world and you know people was were replying to me hey

yeah you have a virus and and and then uh i was like you know uh sending in another email you know it's not a virus it's me yeah your friend just you know take a look at this i live to regret that because uh you know uh two months later bitcoin actually peaked at 30 and then dropped to two dollars so you know whoever bought bitcoin thought that i i really screwed them but you know those who had patient uh still thank me until today and um it took me like a year to even learn how to talk to people about bitcoin how to express how to how to explain it it it was very very challenging and uh and i was during that year i was very active on the bitcoin talk forum you can you know look at my my username there is a y'all and it's my first name

and I was kind of touring with different ideas with different concept initially I thought to build something like what beat pay is doing and I you know I was introduced to the beat pay guys and I said okay so someone is building that let's let's try finding something else then I thought maybe I'll build a Dow So I'm actually talking there about the concept of decentralized organization that I thought, you know, could be possible with something like Bitcoin. And that seemed also too early. But after a year or so, I think I got to the conclusion that I think the opportunity is in, you know, in my big miss from MetaCafe. It is in the long tail of currencies because whenever you remove the barrier from creating anything, whether it's a blog post, like if someone writes or some recording like this podcast and a video or even a marketplace, when anyone can create that, what you're going to get is a long tail.

because when you remove the barriers, when you reduce the cost of failure to zero and you achieve a low cost of failure, people are going to try stuff and some of it will work, most of it won't and it ends up being a long tail and I'm saying what we're seeing here

is that all of a sudden to issue a token, an asset, a currency that anyone in the world can use from their mobile phone, the cost of that just dropped to zero essentially that's a big deal and we're going to see a long tail and where it would be and you know how it would manifest that has been my journey since 2012 to this day when you know we're just about to release our platform for for essentially user-generated tokens and to kind of target

the long tail so so in 2012 we started with um essentially building a platform with a company we we created called app coin which is a platform for tokens and uh back then you know you couldn't build so much on bitcoin so we actually build it on a centralized system just to see how users interact with currency that is not their you know fiat government issued money and we issued a currency for a mums group in Facebook a popular mums group and we told them hey

you can trade within the community with this currency and we built an app for them it was with integrated marketplace with a wallet and the currency was quote unquote pegged so we told them imagine that every unit

worth one shekel the Israeli currency So the currency was issued. When they joined, they got some. When they posted something for sale, they got some. So we kind of used that as incentive for engagement, and we started issuing the currency. And within a few months, it just exploded.

It exploded to the level that 10,000 active users were actually performing something in around 1,000 deals per day transactions. And what they did is they bought jewelry and toys for their kids and clothes and even services like massage and anything you can imagine. They just traded with that kind of local community currency. And we were very happy about it. We thought actually that we figured it out. But little did we know that we're going to run into difficulties.

So after like a year or so that it was running and, you know, we tried to do it with additional community, we ran into a problem that, you know, I can talk for two hours just about the analysis of that. But the world we ran into was the world of liquidity. I mean, the problem was that those currencies, they were like disconnected islands from the world economy. You couldn't buy them with your shekels and you couldn't sell them with your shekel like you can do with Bitcoin. And that kind of created an isolated island of value transfer that had issues because of that. And we started to think of how we can solve that. And we didn't really find a solution until 2016.

In 2016, we got really familiar with Ethereum and with the concept of smart contracts. And as I got familiar with that, you know, it felt like maybe there was a solution there for the problem of liquidity of user-generated token for the long tail of currency. Because what's blocking the long tail of currencies is that, you know, if you create a currency or a token or an asset, it's no exchange going to list it, no market maker going to trade it. So it's not going to be liquid by default. And with smart contracts, it feels like there might be a solution there. And, you know, I started working on that and researching and trying to figure out what can be done. And that was how Bancorp Protocol was born. Bancorp Protocol was actually the initial version.

