The Pomp Podcast - Yoni Assia on eToro Adding NFTs To Their Balance Sheet #903

Episode Date: April 7, 2022

Yoni Assia is the Founder & CEO of eToro. In this conversation, we discuss NFTs, Portfolio Tracking, The Metaverse eTorro.art, and eTorro's brand new announcement of adding $20M of NFTs to their balance sheet. ======================= The Pomp Podcast is powered by BetOnline.ag, the world's largest sports betting, casino, poker and horse racing website that accepts cryptocurrency for wagering. BetOnline.ag gives you the ability to use Bitcoin and more than a dozen altcoins to make deposits and withdraw your winnings. There are no crypto transaction fees, and processing is instantaneous and secure. Visit https://promotions.betonline.ag/pomp and use PROMO CODE: POMP100 to receive a 100% matching bonus on any crypto deposit. BetOnline.ag is available in nearly every country around the world, making it the top global gaming destination for crypto users. ======================= Since 2018 Copper has been at the forefront of institutional digital asset development.   From award winning custody solutions, to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services, in lock-step with a rapidly changing world.    No other infrastructure provider covers as many assets, across as many exchanges, with the speed and security that Copper can offer. To learn how Copper helps the world’s largest institutional investors secure their digital assets, head over to copper.co   Copper - the unfair advantage. ======================= Bullish is a powerful new digital asset exchange built for institutions that delivers the innovations of DeFi in a regulated environment. The Bullish Hybrid Order Book pairs the high-performance of a traditional Central Limit Order Book with automated market making. Powered by deep Bullish Liquidity Pools, backed by the multi-billion dollar Bullish Treasury. So, you can trade with certainty and at scale across variable market conditions.   Learn more at Bullish.com or follow @Bullish on Twitter. Because the future belongs to the bullish.   *Not investment advice. Digital assets and cryptocurrencies are high risk products. Consult your professional advisor before dealing in them. Bullish’s services are available in select locations only and not to U.S persons.    Visit https://bullish.com/legal for important information and risk warnings =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Yoni Asiya is the founder and CEO of eToro, the leader in social trading. In this conversation, we talk about NFTs, the metaverse, NFT portfolio tracking features, eToro.art, buying $20 million of NFTs to put on the eToro balance sheet and much, much more. I really enjoyed this conversation with Yoni, and I hope you enjoy it as well. Before we get into this episode, though, I want to first talk about our sponsors. Today's episode is brought to you by BetOnline.ag. BetOnline.ag is the top spot for all of your sports betting, casino, and poker needs. It's available on your

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been at the forefront of institutional digital asset development from award-winning custody solutions to creating the first truly off-exchange settlement function copper pioneers technology products and services in lockstep with a rapidly changing world. No other infrastructure provider covers as many assets across as many exchanges with the speed and security that Copper can offer. To learn how Copper helps the world's largest institutional investors secure their digital assets, head over to copper.co. Again, Copper, the unfair advantage. Check them out at copper.co today. This episode is brought to you by Bullish. Bullish is a powerful new digital asset exchange built for institutions that delivers the innovations of DeFi in a regulated environment.

The bullish hybrid order book pairs the high performance of a traditional central limit order book with the automated market making. Powered by deep bullish liquidity pools backed by the multi-billion dollar bullish treasury. So you can trade with certainty and at scale across variable market conditions. You can learn more at bullish.com or follow bullish on Twitter because the future belongs to the bullish. Now this is not investment advice. Digital assets and Cryptocurrencies are high risk products. Consult your professional advisor before dealing in them. Bullish's services are available in select locations only and not to US persons.

Visit bullish.com slash legal for important information and risk warnings. Go check them out at bullish.com or follow at bullish on Twitter. All right, let's get in this episode. I hope you guys enjoyed this one. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement

to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I have Yoni back. I think this is your third or fourth appearance on the podcast. People love when you come on.

You're one of the earliest Bitcoin investors. You were around when Ethereum was created. You've been through a whole bunch of stuff. Today, we're going to talk about NFTs, the metaverse, and what you guys are at eToro are doing with this, which is pretty crazy that you're one of the first companies to, again, pioneer a specific approach. But let's first start with the NFTs. Why are these important? What's kind of your read on NFTs? How do you evaluate them as part of the market?

