The Wolf Of All Streets - Decentraland Co-Founder Explains Metaverse & Presents His New Game | Ari Meilich, Big Time Studios

Episode Date: March 22, 2022

Is the play-to-earn model the next big thing in gaming? Founder of Big Time Studios and Co-Founder of Decentraland, Ari Meilich (@arimeilich), joins us to discuss the metaverse and his new multiplayer adventure game. With Axie Infinity disrupting the player-owned economy, the future is quickly being rewritten. On this episode of The Wolf Of All Streets, we take a look at how far the metaverse has come, where it’s going, the future of play-to-earn, and the biggest challenges Ari has faced in building a blockchain-integrated game. ••• FIND US ON SOCIAL ••• Scott Melker: https://twitter.com/scottmelker Ari Meilich: https://twitter.com/arimeilich Production & Marketing Team: https://penname.co/ ••• JOIN THE WOLF DEN NEWSLETTER ••• 📩 https://www.getrevue.co/profile/TheWolfDen/members

What's up, everybody? I'm Scott Melker, and this is the Wolf of All Streets podcast, where two times a week I talk to your favorite personalities from the worlds of Bitcoin, finance, music, art, sports, trading, politics, basically anyone with a good story to tell. For a very long time, it seemed like the main narrative in crypto was simply Bitcoin. Would Bitcoin be adopted? What was it? But over the last year, surprisingly, the narrative really shifted largely to layer ones, NFTs, and the metaverse. Well, today's guest has been building in that space for a very long time. He's actually one of the co-creators, co-founders of Decentraland, which arguably was the first and

largest metaverse in the space. And now he's working at Big Time Studios to build in the gaming and NFT space. I'm really excited to talk to Ari Malek today about everything that he's building. Ari, it's a pleasure to have you. Thank you for joining. Cool. Thanks for having me here, Scott. So listen, every podcast I have at this point somehow degenerates at the end into a grand vision of what the metaverse can be. And everybody seems to have a very different definition of what that is. For you, what does the metaverse look like right now? What is the metaverse? Well, I think when people talk about the metaverse, they're touching on this trend where users want to be in control of their online and their identity their online property or in-game assets and that's

really what uh blockchain technology facilitates in the context of virtual worlds and games i don't really think personally uh the metaverse is going to be um this place where we spend where we spend all of our time and that all of our jobs and interactions go into a 3d virtual world because that's simply at least uh to me not the right interface for a lot of our online interactions. So, for example, SMS works much better to the portable screen. I don't think we're ever going to go into a virtual reality world to send our friends an SMS, right? So the use cases for virtual worlds are very distinct from those that work really well on mobile devices or maybe

AR headsets. So yeah, that's overall how I see it. So you don't see it as a ready player one, alternate reality, one huge metaverse that everybody plugs into and sort of opts out of real life and goes to live in there. Maybe more siloed into individual games and experiences. Yeah, it's more like a set of different experiences that each of which addresses a very different use case. Okay, so you were obviously very... The connecting tissue is our ability to bring our online identity and our online property

back and forth across all these places, perhaps. Right. Which makes perfect sense. And you were very early to this. As I said, it was sort of last year, I think, that the mainstream even caught a whiff of the metaverse and really NFTs to any large degree. But I mean, you're a co-founder of Decentraland. Obviously, people know the coin. Manna, you've been building this for a long time. What made you decide to start building in this space and gave you the conviction that this was going to be a real thing? Sure. I mean, honestly, it was a bit by luck

because I met a group of friends who were very early into crypto and they were already working in the blockchain industry back in the day and when i met them uh i saw that they had this weekend project called decentraland which back then was in a very early stage it was simply a 2d grid a two-dimensional grid where people could run, basically modify Bitcoin nodes to mine pixels on this 2D grid. And that was the first version of Decentraland where you could use the blockchain to assign property

of these pixels, similar to the million dollar website. And this project started evolving and started gaining traction online. So at some point, I was already deep down the rabbit hole. I was investing in Bitcoin and Ether and I saw the value this could all have, how transformative this could be, and apply it to virtual worlds. I saw how we would be able to realize the full vision of Decentraland, which was that if we were going to all be spending a lot of time in a virtual world, it would be cool that for the first time this virtual world would not be in the control of a single company and instead it could be a distributed network

where each of the land owners control their own land and it would be similar to a web domain where you could publish your content except here it would be immersive three-dimensional interactive interdimensional, interactive, and in a social context. So as Decentraland was gaining traction, I jumped on board and I got the support of my friends to be part of the leadership and it all started there. And now land in the metaverse can be millions of dollars. Did you see that happening? And now land in the metaverse can cost, like in Decentraland and Sandbox millions of dollars for plots of land.