Most people don't even know that. But the initial version of Bancorp was just supporting user-generated tokens. So initially, we thought about building a smart token with a single reserve of another currency. It took us like two months to figure out that, you know, you can actually have two reserves in a smart token. And if you have two reserves, meaning that you're holding this token that holds different currencies, and each one is like 50% reserve ratio, then you create what we like to call the token relay. And the token relay is what Bancor network is built upon, which is essentially a smart contract that lets you exchange between any two assets and guarantees liquidity between those two assets at all times, regardless of value. that's that's kind of the the big change this is you know the same thing that was adopted by initially eos for their ram trading this is how eos ram market works then it was adopted by

uniswap uniswap you know two car model one-to-one to build to build their network then it was adopted by tron so so the whole idea of of a smart contract that holds two tokens and the way that you know the price and the rate between them is calculated based on the purchases is something that that actually came you know two months later before we released a bank or but but after we thought about the initial concept and uh and then we released it in february 2017 we released the white paper you know the responses were like initially very mute we couldn't get any momentum people like they couldn't understand even what we're talking about what do you mean you you solved liquidity it sounds like like like weird that that that there could be even a solution

like that and and you know we were in the dev con of of ethereum presenting it but you know people it took time for people to to even understand what what we're trying to say uh it took us time to to figure out how to say it as well and as we were moving into the initial token sale that we had uh at june in 2017 and we were like you know traveling around the world telling the story And slowly but surely, we started to gather momentum around the concept. And we were, like, completely shocked by the result of the ICO. I mean, I remember a few days before that, one of our seed investors told me, you know, what do you expect from that? And I told him, look, you know, if we get, like, a few millions, that will be great.

And he said, yeah, yeah, if we get, you know, three to five millions, that would be amazing. No one expected, like, you know, $153 million in an ICO. And that was a shocker. And it seems like, you know, after our ICO, it's like just all hell broke loose. I mean, you know, people were doing much less. It was a world record for, like, a few weeks. You know, then I believe it was Tezos. And then, obviously, EOS that did a $4 billion ICO after us.

So it was a crazy, crazy period. And at that period, we thought, you know what? What we were dreaming about, the idea of user-generated token, that people can issue tokens easily that will be useful, it's happening. Look, everyone is issuing token. We are seeing the long tail of token being formed. And we kind of focused on supporting that. And that's why we have like 150 different tokens

that we added to the bank or liquidity network. And we know what happened later. It's like everything crashed. You know, everyone believed that, you know, this is the future and let's fund these teams, these groups and, you know, something good will come out of it. some some great product great solution great adoption but none of it has happened yet

and i'm i'm like the probably the oldest one in the group so i'm like you guys i've seen it before it's okay you know the speculators can lose their belief completely again i was trying to raise money for a social network in 2001 and failed i couldn't raise a dime for a social network there is a lost belief but the technology behind bitcoin and behind blockchain is a world-changing technology it's much bigger than the internet and is just now about finding how it will get adoption and what will be the first killer apps and what will drive it and um you know we've been focusing on building our own service that uses Bancor

liquidity network for user generated tokens that we are actually launching today and also on evolving Bancor and luckily we did raise a significant amount that allow us to go through that very long winter But, you know, I do feel like, you know, there is a change and things are starting to pick up and we see a lot of interesting trends like decentralized finance and all those things. How do you think that you guys were able to raise so much capital compared to those who've come before you? What was the difference? So I think that the main thing is that we were the first group that were consumer software, consumer service developers, seasoned consumer service.

The entire founding team, you know, some of us came from a social gaming background. I came with a background of Metacafe that, you know, had like 50 million users every month and even contact before that. So our experience was we were not techies. We are not technologists. We're not coming to build the next best blockchain or anything. We were here to build a solution for the masses. And we had a demo that actually allowed people to create tokens on Ethereum. Before our ICO, it was on testnet.

But people can just go and create their tokens, and those were liquid tokens, and they were working. And I think that people really like the fact that we shipped all that solution that I think looked pretty good before we even went to the ICO. We were actually the first, I think, the first ICO that released its product to mainnet at the ICO. I mean, we took like 10 days in order to kind of prepare this stuff. But 10 days after the ICO, Banker Liquidity Network was up on Mainnet. And then, you know, the code was out there, and we explained to everyone that this is what we're going to do. So I think that was very different than many other ICOs that were just promising things that will happen in the future. And we're like, yeah, this is working, and we're going to do the ICO and launch the network.