So first of all, I think my feeling regarding what's happening in the NFT space right now is similar to when we saw Bitcoin very early stages in 2010, 11, 12, and sort of the first rally towards Mt. Gox in 2014, similar to when we saw sort of the first ICO waves, which continued. People forget that that continued and we see more and more token issuance back in 2017, And I think what we're seeing now is basically the emergence of a new asset class. The reason I think that asset class resonates very well with us and with others is a lot of people are coming into the NFT space from outside the NFT space. So it's the first time we're seeing a lot of celebrities, DJs, musicians, people from consumer goods entering into the space.

And I think this has become an asset class that actually is expanding the crypto universe, which is great for the entire ecosystem and also brings in culture, brings in people who are not crypto geeks into the ecosystem. So when you think about an NFT, do you subscribe to the idea that these are just digital property rights that now can be enforced on unique items? And then that is applicable to art, it's applicable to music, but it's also applicable to a bunch of like crypto native stuff. Like, how do you evaluate? Is this just taking offline things and bringing it onto a blockchain? Or is this actually creating brand new opportunities of assets that maybe didn't exist before? This is definitely creating brand new types of assets, opportunities. The way I describe it is, if you think of it, it's interesting to see you have Nike, Adidas, and Puma all entered into NFTs. And when I try to explain the logic, the way we see it is you look at a sportswear company and they say, we can sell in a specific region. The total available market is 5 million sports shoes. We can be 20% of the market. That's one million sports shoes. And when we sell a shoe, we sold it. That's our entire income.

Now, if we can actually create digital shoes, the total available market potentially is infinite, right? Because people have infinite place in their digital closet. The pricing of those shoes, surprisingly, right now is actually higher, right? People are spending on NFTs more than they would spend on sportswear. So the total available market increases potentially indefinitely, and the cost of creating those digital shoes potentially is zero versus regular products. So you look at a lot of consumer brand companies that are entering this space and they're saying, OK, if we can do this digital transformation into the metaverse, we can actually scale up significantly our business and our margins to become more like tech companies. And the same applies to a lot of different industries, whether it's digital on its own, or whether it's connecting digital and physical, if you think about things like, you know, guitars, collectibles, wine, potentially, or whether it's pure digital art, which is how I think of PFPs, and obviously, the more sort of high valued Beeple X copy art. all of these create an opportunity for creators because of the royalties, right? So people,

creators are used to selling things once. And we all understand now the value of money and inflation. Everybody's talking about inflation. So if you're selling something and you assume it's going to sell again five, 10 times over the next 20 years, and the value or opportunity of what you're selling in value will increase over time, then why not enjoy if it sells another 10 times and you make 5% every time, and on average, it increases by at least two times, you can actually make more money on the royalties than you'll make on the initial sale. And I think every single business that potentially can look at digital goods is now realizing that basically this, you know, running revenue that almost SaaS-like revenue to a consumer good business

is something that you have to explore. When you start to think about this, how important is intellectual properties, right? So obviously an X copy or somebody like that, they're creating brand new IP that is becoming popular today in kind of the modern age. You can think of these as living artist equivalent in the art world versus the Nikes, the Adidas, the Pumas, you know, name your, uh, kind of existing web two or earlier company that has intellectual property that's been built up for years. You could even see Disney getting into it and having kind of offline IP that eventually becomes a digital. Is it one or the other, or do you think both can actually find success in this new digital kind of NFT based world, as long as it's some sort

of intellectual property or brand that people, uh, adhere to? I think it's a combination. I think it's definitely both i think it's the connection for you know between the ip or the brand and global communities right so it's suddenly a way to create also brand new community if you think about the apes right or the punks that's completely brand new communities that emerged out out of the nft space right almost regardless of the art the community is actually stronger than the art or Maybe the community is the art in those cases. I think that we will see a lot of different opportunities. If we think of digital assets until now is, I was in a banking conference recently and

people talked to me about the opportunity of digital assets. And I said, what's the alternative to digital assets? Are you talking about analog assets? So are you asking me whether digital is going to beat analog? That there's only one clear, inevitable answer. Everything in the financial services world is eventually going to move through digital transformation into digital assets that are 24-7 and are exchangeable globally. Now, that same transformation that I think for a lot of people was obvious on financial services, but it's going to take a long time on traditional financial services because those are very large traditional players that are moving at their own pace. Now we're seeing the same digital transformation happening to basically consumer goods or to collectible goods.

