The Pomp Podcast - Rahul Sood, Founder of Unikrn: E-Sports will be Bigger than Traditional Gaming

Episode Date: January 9, 2019

Rahul Sood is the CEO of Unikrn, an E-Sports startup backed by the likes of Mark Cuban, Tim Draper, Brock Pierce, and Pantera Capital. In this conversation, Rahul and Anthony Pompliano discuss Rahul's experience selling his first company to HP, his time launching and leaving Microsoft's VC arm, and why E-Sports will be bigger than traditional sports. ----- 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. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. BlockWorks Group hosts events for Family Offices, HNWI's, VC's, Hedge Funds, lawyers, and accountants that are already operating in or looking to learn more about blockchain. BlockWorks Group also hosts intimate, private dinners for projects in the blockchain space looking to raise capital. To learn more visit http://blockworksgroup.io/ Join the Off the Chain newsletter. Pomp's daily email analyzes the crypto market for institutional investors. Simply, it’s the best crypto newsletter delivered to your inbox every morning. No frills. No bullsh*t. Just everything you need to know in a 3-minute read. https://offthechain.substack.com/

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Season 2 of Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Rahul Sood is the CEO of Unicorn, an esports startup backed by the likes of Mark Cuban, Tim Draper, Brock Pierce, and Pantera Capital. In this conversation, we discuss Rahul's experience selling his first company to HP, his time launching and leading Microsoft's VC arm, and why esports will be bigger than traditional sports. I really enjoyed this conversation, and I hope you enjoy it as well. Before we get started, I want to talk about one of our sponsors, BlockFi. These guys are doing really interesting work in crypto lending. What they allow you to do

is keep your crypto, put it up as collateral, and receive a US dollar loan funded directly to your bank account. They do loans ranging from $2,000 to $10 million, and they're perfect for helping you reach your financial goals of all sizes. You should visit BlockFi.com slash Pomp. Again, that's BlockFi.com slash Pomp. Again, one more time, type it in, BlockFi.com slash Pomp, if you'd like to learn more about putting your crypto to work without having to sell it. Definitely do it. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not

treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys, we're here with Rahul. Thank you so much, sir. I'm excited about this conversation because you guys have a working product, which is somewhat Rare. And you're one of the first founders with an actual token that we've had on the podcast. So welcome. Thank you. Thanks for having me. For sure. All right. How about just a quick background on you personally, right? How do you get to crypto and esports? Sure. Well, I've been a longtime entrepreneur in the video game space. I actually started

the world's first PC gaming hardware manufacturer. We used to build PCs specific to play video games on. And, uh, I ended up selling it to HP, um, many years later. And, um, so I've been in the gaming space for a long time. I got involved with a lot of startups. I'm, uh, you know, on the board of advisor and early shareholder and razor. Um, I've been, you know, involved in like VR and AR companies and things like that. And I ended up joining Microsoft, um, after selling to HP and I, I was at Microsoft for a few years, started Microsoft ventures. Um, and we would invest in companies and we set up startup accelerators around the world. And at that time I was really looking at the e-sports space very closely. And one of the companies that we

invested in at Microsoft was a video game community company. Myself and the CEO got along really well. And I decided that in 2014, I'm leaving Microsoft to start Unicorn with him. So that's what we did. Awesome. Let's talk about e-sports in general, because i think uh it's very very underrated uh outside of maybe the tech community and specifically the esports thing um like how big is this right sure so esports is is actually the fastest growing sport right now it's it's huge there's there's literally uh hundreds of millions of fans around the world that that watch people play professional like professionals play video games effectively so it's it's like watching the nfl but you're you're actually watching people

play like league of legends or dota or something like that and it is um it is it's it's massive it's uh it's uh it's popular all around the world um you know we we have uh i have some videos like we actually have a team that we assembled um they're the most popular esports team in germany they're also one of the best csgo teams in the world they're called big and um there was an event that uh that they did recently and there was a you know a huge stadium in in germany that was sold out. There was like 20,000 people in the arena. It looked like a world cup event. And if we had 20,000 jerseys with the name on it, they would have bought them. Like it was that nuts. That's awesome. So yeah, it is a very, very big space. And, um, and not only does it involve watching

games, but it also involves people who, who watch players. Um, there's a huge, you know, there's, there's a lot of fan and community building in the space. And there's also the competitive side of actually playing video games competitively against people as well um yourself so yeah got it and when we talk about this right what is the draw of watching people play video games is it just that so many people play the games and then they get to watch people who are better than them or like what is actually um you know uh inspiring people to spend the time to watch other people play the video so great question it's it's like you know if you're a huge fan of um let's say you're a fan of the nfl right and you and you love to watch the seahawks play for example um and like imagine

you know you can watch the game and you can be excited about russell wilson throwing a you know a touchdown or whatever that sort of thing but imagine then being able to watch russell wilson practice in his backyard for six hours while talking to you on the camera right that level of engagement you get in esports you just don't get in any other sport these these guys will go home they'll stream and uh and they'll stream themselves playing games that are highly complex highly detailed that you know the the amount of betting markets that we can create in one esport match is is much higher than you can do in a traditional sport so so there's a lot of like thinking that goes into it and then watching these guys play they're super entertaining some of them

