The Vergecast - Steve Aoki on why he’s a ‘crypto believer’

Episode Date: April 1, 2022

Vergecast is on spring break this week! In the meantime, check out Nilay's discussion with Steve Aoki from this week's episode of Decoder with Nilay Patel. Steve Aoki is a superstar DJ, producer, record label owner, and prolific entrepreneur. He has been part of the music industry since 1996, so he’s been through a lot of these big tech transitions, and now he’s heavily invested in another, with Web3, the Aokiverse. It involves selling tokens and NFTs and, over time, is meant to be part of the metaverse. Because, of course. Subscribe the Decoder in your favorite podcast app. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hey everybody, it's Nealai. I'm on spring break this week, so there's no Vergecast. But I didn't want to leave you without something to listen to, so we're going to run this week's decoder on the feed. It's an interview I did with Steve Aoki, the Superstar DJ. Steve recently launched a whole NFT and Metaverse situation called the Aokiverse. I'm always interested in how tech and music influence each other, so it's a pretty fun one. I hope you enjoy it. The Vergecast will be back next week. Support for the show comes from Retool. Too many companies run critical operations. on duct-taped spreadsheets, Slack workflows, and whatever else they could cobble together. Not because they want to, but because building internal tools means weeks of waiting on someone else's backlog.

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Verchcast. We all need to retool how we build software. What's up, y'all. I'm Skyler Diggins, seven-time WMBA All-Star, Olympic gold medalist, and mom. And I'm Cassidy Hubbard, host and reporter for nearly 20 years covering the biggest names and stories in sports and mom. And this is Am Mom, a community for athletes, game changers, and moms of all kinds. Dropping May 14th. Tap in with us. Hello, and welcome to Decoder. I'm Neel Patel, editor-in-chief of the Verge and Decoder is my show about big ideas and other problems. Today I'm talking to Steve Aoki, the superstar DJ, producer, and prolific entrepreneur.

Steve owns a label called Demok, and he tours more than anyone. There have been years where he's played over 300 shows. And now he's launching a big Web 3 project called the Aokiverse, which, of course, involves selling tokens and NFTs, and over time is meant to be part of the Metaverse, because, of course. Now, I have always been utterly fascinated by the constant back and forth between tech and the music business. New tech makes it easier to create and distribute music, but every time that happens,

the business model of the music industry changes. And my pet theory is that whatever happens to music today is a preview of what will happen to everything else in the future. Take streaming, for example. Spotify came to the United States in 2011. before Netflix had even done House of Cards. And now, as I sit here recording this, Apple and Netflix are contending for the Best Picture Award at the Oscars.

Steve has been part of the music industry since 1996, so he's been through a lot of these tech transitions. And now with Web 3, he's heavily invested in another. So I wanted to push on how he makes those bets about what's coming next, what the business of music is like for him today, and how he sees it changing. There's a lot of hype when it comes to artists and NFT, so I wanted to try to understand it from the perspective of a very successful artist, who also happens to be a pretty active investor. And of course, I wanted to push on the hype around the Aokiverse itself. Steve calls it a social club that will combine Web3, Web 2, and IRL experiences.

What does that really mean? And how is he going to manage that community? Like all blockchain entrepreneurs, I also wanted to know how he was thinking about the energy use and climate impact of this project. This one takes a lot of different turns. We talk a lot about how Steve manages his time and all the different roles he plays. And at one point, he even manifests a future music collaboration. I think you're going to like it. Okay, Steve Aoki, here we go.

Steve Aoki, you're a DJ, you're a music producer, you're founder of the Aokiverse. Welcome to Decoder. What's up, guys? Thanks for having me. Yeah, I'm very excited to have you. I am personally fascinated by how art and business work together, especially in music. My personal belief is that whatever happens to the music business happens to everyone else five years later. And there's like a lot going on in music right now between

NFTs and blockchain. You've got the Aokiverse, which I want to talk about. But I want to just start with some foundations so people can understand kind of how the business was working. Yeah. So before COVID, before NFTs, before kind of everything went upside down. What was your business like? How did how did work work for you? Outside of music and touring, like a primary part of my business was investing. So once I started making money, say like late 2000s. It was when the DJ actually came through a full bore and started seeing some income. That's when I started doing some small investments, restaurants mainly. My family's been involved in restaurants since I was born. My dad was a

restaurant tour. So I was like, oh, I might as well invest in something like that. So I kind of went into that world a little bit. Actually, as difficult, of the business restaurants are in general, then nine out of ten restaurants fail. Yeah. You know, it's like a very, very high likelihood that if you open something like nightclub restaurant, it's very well known. It's like 90% chance it's going to fail. But it's doing very well for me for the past, I guess, like 10 plus years.

And then I got into like properly investing and then understanding how to position myself in that space. I started a fund with Eminem called Eminoke. That's pretty good. Yeah, it was private fund. I mean, it was just our money. And we basically were just getting into rounds of like more late stage investing, like Uber, Pinterest, Spotify, gone to SpaceX.

