The Wolf Of All Streets - Why You Should Be In The Metaverse Right Now | Robby Yung, Animoca

Episode Date: February 10, 2022

Robby Yung, the CEO of Animoca Brands is an expert on gamification of the metaverse. As an ambitious pioneer of digital entertainment and blockchain gaming, Robby emerged as a titan far ahead of his industry’s time. According to Robby, the metaverse isn't 5 or 10 years away, it’s actually here now and a lot of us are already tapped in. Listen to this episode to learn how Web3, NFTs, the metaverse, and blockchain are already revolutionizing our lives yet have still barely scratched the surface of what is possible. -- Arculus: Secure your assets, secure your future, with Arculus. Order the safer, simpler, smarter crypto cold storage solution today at https://thewolfofallstreets.link/arculus  Arculus is the new crypto cold storage wallet that combines the world’s strongest security protocols with an easy-to-manage app.  Store, swap, and send your crypto all with a simple tap of your Arculus Key™ card.  *Arculus promo code no longer active as of February 1, 2022 -- Bullish: Bullish is a powerful new exchange for digital assets that offers deep liquidity, automated market making, and industry-leading security. Combining the innovations of DeFi with the regulated environment of traditional finance, Bullish empowers users to trade with confidence across variable market conditions, while secure in a regulated environment that's backed by multibillion-dollar liquidity contributions from the Bullish treasury. Follow @Bullish on twitter or visit https://thewolfofallstreets.link/bullish to learn more. 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 bullish.com for important information and risk warnings. --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by Blockworks. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworks.co ーーー Join the Wolf Den newsletter: ►►https://www.getrevue.co/profile/TheWolfDen/members

This episode is sponsored by Arculus and Bullish. Stay tuned for more information on both of them later in this episode. What's up, everybody? I'm Scott Melker, and this is the Wolf of All Streets podcast, where two times every week I talk to your favorite personalities from the worlds of Bitcoin trading, finance, music, art, sports, politics, basically anyone with a good story to tell. Now, seemingly every single podcast I record now lands on one topic, and that is what is life going to be like in the metaverse? Some people think that we'll be living fully in the metaverse in 10 years, while others think that this is something we could be looking at largely in 2022. Well,

today's guest is Robbie Young. He's the CEO of Animoca Brands, is probably the most qualified person to talk about what the metaverse, specifically economies in the metaverse with regard to NFTs, might look like in the year to come and beyond that in the future. Now, Animoca made huge news of late, raising, I believe, a $388 million round, bringing their valuation to $5.5 billion, which is double what it was just a few months before in October. So if that's any indication of how large interest is right now in the metaverse and NFTs, then we should all be very excited. Robbie, thank you so much for coming on the show. Thanks, Scott. Appreciate the time. And yes, you're right. I think people's interest

has definitely been peaked, you could say. Yeah, I think that that's very clear. Now, as I alluded to, there's people who think that we're building something for a decade from now, but there's some who say there's been such exponential growth in the space that this could very much be a part of our lives within a few months or the coming years. Where do you stand on that timeline? So I actually think that the metaverse is kind of a term that has become popular as of late, but kind of describes something that's been an evolutionary process that we're in the middle of.

It's something that started a long time ago, to be honest, because the metaverse, as we see it, is really a shared online space for you to do kind of the three major things that you do in life. You entertain yourself, so you play, and you learn there, so you have education, and you work there. And I think the internet has been really good at the play, first and foremost. We've been entertaining ourselves online for a long time. And education more recently, you know, in the last decade or so has really hit its stride with a lot of online learning. But the work part has not really been there so much. And I think that's due to the fact that, I mean, obviously, you know, we all work in technology, many of us, and we make a living because of technology, but we don't really work

inside a virtual environment, not at least until the pandemic, now that we're spending so much time on Zoom, for example, and other, you know, and there are other streaming platforms available, obviously. But I think, you know, this is really the metaverse. It's the beginning of being able to do everything that you do online, whether you choose to or not. It's so interesting to consider Zoom being part of the metaverse, but it really is. It's a way

of interacting without being in person and living your lives from remote locations. It's such an interesting view on what it could be. And as you said, that means we've had this sort of evolution, but I think a lot of people are envisioning this ready player one future where you put on your VR, you plug in and you go live a completely separate life. Frankly, that's not my vision of what the metaverse will be. I think it'll be more of everyday things that are somewhat incorporated into our lives. But do you see that sort of future? Yes. Yes. So that will be part of the metaverse. And that will be, like everything else with technology, I think that will be a sort of pro-level experience of the metaverse where people really just want to jump in and they're

massive enthusiasts. And so they will have all the hardware and they will be able to replicate themselves in realistic three-dimensional avatars, et cetera, and live out their fantasies inside virtual spaces. Absolutely. But I think the concept of the metaverse is just as relevant for the fact that, you know, you walk down the street of any city in the world these days and people have their heads down in their smartphones. And while they're doing that, they're still in the metaverse, so to speak. I think what has changed everything now are two big trends.