are just amazing like i i watch this i watch one streamer almost daily his name is bunny fufu i watch him for about an hour every day what's the name bunny fufu amazing he's a he's a league of legends player but he's he's super funny and and you know just if you know the game and how complex it actually is just watching him play is it's kind of masterful it's really neat um and and so you watch them for a while and then you want to see if you can do that so you can just load up the game and start playing it yourself that's sort of the allure and it's um it's it's a space where you know literally hundreds of millions of people do this is why twitch is so popular right it's why youtube gaming exists it's why every major publisher aspires now to have you

know a true esport title because the amount of revenue that they can generate from just the events the viewership the play the skins all of that stuff is just a it's it's incredible um you know how how big these companies are getting absolutely and so let's talk about these esport uh teams right because i think that um watching somebody at home you know while they're playing and they're streaming live is one thing because you get kind of that practice element but then a lot of these players end up going and joining a professional team walk us through like what do they all live together do they train together is there like practice sessions and then games where the games held like just what does that professional esports community look like yeah so

uh there's there's a few really popular uh esports out there there's league of legends there's dota 2 there's csgo um those are some of the big ones fortnite is pretty popular but in terms of the team games it's the first three that i mentioned and you know it's it's it's it's very interesting because you'll have you'll have these players go into a team house they stay in a team house there's coaches there's um there's you know uh like therapists they have they have people that actually work with them on you know physical activity uh they work with them on psychology like there's a sports psychologist on the team there's there's you know a couple of different types of coaches on the team and they they literally play games all day long when they

train all day long to be the best at what they do and that's those typical esport games and then now you've got the nba for example coming into esports and they're really investing heavily into it because they they notice a big trend like in in traditional sports if you just look at traditional sports as a whole start with say the the pga tour the average pga tour fan is 79 years old right the average uh major league baseball fan is 57 years old wow right these guys are getting older and every day you know a major league baseball fan and a pga tour fan you know passes away and there's like four esports fans born because people start playing video games at a much younger age than what they used to play right and so the nba is looking at this and

thinking okay we want to get younger people into the arena and we want to capture their attention so they actually started creating esport teams uh and they had a full combine um and they they have houses they have training facilities i mean these are like world-class setups the nba 2k league you're talking about 2k like i'm talking about yeah so i actually know somebody who was coaching one of these teams and it was fascinating to hear him talk about um not only what goes into it in terms of uh playing but these things you're talking about right the the practice sessions uh the drafting of players um you know this is very analogous to the way that non-esport games work right or teams yeah just like the nfl or nba has these these combines drafts etc how is this

evolving right because really my understanding is that most of this originally was occurring internationally and now it's becoming popular in the u.s it's almost gone reverse for most people in the u.s that it was popular somewhere else and now here actually anthony i you know not to correct you but but no you disagree i want to hear you disagree like i'll disagree in the sense that it was discovered here because people weren't paying attention to it right like i don't know if it's a cultural thing maybe people just don't pay attention to what their kids are doing as much as they do say in south korea um but but it's really popular here and it's always been quite popular here um it's just not it hasn't been as public here because typically people here they'll

look at things like if something needs to be mainstream it has to be on tv for example right that's the old way of looking at things you know the reality is esports doesn't need to be on tv tv needs esports on tv if if cable cutting is to stop right but we all know cable cutting is happening and it you know twitch is where where people are sort of gathering um youtube is where they're gathering youtube tv exists for a reason um and these trends are happening as you know sort of as we speak so you know when i was at microsoft yeah you know i was doing a lot of interesting things with different startups and we were doing trend spotting one of the things we we learned was that there was hundreds of millions of people that were watching other people play video games

which is really kind of strange when you think about it if you're if you're somebody from the outside looking in, you're like, whoa, what is this? And most of these people were playing on the Microsoft platform. They were playing on Windows or Xbox, right? But mostly Windows. So imagine there's like two people at Microsoft that know what's going on and everybody else has no clue that all these people are actually watching these games, right? And my son was the one who really got me into these games. He said like, dad, you know, you started Vudu many years ago. You got to quit Microsoft and go back into gaming and really look at what happened to e-sports because when i was doing it it was just competitive gaming it wasn't as popular

and i started to spend time in his world and i think it's really just spending time with your kids and seeing you know where the trends are actually going for sure let me ask this question how do you think the cord cutting and kind of the streaming etc will impact um kind of in-person attendance the reason why i ask this is i remember there was this photo that kind of went semi-viral uh it's the staple center and everyone's on their phone and well when everyone's on their phone and they have the big screens up and you know when you go to like an nba game for example there's a court and there's kind of movement people are running around everything but everyone went to the staples center and it it appeared i've never been right so this is all kind of my understanding

of it uh the players were down in the in the center of the arena and they were playing and they were kind of lined up you know each team on each side but most of the fans were not watching the players they were actually staring at the screen of the game of which the players were playing. So they went in person to the Staples Center. I mean, there were tens of thousands of people there and they're all watching a screen. One, is that accurate? And then two is, do you think that the streaming live, right? I can almost get that same experience at home. Will that take away from those imperfect in-person experiences? No, you see the difference between, and this is what's fascinating about esports is these are, these are not like three hour events. These are

multi-day events. You know, the last international, the Dota 2 international had a $24 million prize pool and it was a multi-day event. So people would pay $300 for a weekend ticket and they might pay a couple of hundred dollars for a weekday ticket. Um, so they go there for multiple days. And what's, what's amazing about e-sports is I promise you, you walk into an e-sports arena and you watch, uh, those people are fixated on the action in the game, which means you actually have to watch the screens, but they're watching the players and they're not on their devices at all. Like they're, because there's just so much going on in the game that they just want to focus on what's happening in the game so you know it's it sort of goes back to um one of the hypothesis