You're in SpaceX? Yeah, I mean, it was like a friends and family situation where, like, some people that had stock were selling. And there's like a sliver of. a chance to be able to participate in that. And I was able to get in. So that was pretty awesome. I got into that five years ago, six years ago now, I guess. Art, like 2010s, that's when I started getting into alternative investments as well. I definitely, you know, if you talk about business manager, you're supposed to work at like a triangular business model where your PE and all the

alternative investments are at the top end of the triangle and like your safe investments are at the bottom you know you know what I'm saying the pyramid yeah yeah I get it I don't know the right terms but uh I like if if it was up to me it would be flipped because it's just way more fun to get into like startups and like passion projects because that's how I started you know like my record label myself as a yeah consider myself an investment you know like what I do with music that's PE. It's like, you know, I'm vested myself. But thank God I have, you know, someone else at the other end of the stick that gives me sound advice. Balances you out. Yeah, but like it's pretty much more like a square. It's not a pyramid at this point

because I do so much in crypto now. I got into crypto like 2018. I invested in art heavily. I have some incredible pieces in my house. I mean, I don't sell. Like I'm, what I've realized, in the end, I am a bag holder. So for the NFT community, they love me because I hardly ever sell. Like, I do sell. Now, like, I have a team that helps me operate, so we try to get some cost basis back. But it's even rare I even do that. Like, and I go sweep floors.

If I believe in a project, I don't just buy one, you know. And that's just how, like, I learn my lesson that way. Like, you never, like with art, I'll buy one, you know, because I'm just going to have it hanging in my wall or even toys. I, like, invested in to some very high-end toys, like cause toys. I have a whole cause room of toys. But, you know, I guess in the end, like, you know, I'm scattered right here. When it comes to investing and it comes to all that stuff, if I have it my way, it has to have a level of experiential value. it has to have something that I can have a sentimental attachment too.

I'm far more likely to invest into that than say like a stock that is going to perform well. I'll let my business management handle that kind of stuff. If I'm going to put my hands on it, it's like that's what the difference is between, you know, when I first got into NFTs is the difference between like investing into a coin versus an NFT. because the back end of the technology is similar, but the front end is really important. And that's how we identify. It's at the end of the day, we'll get to that, I'm sure.

But like, NFTs are the way we identify with culture, with other people, a way we communicate. And it's obvious majority of the people that are very confused about NFTs, they don't see that. Like, they don't see that this is how people identify. They're like, you identify with a JPEG? Well, it's right in the name. You know, the name is funny because I know people think it's a bad name, non-fungible

token, but it is the most literal description, right? You can't trade them for one another. It's like EDF. It's literally what dance music is. Electronic dance music is EDF. NFT is like literal definition of what you're getting. All right. So I want to talk about that.

That's your investment side. One of the things I really want to explore with you is how NFTs in the music industry are colliding. So outside of the investment side, tell me how the music part of your business works or how it worked before COVID. Because I think people are often really confused about that because it's like a business that doesn't really make a lot of sense. How did that side of the business work for you? The business of music? Yeah. It's like it feels non-existent.

Really? Outside of shows. I mean, yes, you get like, if you get a big sink, yeah, but like that doesn't happen all the time. You know, that's why it's, it's, those things are rare. If you get a big sink on a song, that's how people get their payday. And that's in a commercial or in a movie, something like that. Yeah, like if you get, and even like some big movie might be like lowballing you because it's such a big movie, you know. Or, you know, you know, if you get a commercial for tied detergent and, you know, like, you've paid like a hundred grand

aside. It's like, sweet, you know, especially if you wrote the song, you know, or if you're part, you're participating in the publishing and the master, the master, the master are you're going to get paid on the master's side. But like on the streams, for like 99.9% of the artists that are making music and putting it out there, you can't survive off of streaming income. You know, you probably know better than me, like how much we make on a stream. Spotify stream is like, I don't know, a fraction of a penny. Yeah, it's like 0.008 or something. Yeah, yeah. So, majority of people that are making music are not getting 100 million streams or 100 million views on YouTube where like, okay, then like you see some money. But like you, even if you're a big artist, even for me, I mean, yes, I get like some really high streaming numbers onto few songs, but it's a few songs. And YouTube is like, is also very low income stream per view, you know. So it's just for sure, I will. wouldn't be able to have a lifestyle that I have if I wasn't touring because that's 95% of my

income, I would say. I mean, I don't even know the percentage. I'm just taking a wild guess here. But yeah, obviously, as you get bigger as an artist, you find other ways to make money outside of the music business. Music business hasn't changed. It's kind of like once they set a standard, it's like they don't need to go up too far. Right. So the standard is you get this and that's what everyone else is paying. So whether you get 0.08 of a cent, yeah, let's say you get to 0.1 of a cent. It doesn't change much. It might be like you get your like, you know, a level up there, but it's not enough, right? So clearly with NFTs and music is providing a different way for musicians to be more engaged with their audience.

And this is like, this is where it happens is that like you have the NFT community, the crypto community that are also looking into music as an art form. Because that's the conversation that's being had is that music is art. We all can agree on that. We all can agree that music is an art form. But it's not regarded as an art on the financial side of collecting. You don't collect a song. Right? You don't, you just listen to it. It's free. It's always been that way. It's how it is. But, well, let me ask you about this. So you started, you said, before he started, you said, in running your record label, Dimmac for 27 years. So it's like in the 90s. You started, I think, in 1996. Yeah. The 90s are crazy for record sales, right? Like, CD sales are through the roof. There's no streaming. There's no whatever. And then you, like, hit Napster and MP3s. That whole business gets turns upside down. Now we're in Spotify's world. There was a moment where you, you know, you know, you know,

I have a vinyl collection. I'm sure you have a much bigger vinyl collection. But, like, you know, people still collect physical music. No one, I think, collects digital music. How did you manage through that? As a label? Yeah, as the proprietor of a label, as an artist yourself. Yeah, I mean, like, one of the first things we did during that period of time was did the unthinkable.

It's like, okay, hey, we want to give away a song for free. They're like, what? The manager's like, no, no chance. I'm like, listen to me. This is where it's going to go. I know it doesn't make any sense. And I know like everything is getting chopped off as far as how much money we're making. But this is how you're going to make money.