The first one is blockchain. So blockchain provides us with an economic underpinning to the internet, a secure economic underpinning, which we never had before. So we've had a great internet for many years, but we never had a great way to do peer-to-peer financial transactions. And once you can do that, it adds a lot of value to entertainment and to education, but it mainly enables the work bucket. It means that you can actually have a job online one-to-one and it doesn't require you to have any other infrastructure other than your blockchain wallet, which means that basically you can work not just at a distance, but at the margins of traditional economic systems. As a result, we see huge numbers of people who are now being employed via crypto

payments in many developing countries where financial infrastructure is not part of the global banking system. And that's pretty amazing. Axie Infinity being obviously one of the best examples for that. I believe that you guys are heavily invested in Sky Mavis, who are the ones behind Axie Infinity. And that's, in my mind, a very, very early iteration of what's to come in that space. Yes, definitely. And I think the other pillar of it is, of course, gaming, because the metaverse per se is going to be largely built out by game companies because game companies happen to be the types of business, the employers that employ the types of people who have the skill sets for building these virtual environments. Because we have artists and game designers and programmers who are used to making 3D environments, whether they're photorealistic or not. And we know how to make compelling,

user-friendly, interactive content. So we're kind of, you know, we're what website builders were 25 years ago. Yeah, that's a perfect sort of, I guess, way to view it is that now we're just sort of building it in 3D as an experience. And I love what you said about the blockchain being the underlying layer. Obviously, that's the sort of move from Web 2 to Web 3 that people keep talking about is having this internet of value. But that now means that basically you can do anything transactional without a third party in between, right? And eliminating that third party seems to be the key to all of this. Yes. And the nice part is that you don't need to, but you can. So I think the interesting next evolution is going to be how people provide value as third parties.

So I was having a discussion this morning with somebody who's new to blockchain. And one of the concerns that she mentioned was, you know, she said, well, one of the big issues that I keep hearing about is people being concerned of things like, you know, getting scammed or what happens if you send a transaction to somebody else and it's the wrong person and you can't get it back. And I said, well, actually, I think that's where we're going to see another industry of people who absorb risk just the way our credit card companies do for us today, because we may not all want to make peer-to-peer transactions. Some people would prefer to do them through an intermediary who provides a cushion for

mistakes. And that's a job description. I would argue that most people want that. Correct. They don't think that they do, but you see it sort of anecdotally with people who come into crypto for the first time, right? Or who buy Bitcoin for the first time and then realize that the idea of being your own bank is actually terrifying. And especially the more that grows, the more risk is associated, the more emotional you are,

obviously, about potentially losing it. And that's why we're seeing sort of this proliferation in the Bitcoin space of like large custodians. And that's how institutions are coming in with custodians. So it's interesting to think of the fact that we'll need all of those services even now when we're sort of transacting directly. Insurance, you know, people to cover the risk. It's like an insurance policy.

Exactly. Exactly. Well, because the prospect of, you know, I'm the first one to say I love the idea of having a hardware wallet built into my smartphone for convenience. But then you think, oh, well, I'm already carrying around a thousand dollar device in my pocket waiting to get mugged of it when I'm in some busy city. What if I put all my crypto on that too? Would that be horrible to carry it around with me everywhere I go? So, you know, there are trade-offs. Right. But there's going to be solutions for that as well. Right. And I think that those of us who have been around for a while, myself only 2016, but I don't even put anything on my phone. I have to have sort of

separate devices that are in safes and remote locations because I know that I could be a target and would be walking around. And so, but I do, I am confident that they will build secure systems where then I will be comfortable having it on my phone, walking around and knowing that even if somebody takes it, they won't have access. But that doesn't that just kind of show how very early we are still in all of this? Exactly. And I think the coolest part is, while we still haven't figured out the answers to everything, I think one of the answers to your question of why there's so much interest from, for example, investors who are investing in the sector is because what little the market has shown of progress to date has been dramatic. So I think unlike previous tech cycles, the emergence of blockchain-based

entertainment has had an incredible year last year, a year unlike any other technology I've ever seen, where companies went from a standing start to tens, if not hundreds of millions of dollars in revenue within the first year of operations. And that's very different because for anybody who's been through web one and web two, those were largely cycles built around building up user bases at heavy cost for a long time before you even thought about monetizing anything. And now we have an industry where monetization comes from the first thing you sell, which is completely different. And I think a reassurance to investors that there is something

here. Yeah. Maybe it's not like the internet bubble where the valuations aren't based on actually any earnings or income. You talk about that scale. I remember reading that first time that Axie Infinity had crossed, I believe, a billion dollars in revenue in a month. And then seeing that Vegas had had a record-breaking month and all of the casino revenue in Vegas combined was like $750 million. Yep. And then the funny thing is that- So Axie was more than every casino combined in Vegas in their best month. Yes.