with with the nba was that young people don't have the attention span to spend three hours inside the arena so what are we going to do to attract young people and they're wrong um you know these guys will spend nine hours watching esports you know like full on because they actually care about it and there's just a lot of detail happening in the in the game so um so so going back to you know the idea of a second screen experience um unicorn we actually created a uh we have a lot of people in in the betting business who don't understand esports right okay before you go into this let's talk about unicorn specifically and what you guys are doing sure we can get into um so give us some background on unicorn and kind of what you guys are doing and then we can talk about the product

sure sure so so we're unicorn is um effectively an esports bookmaker okay but we're much bigger than that um you know a typical betting company is just a is you know they'll have odds and they'll put odds up and people will bet you know against lines and things like that unicorn is a fan first betting company we were founded in 2014 we're venture-backed um you know we we had investment from ashton kutcher mark cuban elizabeth murdoch sherry redstone like a bunch of really great investors came into to unicorn when we first started and um we're we are uh sitting at the intersection of e-sports and video games, regulated gambling and blockchain. And it's a really neat space because we're building the most comprehensive sports book for e-sports in the world where you

can bet on lines, but we also have a skill betting product. The neat thing about e-sports is you can monetize it in many different ways, but it's truly a skill. Like if you play League of Legends, right you're it's your skill that you're playing right and we've come up with a way for us to put odds on your chances of winning a game how do you do that that's fascinating yeah so in 2015 we created a coin called the unicoin and um we did it because we wanted to test out new betting markets um we weren't licensed in every market around the world obviously we only had a couple of licenses because one of our investors is the largest uh betting company in australia and they let us get a license in australia in the isle of man that we could work with them just to just to

test the efficacy of our sports book but there's people in the u.s there's people in korea there's people like all over the place that wanted to use the platform so we created the unit coin as a free token that people could earn and they could use it on the platform it couldn't be bought or sold but it could be used for jackpots for skins and you know other things sort of like digital points just like digital points but but um you know we created it to sort of test out new betting products and things like that. And at the same time, what happens is customers come to our platform, they connect their League of Legends account, or they connect their Dota or their CSGO or Rocket League. You can connect your gaming account to our platform, even Fortnite, and you

earn tokens as you play and win games, right? And you earn these tokens and you can use them for different things on the platform. But what we do then is once you're connected, we can start collecting data on gameplay, game dynamics and things like that. And we started to really hone our odds bet our odds uh making skills right and so so so not only do we create amazing odds on just all this the professional matches out there we now can create odds on individuals matches and the reason we did that was because we know that if people want to bet on themselves they don't want to wait for someone else to bet against like if i want to bet you know on league of legends i don't want to wait for you to to play against me because then it's like i'm waiting there and you

know who knows if you're going to bet or not right i want to do it so i can just bet on myself and that's what we did. So, so we made it possible for people to bet on themselves in the game and then play the game. And then, and we put odds on their chances of doing certain things. Like for me, if I play Fortnite, I have a 15 to one, you know, odds of being one in 100, right? So I could bet a hundred bucks and, you know, win $1,500 essentially on, on a game like that. And that's, that's how we do it. Um, and then, and then, so, so as I said, Unicorn does skill betting and spectator betting. We, we are a community first company. So like, I'm a big believer that if you want to build a real brand, you have to have a community. You have to have a

fan base. I think about Apple. I think about Ferrari, Tesla. These are companies that actually have fans that evangelize and love their product. So we create content like ESPN would around esports. We also have a team. So as I mentioned, I mentioned BIG. We have a tournament platform where people can create their own tournaments. We run events at the MGM Grand in Las Vegas every week um we uh you know and then and then we have these these you know these cool betting products that we've created and the one thing i was going to mention to you about that you know the spectator thing is we created a bingo game where you could be watching a match and it auto populates with all the live data in the game like if you're watching csgo for example it'll be like you know bomb

planted or or first kill or you know that sort of thing on the bingo card right and and it and it populates live so it's sort of a an onboarding for people who don't understand esports how to play it you know one of the things i've always uh caught my attention about esports i was in nigeria of all places um this may be two years ago now and uh they have these betting houses right so uh basically people in the local community will go into this you know building and they will make bets they'll bring cash and they'll you know pick a line or whatever right And they'll bet on these different soccer games or whatever it is. But when my friend and I went in and we were trying to, you know, understand the community and the culture and all this stuff.

And so the gentleman who was taking us around took us in and was explaining all this to us. And I saw a game playing on television, but it wasn't humans. It was a video game. And I looked around. I didn't see anyone playing the game, but it was obviously playing. And so I asked the guy, so, you know, what's going on there? He goes, oh, those are the simulated games. and so what do you mean the simulated games he goes well what can happen is if there's no live

games being played anywhere in the world and you don't want to bet on any of the upcoming games actually 24 hours a day i think it was uh there's these simulated games that play on the screen and you can actually bet on who's going to win the simulated game you're not in control right so you don't have the ability to play you don't know who is playing there's no human on the other side it's literally a simulated video game uh but people are making bets on it and so i asked him How popular is that? He goes, it might even be more popular in some of the games. It's very popular.