Did you think that was going to happen certainly by 2021 when it started happening last year? I mean, when I was getting started in this space, there was basically no validation whatsoever that this was going to be a thing we had to swim upstream and crypto people didn't really see uh the marriage of blockchain and gaming or blockchain and social platforms as a trend at all most projects back then were base layer infrastructure place or layer one so what not we were definitely an outlier but I started seeing traction and started to realize where the space was going to be after I organized nifty which I think was the first conference for NFTs and watching gaming. That was back in 2018. And I congregated an amazing group of about 800 people in Hong Kong. And a lot of the entrepreneurs

were just getting started and building their NFT-related companies where they're like YGG OpenSea, I think, CryptoKitties, Animoca, Sandbox, and many others. So at that point, I realized that we were not alone. And there was a tremendous enthusiasm to build for this very legitimate consumer use case of gaming or social using blockchain technology. So at that point, I realized this was going to be a huge industry.

Yeah. I still just can't get past the fact that land costs millions of dollars in the metaverse, but I think that it makes sense and it's justified. When I started looking into it two or three years ago, when you're talking about it, I mean, I used to trade mana, the coin on Binance in 2018. I just didn't think that it would get this big this fast. It's just really incredible to me. So obviously you've identified other opportunities in the space and now you're building a big time studios. Can you talk a bit about what that is

and what you're building? Sure, so at some point we saw that Decentraland was ready to launch and to really let the platform flourish. We created the DAo and an independent foundation and at that point i stepped down from the ceo role and turned to more of an advisor to the dao and around that time i had accrued a lot of learnings about uh what things were working in web3 gaming and what things could be done differently to maybe capture the interest of the different set of people. So my thinking was people are very excited about NFTs in the

context of gaming, but the user experience is still really rough. So if we think about how big gaming is and how few of those people have access to wallets or the willingness to install wallets to be the custodian of their own assets to execute on chain transactions and all of that that's already hard right so I decided I wanted to continue building in the space and I built I started Big Time Studios to cater to the more mass market gaming audience. And at this company, we are creating a platform to help game entrepreneurs launch their NFT gaming projects to mint them, to give their players access to the NFT and token economy

in a way that it's a lot more friendly to the average users, and to pair that with high quality game content so that people were coming really for the game themselves, not just for the trading aspects. Right. I mean, we've obviously seen sort of proof of the use case with things like Axie Infinity, but sort of as you touched on, those aren't very exciting games, right? People are there because they can make money, not because they really love playing it. Are we to the point with what you're building that we have Fortnite Call of Duty level gaming that's blockchain based and has in-game economies that are actually translatable for making real money in the real world? Well, first, I think what I see in Payday Discover is fascinating. So props to them.

I've seen them get started and work really hard for years. So it's really the evolution of the free-to-play model in the sense that free-to-play allowed us to have a much wider user base because you suddenly were not asking people to pay up front. The games became free. So with crypto, you can actually use incentives to onboard and retain users, which really shows how powerful of a tool crypto assets are in the context of gaming. And when it comes to whether we are at the level of Fortnite, I mean, certainly not. There are no games that have launched yet that are being played by a massive audience.

We have a few people that come from the Fortnite team, actually from the very beginnings of Fortnite. And I think the game we're putting together is looking really promising. We have been doing testing for a few months already, and we have people that play daily for several hours or someone who played like 10 hours straight. And this is before we've plugged any sort of crypto economy into the game. So I think 2022 is going to be a tipping point for gaming in the context of crypto.