So I think people really responded to that as well. Got it. And so let's get into some of the announcements that you guys have, right? Let's start with the liquidity changes that are going to occur. So, you know, our goals is basically to get more liquidity, to get more developers to work on the bank or liquidity network and to get more community governance. When I say more liquidity, so, you know, one of the things that we are working on, for example, with one of our partners, and this is announced, again, today, is something called the Bancor Stable Token or USDB, which is essentially a stable token that is similar in some sense to DAI and to Maker in its structure

but it's collateralized by BNTs and the reason that we're doing that is because we feel like there is a great need for a lot of people that want to provide liquidity to be able to reduce their speculation to a single asset

So it's much more sensible to speculate on a stable coin and another asset, which is what you do when you provide liquidity at a bank or liquidity network. So this is those kind of things, supporting developers that are building those kind of solutions is our core focus. Also with a co-trader, we have launched essentially a permissionless liquidity portal where people with self-service can just create their own relays on the bank or liquidity network and they can contribute liquidity to existing relays. and we're looking at a solution to allow the liquidity providers to essentially set their own fees because that's also, this is how liquidity providers get rewarded for the volume that is occurring on whatever liquidity pool they're supporting. Those kind of things are like our top priority with the liquidity network.

And of course, expanding it to additional blockchains because we go where the activity is, where the users are. We started on Ethereum, but we talked from the first day that we want Bancor to be a cross-blockchain liquidity network because obviously liquidity is something that you don't need only within a blockchain, but between blockchains. People today use exchanges, and those exchanges are using, are connected to many different blockchains.

And if you're going to have a decentralized liquidity solution like Pancor, then it should operate between blockchains. And we actually, almost a year ago, we launched our cross-blockchain solution, which I believe was the first one in production, maybe even still the only one. People can actually move their BNTs from Ethereum to EOS and back, and using our system they can convert any ethereum token to any eos token with a single action and

everything will just happen automatically in the background to support that so as we we someone want to do that why would someone want to do that to convert between um assets you know this is what this is the only thing people can or are doing today in in the industry it's all about speculation right now i mean if you if you look at the entire space the only use case and it makes sense because because there are no mass adopted solutions at this point in time but at that point you know people speculate and they speculate by by buying different currencies different tokens and and and change them you know and and you know change their bets from time to time. And what Bancor is allowing to do is to do that in a completely decentralized way

and to also support small assets that don't have a lot of volume and provide liquidity for those. So, you know, just like people want to use Binance that support both EOS and Ethereum and Bitcoin, we believe that as a liquidity network, that essentially providing an alternative service and just just like uniswap it's an alternative to an exchange um we need to support multiple blockchain we shouldn't be focused on a single blockchain and and and we see our users using that a lot and very happy with it with the fact that they can convert eos to ether and eos ether to eos just you know with the complete non-custodial solution got it And then let's talk a little bit about kind of the Ethereum-based model versus Ether, EOS, and then moving to this multi-blockchain model.

Talk to us first, you know, what the goal is or what's the driving force as to why to do this and maybe cover some of the technical components. Yeah, so when we launched BNT, we launched BNT as a smart token, like, you know, dogfooding, if you will, that has 10% reserve in Ethers. So, you know, whatever the market cap of BNT at any given moment, it holds 10% of that market cap in Ether within the smart contract of the BNT token on the Ethereum network. And that's how we launched it. And that's how, you know, that drove the liquidity of BNT throughout that time. We never asked for any exchange to list us because, you know, you can just convert Ether to BNT and BNT to Ether on chain using our service. So we didn't really need to be listed in exchanges to have liquidity. But as we expanded to EOS and we plan to expand to additional blockchains, so now this tie into Ethereum doesn't make as much sense as before.

And what we're planning to do is essentially to take the Ether reserve that resides within the BNT smart contract and create essentially a relay between BNT and Ether and essentially distribute in some fashion. We're working on exactly how it will work, but distribute that relay to all the holders of BNT. So actually giving the Ether liquidity of BNT to the BNT holder directly and they will become proud owners of the Ether BNT relay themselves

and they can choose to do whatever they want with it. So this is a big change for us. And as part of this change, we are essentially making BNT an inflationary token with a default inflation of zero. And that's very important because the community can actually decide collectively to raise the inflation or to keep it as it is,

but they can raise the inflation in order to support strategic liquidity pools, so support them by dropping P&Ts into them and encouraging liquidity providers. They can use the inflation to support developers that are building on the bank or liquidity network. They can use the inflation to sponsor oracles that are actually using a multi-signature model

connecting BNT to additional blockchains. So those things will make the bank or liquidity network more independent and more, I would say, long-lasting in that sense that it can sustain itself for the long term. And we're giving this control to the community because we believe that the BNT holders should be the one deciding on the future of the bank or liquidity network. For sure.

