Unchained - The Chopping Block: Did Blur Cause a Decline in the NFT Market? - Ep. 567

Episode Date: November 9, 2023

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest news. This week, they explore the enigmatic 'unhinged scale' metric, consider whether recent layoffs could have been anticipated, and examine the challenges facing the NFT market. They also provide a somewhat critical look at the events of the recent BAYC Apefest and share their takeaways on how Solana survived the Sam Bankman-Fried and FTX fiasco.  Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show highlights:  What the unhinged scale metric is and why SBF ranks the highest in that metric Whether the companies doing layoffs could have predicted the market moves in a better way Whether people and the press are being too harsh on the companies reducing their workforce How the NFT market is a much harder environment than everything else, given the extreme volatility Whether the model used by Blur caused the value of NFTs to go down What’s more important in the NFT market: the supply or the demand The BAYC ‘Apefest’ that caused eye damage to some participants and whether someone sabotaged the meetup Tarun’s takeaways from the recent Solana conference in Amsterdam Whether the people who survived the Solana market crash are like ‘cockroaches after a explosion’ Why Haseeb believes that Solana represents the most incredible story in the history of Layer 1s Whether crypto gaming studios should focus on building ‘dumber’ games rather than AAA ones Why “nature is a Ponzi scheme,” according to Tarun Hosts Haseeb Qureshi, managing partner at Dragonfly  Robert Leshner, founder of Compound Tom Schmidt, general partner at Dragonfly  Tarun Chitra, managing partner at Robot Ventures Disclosures Links Previous episodes of Unchained and The Chopping Block debating NFT Royalties: The Chopping Block: Two on Two Debate: NFT Royalty Throwdown! Are NFT Royalties the Way? How to Build a Sustainable Creator Economy Decrypt:  Ava Labs Confirms Layoffs, Affecting 12% of Avalanche Studio's Employees Did Blur Really Crash the NFT Market? Cryptotimes.io: Blur Jumps Nearly 30% Within Days While OpenSea Layoffs Cointelegraph: OpenSea lays off 50% of staff with severance in preparation for version 2.0 launch Learn more about your ad choices. Visit megaphone.fm/adchoices

Not a dividend. It's a tale of two pawn. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. I'm named the trading firms who are very involved. D5.Eat is the ultimate. Defy Protocol is part of the antidote to this problem. Hello, everybody.

Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insider's perspective on the crypto topics of the day. So quick intro is. First, we've got Tom, the Defy Maven, and Master of Memes. Hello. Then we've got Robert, the Cryptoenastekonist, and Captain of Compound.

GM everybody. Wait, sorry. Zara of Super State. Sorry. Zara of Super State. Then we've got Tarun, the Gigabrain, and Grand Puba at Conlet.

Hello. Very creative. And I'm a Cive that head hype man at Dragonfly. So we are early stage investors in crypto, but I want to caveat

that nothing we say here is an investment advice, legal advice, or even life advice. Lecy Chobin Block. That XYZ for more disclosure. Can I start with a disclaimer disclosure?

I'm not drinking a Red Bull, not because I'm cheating on Red Bull. It's just like there happens, I forgot to bring one, and there happened to be Celsius with this podcast, which is great, but not Red Bull. I can't touch anything

with the name Celsius. I just figured my fingers start troubling when I see the name. I had to point it out because I know someone on Twitter will comment on. Yeah, honestly,

I was about to call you out. I'm like, dude, we're losing the sponsorship money really fast at the moment you start drinking that. Celsius, if you get out of bankruptcy court. Selsius stock is actually ripping. Not the crypto Celsius.

It's crazy. It's crazy. crazy. Americans love energy drinks right up. Well, Monster Energy is actually one of the most successful stocks of the last like five years or whatever. There you go. And what was the one that IPOed that water with liquid death? Oh, yeah, that's right. That was ridiculous. That went public? That went public. Yeah. It's, I mean, I don't really get it. So interestingly, I mean, some people who know me know this, but I only drink water. And so a lot of people, especially when I got into crypto and like there's a lot of money being thrown around and stuff, people would try to get me

gifts and a lot of common gifts is like, oh, you get something like a really fancy alcohol. And so people are like, oh, you don't drink. Like, what can I get you? And so people are trying to get me like really rare water. So it's like, oh, this water was bottled in like Switzerland and it's got this super failure. I'm sorry. You know there is. I can't, I can't taste it. I don't know. The whole non-alcoholic spirit industry now, which makes non-alcoholic tequila and non-alcoholic, like they're meant to taste like a very weird. I don't see the attraction. Yeah, I can't think of anything worse than tequila without alcohol. That sounds like actively the wrong way to go.