And so it was shocking to me how that was a version of esports to a degree, but there wasn't even anyone playing. Yeah. Imagine. So, as I mentioned, TabCorp is one of our investors, right? And they're the largest. They're a $14 billion wagering company based in Australia. They have these terminals where you can walk up. Horse betting is huge in Australia.

But they have these terminals where you can walk up and you watch like digital horses race. it's like 24 hour betting we're applying that thinking to esports and um we're releasing a product in the next three months that will allow people to you know to do something similar i'm like i can't get into too much detail but basically the idea is that right now that we cover a lot of different matches like there's thousands of markets that you can bet on on our product but um but the more markets you have the more products you have the the more likely people are to bet in different regions and things like that and given our expansion that we're we're in the middle of um that's really important to us so that type of betting that 24-hour betting is

really really key and um and as you said what you saw was like a version of esports but not really but imagine if it were games that people were familiar with that you could bet on absolutely why is like madden right so the the nfl version of video game why is that not as popular in the esports world as like let's say the league of legends or uh fortnite or one of those yeah it's it's a really good question so that's like a that's like a sort of a mainstream way of looking at it right you think about you know like madden nba 2k you know how do these things become more you know um interesting i asked because my brothers and i spent our entire childhood playing madden who was good yeah yeah so so let me just explain the the the ecosystem really

quickly um the games like dota and league of legends like you know csgo high functioning players um are tend to be um great collaborators they tend to be they tend to work well under pressure they tend to be really fucking smart like really good at math um they they also um they also can you know can make you know great like quick decisions and be really good leaders this is why many universities are actually offering scholarships now and in fact this year you'll see ivy league universities offering scholarships for top players because they want those type of students in their schools. They, these are, these are the best students that you could possibly get who play League of Legends or Dota at the highest levels. I mean, it is a very difficult game to

play. And I promise you, anybody who plays at a high ELO is super smart, right? Games like, like NBA and, and, and, you know, Madden and things like that. These are sort of, these were kind of one player games, right? They're kind of one player competitive games where you play against, you know, each other, the, the, the leagues are starting. So NBA 2K is a good start because they actually have team team play and team play offers a different dynamic than like a single one-on-one play um fifa has uh esports league now and so but they're they have like one or two players per team so it's it's something that they're starting to build and they're trying to turn it into you know something that it's currently not but it will it will

eventually get there it'll eventually be popular amongst a certain audience um the thing is though i i believe that the reason these other games are so much more popular is just because of the complexities and the you know all the variances that happen within the game itself interesting where do you think esports goes right so i've heard and i've actually tweeted this that esports will be more popular than the afl at some point in the future right and and i think it's just law of large numbers global audience right kind of uh trends etc but where do you think it goes in terms of in the united states how does this evolve do we literally see you know the traditional sports giving way to esports and it's like a binary one has to lose and one has to win do

they coexist does espn all of a sudden start covering esports right like how does this play out so espn is covering esports now right um the the the question is like where does it go i think i think esports can coexist with traditional sports i think for example you could say unicorn right now is an esports only company but in the future you could say that we're esports first. And we'll start to look at other sports that are esports friendly, for example. But to me, if you really want me to paint the future of where esports is going, I'm somebody who I heavily invested in a VRAR company based in Canada called Vervana. They just got bought by Apple recently. But what they were working on was really compelling. So they had a headset that

you'd wear like an Oculus, right? But the difference between this and the Oculus was this supported full vr but it also had cameras on it so you could do ar with it as well now what was unique about it the reason apple bought them was um you could be wearing it in this room and i could throw a football at you across the room and you'd catch the ball right because the latency was just like near zero now um now um there's these arenas that you can go into we can play like laser tag for adults basically there's a there's one in seattle called virtual sports you wear a vest you walk around with a with a fake gun with articulating feedback um there's sensors on your you know on your head on the vest and then there's tvs everywhere with like data and what's happening

in the game um and you're running around you're playing laser tag and um you know they they have different games they have capture the flag you know it's team based it's really fun now imagine that with with with uh ar like you're wearing aero goggles now and now you're being dropped into a map so now you're playing like real life call of duty against other players and then there's people watching on the top that are placing bets on the action that to me is sort of the future of esports where you have a blend of physical and virtual worlds what's the timeline for that to happen you think it's sort of happening like it's coming together now but i would say within five years we'll start to to see that in a you know in a bigger way really yeah and do you think in that

scenario uh what's holding us back is like people's desire to do that do you think it's the technology right so actually like the ar goggles themselves like why hasn't it happened already the technology the technology definitely has to be there and also you know it's it's it's like it's like a process right i mean these things develop over time they sort of they come out of nowhere people are like where did this come from in the first place well you know when when people say like how how is it that hundreds of millions of people are watching these games and i didn't know about it well it's because you're in a different world like you're a different generation right you didn't know because you're you're too busy watching espn on tv rather than looking at

what your kids are watching on Twitch. Right. And once you, once you sort of immerse yourself in that world, you can start to see where things are going. Um, and I think that's just, you know, the reality is it's sort of happening today, but it's happening in, in ways that are maybe not as obvious to some people. All right. Before we continue with this conversation, I want to mention our sponsor again, BlockFi. Remember they do crypto lending. So you posted your crypto as collateral. They give you a U S dollar loan, and you can use the U S dollars to do whatever you want. You should visit BlockFi.com slash Pomp and then tweet at me that you went. If you tweet at me after you went to BlockFi.com slash Pomp, maybe I'll throw you a like, a smiley face, or the fire