And then as you're moving forward, what's the biggest risks that you face? The biggest risks, you know, I think that for us, just like any other new technology developer, You can't expect what will come about and what kind of competing services will appear and how well they will work. And I strongly, strongly believe that the future is all about blockchain. And I strongly believe that the ability to issue an asset is something that has proven to be useful and is proving itself more and more to be useful every single day. So I do think that a solution for that will be needed. There's always risks when you're dealing with smart contracts.

You really don't want to find a critical bug at any point that could be a real challenge. And we know what happened to the Dow, right? And there's always, I would say, a risk of just not being able to see the future as it unfolds because this is what we're doing. We're trying to essentially guess what will be successful in the future, not just us, you know, hundreds, if not thousands of different groups. And guessing wrong is always a risk, but it's really good that so many people are trying and guessing

because guess what? Some of us will get it right. And we just hope that it will be us, you know, at least that that on the on the side that that that of the people that that got it right but there's always the risk that we're not got it and so you're of the mindset basically the the more experimentation the better right there's no kind of sacred cows oh of course of course you know the i think i think that every industry in the history of technology is is proving that point you know i've been i've been in in this industry for you know

actively working for more than 20 years and i can tell you it was always you know so many on whether it was networking or the first internet infrastructure whether it was the first web apps and the first mobile apps it was always about experimentation endless experimentation and that's That's how you discover what people really need because if people need something, they will just adopt it and it will grow and it will explode. That's how evolution works. That's how nature works.

It's experimentation and when something succeeds, then everyone can look at it and learn from its success and it leads to the next wave of innovation. So, yes, I'm a very strong believer in that. Got it. And then maybe talk a little bit about this idea of the inflationary aspect being controlled by the community and how that, you know, emulates a DAO, essentially. Yeah, so, you know, basically we're using, I shouldn't go too much into this because it's pretty technical, but the model that is called weighted median. So, you know, everyone can essentially vote on what they think should be the inflation.

And based on the amount of token each voter holds, you actually take the weighted median of that vote and that will be the inflation. And every token holders can also vote on which parties should be the recipient of that inflation. as well as voting on how many parties should receive that inflation. And using those mechanisms, you essentially allow the community to express their opinions without creating camps and tribalism and those kind of things because it's very, should I say, mathematical in its nature. You just say what you want and the smart contracts calculate the the majority will because the idea of weighted median is that if if if a group of people vote on

different numbers the weighted median would be exactly the number that 50 percent of the token that vote voted for that number or less and 50 percent voted for that number or higher so that's the fairest the most fair system that i can think of for for a large community of holders to decide on any particular parameter. Skrrt, skrrt. Want to know who has the best URL? Crypto.com. That's right, Crypto.com.

They're a crypto platform with one goal, motherf***ing mass adoption. That's why we're all here. We're trying to get crypto in every wallet. Crypto.com is helping people do that through buying, earning, lending, and card payment. Everything you could want at Crypto.com. Go help your boy out.

Tell him Pomp sent you. Download the app or visit Crypto.com. Pomp's got you, always. Ever wanted to get into mining and didn't know how? Don't worry, your boy Pomp's got you. Everybody got some electricity and Wi-Fi. All you got to do is go to CoinMine.com. You buy a CoinMine.

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Go check out BlockFi.com slash Pomp. Again, BlockFi.com slash Pomp to sign up and start earning interest on your crypto today. As part of that, you know, I think a lot about these DAOs and kind of the potential is incredible. Obviously, we've seen some of the downside in the past. What's the timeline for this to be pervasive if you think it'll ever get there? So, you know what, one of my inspirations about that is actually MakerDAO. I mean, if you think about it, I think Maker is probably the most, if I'm not mistaken, is the most successful token today, both in terms of adoption and in terms of market cap. In terms of adoption, obviously, I'm talking about DAI, which is the product of this DAO.