And the funny thing is that that was really widely reported because that was August for Axie Infinity. And then actually much less reported, because I guess a billion is a big milestone, was that in September, they hit two and a half billion. Yeah. Exponential. Yeah, exponential. Yeah. So they more than doubled the next month

after already beating every record ever set. Yeah, it's absolutely incredible and mind boggling when you think about it. And one of the things that I like to sort of discuss when it comes to Axie, I'm just sort of obsessed with the use case, but it's not that easy, right? I mean, you still have to get a

MetaMask wallet, buy some Ethereum, move it into a Ronin wallet, understand how to do this. It's not UX UI is not grandma can use it simple, right? So I like to imagine, and I'm sure that's what you're working on. How do we get to the point and what does it look like when, you know, doing play to earn and participating in all of this is as easy as checking my email or Googling something? Yes. And I think what's interesting, so first of all, it will be that easy. And I think we as a consumer culture have been lulled into a false sense of ease of use because mobile as a platform is so incredibly easy as a result of being so highly centralized predominantly between Apple and Google, because we all forget that we gave up

all of our payment information and personal information years ago. And if you actually think back, if you're an Android user, for example, when Android first came out in 2011, 2012, and you tried to connect a payment source, that was way harder than opening a blockchain wallet and doing KYC. I can tell you that much. And that was even if you had a perfectly well-distributed credit card from a major banking institution, it was still hard. And the only reason onboarding is easy is because they have all our information already. So actually, you don't need to put it in again. And the same is true, obviously, in crypto, because once you've got a blockchain wallet, everything's easy after that. Now, that notwithstanding, I think we can see from the success of Axieie the power of incentive. Because

if you look at the 2 million plus players who have opened blockchain wallets for the purpose of playing, it's because the incentive is big enough that they will go through that quote unquote hassle to do so. Absolutely. If there's a way to make more money than you're making in your day job by sitting at home and farming axes, you're going to find a way to do it because it's better for your life, right? Another thing I find very interesting about that, though, is that then you have the in-game economy and the way that people make money. Obviously, you've seen the price of smooth love potion, for example, continue to drop because it's incentive that people are given. And if they want this to

be their real income in the real world, they need to sell it. Right. And so doesn't that speak to the fact that maybe a lot of the problems that we have with monetary policy in the real world are also going to be challenges in the metaverse. And all of a sudden crypto doesn't solve it all in the same way. Like, you know, Bitcoin fixes that we talk about with monetary policy and economies. They're going to have the same challenges in the metaverses in the real world. Yes, we will. We will for sure. Because I think one of the things that's become apparent is that when we're faced with questions in the metaverse, often we can solve some of those issues with thinking about how we solve those issues in

the physical world. So things like property rights and virtual land and transfer of titles and things, we can actually replicate all of those legal principles that we have in the physical world, governance, governance tokens and all this kind of stuff. But some stuff, there's no point in relitigating and trying to come up with a new idea when, for example, legal precedent in the physical world, you know, people have been arguing over these things for centuries, and they didn't come up with a better solution than what we have to, first, we have to bow down at the feet of Sky Mavis because what they've done with Axie Infinity is incredible. And it is incredible, not just because of how far they've come, but because it's a constant work in progress. It was an accidental success. They were trying to make a really fun game that they enjoy,

and it turned out to be something with much bigger implications than just entertainment. And they've created an entire industry of play to earn games as a result of this. And they've been innovating in order to solve problems, which is the mother of invention is having problems, basically. And so they haven't figured out all the problems yet, but I have to say they've been doing a damn good job of solving them along the way. And so I always give them the benefit of the doubt that there are going to be ways to continue solving these problems. And the beauty of what we have with blockchain is that the solutions to the

problems can often be implemented relatively quickly and also experimented with relatively quickly, like tested, like A-B testing and this kind of stuff, which is different, of course, than asking the Fed to change monetary policy and see what happens to the economy. We see that in real time, seemingly every day right now, unfortunately. So obviously Sky Mavis, Axie, that's part of your portfolio. What else are the sort of key investments that Animoca has and what are you working on? Sure. Well, we're working on all kinds of things. We have both our own studios and also we have minority investments, strategic investments we make. So Axie and Sky Mavis would be a strategic

investment, just like we're strategic investors in Dapper and OpenSea and many other companies. And then within our own studios, we have a lot of content focused on different verticals. So we have our Rev Motorsports ecosystem, where we work with Formula One and MotoGP and Formula E. We have our Gamee Casual Games. That's a studio in Europe that just focuses on building token incentives for casual gameplay and collecting rewards. Because the idea is, you know, we want to bring new users into blockchain. That's the power of entertainment content. And one of the best ways to leverage that power is through mobile platforms. And at the moment, there are challenges associated with working in a compliant way in the app stores

with blockchain technology, as we know. The easiest way to describe it is it's just not entirely clear what the rules are because the rules are still yet to be created in many cases. So what we're trying to do is with our game platform is to figure out ways that we can integrate blockchain mechanics and incentive mechanisms to encourage people to be engaged in casual games. And they've done that now on Polygon since October very successfully. We brought on a couple of million users onto Polygon through these really sticky casual games that we know people love. And then on the hardcore content side, we have things like Phantom Galaxies, which we're launching at the moment from our studio Blowfish. And that's, you know, big cinematic space themed content for, you know, real fans of kind of Transformers meets, you know, EVE Online type of stuff. Right. And you're launching that now, you said. So that's in the works. So that's happening. And that's the level that I think

a lot of people are saying five, 10 years, right? It's happening now. It's happening now. And to be honest, it would have been out a few months earlier, but Steam changed their mind on their view on blockchain games the same week we were going to launch it. That's right. I forgot about that. Steam, that was not a popular decision for them. No. And do you think that they'll pay for that, so to speak, or do you think that they'll pivot back? Because it seems like that's in denial of what seems like an undeniable trend in the way that gaming is moving. I mean, why would anyone choose to play a game that you can't make money in if you have an equal quality game that you can actually make a living playing? Yes. So I think it's just a matter of time.