And I'm not participating on their touring. But you're going to make more money when more people listen to your songs, period. By your shows. As far as on the business side of things, I feel like one thing that I've always had in my back pocket is like, okay, we got to be a little bit more earlier. We got to do something that other people aren't doing. and take that leap forward that's that's like a bit scary bit speculative the haters going to come out but fuck them let's go like you know so like yeah i mean i definitely went into the space guns blazing like that and it worked and i was like just trust me on this on one song and like

there's so much more visibility on the single and but like here's the thing to answer your question on the business side it didn't really help us short term long term yes That's how you have to think. I think about whenever you do these speculative moves, it's like, you can't think about short-term gain or else you're doing it for the wrong reason, period. It's just like one of the life lessons I've learned. It's like, I'm here. I'm not going anywhere.

What I've been doing my label, it's not like, oh, we've got to make all this money on this artist or ban, whatever, and then boom, we're out. No, we're like here to establish an even larger community of people that, support us, you know, starting in like these small rooms into like bigger rooms into, you know, arenas to whatever and keep growing it and keep servicing them and keep like advancing and, you know, fast forward to now. This is exactly the same kind of concept. Like, I'm not going anywhere. I'm here. This is the future. Actually, I, it's not like I'm not going anywhere. Like, this is how commerce will be. So regardless of I'm not going anywhere. It'll be here. It'll be here. Like, that's why I'm like, I see like these people that get into the NFT space and

and then like there's these rugs that are happening. I'm like, don't you see next year, everyone's going to be doing it and you just rugged yourself. You rugged yourself from what how people you know, this is how commerce will be. This is how we will communicate. This is going to be become very normalized. You know, so it's just, you have to think about the long game. Yeah, this actually kind of leads me into what I think of as the classic decoder question. I asked everybody this question. You run a lot of businesses. You're an artist.

You're obviously an investor in a lot of different things. How do you make decisions? What's your thought process when you go through a decision? Decision, you know, it's a balance of passion because it's like, you know, I only have so much time in the day. So you've got to be like, it's my passion going to lead me into making sure I carve this, amount of time in my day because you know time is all we have and my time you know just like everyone else's time is valuable and um my schedule is stacked like stacked beyond belief but it's stacked with things that i that i'm obsessed with that i that i love so passion's got to leave the way

and then the economics is important you know you have to like think about that too because if it's all entirely passion you know i've learned the hard way and that's why you have to have teams. That's where you have teams involved that can provide a different, you know, just angle at what you're doing, give you more insight, more just information on your choice. So, like, I do keep my mind open. I think it's also important to not be stubborn and to know when you're wrong and to know that you're not always right. I think it's important you have the right team because those people are saying stuff to you that actually can't change your, decision, you know, and you keep trusting time and time again, this decision isn't really true to

your core, regardless of the money. It's, you know, you're picking the wrong team. So you have to find the right team. I've asked this question of the biggest CEOs, individual creators. It's funny how the answers all kind of line up at the end of the day. They're all different, but they all line up. And I think to me, it's one of the most important questions we ask on the show, because honestly, a few people take the time to step back and think about it. And it's like, kind of of the most important thing you do with your time. Yeah, actually, you know, actually, I'm going to go into that. I think it's important for everyone to step back from what they do on the daily grind

and ask themselves the question, why am I doing this? Because like, it's okay to be like, this isn't for me, even though it feels like it is. And you only have one life. I always think about that too. Like, I only have like what. You got to think about the time that you have on the planet. it like my average life expectancy. It's like, I'm in good health, maybe 90.

But like 80 is like pretty much like, you know, you generally think you're. You might want to slow down at some point, man. You're a worker. Yeah, 75, 8. I say 80 maybe like it's like slow down. So I have 36 years left. Like that's it? 36 years?

Like three decades? Yeah. Three decades. And some of these decisions that you make, it's not like, yo, yeah, we'll do this. And we'll get out of it soon. No, like most of the decisions I make are long term, like life long term, you know. There was no end in sight, no exit with Demock, my record label. There's no exit.

You know, I know, like, when it comes to, like, real big businesses, you think of the exit. Like, five years, we're going to sell them, we're out, we can do something else. A lot of the stuff I do, there's really no exit. I mean, yes, some cases, yes. I mean, I'm going to continue to build. it becomes a part of me and maybe partners will come in. So I guess that's the exit

because I'll get some money out of the equation for myself. Yeah. But I have to consider like 36 more years. Is this going to be part of my game plan for that? And there's a legacy attached to that too afterwards. That question, I'm telling you, I ask that question almost every episode. It leads places that you would never expect.

So that's why I ask it. You are a worker. This is the thing about you. You two more than anyone. I saw a stat that one year you toured 361 days of the year, which is crazy. You do a lot of things. How do you decide what is Steve the performer time, Steve, the investor time? How do you manage all that? Okay. Steve, the performer time is only two hours. Okay. That's what people forget. But the traveling is a fucking crazy time sink for sure. Traveling and then the side effect of traveling. is a time sync, a brain sink. It takes away from the brain cycles, for sure. You know, when you're zombing through jet lag, it's fucking hard to be like optimal, you know? And I'm still trying to figure that biohack out

because I do travel, I mean, pre-COVID, I was a global, I'm a global artist. So it's not like I'm just doing like one or two or three different time zones. You know, I'm like traveling across the country like every other week. So I was, I didn't try. I think, you know, 14 tours in China in like two years or something, three years. So every other month I was in China. Then I was in Ibiza.

Then I was in, you know, a year across Europe. Then back to America and Central America, South America, Asia. It's like it never ends as far as a jet lag. I was a constant jet lagger. So that's tough. But I have a really good team as far as making sure that everything's on schedule. Everything's on point. I regard my schedule like the grail.