And, you know, the way, for example, that they upgrade their mechanism, which we definitely plan to adopt, is by community voting. So using the holders of MakerDAO's voting, they can upgrade the mechanism that actually runs their DAO. And they can add more features. This is how they change the interest, actually. This is how they're going to add the multi-collateral capabilities to DAI. So I think the model, as far as I'm concerned,

has pretty much proven itself in probably the best, most successful use case for a token today. And again, as I said, I think it's critical that we look around, we see what works, and we learn from that. And that's a great example to learn from. For sure. Let's talk a little bit about Creator and what you guys are doing there. Yeah, so Creator Eco. So it probably should be up by the time this is broadcasted. Creator Eco is essentially a solution that is built on top of the Banko Liquidity Network,

where anyone can create a token for free. It's very simple. You don't need to be a crypto head in order to use that. You actually sign in with your phone number. You have a web-based wallet. It's everything in a single solution. You don't need to use any external solution for that. So anyone can create a token for their channel. So I'm actually going to launch my own channel.

For the first time, I'm launching a video channel on creator.eco. Actually, because of MetaCafe, I have a really nice YouTube channel name. I'm youtube.com slash Eyal. And I'm going to launch my video channel. And on creator.eco, I'm going to issue my token that is called Eyal ECO, E-Y-A-L-E-C-O, which is like a seven-letter symbol. and the way that it works is that um i'm gonna have my premium content and as well as premium q a sessions for supporters as well as many benefits that are open only for token holders

so let's say if someone is holding um you know a hundred tokens they can actually go and watch the premium video on my channel where it's like an unlisted video on YouTube. Or if someone holds 150 tokens, they can participate in a Q&A session or Ask Me Anything session on Hangouts that is later broadcasted in the channel. And if someone is holding, I don't know, 200 tokens, then I will have a one-on-one session with him, just a private consulting session or for whatever purpose so i can offer all those perks i would say in a similar way to how patreon is is offering perks to supporters of youtube channel but the main difference is that with patreon it's a monthly subscription you pay ten dollars twenty dollars thirty dollars a month and based on how much

you pay and how big is your support and you get access to different perks and with with creator that eco it's not about how much you pay it's about how much you hold so if you hold more tokens you actually get uh more more perks and and it's also visible within the community so uh you know some of the features are are not up this is this is this is beta but uh if if i you know post something in the community and i have many replies the reply is going to be sorted by the holdings of the members so those who hold the most token the reply will show you know um at the top so it's it's a kind of a way to to to to give clout to an audience and and and and and get support using a very different method now the token that you issue is is a smart token that has bnt in the

reserve and people can buy it and sell it and just like any other smart token just like bnt was when people buy it the price of the token goes up when people sell it the price of the token goes down so it's it's really a good idea to to maybe first of all look for creators when they're small but it's also incentivize those those people that hold the token to kind of spread the word about the channel because they they become you know more vested in in the channel and and they become stakeholders if you will and and and become part of it for its success so you know those who who hold my token will have you know much much more incentive to kind of share my videos and tell the story about this channel to other people than than people that are just mere followers or even people

that support uh support you on patreon so it's a very different model to get support from for creators and and it's actually closing a big circle for me because uh medic affair had a program you can actually search for it it's a there's many articles about it from 2007 i believe called producer rewards medic affair was the first video sharing service that actually shared the advertising revenue with those who uploaded videos and their own videos not you know videos that they own, the copyright, and we're checking that, and, you know, we just share the revenue with them. So we believe that supporting creators was very important more than 12 years ago.

So now I'm actually releasing a system that, you know, can support creators and allow them to engage with our audience in, you know, in more ways that is just using tokens, their own tokens. And this is the first time that we are essentially releasing a product that is not targeted at the crypto market. Because if you think about it, most of the solutions, the successful solution, the solution that got any kind of adoption in the entire world of blockchain are self-serving.

And that's fine. This is how the internet started. I remember it like it was yesterday. The only users of the Internet were Internet startups and Internet-related services and Internet companies. These are the people that use email and the web and no one else did, especially when it was dial-up, you know, in the 90s. So, you know, today we are dogfooding more than anything. That's what we're doing in crypto. And the reason I'm excited about that is it's the first time we're launching a service that is not targeted at crypto people.