I think it's just skepticism on the part of a traditional game industry where the challenge, I think, for people in traditional gaming is that much of the success of late of blockchain games has often focused on financial return. And because the industry is young, we don't have many examples of so-called high-end AAA content development that people are used to on other platforms, consoles, and things like that. I mean, frankly, because it takes, number one, it takes years to make that kind of content. And in a four-year-old industry, that doesn't give us much time. And on the other hand, because integrating blockchain mechanics and a totally new economic infrastructure and stuff is challenging. We're still developing the technology tools to allow us to do these things at scale. And whereas the tools for gaming have been around to do that at scale for

quite a long time. So I think it's about a maturity of platform and you can't expect an apples to apples comparison with such nascent technology. You took the words out of my mouth, which was I was going to bring up scale, because I think that everyone understands at this point, I don't think there's any single layer one. I mean, even Polygon, which is a layer two that makes Ethereum much faster by one sort of game like you were talking about, had some problems, right? They had some congestion, prices went up, transactions slowed. One could certainly make the argument

that none of the blockchains that exist right now can operate at the scale necessary, right? So how much of a challenge is that? Yep. And I think first, it's a challenge, but it's one we're solving right now. And I think to make a fair analogy, you have to, again, think back to when you first started to download mobile games. I mean, I don't know if you remember, but 2010 and 11, when there was only iOS games, you had to pay upfront because it was pay for download. And most high-end games required you to do a seven or 900 meg download first before you could play something, which is a ridiculous thing really, now that we think about it in the current context, but it was because they wanted

to give a certain kind of experience, which basically meant as a developer outside of the US largely, you couldn't distribute a game because nobody in a developing country would pay for a 900 meg download. I mean, it was an absurd idea. And we're kind of at that stage now with blockchain where you think, okay, so we can't have a game with 10 million DAUs because the network won't accommodate that. But I mean, look at where we were a year ago compared to now. With that kind of progress, I think we'll solve these problems very soon. Yeah. And that means that in theory, we'll be able to onboard a billion people rather than 150 million or whatever.

So you're confident that that scale is coming. I mean, it makes sense, right? I mean, the way, how fast we've seen things develop in this space is absurd. I'm confident that the scale is coming. And then on the other hand, it also doesn't need to come quite so quickly because what we've realized with content on the blockchain is that it monetizes at a much different rate because when we have player-owned economies in games, people spend more because the money is not just going from the customer into the pocket of the developer. The money circulates in an ecosystem where the customer can sell their items in the game to somebody else. And so whether or not they make money, like, you know, so much headline ink has been devoted to people making money.

I think to me, the excitement of blockchain gaming is that you don't lose all your money, which is a really boring headline. But the idea that you can play games and, you know, recycle your digital content and get 10, 20 cents back on the dollar of what you spent, that's actually a really big seismic shift. Because what it means is that the $200 billion a year game industry may be subject to 20% overall growth because people are spending more, because they don't lose their shirts when they play games anymore. And I think that's a really big story. That is a huge story. I think the entire story of sort of, you know, I don't know how metaverse, web3, NFT, what we want to call it. Speaking of what it could look like in a year or two years or three years, I like to look back

one year because at the beginning of 2021, when it came to crypto and blockchain, all people were talking about really was Bitcoin. They were talking about Michael Saylor and Tesla and Elon Musk and all of these things. And we sort of had this meme point. And the expectation was that all this money was going to pour into the crypto space by companies buying Bitcoin. And what happened? $25 billion into picks and shovels of projects being built, Web3, that have almost nothing effectively to do with Bitcoin at all. Yep. Well, because Bitcoin paved the way and showed us what was possible. And then

NBA Top Shot came along and said, hey, look what happens if you think that what you imagine using Bitcoin or Ethereum in this case as the underpinning to do something totally different. What happens if you take that idea of the Bitcoin financial system and put it under the hood of an entertainment product? And that was the genius behind CryptoKitties, frankly, which was the aha moment. And, and I think that that once people see that vision, you can't unsee it, you know, it's like, so once you own something in a game, you think to yourself, why would I ever not own something in a game again? I mean, it just seems patently absurd. And so that's why I think this is a slow evolution, but it's one that will not turn around because once you give people ownership of something, you can't take it away

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Yeah. And so that obviously you just talked about NBA Top Shot. I can only speak anecdotally, but I had friends who I tried for years to get into Bitcoin and blockchain and crypto who just weren't interested or didn't get it or told me I was the crazy one who became obsessed with NBA Top Shot. We're in our 40s. We're in our 40s. We all collected baseball cards and sports cards as kids. So they immediately got that. That immediately made sense. Even though it could be a digital clip that they don't even want of some guy they've never heard dunking, it made sense. Yes, because the content category resonated with them. And I think that people all have familiarity with that, which is why games make such a powerful ambassador for the technology. Because so many people, everybody is a gamer now.