Like I really stick to my schedule. And as far as being 100% with what I'm doing on the schedule, that's also very important. That's a big part of that. So, I mean, out of all the shows I've done, you know, I never broke under 200 shows a year for 15 years. So out of all those shows, I think I've only missed a few. My track record of reliability is,

Like the UPS man, rain, sleet or snow, I'm there. Like, I will make it there however way I need to. I will do whatever in my power it is. But sometimes the act of God comes or I just get fail sickness or whatever it is. And that's it. Like, I just can't go. I mean, this is like, it's not just shows or just an aspect of one thing I do in my life. That's really important.

So I try to really maintain that alongside everything else. And in order to do all that, in order to be able to make it to all those things, you have to be a mental athlete. There is no other choice. If I've decided to take on all this stuff, and trust me, the NFT world, Aokiverse is a major time sink in a good way, in a really exciting way, in the future development way. We're building a world. With all that going on, you have to sacrifice certain things. that will not allow you to be optimal. It's so important to be optimal so that I go into things with my team.

And they have to be optimal too. You have to have like just like I was talking about before. It's like the team you pick has to be with you. We're going together. We're moving forward at this speed, at this pace, this tempo. And the train does not stop. And I like that. You know, you have to want that.

You have to like that. And you have to train like an athlete. I love this kind of boot camp mentality, though, physical, mental, spiritual boot camp. So one of the things that I find in my life is I wear a bunch of hats. One of them is a management hat. One of them is a creative hat. One of those a podcaster hat. Switching context for me from it's my creative time to I'm talking to other people about other stuff is I need to schedule that time to be creative.

Yeah. Switch modes. Do you have to do that? Are you mental athlete? Can you just go from one to the other? Like, can you walk out of a business meeting and write on? stage? Yes, 100%.

That's crazy to me. I would not be able to do that. Okay. What's even more difficult is, because I've mastered the nap, I think this is far more difficult. So it's like, you know, I did five different countries in 40 hours, five shows in 40 hours. So the only ounces of sleep I was getting was on the transportation. I remember like one show, like we're like literally, I was driven right to the back of the stage. They're like, I could hear them chanting my name.

I'm on. And I'm still like asleep. Like I hear them. And they're like, my manager is like shaking my arm. Like, you got to hit the stage right now. We just arrived and they're chanting your name. And like you have to. And like, you know, 30 seconds is all I really needed.

And I just got to stage and boom. Like, you know, you just feel it. You know, like, I'm just excited. Like at the end of days, just follow the excitement and the passion. And yes, when I go from like, let's say the polar opposite mental health, hats that you're talking about. Yeah. You just have to accept that your brain isn't going to be able to adjust so quickly.

And you're just going to have to just like fail a little bit in like the first part. But when once I'm going, I catch up and I'm like riding on my horse and I'm good. I'm, I am flying. But like I always accept that like, you know, it's just part of who I am. Like, you know, like luckily I'm. I have some leniency from people that are listening to me to kind of give me some benefit of the doubt. Let's take a quick break, but stick around because when we come back, we're going to talk about Steve's new Metaverse platform, the Aokiverse.

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talk about the Aokiverse. So COVID hits, touring goes away. That's what you're spending all your time on. You got deep into NFTs. You jumped in really hard. What drove you in that direction? I'm already like a crypto believer. Yeah. So I think that's actually the foundation is important. Like I'm already pretty savvy in the space before I was in the NFTs. During COVID, that was the opportune time. It really was for everyone like me that has some money to invest, believes in alternative investments, believes in art, believes in collectibles, believes in crypto. There's a lot of different reasons why I jumped in. And that's also why I jumped in. There's so many different angles of why it makes sense to me. On the collecting side, on the investing

side, you know, on the curating side, on the creative side, there's just so much more I can participate in. And at the same time, I was getting into cards, sports cards, Pokemon cards. And, you know, later on down the line, I formed my own TCG company with the founder of a, that was already developing this particular brand. And we're doing absolutely incredible with this. So I'm heavy into the card world to that whole space, the collectible space, right? So it's, it's, It's like on the collecting side for NFTs, I'm already there. Like, you know, certain things that you love, certain things you believe in, and you understand the communities.

And that's the other thing, too, is the community side of NFTs. It's just as important as the art, as the technology behind it, the utilities behind it. The communities is really, really important. By far, the community that are part of each of these projects, far more important than any other industry I've ever been part of, Whether you're like investor in Tesla and you're like part of the, you own the stock and you have a voice, you know, essentially it's very similar. But this is way more of a two-way street, way more transparent, way more real time. Yeah.

And that's also important when I created the Aokiverse membership community is that we have to be real time. We have to deliver fast. And, you know, some other, the projects that I was part of, I wasn't seeing the delivery as fast as I would like. And this is where I was like, this is something when I created the Aokiverse. I was like, wow, there are like multi layers to what we can deliver to this community. Real time, real world stuff, you know. I'm excited to do these, like shows. Like I'm doing the first Aokiverse only event exclusively for passport holders during NFTLA.

So that's about to happen. We haven't even announced it yet. So you guys definitely... There's a scoop. Yeah, there's some alpha there. That's what's exciting is that, like, I want to do this just for the citizens of the Aokiverse. Because part of being in the Aokiverse, you get a passport, and you could grow your passport and level up your passport. Let's talk about that a bit.

So the Aokiverse is your community. I've seen it described as a token-gated social club. You just described it as a membership community. on the website, it says it's a Web3 meets Web 2.0 meets IRL, which is great. Tell me what all that means. How does it work? It's everything that we just said. It's a social club. It's a membership community. It is Web 2, Web 3, IRL, all combined into one because there is the real world utilities and offerings, the live shows. There's actually one person that made it to the highest level, level six.