It's targeted on the mass audience and we really hope to see it grow and succeed. For sure. What's the one thing that you look forward to with the Creator Project that you're like, look, if we can accomplish this, that'll be an inflection point for the business? the word uh i would use is viral coefficient because the way that it works is that let's say you know i'm a creator and i have i don't know 4 000 followers on twitter i know it's nothing compared to you but but still and let's say i tell them hey look at my channel uh and and and they come and you know maybe some of them buy the token or not but the idea is that there is a little button at the top right uh always which says create your own token and if there's anything

that we are hoping for is to get more and more people trying it out and and that's why we're kind of working on having a low cost of failure so it would be free you wouldn't risk anything material when you when you're trying to do that and what we're hoping to see is that every creator that has used that with their audience actually ignited their imagination of at least some of his his supporters in order to try their own token create their own token and and if that happens then what you what you're getting is is a positive viral coefficient and when you get there then this is the making of the googles the youtubes the whatsapp the facebook that this is what drive growth would you know to to maximum to to to the billions and um you know i just i just

hope to see more and more people trying it out experimenting with it and and and and see that it works for them and bringing actually the next wave of users after that that's that's what i hope for for sure what um what's the one lesson you've learned uh in in all the years now that you've been uh focused on bitcoin cryptocurrency etc that's the one takeaway one lesson you know i will tell you the biggest lesson. The biggest lesson is that no one is immune from the euphoria when markets are going up. No one is immune. And on the other hand, no one is immune from the depression when everything is going down. And I think that my most important lesson was that we should always just not focus on the market,

not focus on price, but focus on building something that people want. And this is the best thing that we can do for the markets as well. You know, the reason that the internet, after the crash in 2000, 2001, was able to climb back up is because people were using it.

And I think, you know, we got carried away with all the hype. Definitely, like many others, we got carried away. And, you know, today I feel like we are much more focused on solutions and advancing the technology than on, you know, on the greater market. And, you know, all the hype, this is just, it's a distraction by the end of the day. And I think that was an important lesson from the last two years that has been quite a rollercoaster, as you can imagine. For sure. Before I wrap up, I always do rapid fire questions. What do you think is the most important company in crypto other than your own?

I would say, you know, I would say Maker. I think that they are doing they're leading the way in something very important, which is a stable coin. And, you know, no currency that is not stable ever circulated as money. So I think that's a very important step toward mass adoption. What's the one regulation you would change or improve if you could? You know, definitely would make it more clear, you know, what constitutes security and what constitutes a utility. And I would, you know, I would make it more clear that when a token is being used to power a decentralized network that is controlled by its members, that clearly should be regarded as a utility and, you know, let people innovate with building kind of token-based networks. And there's so many concepts and ideas that can be experimented on.

What's your most controversial thought in crypto? Like when you say people will vehemently disagree. So I guess my controversial thought is that I think that Bitcoin value is not derived from the fact that it's going to be the future of money. I don't think that's the case. I think that the Bitcoin value derived from the fact that because it was first, it became the most popular trading pair in crypto. It has more, it's the base currency on crypto and which makes it the Dow Jones or the Nasdaq of crypto, which is kind of a safe bet on the entire market. And because the market is all about speculation, if you don't want to dig into the details or you don't understand the difference between the different projects, buying Bitcoin is a safe bet on the market and it has nothing to do with its technology or even its use case outside of speculation.

It's an index, it's a very useful index and it has a network effect as an index and that's what Bitcoin is. Most important book that you've read? Recently or ever? So I would say recently, Anti-Fragile really affected me by Nassim Taleb. If I'm looking in the longer term, I think The Long Trail is probably a very, very good book that explains internet phenomenas and successes in a great way. So that would be my second. All right.

Aliens, believer, non-believer. Aliens? Of course I believe they're aliens. Why? Of course. Why? Yeah. I researched it. What did you find in your research that convinced you? Just too many

anecdotes. Way, way, way, way too many to be all delusions, coincidence, you know, propaganda, misinformation. It's just too much. and then and and i didn't you know i i could keep on but but it's just overwhelming but you know i

think it's like star trek it's they they don't want to interfere with with with unevolved culture so they they keep themselves hidden it's it's crazy how many people uh have never looked right or researched it i just it's one of these things where it's one of the most fascinating things in the world to me is whether aliens are relearning or not but i see all the time that people know uh you know i don't know i haven't looked at it and it just feels like if that's one of the biggest questions in the world why not uh why not take a look so you know first of all i recommend to everyone there's a the guy that wrote the story of the social network that became a movie and also 21 he's like he he's this the guy that wrote the script for those i forgot

not his name, but he actually had a TED talk about aliens and why I believe in aliens and why you should believe in them too. I recommend that. It's a very short talk, but it's really on point on that subject. And it's clear to me why people don't want to research that because it's, you know, excuse my language, but it's like being a Republican in California. You don't want to hold an opinion that puts you in the crazy bucket.