Thanks to mobile, games have gone from being an enthusiast's pastime to literally something that everybody on earth does. Because I don't think anybody who owns a smartphone doesn't play a game with the exception of maybe my father. None? No games at all? No games. Unfortunately, getting your first smartphone at 80, eh. Yeah. Not even like a Wordle or a Scrabble or anything. Because we have all the classic games, right, that you can play that existed. So you even find that the people of our parents' generation play the games that they loved on their smartphones. Exactly.

There's a little something for everyone there. So that obviously, you know, Top Shot sort of, I think, was the first piece of Tinder in this fire, I would say, very largely over the past year, which leads to this absolute NFT craze. Right? Yes. And so I think we've seen this sort of experimental phase with the art side of it, the JPEGs, but that's not really the most exciting use case for NFTs, right? So I think that the whole idea behind NFTs is that NFTs create digital scarcity. And that part is kind of, it's critical to the idea of having property ownership because you have something that's unique or one of a

limited number of an addition of something. But the key to providing value in NFTs is utility. And that's why we believe strongly in the gaming thesis, because at the end of the day, if you have in-game items that are NFTs, they have fundamental underlying utility because they're useful in a game. So you can, you know, people can have rare collectibles in a game and they love the aesthetic look of the artwork and other things, but fundamentally, you know, a sword in a game is used for killing dragons. And so it has this base utility that you can use it in the game and kill dragons, even if it's not worth 10 times on OpenSea later because people want to chase after a rare item. So having that underpinning of utility

is critical. And because we can enable interoperability between games, we have the potential of incrementally increasing the utility of existing NFTs. And that's why it's very exciting when you think about how content becomes the platform, because you can put out an NFT collection, and then you can incrementally build more utility for those NFTs by creating more games, more experiences, more services to cater to that community around the NFT collection. And I think one of the great examples in the industry is Bored Apes, of course, because Yugo Labs has created this incredible community around Bored Apes. And they're catering to that with merchandise, with live events, with spinoffs and music. You know, we made an announcement, we're working with them to create a game experience. And so there are all these things that it now means to be a Bored Ape member, if you will, as an owner. Ownership makes you part of a community and gives you access to many different types of utility.

And that actually has a direct impact, in my opinion, on the value of a Bored Ape, because it's not just an image that you might like and you might like to share with your friends, like a piece of artwork, but it's also an access key to a wider set of services. And frankly, I completely had my opportunity there, missed the boat and didn't get it. And then I think that's my biggest miss of 2021, frankly, was board Apes. I was sort of dismissive of it. I didn't really understand the IP side of it until I started seeing people getting record deals and the apes were the musicians, right? No actual band. They'll play in the metaverse. You live this.

I have a 20-year career as a DJ and music background and music producer. I should have gotten that very, very quickly. And I totally missed. I totally missed. I was like, they're silly. They're apes, right? I don't get it. And I missed.

It's my bad, really. And I regret it. Yep. Don't worry. That room of people. It's my bad, really. And I regret it. Yep. Don't worry. That room of people who missed that one is very large. And because it's a cultural zeitgeist moment, it's an idea of really pioneering how we're building online communities and they can be built around many different things. So we have a game called The Sandbox, which is quite popular as a user-generated content platform. And we're experiencing a lot of similar, I think, positive impacts of building community because the community of people who are developing in The Sandbox are incredibly passionate because they want to share their creations with everybody else. And the sandbox

has a relatively unique art style, so it allows them to express themselves in a particular way. And similar to the Bored Apes community, I think the passion level of the community equates to the potential for it as a business. But in that community, you buy the land, right? And then you develop on the land as opposed to owning the ape or the character. Correct. Correct. And didn't Warner Music Group just secure a huge plot of land to effectively start throwing music festivals and experiences in the metaverse? Thank you. And I think that it's one of those kind of, you know, we were talking earlier about making analogies to the physical world. And I think this, you know, real estate analogy in the sandbox is a great one because there are third party, you know, developers. And when I

say developers, literal developers, as in real estate developers who develop metaverse real estate. And so they come into the sandbox and they buy land and they develop it, which means creating entertainment content, but they're basically just increasing the value of the land by adding services and experiences to it, just like you would on physical land. So in fact, the business model for them is the same. There's filters. Yeah. And you can just translate that into a metaverse context. Yeah, you can.

And at some point I tweeted, it would be really interesting to see real estate companies in the metaverse who go and find you the best plot of land. And then I immediately found out that that already existed. That already existed. And was very much a thing. But there's a lot of pushback about land in the metaverse, right? And admittedly, I was guilty of this initially too. You think of land being valuable in the real world because of the scarcity, right? There will never be more.