Now, collectibles as a whole is a $7 trillion market, right? It's the size almost of the gold market. So even if you only think about art and collectibles, it's a very big market. If you think about brands and IP and Hollywood and the opportunity of Hollywood sort of taking celebrity mode into this world, if you connect the world of sports like we've seen DraftKings do, then you understand this is actually bigger than just collectibles. This is now an asset class on its own that in the past wasn't traded or exchanged because it was all owned and sold. And that's a very big opportunity in a very big market. Talk to me about, at eToro, you guys launched portfolio tracking for NFTs. And obviously, this idea of social trading, copy trading, you all pioneered for quite a number of years now.

Why add this to NFTs and how are users reacting to it? So last week, we launched our Delta Portfolio Tracker, which today enables you to track, I think, about 50,000 stocks and about 16,000 cryptocurrencies. So you're able to connect your wallets and look at your own stocks and cryptos, or you can connect the brokers, exchanges, etc. And we've added support to NFTs. And just by supporting Ethereum NFTs at first, we now have over 45,000 collections. And I think it's over 10 million NFTs on the Delta platform, which enables you also to connect your own MetaMask or other wallets. So you can actually track the value of your NFT collection on multiple addresses and eventually multiple blockchain within one place. So our view has always been that at eToro and Delta, we want to enable you to look at all of your assets, whether it's stocks, whether it's capital markets or commodities, or whether it's cryptocurrencies.

And now we think this is a new, interesting asset class that people need help to track, to explore, to get updated about what's happening in prices, etc. Now we're going to launch eToro.art. We're very excited about this. So very similar to 2011 when we started buying Bitcoin for when it was $5 and $10. And that was an interesting, constant dialogue. I think over the last couple of months, we started basically building our own art collection and we are deploying $20 million to support the ecosystem, to support creators, both blue chip project and new creators, new collections to build our own art collection. So if you think of the same, I see your shirt, JPEG Morgan. So if you think of the JP Morgans and the Goldman Sachs in the world, when you come to their real offices, you'd see their art collection.

For us as eToro, as a crypto native fintech company, I think this is a great opportunity to basically build our own digital art collection. And it's a way for us also to jump into the industry and to support the industry. When you start to think about how users are actually playing here, what's the kind of end goal? Do you think that most of the folks who are already on the platform are going to add NFTs? Or do you think that this is a brand new user base that comes in and uses some of this? It's probably a combination of both. We did some survey with users and we were surprised by how few have already been exposed to NFTs. So by far, the vast majority of eToro users currently do not have NFTs or have not bought NFTs. It's still, although it's been in the headline and everybody's talking about it, it's still relatively a small, very active, rich crypto community that is NFTs with a lot of externals

coming from sort of the, I'd say the celebrity world, but it's still not completely mass market. I think that's a huge opportunity. So I think it's a combination of both helping eventually our 27 million users understand what is this new asset class? How do I look at it? What's the risk? What do I need to know in order to buy something? And again, it's more of a digital good than a digital asset. And at the same time, I believe we'll see an influx of new users who simply need a better user experience in order to explore the NFT space. How much of NFTs have you guys bought? How much money have you spent to put NFTs in your balance sheet?

I think the value of the collection right now is about $4 to $5 million. We bought some metaverse land and the big metaverses. We bought some apes, some punks, some doodles, world of women. Azuki, Clonix. So we went really through all of the sort of blue chips, as well as some collections that we were sort of supporting the collection as we learned the space. When you think about what to buy, are you calling the shots? Do you have a team that's analyzing for economic reasons? Are you just trying to figure out things that are kind of culturally relevant? What's the decision process? There's an investment committee. So similar to,

Bless you. So similar to how we run our smart portfolios product. So on eToro itself, you can buy, for example, the DeFi portfolio, which is a combination of all of the DeFi protocol tokens listed on eToro. So you can with a click of a button invest just in that portfolio. And we have a Metaverse portfolio, which obviously is related, but also includes companies like Meta. meta. So both stocks and crypto around the metaverse. And that process has always been led by our investment team and sort of structured with an investment committee. We're doing the same process just for the NFT space. We're looking at projects. I would say, as always, the first thing we ask ourselves is, you know, is this project here for a long period of time? Do we think it

has a strong community around it? Does the community appreciate sort of both the art and the combination of the art and the community? But we're looking into various, we're looking into, you know, the PFP collections, the blue chips. We're looking some into sports. We're interested in what's happening with intersection of music and NFTs. So we are looking sort of to look at a diverse way of the world saying this is interesting and we want to support the ecosystem. But yes, we're doing it because we also believe in the value appreciation of potentially these assets. How many are you going to buy? Do you have a target number in mind of how much you're actually going to purchase? We currently are announcing a $20 million deployment.