And people's opinions about almost anything is affected by the social circles that they have. And there's a great movie on Netflix about flat Earth. And it shows you that flat Earthers, they don't have a choice. Even though their own experiments prove that the earth is not flat, you know, one after the other, they don't have a choice but to believe in flat earth because not believing in it would just terminate their entire social life. Everyone that they become friends with, there's no choice but to keep believing it. And I read a great sentence just the other day, no one can fool you as hard as you can fool yourself. I think that's very, very true. I love that.

And the part that is great is those sayings, whether they're jokes or sayings, the ones that have the hint of truth are the best ones, right? Mm-hmm. Mm-hmm. I do believe that, you know, people can fool themselves. We see that in crypto all the time. I mean, look at all the people that's saying

it's only going to be Bitcoin, And there's other people that say it's only going to be Ether, and other people saying it's only going to be EOS, and other people saying it's going to be many. They cannot all be right, but they have such strong conviction in what they're saying. You can see that in their eyes, and you know that that's fine, because maybe you shouldn't believe that it's only going to be Ether if you're going to dedicate your life to building infrastructure on Ether. And maybe if it is Ether, you're going to be very successful. But I think that, you know, it's just how we are wired. We make our own reality. We can convince ourselves of anything.

And when you accept that, then you're not as bothered by people that think differently of you, of what you think. That's how it's going to be. And maybe that's good because you might be wrong or they might be wrong. It's a good thing to have a variety of opinion at any given moment as long as you don't kill each other for it. For sure. The last thing I end with is letting you ask me a question. What do you got for me?

Ask you a question, yeah. I wanted to ask you about the whole Ubi episode I actually had the chance to meet him in a conference that we helped organize in Bretton Woods a few months back. He was invited, and I had an interesting talk with him that he abruptly ended. He got too upset. But I wanted to ask you what you think about Rubini and your interaction and why he thinks that. And even more importantly, why do you think that so many people think that he won the debate that he had with the BitMEX CEO? Yes, I don't know that much about the debate.

I think, look, he's a very smart guy. He knows exactly what he's doing. And, you know, here's what I always go back to this one saying where a buddy of mine in, I think it was high school, used to always say, real recognize real. Right. And what that means is it's this idea of when you play a game and you see somebody else playing the same game, you just got to kind of say, you know, hey, look, I respect it. And I think Rubini is perfectly in line with that. And so if you look at all of the people who debate him, all of the people who argue with them, et cetera, they're all playing the same game. Right. It's this game of controversy and awareness trying to drive benefit. Right. The benefit being either personally or for their business or whatever it is. He's doing no different. Right. He is building a personal brand, he's getting paid to speak, he's doing all these different things. And I think for him, you know, we just got to understand that he's playing the role of entertainer sometimes. He's got other, you know, ulterior motives, that doesn't mean they're bad, right? It's just when you when once you recognize it, then it all kind of makes sense, right? It just fits into a bigger story. And so that's kind of the category I put him in. It's no different than majority of people. Right. So again, I don't think that's a bad thing, but it's important to kind of just understand, you know, if you look at him as an entertainer, he's doing a fantastic job of that. So keep entertaining. Yeah, yeah. And I think he may have a point with some of his claims that maybe the techies that understand Bitcoin are not completely in the position to predict how the future of the world economy is going to operate, which many times they do.

for sure look he's no right he is no dummy and anyone who thinks he is dumb is uh is probably missing the point so yeah yeah he's an economist though he's not a technologist and sometimes i think he forgets that i think that he understands technology better than people give him credit for so we'll uh we'll see um all right man listen i really appreciate you taking the time to do this um you know i i know that your time's very valuable and so the hour you spent with us is uh much appreciated uh of course and uh we'll uh we'll get this out and people can uh can kind of hear about some of the updates to a bank or and then uh we'll have to do it again in the future as as you get more progress under your belt oh i'd love to hey everyone pop

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