And on level six, one of the offerings is, I'm going to make a record with this person. Wow. They're going to come to the studio. We're going to make a record. And we're going to release it together. And it's going to be Steve Aoki and XYZ, you know, dropping a record. And, you know, here's a thing. I don't just work with musicians and artists.

I made a song with Bill Nye. I made a song with J.J. Abrams. Ray Kurzweil, like scientists, thinkers. probably one of the most exciting collapse I've never done that I'm putting out to the space the ether, hopefully it comes back, is doing a record with Elon Musk.

You know, I just like to me, I just see the spirit of someone in the studio with me when I'm creating. You know, it can turn into something beautiful. But in any case, a lot of stuff happening at my shows, that kind of access to the shows I'm already doing, to shows that we're going to be creating.

And drops, obviously physical drops, digital wearable drops, the figital, drops, right? Combining both. I think one thing is really exciting to announce here, too, is the first collab that we're doing with my little pony, which is, I think, dude, I swear to God, every time I've, like, announced, like I talked about some Twitter spaces, everyone's so excited. That's the thing. Like, we do collabs, my brand, Dimock fashion, like our merch line. We do tons of licensing deals with really big anime.

and cult IPs. I grew up with like Matrix and Gremlins to now My Little Pony to like Naruto, Dragon Ball, Bleach, Attack on Titan, things like that, a lot of anime stuff. But the first drop we're doing is gonna be exclusive. I'm gonna do an exclusive collection from My Little Pony for all the AV members.

We've also got the next chapter of Dominion X. My first NFT drop I did Character X, and then we launched with stupid buddies, Seth Green's stop motion animation. company created Dominion X. Seth and I were doing the Dominion X NFT collection, the PFP, is coming soon with exclusive early access to just passport holders. Can I get on the weeds on just like how the passport works and stuff? So this is stuff about these communities that I think are utterly fascinating, right? They're all built on the blockchain. These are all tokens. You should theoretically

be able to sell them and resell them. So on the website it says Aoki credits are ERC 1155 NFTs. They're on Ethereum. You buy a bunch of those. And then you can trade them in for an Aokiverse passport, which is itself an NFT. So when you trade them in, and there's 30,000 NFTs, the credits to start. When people trade them into you, you get them back. Do you get to resell them? Yeah. So when you trade them in, you essentially burn them.

You burn them. Okay. There's like whatever credits left over. And people, you know, obviously the more they burn, the less are in population. And presumably, you know, that drives the, you. the price of the credits up. But you use up the credits to level up your passport. And as you level up your passport, it goes from level one is one credit.

Level two is four credits. Level three is 16. Level four is 64. Level five is, I forgot what it was, like 256. And level six is a thousand something. You know, it's all in multiples of four. Okay, sure. each level has different applicable rewards and utilities and offerings.

So what if someone, this is such a dumb question. Like the idea is to get a lot of people in the community, right? Yeah. What if someone buys a lot of the credits? Like what happens then? Because this is a part of buying and selling your way into a community that I think it's early, so we're still learning. But to me, the idea that there'd be an aoki versus whale that just like chokes out of the community,

It seems like a problem that may or may not happen. I think it's difficult to do that because there are whales here for sure. I mean, there's already one whale that got to Black PRISM level six. And there's a few level five. There's, I think, five members that are level fives. If you look at the floor of the credits, they still are around the same price. I think it's like right when we launched the passport is like 0.1. And I think maybe it's at 0.15.

I'm not sure I have to check the floor again. But it's, yeah, later on, as these credits burn, the floor will decidedly go up. That's for the market to decide that, you know. Right. And the passport itself is an entity. So can people resell the passport? Absolutely. Yeah.

I mean, you could level up because here's the other thing, too, is that we're building out a mechanism. And by the way, the dev behind this is manifold. And to me, they're the best dev on Web 3. You know, they just, like, all the stuff they've done previous to Aokiverse, with Pox, pages to Poets, which I thought was phenomenal, with Matt Dog Jones, a generated project, with, you know, everything they've worked on has always been out of the gate something unique. So we kind of, like, launched this with a culmination of a lot of the ideas that already existed and put together, whether it's like, you know, I love the hundreds, Adam Bomb Squad. Fidgetal concept because they had their merch company, their fashion company, right? And I offer the same thing. That's why we're doing these drops with My Little Pony.

We're going to do Attack on Titan next. Then we're going to be working with other NFT projects and dropping exclusive collapse inside of AOKipers with great projects that, to me, are blue chip. And you have that aspect. You have what Gary V and V Friends has done on building out what VCon is going to look like, which I'm going to be speaking at as well. But I guess my question with the passports is like this stuff is all really new. So I'm just thinking of the corner cases, right?

Yeah, sure, of course. What if someone buys all 30,000 credits and then they turn them into level six passports? And then you hold a show and there's 30 people there. That's fine with me. That's fine with you. Okay, because that's a weird outcome, right? It could happen. Okay.

So that could happen. But I think there's like 2,000, between 2 to 3,000 members. Sure. of the Aokiverse. So that could have happened is not happened. You know, you're right, there's someone that could have done that. But like, for example, I played,

I played for Gala Games. So Gala Games, I played their Vegas show, the first Vegas show they did. And I just played in L.A. And it was, like, I think they booked out Doja Cat, Aziz Ansari, but they couldn't make it for some reason. but Kings of Leon and myself and, you know, some other DJ friends, Blow was also like, you know, clearly, like, you know, who Blow is, and other DJs, right?