And actually, since Axie Infinity took off, I've seen a lot of new companies get excited about NFTs in the context of gaming. So it's no longer just an R&D effort. We have huge billion plus dollar companies developing blockchain games. So I'm hoping that the space will get a bit more crowded than what it is now. And I think it's just a matter of time for all the game entrepreneurs to launch these games,

to test them with the public and to really come to terms with what's the key value that crypto can provide to the game economies. Yeah, play-to-earn model seems like such a slam dunk to me. It seems so obvious, like you literally make money playing a video game. But for some reason, there's actually been some pushback from traditional gaming studios and from traditional gamers against this model. Why do you think that is? Well, I was a bit young when free-to-play emerged, to trace the analogy. So what my co-founder, who was there, and many other people who are veterans in the gaming space tell me is that,

I mean, in general, there are a lot of people who are just uh averse to change and when free to play came games uh came out they were maybe not as polished as premium games um hence the backlash and that's probably a similar thing now the initial uh blockchain games we've seen uh they seem like a prototype or like an experiment they don't really compare to a game that has had a 50 to 100 million dollar budget uh and honestly they have mostly been built the blockchain games by people that don't come from the gaming space and who don't have this type of experience. But that's slowly changing. I see it firsthand. I see a lot of companies and a lot of gaming entrepreneurs who come from the top studios who are entering the space. So backlash,

I think it's just a common denominator of any transformation. And I don't think we should be worried about that. So talk about your actual game that you're building. What does the gameplay look like? What do the characters look like? And then, I guess, importantly, how will the crypto economy actually be integrated into that in the future? Sure.

So Big Time is a time travel inspired adventure where we see it like 80% Diablo 2, 20% World of Warcraft. So the core game loop is very much hack and slash game, except that in most hack and slash or action RPG games, you have an isometric camera, meaning people see it from above. In our case, we have an over-the-shoulder camera that resembles fortnite so you're a lot closer to the action and the game is multiplayer it's initially pve meaning player versus environment and it consists of you and your team going through different dungeons and open world levels defeating mobs and bosses,

enemies, and through combat you get to progress through the game. And sometimes you're going to be getting some sweet loot, as is usually the case in a lot of RPGs, and sometimes that loot is going to be blockchain-based. So you could think that you're going to be getting special wearables inside of the game that then are tradable, they are transferable, and they have scarcity, which is the main tenets of blockchain assets. And also, I mean, there's going to be a chance for players to produce items themselves.

So the idea is that in traditional game economies, the flow of funds is usually the developer creates and sell assets to people, and then those people cannot move the assets or transfer them to anyone else. Here we want that to change and we're exploring with players being able to produce assets and selling them to other users themselves in the hopes that the game economy is going to expand drastically. And what we want to see change is that

in traditional gaming, any sort of secondary market is usually in a gray area or outright prohibited. Here, we want to embrace that and make that a core part of the business model, meaning letting people trade, letting people create and sell to others, and monetizing that to take rates through secondary fees. So that will happen on the platform or will it be on secondary markets like OpenSea as well? We've been pretty open in terms of working with other marketplaces.

We've had NFT drops in OpenSea. The last one was this Monday. We had another with Binance. A few of them, actually. And in December, in late December, we launched our own marketplace at nft.bigtime.gg. The advantage to using our marketplace is that the login is a lot easier. You don't need to have a wallet. You don't need to be the custodian of your own assets. You don't need to know how to execute a crypto transaction

and you avoid all the gas fees in this experience. So a single login gives you access to your inventory that you can use inside of the game or trade on the marketplace. So the onboarding looks a lot more like a Web2 application, but the value proposition of Web3 is still there. Over time, we're also going to add support for people to bring their own wallets, but we wanted to make sure that we're focusing

early on in the bigger group, those that are not yet familiar with crypto. So let's talk about a few years down the road or whenever it happens and you're operating at scale. Let's say you become a game that's as popular as a Fortnite or something like that. Robust economy. How much money could a player theoretically make? Can you make a living playing this game? Can you become rich playing this game? Or is it more of a bonus that comes along with the gameplay?