emoji. The fire emoji is the best. Remember, go to BlockFi.com slash Pomp and I'll see you on Twitter. Let's talk about the company and kind of this token that you guys have, right? Because I'm really fascinated by people who create tokens that have a working product and they use it as an incentive, right? So to either drive users, drive actions, you know, this isn't something that's new, right? We've been using streaks, badges, points, you know, kind of the whole nine yards as digital assets or digital products for, you know, incentivizing behavior for a long time, right? What you did was you basically created a token that would allow somebody to wager quote-unquote value, right? Although it wasn't accepted currency, it was a value on the

on the platform when you first started was it based on the blockchain was it not based on blockchain so when we first started no it was not based on a blockchain what happened was we were in the middle of getting our license in malta and and we knew that we're we're just about to get our license in malta for for fiat betting right and i put a call out to investors because we needed to open up a couple of bank accounts in europe and i don't know you know if you've ever tried to open up a bank account in europe but it's a real nightmare especially being in a highly regulated business like ours so i put a call out to our investors and i said hey we need to open up some banks in europe can you introduce us and within two minutes i got an

email from mark cuban who said are you guys looking at blockchain and this was like in late 2015 um and i said no not really not yet and he said well you really should um you know it's the future of commerce there's a lot of reasons why you as a regulated business would want to you know be on blockchain you start looking into it and and so we did um and and you know at the time we already had the unicorn going we had turned over a quarter billion unicorns in six months and you know we're looking at blockchain from the standpoint of as a regulated business how can blockchain technology help us right now imagine we're dealing with regulators on a regular basis they they care about things like aml and kyc um you know they care about

responsible gambling where where uh customers can have like a full history of their their bet history you know imagine putting it on a ledger you know that that can't be modified um and then on top of that we have this this coin economy that's going but but even before the coin economy we're thinking about how we could use blockchain to really help our business but more than anything how can we use it to to disrupt banking to circumvent banks like i'm not about breaking the laws it's more about circumventing banks which is like an old archaic system that that you know in reality in our business it's it's shitty like it if you build a really good blockchain platform um there is no better way to track AML and KYC than through blockchain on any fiat betting platform. And so

we were convinced, you know, we were building, we, you know, and at the same time, we started to pull our customers about the Unicoin. And we said, hey, you know, like, we didn't outwardly say, should we turn this into cryptocurrency? We started to ask them questions like, are you familiar with Ethereum? Are you familiar with Bitcoin? You know, have you ever traded like a wallet and this sort of thing? And what we're, what was crazy was 70% of our customers responded favorably and said they either trading or they were interested in it you know like because they tend to skew younger right so we knew then look we have a user base already we know that we can go do this that's when we created unicoin gold and and unicoin gold works just like unicoin silver

does except you can take it off on an exchange however there's a there's a few things that that's really unique about it so so customers can still connect their league of legends account or their dota account and they can earn these coins they earn both gold and silver coins but you can't just take the gold coins and then put them on betrix and dump them right you actually have to turn them over on the platform so you can use them in jackpots for skins um you can trade skins for coins so so not only can you use them in jackpots for skins but these skins have real world value right people come to our platform all the time and trade all their skins for unicoins and then you can also you know the future when at the time was you could also bet with them but we treat our

coins like fiat right so so we treat it like you know we need a license for this um and uh and so at the beginning when we launched the coin it was basically trading skins for coins uh entering jackpots um you know doing things that were like non-wagering related and uh and our plan was to make it so that you could bet with the coins on skill and also spectator games so we started to work on a license and it took us about a year we we worked with the island man and with malta and um and the isle of man you know they did a forensic audit on our token sale they looked at how we handled kyc on the sale itself how we handle forensic wallet you know forensic auditing on the wallets themselves um and we eventually got a license man we got this is why i've been

sort of bugging you i just wanted to tell you that look you know we're a company that's sitting in seattle we we we have you know we have a team that's sort of all over the world we have 93 people in this company and we just got a license we're the only put put aside any type of esports or whatever we're the only gambling company in the world with a license from the isle of man for live betting on sports esports online casino and skill right with fiat and cryptocurrency they've never given a license for anyone with cryptocurrency before and they did it with us because they saw how we built our platform and and now we have a license that's awesome so now we're doing this rollout over you know across 20 countries it's sort of a i'd call it a slow

rollout because we just want to make sure that everything is working um and including the u.s We're actually doing a, uh, you know, a launch in the U S imminently, like, uh, you know, it'll be, it'll, we'll, we'll announce it within the next two weeks. Um, and, uh, and it's going to launch across 41 States. We're launching a certain product across 41 States. It's legal in 41 States and, and you'll be able to use Unicoin gold as a, as a betting product in these States. That's awesome.