What's to prevent a bigger, better, more advanced, newer, shinier metaverse from coming along and all of a sudden making the sandbox or Decentraland or any of these seem moot. And then all of a sudden you've spent millions of dollars developing in a metaverse that nobody's hanging out at. I think the analogy would be Las Vegas or Dubai, where places, cities were constructed out of land that was considered undevelopable until somebody proved them wrong. And it shows that the idea of developing real estate is all about the community and the people

and the businesses you bring to that place. And if there's enough will, you can do it by brute force. The mob did it in Las Vegas first. And now it's the entertainment capital of America, pretty much hands down. Yeah. So you have to be the first mover and you have to go big. Yes. And also I think when we talk about the metaverse, I think the metaverse is a really big concept because people ask me, oh, so is Sandbox going to be the metaverse? No, it's not. It's going to be a metaverse. And we think of it like a city. So we hope that with good luck, Sandbox will be the New York or Tokyo or London of the metaverse, but there's going to be a whole world with many other cities like the Sandbox. And there are going you know, with different kinds of people who speak different languages and like different things. We just hope the first mover advantage means that we have a more popular one than other places, but it's not the only one. But you can still be Omaha

and be great. Exactly. Right. So I guess that, but I think that's the important thing that maybe people miss. Sure. It's not going to just be one. We're thinking in terms of if the only metaverse was New York and there still needs to be thousands of other cities. Yes. Well, Omaha's where we're going to do all our farming. It's exactly right.

Yield farming. Exactly. All of our yield farming so you you're talking about nfts needing utility to give them that true value and that you as building platforms and other platforms investing can add more utility to these items but beyond what's i guess in the immediate focus and what's what's being concentrated on what are the craziest ideas sort of in your mind thinking forward of what kind of utility you could have from an NFT in the future? So I think the coolest part, and this is the most difficult to organize, is the fact that NFTs are openly composable will allow us to hook into all kinds of other technology. So low-hanging fruit, which we'll probably see in

the next year, are going to be things like ticketing, as in physical ticketing at physical events. And the idea of, for example, combining brand experiences. So imagine you're the New York Yankees and you decide that you're going to do a deal with the, you know, CryptoPunks. So anybody who's a CryptoPunk owner can go to a Yankee game. You know, I'm making this up, obviously. But the idea that you can do collaborations like that, where the ticket of admission is showing your punk at the gate, and there's a way to let you in, then you can extend that analogy almost infinitely just on ticketing. And then you can start to apply the same things in other, in other spheres where you're combining with other types of technology. So I think that's very,

very exciting because you can start to use your NFT as a calling card or as a ticket of admission or as a membership to so many different types of experiences. And if you're looking at it with a Web2 hat on, a blockchain wallet or an NFT is essentially a single sign-in. So when you're navigating the web and services on the web, you can identify yourself and you can do CRM all based on what's in somebody's wallet. Log in with your ape. Yep. Well, because also it's clear when I look at your blockchain wallet, I should know how to treat you when you come into my experience and customize the experience appropriately because I can get... Your blockchain wallet may have no personal identification,

but what you collect says something about you. And you have a quarter million dollars to buy an ape. Although a lot of those people were admittedly very early, right? So we talk about the fact that apes are a quarter million dollars or whatever they're trading at with the price of ETH at the moment. And the people who are buying them now though

are not the majority of board ape holders, right? The majority are the people who got them earlier and were passionate and were smart enough to understand? The majority are the people who got them earlier and were passionate and were smart enough to understand that vision. Although the people who got them early still had three or 400 bucks to spend. Yeah, which was still really expensive. So that's the experience I think of everyone,

everyone with every asset in history, probably. But certainly in the crypto, right? It's the Bitcoin story. It's Ethereum story. I would buy it, but it was like 5,000. Now it's 10,000. I'm not paying 10,000 for a crypto, right? It's the Bitcoin story. It's Ethereum story. I would buy it, but it was like 5,000. Now it's 10,000. I'm not paying 10,000 for a Bitcoin, right? It's always looking back at what you could have just gotten it for when you didn't quite

get it. I'm still thinking that way about a punk. I've almost pulled the trigger here at like a quarter million dollars because I want to be a part of that club, maybe, right? You want to promo into it. So how do people then identify what's going to have value and worth and actually be early as opposed to be the guy buying, being Eminem buying your ape for $350,000, $400,000? I think that first of all, you have to get involved in the community because I think like everything else, you know, it's like people who go and understand who are the up and coming fine art, you know, artists.

Because you spend a lot of time in the community, you go to gallery shows, you meet artists and you learn about the work. And that's why I think you see that people who got into Bored Apes early are all crypto native people for the most part who are really invested in the community. It's about being part of the community. And this is important. And I think it's like any other investment. Do your homework. And so being part of the community is part of that homework. And I think that if you're looking at up and coming projects, my advice would always be look at utility, you know,

because a lot of people are, I mean, how many, how many clone ape projects are there out there? PFP projects. Alliterative animals, right? I joke about it all the time. Like rambunctious rats. Great. You know, like if it rhymes. And if you look at the price of punks already before Bored Apes came out, you would have thought that maybe the PFP thing was done. And then Bored Apes came out and was equally, if not more successful, depending on what measure you want to look at. And they did it

because they built community in a different way than the way that Larva Labs did with Punks. And so they added value to the concept. And I think that's where they're reaping the rewards of that now. So I think you need to look at what is the roadmap for that product? Is there a plan for building out lots of different content experiences or additional utility? Does the developer have a history of doing that? And is there a reason you should trust that they will actually follow through with their plans, for example? All these things are important aspects, I think, of doing your homework. It's largely about community, right?