And I show up, it's the forum. The forum holds 20,000 people, okay? But Gala Games is doing an exclusive community show, and they brought in the heavyweights, and they turned this 20,000 cap venue, legendary iconic venue in LA and made it special for 200 people. That's amazing. 200 people, maybe 300. I don't know. Her was playing too, her.

She was phenomenal. That's something that's like an aspirational. I mean, they have an incredible business and incredible community, and they're taking care of them, you know? I love that. I think it's like you can do anything. Like, for me, it's going to be a different feeling.

when I play this Aokiverse show. Yeah. I don't care if there's five people there. I really don't care because I look at each person as people that believed in the Aoki verse membership that got themselves a passport. It's going to be so much more meaningful to me because I know where every single person came in from. How does that generate revenue over time?

So once all 30,000 credits are burned and there's however many passports and you're playing shows for those people, where do you get more money from? The secondary. So when people resell the passports, that's how you get paid. Yeah, so there's a secondary, the Aoki IP, whatever company participates in the secondary. I mean, like when we launched this, we wanted to be a very healthy cross-section of NFT culture and community that's participating, not just Aoki fans. So we reached out to all the different communities that supported us in the last year, which is when we started designing this. but about like six to eight months ago.

So we reached out to all these different communities. So like really wanted a very diverse broad base, you know, reaching out to like Fuck Render's team to Janxy Squad to the Doodles Camp to, you know, Adam Bomb Squad to Blau's Camp to, I mean, it just was like 24 different communities that were all part of the launch of Aokiiverse. So I think in now what that does, you know, as far as like, building the community is it just brings in a lot more different kinds of ideas, different, like reasons why they're part of it. It makes the discord way more vibrant, you know,

like conversation is going to be not about just one thing. There's going to be different, you know, things that they want, things that they're looking for, things that are excited about, things that they value. And that's one thing that as a social club, and this is where the social club fits perfectly, is that we're, going to communicate and actually connect with a lot of these different partners, the deadfellists and whatnot and do really cool offerings from our community and their community and do something exclusive for what we're doing, you know, whatever those offerings might be. When you have a community like that, this is one of those, like, I end up asking everybody's question. You've run a

Discord. Do you have moderators? Are people keeping it clean or people keeping the racist out? How does that work? Yeah, that's a good question. And yeah, we have moderators and, you know, we have our weekly calls and meetings about how it's going in the Discord. And, you know, definitely rely on them to do all that stuff. So that's really important. Yes. It is because, like, you know, that's what you hear all the time. It's like, oh, my God, this so-and-so community's discord got hacked like by this and that, you know.

And like you're not impenetrable, you know? It's like it happens to everybody. I think at this point in time, as people have ventured into the space, that's one of the big notifications and conversations and initial dialogues is be careful with like whoever's saying what to hit this link to do this. You know, just double check and make sure. But are your moderators double checking for you? Yeah, that's their job, right?

So, yeah, they might miss through the cracks. It might some things get dropped. But, you know, it goes right back to making sure you have a quality team. So if your level six passport owner goes, I don't mean to impugn this person because they're like, but you have a level six passport owner. They go on the Discord. They say some silly shit or they try to do a scam. Do you boot him and take the passport away?

God, I haven't even thought about that. I mean, there's like a different conversation we have level six. Okay. The level six, the level six passport has, it's like, I have like a one-on-one discord with them. Okay. So, I mean, would a level six do something like that? You're right. It's possible.

You know, it's possible for anything in the world to happen, you know. But I think it's highly unlikely. Yeah. If someone's going to invest all that money and time and energy and be a part of it at such a high level, like, would they try to rug everyone and try to, like, scam other people? it's very, very difficult for me to see that happening. Is it like, is it possible? Yeah, it's possible.

But is it likely? No, it's highly unlikely. I'm just curious. Like, again, it's early. I'm just thinking like, let me pull the string all the way. Yeah, of course. You have to definitely, like, I think that's the only way you can safeguard or protect, you know, is by asking every question you can so that, that, you know, there's levels of protection there

because you're right. It is, it's early. It's decentralized. Yeah. It's the only way we're going to move forward with innovation technically and philosophically is with these kinds of questions, you know? We're going to take another break, but when we come back, we'll dig even more into the consequences of putting the Aokiverse on the blockchain.

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We're back with Steve Ayoki talking about some of the consequences of Web 3. Let me wind us down with what I think are some of the most important questions of all. You're on Ethereum. Yep. The criticism of all of this stuff, whenever anyone talks about NFTs on our site or we talk about the podcast, the feedback I get from our audience is all this stuff is so energy and efficient, it's so horrible for the climate. It's all a scam, but the worst thing is the climate aspect.

Right. You're burning a lot of energy to do this stuff that, you know, it's a club. You could just not do it on the blockchain. Do you think about the climate aspect of all this? Yes, I do. It definitely is a very important topic. And it's something that needs to be addressed in a way that uproots all of it. You know, that there's a way that we could figure out how to build a more ecologically friendly foundation underneath the actual blockchain. Yes, it's like it needs to happen, you know, but like I guess if this is a question like, is it worth doing or not doing? Well, I'm building in the space. I really am hoping for people that are way more versed in understanding how to make that happen happen. You know, like it's like it's definitely a hope and dream that we can actually find a way to to make it more ecologically sound. Yeah, absolutely. But you don't think the climate aspect outweighs the opportunity aspect. Because I think that's the complaint, right? If I had to sum it up is, yeah, there might be a lot of opportunity. Yes, this might be better for musicians. Yes, there's a direct relationship.