I say more as a bonus, right? Because there needs to be a balance in the economy if everyone is trying to extract value, the numbers simply don't add up. The way I see it is that people are going to procure assets that they're excited to use

instead of the game, or they want to wear exclusive wearables that they want to show off. And the idea is that a lot of these items are going to be scarce, and people are going to have the freedom of reselling them to others if they no longer want to use them. So if you get an item and sell it over time at a higher price, yeah, you're going to be making money. But that's not what the game is about. The game is about having fun. That's what all games should be about, right? And so I like that it's an added bonus. I mean, Axie is the perfect example. I mean, people created entire businesses around playing Axie

Infinity, right? I mean, you have these sort of farms of people in the Philippines just clicking buttons and taking care of them. And there's someone who's managing that effectively and making tons of money. And it's interesting, but I don't think it's sticky. Well, that in itself is maybe not sustainable. I think we're going to have a lot of guilds in our game. I mean, there are already a lot of them that have big plans for big time. But ultimately, if there's also not a bigger number of players who are playing just for the sake of getting entertainment,

the game economy just wouldn't be sustainable. Yeah, that makes sense. So outside of gaming and the use cases, we're already seeing what else excites you about NFTs and metaverse, this entire space. What do you see in the future that maybe people aren't thinking about yet? I mean, what excites me the most is that I'm finally seeing gaming entrepreneurs that have had a successful career and who have worked at some of the best studios and the best game franchises entering the space.

So even though we've been chatting, talking a lot about blockchain gaming in the past few years, very little has really seen the light of day. And there's not a lot of quality content that we can point towards as what's a good example of blockchain gaming. And that's the reason why at Victim Studios, we devoted the majority of our first two years towards a single game because our ambition is really for us to create a platform and to support other game companies

who want to go through a similar journey as ours. But in order to get there, we needed to create a game that would inspire players and inspire other game developers to work with us in the future. So again, I think this year will be a tipping point, where we're probably going to see our game and other games getting to market and hopefully starting to change a little bit the negative perception

that a lot of players have with regards to blockchain gaming. So that's what excites me the most and what I'm working towards. What are the challenges of building games in the blockchain space? Obviously, there's a lot of excitement about different layer ones, layer twos and the speed, but arguably none of them can operate at scale. Right. So how do you build these games with the blockchain integrated and know that no matter how big you get, the blockchains are going to be able to handle it? Yeah, so UX, scalability and regulation are some of the bigger challenges that we faced as blockchain

gaming entrepreneurs. On the UX side, we basically removed most of the typical decentralized user experience from the middle so that we could be a lot more welcoming to the traditional player.

And I said this already, but it basically consists of not forcing people to get wallets and get crypto and execute on chain transactions and castrate their own assets as a necessary step to participate in the game and in the game economy. So that's one. When it comes to scalability, we built our own solution to solve that problem. There are a lot of ways to do this, but our solution is really meant to let people participate without wallets again. So it's a more centralized system where we provide

hosted wallets and where we take a lot of the transactions off chain right so the nfts uh are minted on chain on ethereum uh when the player wants to take it out of the platform or out of the marketplace so of course there's a trade-off there, but again, our main objective was to create a very accessible experience to navigate and we want to be very careful that we're doing things right. So our marketplace, for example, because we wanted to work with payment processors and let people to pay with credit, debit, to transfer money from their bank account we had to make sure that we built robust uh anti-money laundering uh and kyc checks uh through the entire platform so that's very different to how most crypto applications work some people may not like it but it's really the price you have to pay if you want to go uh mainstream we haven't yet but i mean it's a necessary step if you want to

onboard the average person that you're going to let them just swipe their credit card. Yeah, just this week, Board Ape Yacht Club announced they were doing that deal flow through your application and you're actually a centralized content creator or company that runs all the risks, it's just not sustainable for decentralized networks that's a different story i think every proponent of for example uh i mean bitcoin in my view should will always have uh wallets that don't require kyc and i don't think there's anything anyone can do about that but when it comes to gaming which is uh content created by a central company that's pretty different Do the regulators view you as a broker? As an exchange? I mean how do they basically

approach gaming platforms? Well the legal side is a bit technical so I may best not get into that but we have to abide by a lot of rules on many different fronts.

Awesome. Well, I know that we're running out of time here, so where can everybody follow you and check out BigTime after this conversation? Yeah, so the best would be to go to our website, bigtime.gg or follow us on Twitter. It's twitter.com forward slash play big time.

Or our Discord as well, which already boasts like 400,000 people. That's Discord.gg. Yeah, we have one of the largest in the space, I think. Discord.gg forward slash. I guess this is going to be a popular game. I hope so. Yeah, forward slash big time.

So when can people look for the launch I mean when when do you think that would actually that should actually be happening in April so that's around the corner

amazing amazing well thank you for sharing this information and I can't wait to check it out myself have a good one man cool

you as well thank you Scott take care