Yes. 100%. Absolutely. And where do you participate in these communities? Discord groups? Discord groups, Telegram groups, Twitter. I have it on good authority that crypto Twitter is by far the most engaged content community of Twitter, by far. Oh, for sure. It's not even close once you step outside of that small room and see what's going on in the rest of the place. Exactly. Exactly. But all those are great places.

And that's why you'll see with any new project that comes out, they'll actively moderate their Discord channels and their Telegram channels and everything and go hang out with the community and see what you think. Because ultimately, the place that's going to be a good investment should also be a place that you enjoy hanging out with the community where you feel some sense of community yourself because you'll get more out of it. This is something that I sort of, that bounces around in my head is that, you know, I think a lot of these projects, which you said are sort of knockoff apes, for example, they come off like cash grabs, right? Because it's just people do something knockoff. They don't really focus on it. They see how much money they can get for them. And the minute the value

goes down, there is no real community, right? So the community is really strong as long as the number is going up to some degree. I always, you know, and that's where I had the problem with calling a lot of it art, right? I mean, it is technically art, but to me, you might buy a piece of art because you believe the number will go up or the value, but you should only buy a piece of art you'd be willing to hold forever if it didn't. Exactly. Buy it because you love it. You don't buy an MP3 because you're going to sell it for more. You don't buy an MP3 because you're going to sell it from where you buy it. You don't buy an MP3 at all anymore.

But, you know, but you would buy it because, you know, it kind of takes me back to the vinyl days. I would buy a record and I would take the notes out and read who played every instrument. And I felt sort of a connection to that piece. And to me, I think that's why I was sort of dismissive for a very long time of that side of the NFT world was because I felt like that part was missing. People were just buying it because they thought it would be worth more and convincing themselves it was cool. I wouldn't ever want to be a member of a club who would accept me. Yeah. So it's about, it's about feeling that resonance. So, you know, you see great, you see projects, for example, like star Atlas, star Atlas on Solana has been incredibly successful, but there's a bond in the community, which is everybody loves space and they love the idea of space science

fiction. And that's part of the community. So you can share that passion with the other people in the community. And that's what holds them together. And the project is successful because they figured out how to create content that resonates with a consistent community. Right. Even without a game being developed yet. Right. Correct. With extremely cool, extremely cool trailers and cool NFTs and cool ships. My same friends who love NBA Top Shot have bought ships in Star Atlas and we're guys in our mid-40s.

Yep, but that's because guys in their mid-40s all saw the same sci-fi movies growing up. Yeah, we're Trekkies and Star Wars kids and it resonates, right? Same reason we like The Mandalorian and Boba Fett and those things. Right. And I think that that like really is the corollary for what's to come. It's that sort of like, because we, I don't know how old you are, but like, you know,

you watch Stranger Things and that feels like my childhood, right? Absolutely. Goonies. Absolutely. Goonies. Yeah. So I guess for people who are growing up now, they will get those type experiences in these metaverse projects and in game. Yes. Yes, for sure. For sure. And so I think, again, it sounds trite to say, oh, it's all about community, but it literally is just about community. Because the thing is now the community can not just share a passion the way they share fan art and start a

group on Reddit, but they can actually transact with each other and it becomes a virtual swap meet. Because for all those people who have Star Atlas content and are fans, there's a way for them to trade that content and buy it and sell it with each other. So it's a much more, there's a way for them to trade that content and buy it and sell it with each other. So it's a stronger bond still. Right. So say I'm an individual, not a company. I get why Warner Music Group definitely wants to have a presence in the sandbox, right? They're going to do concerts. They're going to make money. They're going to offer experiences. If I'm just an individual, I want to go buy a plot of land next to my favorite rapper. For example, beyond the monetary side, how expensive would it be for me to develop something cool on that piece of land right now? And beyond that, just being for my entertainment,

what does that look like if I ever wanted to monetize it? So I think that there are two things to think about. On the one hand, the tools that the team has been creating for you to be able to create your own content, they've been working on those for years. So anybody can make content in the sandbox. I mean, there's a difference if it's a professional studio to an amateur in their spare time, of course, like anything else in life. But the tools are such, and the pixelated art style was by design. So everybody can make cool stuff because we want it to be accessible to as many people as possible. I mean, the heart of the sandbox is not for it to be a corporate environment. It's about user-generated content, meaning individuals. The reason to have corporate partnerships is because like any

massive community, you want to have a mix of stuff. You want to have businesses and shops and professional entertainment, as well as amateur stuff. So we want an environment where everybody mixes together and what will happen is like a city, right? So you're going to have different neighborhoods in the city with different kinds of content and interests where people will gather for different stuff. So I would, of course, encourage people to buy land in the sandbox because it allows them to build their own stuff. And I think that given the amount of traction that the sandbox has had so far, I think that for sure, you're not going to lose your money if you invest in land. I can't guarantee on a day-to-day basis that it will go up every day. But I think, you know, if you believe that the community direction is headed in the right direction, I think that it's a reasonable investment only because it will hold. Not dissimilar to buy a piece of land in the real world

and building a house and not expecting to flip it in six months. Exactly. So the big investment is to think, what do you want to do with the land? Because also you can come to Sandbox and have a great time without developing land. You can just come in and walk around and experience stuff.