The climate stuff is so bad, the thing is so inefficient that we should wait. Or you should use a different blockchain that is more efficient or somewhere down the line. But you picked Ethereum. So I'm just wondering how you made that decision. Well, when I first gone to NFTs, through Nifty Gateway that's on the Ethereum blockchain. That's like where we were able to source it all. It's like I still,

I can't really answer that question for you in detail. That's something that just we have this conversation with my team about do we switch to Salana? Yeah. Do we switch to another blockchain? And actually, you know, I love Salana. I love what they're doing. I think it still needs some work and it still needs. a way to build into a premium NFT blockchain provider.

But I do love it. And I do plan on working with Slana. So, yeah, I mean, that could be the pivot, you know? I mean, there's, we definitely have, like, there's a lot of different people on the team that actually make these decisions as well. So it's just kind of, like, go with what we're all going for, for the time being. I hear this all the time, right? You're describing a bunch of people in a club.

they can buy and sell the tokens that is mostly happening inside, right? Like, you're not interfacing with the world a whole bunch. Why does this have to be on blockchain at all? Why don't you just set up a server and a little social network and do it like super Web 2? I think the big difference is exactly what you just said. I mean, the whole idea is that we're moving towards Web 3. That's the main difference. Web 2 is you don't own anything.

you like yeah you know I always put it like this like yeah I always fly American Airlines because I want to get my points up but I'm the highest level of American Airlines I can never sell it you know like it's the same thing with like certain things that I that I always use it I

that is part of my you know the way the way I decide like I of course I could fly united all the time but I decided American and I'm like an American flyer you know I'm concierge key like I'm proud of that I can't sell it I wish I could

I wish I had the opportunity to it's not like I don't want to sell it's like I want to have the opportunity to sell it so I think that's the main difference is web three allows you to like if this is like the world that the social club that you subscribe to whether it's like Soho House your Soho House membership you don't you can't sell it I like going to Soho House so I like going there feeling like I can have my meetings here I can you know do my thing here you know I like I like enjoy being in that environment. So I'll pay that, you know, whatever I pay to be part of that.

I can't sell it. So I think that's the main difference is this ability to sell it, to be able to grow it and sell it. You know, you could micro-level into your, in your levels. Eventually, we're going to be able to do that where you can gamify it where you go to all these different shows and you can start micro-leveling in your level. Yeah. And you could grind it all the way up. You grind it up to a different level. And then you spend all this time grinding it. to this level and have all your poaps and all the different badges and stamps in your passport that allow you to grind. And when you get to a different level, you're like, you know what, I want to sell it. You have the ability to do that. That's cool. So this leads right into my last

kind of big think question. And I have been excited to ask you this question the whole time. This might be the only question I have. You're in it when it comes to art and commerce and finance, right and I'm like a hippie and I'm like the point of art is to be democratic and to improve people's cultural lives and to knock people out of their comfort zones and we have spent an hour talking about financialization right buying and selling things creating tokens creating markets grinding so you can resell a product that is based on your experiences where do you see that tension do you do you ever worry that art music is just getting to financialize that nfts you or kind of creating all these monetary incentives around culture?

I think we haven't really even made a dent in culture. We just haven't even, like, we've made a dent within our small world, for sure. But as far as like cultural ramifications, we have, we're like so small. We're like, you know, such a small percentage of the whole space. I just think it's going to start changing. Yeah, you're right. The dialogue will change with. let's say for example with music the dialogue's going to change when you know your favorite artist is

doing an nfti and it's it's art it's like yeah you can actually listen the whole world could listen to radio head's album but tom york is making something special with that album limited to only a certain number for people that love that album and love radio head and then it provides a income stream in a conversation in a way that never happened before It adds a different layer. It allows it to be viewed as art the same way that you would buy a piece. I mean, it's just, it's exciting, to be honest. And I think the end of the day, it's up to the artist, right?

So I don't know. I think that's the thing. You know, this is, again, this is me just pulling the string. It's early. But I don't know. I think a lot of what we've talked about is based on the fact that, unfortunately, in the current system, the music itself isn't worth very much money, right? And we're moving the value to everything else.

And the music is kind of becoming, for a lack of a better term, like marketing for the stuff that is worth money. That's right. Music is meant to be, at this point, the way we view music is meant to be free and heard. But you're adding a different layer to it of scarcity, where it has an art impact of scarcity. So, I mean, like I said, like it's up to the artist.

It's up to the artist if they decide they want to even venture down that path. But can any artist realistically make that choice? That's what I'm, that's like my pull the string all the way. Like, will you be able to make money as an artist if you're like, I'm just going to do music? And then the music isn't worth anything. Well, it's up to the, it's also up to the market. It's entirely up to the market. Yeah.

That's the other thing that's exciting about the whole world is like the market decides. The market will decide if they're going to. spend money on XYZ, the band that just came out and it's like, hey, I want to make money off this album that no one's heard of. And the market will decide if they want to pay for it. They're going to decide

what the floor is. They're going to decide with their wallets. Yeah. At the end of the day, you know, it's like, let the market decide, let the artists decide if they want to do it. But like, why not allow this conversation, this way of viewing music as art? Why not allow that to happen?

Yeah, I don't, I don't think I'm at, I wouldn't allow it. Yeah, yeah, I don't just saying like, you know, like, no, I'm just like pulling the string the other way. Yeah. The artist doesn't have to do it, right? You don't have to do it. You can just release music. It's fine. That's just how it is.

But then you won't make any money. Yeah, you only make money in the confines of how it works. Yeah, right. So I think that's the tension that I'm like really interested in, right? Like, it's at some point, the music itself should be valuable, not connect. Yeah, but that's a different conversation here. It's nothing to do with NFTs. Yeah, but if NFTs are the big opportunity.