So you're going to buy $20 million in total. You're about 25% of the way there. And is there a way for people to submit, like if they want one of their pieces purchased by you? We'll have on eToro.art the ability to connect with our team so we can learn about basically new collections, about existing collections. We have our own NFT analyst team, which will look on various types of basically how to partner with these collections. And when you think about the art that you are buying, are you going to eventually create like a museum in the metaverse or maybe in a physical place to display these? Already on eToro.art. So the whole idea is basically, one, you're supporting folks. Two, obviously, there's some economic potential upside here.

But really, this is eToro's big play to get into NFTs. You got the portfolio tracking. Now you guys are putting NFTs on the balance sheet and you will continue to kind of innovate products there in that space. Are you the first company that is not crypto native from like the start to put NFTs on the balance sheet? I don't think I know of another one. Maybe Visa bought one? Yeah, I think Puma bought a couple. So we've seen some that are buying sort of a few.

I think we're the first fintech that's basically looking at this the same way as sort of traditional finance companies are looking at their art collection, being able to present our art to communities that potentially will explore in the metaverse, whether it's, you know, in the sandbox or decentralized is something we're looking at or buying land in order to put art there in order to basically bring in people to enjoy the art. Got it. What about yourself? You own any of this stuff personally? I know that you're big in Bitcoin and you're big in Ether. What's your personal decisions here? I'm also an ape and a punk. So obviously these are pieces of history. I think they will definitely resonate with us. And interestingly enough, now we're both owned by Yugo Labs, which is crazy. And yeah, I'm a small collector myself as well. All right. Just checking.

What should people do if they start getting into NFT? Should they go and go to etoro.art? and is there any educational materials or how do they learn more before they get started? So they can download the Delta Portfolio Tracker. They can start exploring. They can set up basically their wallet there to track. Their NFTs will be launching more functionality.

So you'll be able to access various marketplaces as well and multiple blockchains in the future. We'll be able to connect between eToro and the world of Delta into the world of Web3. So our approach here is going with NFTs Web3 versus sort of CeFi versus DeFi. So we do believe NFT for us is that bridge from CeFi to DeFi as a company. And Detour.R just shows, you know, where we put a bit of our money, where our mouth is. I would say that this is obviously high risk, less liquid market.

So, you know, if we go all the world from traditional regulated finance of value stocks to growth stocks to crypto, then this is definitely you're going into something that the risk is having no liquidity, right? That's the biggest risk in NFTs. I would recommend people to really buy something that they want to hold, right? So people can become NFT traders, which is interesting, but requires a lot of skills and understanding of those market dynamics. But as a first step, I would just look at the trending NFTs on Delta and figure out which one do I fall in love with? I always respect the fact that not only are you early, but when you decide that you're

going to go, you do it with conviction, my friend. And I think this is just another perfect example of where you've identified a market opportunity. Not only are you all building products, but you're actually putting your money where your mouth is and you're providing the opportunity for a number of individuals that are users to get exposure as well. So it's pretty cool to see. Where can I send people to follow you on the Internet or find out more about eToro? Just eToro.art? Well, eToro.art for our NFT collection, at Yoni Asia, my Twitter, and at eToro, which is eToro's Twitter, which is now part of the Musk Tesla family. Maybe I should say Musk Tesla Dogecoin family. Now suddenly Twitter is connected. I can only imagine some of the ideas that are going to get floated in the board meetings as

the things that they could possibly do followed by Elon laughing to himself about wouldn't it be crazy if but uh I tend to think it's probably a pretty good thing for Twitter so let's uh let's see what happens all right my friend thank you so much for taking the time to do this congratulations on uh on the announcement obviously putting uh 20 million dollars of NFTs in your balance sheets no joke and I think people really enjoy uh using the new products so we'll definitely talk again as you guys come back and say, hey, remember all those NFTs we bought? Look at how smart we are in like two or three years. We'll just enjoy looking at them in any case. Pomp, thank you very much. Enjoy Bitcoin Miami. All right. See you, buddy. Thanks so much

for listening to today's episode. I really hope you guys enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. head over to palmscryptocourse.com we've developed a curriculum with the top teams across the industry it's a three-week intensive training program with over 50 events packed into that three-week time period go to palmscryptocourse.com to learn more and i'll meet you guys for the next episode