Congratulations. Thanks. The, the, what you're talking about here reminds me that, um, I saw an article, uh, recently that said uh for the first time um i think it was teenagers or young people uh for christmas it was like you know here's what people are asking for christmas and uh both bitcoin and uh fortnite vbucks yeah we're uh we're on the list and it was you know the article was basically saying look this is one of the first times that this has happened and it's becoming obvious that young people want more and more of these digital assets right yeah they don't care about cash they don't want cash

yeah that's right and and uh you know i'm guessing that that's going to continue right i don't see a reason why it would not um and so how do you you know incorporate that into the growth plan right so i'm fascinated by this idea if if you've got a user base that will only continue to grow and demand will continue to grow because more people will become aware of it people will get older or be replaced by even younger people who are still interested in this how do you leverage that interest to actually, um, kind of put, you know, rocket fuel on growth for a company that's in a space that, uh, you know, maybe couldn't have existed 10 years ago, but now today from technology regulation, right. Kind of consumer interest. Um, it's all kind of coming to a head at the right

time. Well, there's a couple of things. So, so the first thing I would say is the beauty of the coin or the beauty of having a coin or a token is, um, you know, we're, we're building a brand around it. You know, the idea of Unicoin is, is, is no accident, right? We're, we're, we're using it as a foundation for building community um and it's also a great way to discover new potential applications for our product like for example there's a there's a high-end pc company based in new jersey they're like they make the best pcs in the world they're like desktop ferraris they're called main gear pc um they they accept unicoin and to to uh to purchase their gaming pcs right um and and you know they also started to uh build these really cool mining machines that

you know that that are just i would describe it as like the bugatti of a mining machine it's just like a beautiful looking system um and uh and and they you know they're creating applications around cryptocurrency uh using using our coin but also just you know kind of thinking about crypto in general as a as sort of a different use cases and so it's like a neat way for us to discover interesting use cases um there's other betting products out there other companies that are approaching us who who want to build on blockchain and don't know how so they want to license some of our technologies um and it's just it's just a really great way for us to discover what's coming in the future and then from a standpoint of virtual goods there's really the gaming industry

is crazy i mean the skin industry i don't know how much you know about it but let me just give you a little bit of insight as to how big this industry actually got until at one point there was uh there's skins in in steam in valve in in a game called csgo that are super popular and they have a real world value outside of the game and the way people purchase these skins is they buy keys for chests a key is two dollars and fifty cents and the chest you open up a chest and you'll get a skin now some of these skins are super rare and they trade on a secondary market because valve created an api that allowed people to trade these skins some of these skins man they sell for five thousand dollars um you know there was a skin that that sold at auction for 60 grand last year

it's it's stupid right and these are skins that just basically modify the look of your character in the game or your weapon in the game and a couple years ago they there were sites out there across eastern europe in different places that allowed people to connect their steam account to their platform takes about 10 seconds and then play games like dice and roulette and these were all rigged games this became the underpinning of the largest underage gambling ring in the history of gambling there was over two billion dollars turned over in in in illegal gambling uh with skin betting and um and it was horrible i mean 13 year old kids were getting blown up you know betting on games that they didn't even know what they were doing but they were losing all their

skins and eventually valve you know got got some major heat for it because effectively their api was enabling this even though they weren't behind it uh they knew that it was kind of happening and they started to send out cease and desist to all these different sites um i guess i guess what i'm saying is that there's that sort of opened up the opportunity that there is a there is a market for for betting in the space, but it needs to be regulated. It needs to be, you know, 18 or over and that kind of thing. And then, and then, sorry, the second part I want to say about this is, um, e-sports betting has opened our, has opened the eyes of casino operators. How often do you go to Vegas? Do you go much or? I've been. Okay. So look, I go to Vegas all the time.

And if you walk through the, through the slot machine area, which is the highest sort of revenue generator for the Las Vegas casino, you'll see more wheelchairs and walkers per square foot than anywhere else in the casino, right? There's basically 150 year olds using these machines and they tried everything. Like they're trying to make these machines more fun for younger people. So they retheme it with Britney Spears

and they put music on it and they have Pitbull and all this stuff and they make it like almost like a dance club, but there's still a hundred year olds using these machines. Young people hate slot machines, right? So we started to push on the MGM and other casinos saying,

look, you guys should just like move some of these slot machines and like let's set up an e-sports lounge and see what we can do with it. And now we actually do that. We actually have an esports area inside of the MGM Grand where it's like a high-end card room where people can go in and play Fortnite on Fridays

and they can sort of do a buy-in tournament like a card game, right? But eventually we see it where people will be able to go off to a machine. They'll be able to bet on themselves in that machine. And then the cage just sort of pays them out. We also worked with them on bringing cryptocurrency onto the strip so it was interesting work with the nevada gaming commission and we said look we

we just want to use unicoin gold as a means of incentive and prizing in these tournaments and we actually got approval for it last year to do it we're the first you know first and last i think company to to be able to bring a cryptocurrency on the strip um and you know we we did it in in ngm you know a few times we ran it a few times and then mgm sort of wants to kind of evaluate where this goes but i think crypto in in a casino has a really really good place like i think this is a natural fit with the whole chip economy and things like that being able to track these chips on the blockchain you know that sort of thing just seems like a natural fit and i think all these guys are really actively looking at the space they just don't know how to get in yet

that's awesome yeah what's the biggest uh challenge for all of this to uh to come together man it's time well no you know you know as i know right i've seen you on tv talking about this stuff and it's really just belief you know like it's so frustrating like bitcoin bitcoin goes goes up hard and then it comes down hard right and we've seen it do that multiple times and we know that it's going to go up again and we know that the next bull market will be bigger than the last bull market but maybe more focused right maybe there won't be 2 000 coins maybe they'll be like 200 And that's a good thing. It's like a healthy kind of, you know, pruning. Yeah. Healthy pruning. And it has to happen. The frustrating part is when you're dealing with sort of mainstream investors or, you know, just like companies like partners, things like that. And you're talking about it using the word crypto is either you're going to get different reactions. Right. It's either going to be really good or really bad. and and and imagine you're a company that's sitting at the intersection of regulated gambling so we're