I mean, there's that part of it too. So hopefully there's something for everyone. Build a big mansion in there. And for, obviously you can build this yourself, but like what's the level of expense right now to hire one of these studios? If they said, I want to go in there and I want to build a mansion

to have my presence in, you know, in the sandbox. Totally up to, I mean, literally like any kind of game development. Millions of dollars, right? It can be anything from, you know, in the sandbox. Totally up to, I mean, literally like any kind of game. It can be, it can be anything from, you know, hundreds of dollars to millions of dollars, depending on how ambitious you are, because you can, you can hire individuals who can do this for you who are, you know, freelancers, or you can hire whole studios to make, you know, professional corporate level content for you. And also, frankly, there are great links on the site to developers who work closely with the team, like third-party developers

who specialize just in making content for the sandbox if people are looking for developers. Yeah, it's incredibly cool. Incredibly cool. And I wonder if we really will get to a point, which maybe, listen, I don't think you can ever replace the in-person experience of going to a concert. Right. I would, I would, I would hate to think that all the concerts will be in the metaverse, right. Um, but I think that if you have both, it's such an incredible, amazing addition, especially for people who either can't get to that city or don't have the money and just want to experience that interaction with their favorite artists. Yeah, absolutely. And if you think about it, if we can offer these kinds of metaverse experiences, but at price points where it becomes an investment, like when we buy digital media, whether it was CDs and vinyl or downloads, but at those price points to experience

live events through the metaverse, because there's an economy of scale where the artist can offer that experience at that price point, rather than the relatively higher price point of a live event. That's amazing because that just allows that. Yeah. It's great for everybody because it allows fans, as you said, to be able to access stuff. I mean, often for really big artists, the problem is, you know, not only can't you get to the city or the, you know, the tickets are expensive. You might just not even be able to get them honestly, because they sell out so fast. And so, you know, I think there are a lot of people who would just love to participate in these kind of events.

I agree. And what about the centralized metaverses, the Zuckerverses of the world that we're going to see, obviously, versus these more decentralized versions that are blockchain based? I mean, aren't we going to have sort of this competition between centralized and decentralized metaverses? I think there will always be a healthy tension between the level of centralization and decentralization in what we do, but I think it's extremely important. And this is the only place where we as a company kind of get on our philosophical sandbox. It's very important for us that the metaverse remains open because open platforms and open source technology is the reason that we are all here and have had what limited success as an industry that we have so far. I mean, this industry is in my 30 years working, this is the nicest industry I've ever worked in. And the reason it is, is because everybody has a spirit

of collaboration because we all benefit from collaborating with each other because every piece of software we build is connected to one another. And that gives it power as well. It means every time somebody else comes in and builds a new application and interoperates with us, everybody benefits because there is this network effect. And that doesn't happen once people start walling gardens. It's why all of a sudden Axie Infinity can literally blow out of the water any other game that's ever been made in terms of the economic activity in the game. When you think that in August, Axie Infinity generated the same amount of money for the developer as Candy Crush did for its developer, but with 2 million players instead of 270 million players. That's evolution.

It's crazy. So we're all in agreement that we're opting out of the Zuckerverse then. I get it. And opting into the better versions. I just think it's bad for innovation. It's bad for innovation. I agree. I love that you said that you had your philosophical sandbox instead of your soapbox. I love that. So where can everybody follow you and follow along with what Animoca is doing after this conversation? Absolutely. So as I said, Twitter, definitely.

We're all over the Twitter sphere. You can follow me. I'm at viewfromhk or Animoca Brands as a hub is a great place to be connected to all the different projects of what we do. Obviously, we're on Discord and Telegram and all the usual places. And you can always go to our website if you really need a central repository of stuff. Still might buy an ape. Might happen. Are you an ape? I am an ape holder, I have to say. Of course you're an ape. Of course you are. I should have gotten in on that. See, that's going

to be my one still. Maybe it won't be my regret of 2022. We'll see. But that's the thing. They're always, I'm always gonna be waiting for them to come down in price, right? Yep. Well, and you never know. Oh, yeah, of course. Volatility is the hallmark of the crypto business. That's what keeps us in business, isn't it? Well, thank you so much.

This is really one of my favorite conversations I've ever had. I think that it gives so much perspective onto what's to come and really how early we are. And I think that's so important for people to hear who think that they've missed the boat. Oh yeah, no, the boat hasn't even left yet. Yeah, love it. Thank you so much, Robbie. I really appreciate it.

No problem. Thank you, Scott.