Are you saying the NFTs take away from the potential for music to have its own value? I'm saying the incentives are more about the, if the money is on the NFTs, everyone's incentive is to focus on that instead of the music, which is, again, in my like 90s don't sell out worldview, the music is like the most important thing. Oh, I know, but I think it's like two people talking over each other's. heads because the music is going to exist regardless. Interesting. It's going to be out there for people to listen to. Like we said, it's basically free. You know, what we're talking about with Spotify, they're like, you know, they might

increase a little bit extra money for people to make money, but it's not going to be a game-changing effect. It's always going to be at that level free. Yeah. So it's going to exist. But if you want, if there's someone that's like, hey, I absolutely love this album and it's attachment to this particular. rarity, scarcity of this

NFT of art that's connected to this emotion I feel when I listen to the song. And I want to be the person that owns one of those few hundred pieces of that. Why not? Why not allow that conversation, dialogue

to exist? It's up to the person buying it in the market that dictates what the value is, and up to the artist to actually allow it to happen. I think that's an amazing place to end it. I will say this. I think you should come back in like a year and we should talk about how it's going

because it is early. Yes. We're talking about some hazy ideas that are going to get a lot clearer and even just a year. For sure. Oh, yeah. It's six months.

I feel like you're a veteran in NFT space. You've been in here for like six months. It's like, I've, you know, like I got a PhD in NFTs only been here from the six months. It's like that early. You know, like I get it, getting into NFTs in like summer 2020,

I feel like, wow. It was so long ago, you know, dropping my first collection in February 2021. It feels like, you know, it was a year ago. I mean, literally a year ago, I dropped my first collection. And it feels, you know, I mean, there's so much that's out there. But, like, feels like incredibly knowledgeable about what I understand now. But, you know, what's exciting is it's just, you just every day, there's something, a new level, new way to advance it forward, do something.

thing that's interesting, keep building on this idea of community, because that's really what's all about, you know? Yeah. Beyond the art, beyond everything, it's about this two-way combo with community and delivering like incredible experiences. At the end of the day, it's like I go back to the real world stuff, you know, real world shit. At the end of the day, our life is a bunch of, based on a bunch of experiences, right? Yeah.

And you want those experiences to be. meaningful, whether spending time with your family or going to a live event where you feel something, listening to a song that makes you cry, you know, looking at art that makes you melt, being part of communities that make you feel connected. We need to continue building off that. You know, like the same way I'm going to my shows and I play a show. I literally, the reason why I play so many shows is because I'm obsessed with just like that level of connection I'm having with different crowds through those music. I'm barely saying anything on the microphone, yet I'm connecting with strangers. Those are moments that are so important. So it's like,

how do you encapsulate that and bring it into what the future looks like, you know? Yeah. I'll tell you when I was, I'm old now, but when I was in my 20s, before my friends and I would do something crazy, we would always say life is a collection of experiences. And I think about that all the time. It really is, though. Yeah. It's all it is. Sometimes I was experiencing we maybe shouldn't have had some of them. But we do.

Yeah. Yeah. We've all had that. We've all had that. Steve, this is great. I really do want you back in a year to talk about where this is all gone and what you've learned because it is the beginning and I feel like a lot of these threads are going to pull.

But this was a great conversation. Thank you so much for coming on. And I do want to say that what we're doing with Aokiverse and the passports and this community membership and the social, the social, the social, club because essentially people are like if you see what I've been doing in the past year with NFTs and you're like I really love this kind of this whole world because it's really a multiverse where you know it's like the multiverse of communities that I'm part of essentially that's what it is you when you enter in the space you're like I want to be part of that you know I want to I want to be

part of all of that's happening in the Aokiverse that's why you enter in the space and and then you start, you know, we start understanding, oh, you really like that? Okay, we're going to try to deliver that if that's possible. Like those kinds of fun activities. I really believe, like you said, in a year's time, that there will be other people in the space that are in the center of certain things that you will love, whatever it is. So you love cars. And there's like one guy that's just, or girl that is just in the middle of like car culture.

And they're like, this is our business. membership community to all things in the car culture. And I really love this person that's in the middle of all that. They should have a membership community that bridges all that to the people that want it, right? Yeah. This is basically that. I think it's what's going to happen is that in a year's time it's going to be, you know, and that what I've seen is like whenever you see a really brilliant project that drop,

you're like, oh, this is great. I'm going to use this idea, this seed, but I'm going to put my own DNA to it or put our DNA to it and build it up for the community that we're trying to speak to. That's going to happen a lot more. That's my prediction. You know, one year, what do you call it when you, when you, time capsule. Oh yeah, we'll play the, a year for now. We're going to just have a sound more of all your predictions. We'll play the clip. Yeah. This is great, man. Thanks for going deep with me. I really appreciate it. Of course, man. Thanks again to Steve Ayoki for taking the time to be on Decoder today. And thank you for listening. I hope you enjoyed it. As always, I'd love to hear what you think of

Decoder. You can email us at Decoder at theverge.com or hit me up directly. I'm at Reckless on Twitter. If you like the show, please share it with your friends. Subscribe wherever you get your podcasts. If you really like us, give us at five-star review. If you tweet the show at me, I will almost certainly retweet it. Decoder is a production of The Verge and part of the Vox Media Podcast Network. Today's episode was produced by Creighton D. Simone and Jackie McDermott. Additional research was done by Liz Leone. It was edited by Kelly Wright. Decoder music is by Breakmaster Cylinder. Our senior audio director is Andrew Marino. Our executive producer is Eleanor Donovan. We'll see you next time.