already dealing in a highly regulated industry blockchain which is not yet regulated but they're trying to regulate it they don't know how to regulate it and then you know and then video games right so we're that's the challenge for us is where the good thing is we're comfortable dealing with regulators and we do it all the time the the bad thing is there's there's still sort of uncertainty around how to regulate you know crypto and how to regulate um you know icos and things like that there was just too many scams last year and it just made it really hard for companies like us to to sort of emerge right and and to kind of expose ourselves because if you look at it if you look at like coin market cap which i think should be completely changed right

but if you look at coin market cap and you and you say let's say the top 100 coins i hate to say this and i and you know this probably isn't a very popular opinion but like i would say 97 maybe 95 percent of all the coins in the in say the top 2 000 or whatever the 2 000 coins are going to disappear and and five percent of them are probably three to five percent are going to be like stellar winners but they're but they're buried underneath a pile of crap and for us uh crypto is about being discovered right it's about um like working with an exchange in in south korea for example is about discovery for us right it's about you know somebody seeing our coin and saying wow what does this company actually do and and you know versus say speculators who just want to buy and

dump it and that sort of thing we we want users to discover us and actually use our platform so there's those are some of the challenges and then and then the other challenges there's a ton of greed in the space right um we we we believe i believe exchanges are about discoverability they're nothing to do with access access is a totally different animal so imagine you are a customer of unicorn right and you want to bet with unicorn gold yes you can earn the coins on our platform but let's say you want to bet like a hundred thousand unicorns on something you want to be able to acquire those coins so in the past you'd have to go to coinbase you'd have to buy some bitcoin you'd have to then take your bitcoin go over to say bittrex and then and then deposit

your bitcoin onto bittrex and then from bittrex you'd have to convert that to ukg and then take it off to me like the experience is completely stupid right so we worked with bittrex which by the way bittrex i think is the best exchange uh on the planet they are they are so good because they actually work with us on the platform itself and and they helped us build uh access to our token so we have a system where you can actually pay with credit card come to our website swipe your credit card buy your tokens right off the market and it comes right off of bittrex's market um it doesn't work in the u.s yet but it works outside the u.s and around the world and that's about to me that's about access so the frustrating part for me is like many of these exchanges in the

last year were charging massive listing fees uh to tokens right and you know as you know many of these tokens don't even have a product yet yet they're paying like hundreds of thousands millions of dollars for listing fees and now you know with liquidity the way it is they're coming back and saying oh by the way you know your liquidity isn't there so therefore we want to charge you market making fees here's our fees for market making and so guys you know what you're doing is you're basically stripping out this ecosystem of any type of innovation at all by constantly charging for stupid shit versus helping them actually instead of thinking about exchanges and liquidity you should be thinking about how do we turn our exchange into a platform and how do we help

these companies actually build and innovate so that we have a long-term business here and you know the funny thing is as soon as we say no to that uh we got another notice from another large exchange saying okay well we need we need large deposits now to protect our customers like Yeah. Like, you know, and that's where I just say like, you know, GFS, like just, just it's just like, I'm just done with that, you know? And, um, and, and so that's why I think there just needs to be more sort of thought around people talk about the ecosystem and they care, then they should actually put their money where their mouth is and start showing that they care and they want to help innovate. Skin in the game. Yeah, exactly. Um, all right, before we wrap up,

I do quick, uh, kind of rapid fire. Um, what's the most important company in crypto other than your own uh i i it sounds biased but i say bittrex bittrex yeah interesting yeah definitely anyone's ever said that before yeah i'd say bittrex because they work with regulators in the u.s they're based in the u.s um they are though i believe one company along with say coinbase that's that's working to sort of legitimize crypto and legitimize you know blockchain with with huge implications um when you think about things like uh you know the the future of the security token and by the way people look at they think about security token they think oh it's just about equity in a company and on a token it's not it's way more than that if you uh the idea of a

blockchain security token can be it could be profit sharing in a product it could be short-term loans it could be long-term it could be based on real estate assets it could be on a number of different things and you know these guys are working actively to legitimize the idea of a security on a token and uh and do it on an ats some sort of alternative trading system so definitely bet trucks i think very cool what what is the one regulation that you would change or improve if you had a magic wand and can just wave it um well i i think i think i would say that um it's not about regulation as as in i want clarity so if i could change one thing just give us clarity you know stop telling us to look at uh laws from you know 100 years ago and trying

to apply it to blockchain um if you don't fully understand you know what what the the products are actually being built so for us regulatory certainty is more important than anything else this is why we're working in malta um because in malta they're very crypto friendly but but i promise you even though they're crypto friendly doesn't mean you can just go there and set up a scam i work with regulators there and they are hardcore but the nice thing is you have regulatory certainty so you can operate and innovate in that type of environment i worry for the u.s you know to be honest i worry that the language they use sometimes scares people scares companies who who really are trying to build something right who really want to build the next generation internet

here in the u.s otherwise we're going to lose like the the next twitter the next facebook the next amazon those types of companies they're going to end up somewhere in like friggin malta which is really stupid right i mean we we really need regulatory certainty to enable to to encourage innovation here and like safe innovation and not go out and like use language that scares you know people into not wanting to do business here for sure uh most important book you've ever read um hmm um i i've read a lot of books i i think uh a brand new deal i i really like that one. It's probably a book that no one's read ever. It's made by a guy named Scott Bradbury, who basically talked about brand. And I learned a lot about brand. I learned that a brand

is more than just a logo you put on your t-shirt. A brand is effectively, it starts with, first of all, a great product. You have to have a killer product, which is important. But second thing you have to have is you have to have a great team, a great culture. Now, many companies would say, oh that's that's basic stuff right the part that they miss is you need a fan base if you create a fan base then you have you know people that are going to carry you on your back when you're down and out right if you have those three components the foundation of it becomes your brand and i sort of gleaned that from that book yeah very cool um the only non-crypto question i ask and then you could ask me a question uh we have to admit that aliens are real and uh every single time

aliens are ever depicted it's always as a human-like comparison right obviously we have multiple types of species here on earth uh do you think that there are alien pets or alien animals or are they all just alien humans uh no i i think that there's i definitely think there's alien animals i believe there's uh life outside of earth for sure um and uh and i think it's all kinds of life so yeah do you think that those aliens i never asked anybody this before do you think those aliens uh are likely to know about us i think there's probably more advanced civilizations that know about us yes absolutely interesting all right um i won't ask you why you think they haven't contacted us yet or maybe you think that they have maybe they have all right we won't go

down that rabbit hole um what uh what one question do you have for me i want to ask you about tesla i'm interesting okay i want you to tell me what you think the future of tesla is in the next five years and i'm going to tell you what i think um the next five years so i'm going to cheat and i'm going to say that uh i'm going to remove the time frame sure right so just what do i think the future looks like for tesla um i don't have any kind of inside knowledge i don't really know anything other than what people externally have but um i will describe a world i believe can happen right and i've got a lot of heat about this but i i don't think ultimately tesla is a car company right i believe it's a power and energy company um i believe that uh what is happening uh that

a lot of people are not paying attention to is a complete disruption of the energy market and it's coming at it from a consumer standpoint so we've had a ton of different renewable energies and you know all these different types of energy sources that are you know supposed to be cleaner better you know all this stuff what no one's ever been able to do is figure out how to get the consumer to demand those better types of energy right and so the best way to do that is actually not to sell them energy it's to sell them a consumer experience that they want that's better and i'll make the comparison to the blockchain space a lot of people argue decentralization is better than centralization but when you just go around you say i'm building let's say the decentralized facebook

nobody is willing to leave the centralized facebook for the decentralized facebook just because it's decentralized exactly you need to build a 10x better product or more to get them to switch and you actually don't have to tell them that it's decentralized even if it was on blockchain no and if you build a better product people will switch right and whether it's facebook but you know any product which is facebook an example and then oh by the way it happens to be decentralized it's just an added benefit yes go back to the tesla example they've built a better car yeah right and so they get people to buy the better car and oh by the way just happens to be electric yeah right yeah and so i think that that's the innovation and the beauty of what

musk has done here is he's convinced people to demand an energy source right without actually asking for just the energy source like i don't i don't i fundamentally do not believe that most people who are buying teslas actually want teslas because they are electric i think they want teslas because they believe they are better cars yeah and that's really really important and so i think that will continue over time and i think that he's going to hopefully do this cars the charging network right the the home uh wall unit right the the shingles all of these different things that he can uh you know kind of he's already showing um if he can keep changing the consumer demand to demand the products i think it's better not just because it's you know got this energy source

i think that he can fundamentally change the way that we consume energy i think it's an amazing uh it's it's i i'm lighting up because you're saying something that i fundamentally believe that they're not a car company right and that they are uh you know i think there's an ai neural network part to it as well you know i don't know if you've driven one uh but i i i drive i'm a car nut so i drive Teslas. And I can tell you that, you know, the idea of autopilot and having other cars on the road is really interesting. I think Apple is going to buy Tesla. I think Apple, if Apple doesn't buy Tesla, they're in trouble. I think Google will buy them. And I think Tesla would be better under Google than under Apple. But I think Apple is going to try very hard to buy Tesla. I think

they'll make Elon Musk the CEO or the chief visionary. And then, you know, Tim Cook will do, you know, something around operations and, you know, operational CEO or something like that. apple needs tesla big time they need that type of innovation back in the company it's just it's just not the same company as it used to be it would be wild to see tim cook and elon musk co-operating a company together yeah i don't know if that's good or bad i have to think about it more but that would be a that would be a very interesting world and i wonder if they could coexist yeah and you know the idea of tesla 420 you know fun secured is just to me it's cheap i I just cannot believe what's happened to them in the last year with the SEC and all the other

stuff that went down. But people underestimate Tesla. If they do, they're in trouble. Awesome, man. Thank you so much for coming. This is a lot of fun. I appreciate you dropping so much knowledge about esports. It's a fascinating industry. I think you guys are doing cool stuff there. Yeah. Thanks for having me. Appreciate it. All right. You reached the end of the podcast. Congratulations. I appreciate you listening all the way to the end. You deserve a trophy. But before I hand out the virtual trophies, remember to go visit blockfi.com. They're the crypto lending leader in the US. They do it in 45 states, interest rates as low as 8%, and you can use the US dollars funded directly to your bank account to do whatever you want. You should definitely go visit blockfi.com. You know you want to do it, so just do it. Blockfi.com. slash Pomp. Hey everyone, Pomp here. If you liked this episode of Off The Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor

and rate, review, and subscribe. To review, simply go to the Off The Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off The Chain. Thank you.