A lot of them are just like basically melatonin plus like because like they're meant as like sleep aids for like people who are like trying to drink less. But they want to like they use drinking sleep. Do people drink tequila as a sleep aid? You know, I'm just giving you the pitch from these people. I don't, I can't really relate to the user. Got it. Well somehow I am not in the target market for liquid death even though I only drink water. But I'm just like, yeah, just get regular.

bottle water. Anyway. No, I do sparkling water as well. So that's when, like, I'm trying to be fun. I will get sparkling water. Would you do yourself? I see if on the least. I know. That's what I'm really getting wild. I'll get sparkly water. Maybe a lemon if I'm really feeling spicy.

But yeah, anyway. So on the unhinged scale, you're like a 1.1. The unhinged scale. Okay, hold on. Robert, you got to introduce the unhinged scale. I forgot about this. Okay, so backstage on the chopping block, we are marinating over a new, metric. And the metric is actually to quantify the personality types of different participants in the crypto ecosystem. And it's actually called the unhinged scale. And it really ranges from completely hinged to completely unhinged. And it's measured in standard deviations. And so one of the things that we were

talking about was trying to measure different people. And this is, there's not a formal framework for this yet. I think in the next couple weeks, we might be releasing something for public comment and analysis on like the actual mechanics of this. But to give you some basic color, SBF is probably the most unhinged that we've seen in our industry. He would probably be six standard deviations of unhinged. So that would be pretty much as high as you can go. Where's dough? Doe, probably a five. You put him below. I was kind of curious of like the relative difference. Definitely below. Yeah, definitely below. No, I just, I just want, I don't have a strong opinion on that. Yeah. Most people in crypto, I think by default, uh, started about

out of one, simply because you have to be, you know, a little bit more out there than the, you know, complete median American just to be in the industry at large. But within that, you know, you have people like myself and Haseeb that probably score pretty low. And, you know, what we're trying to do is come up with a framework that the public at large can use, you know, to joke around about, you know, how unhinged. Okay, let's do, let's do some Rochecks. Who's the most hinged? If it's from SBF to who? Ooh, in the whole industry. Who's negative six deviation? Negative six. But wasn't it supposed to be Barry Silbert,

until recently. Yeah, definitely not. It doesn't not appear so, no. He's like a four and a half, I think. Yeah, yeah, yeah. But he was a four and a half dressing as a one. He was the most hinged. Maybe Jeremy, O'Leary.

Jeremy O'Lear. Yeah, he's like a simple Pizzo. It's just like, it's straight business. He's quite hinged. Yeah, he's like a zero, I think. Yeah. Or Katie Hahn. Katie Hahn's very hinged.

But the weird part about this definition is like, it's ranking the number of standard deviations. If I'm zero standard deviations, I'm just at the meet. Yeah, yeah. Yeah, that's true. That's true. Yeah, there should be negative sex. Yeah, yeah, yeah.

Oh, I mean, no, I think even working in the industry can't be negative six. Like, I see, you're saying you have to have some level of unhinged tolerance, so you have to be at least the mean of the population in hingedness. I think you, I think you're, I think, theoretically there are negative sixes, but they don't work. Yeah, I haven't seen them. That's like the Amish, you know, that's like negative say, yeah, exactly. They seem a little unhinged to me. Yeah, actually, no, fair enough, fair, right.

You're not good business in this broadcast, so you can talk shit. That is pretty base. That is true. That is true. Okay, maybe I'm thinking about this the wrong way. That's more like very socially conservative as opposed to unhinged. Yeah. All right, but you were giving out rankings for the four of us on the hinge scale. Wait, wait, wait. Let's do a few others, Vitalic. Hmm. I mean, that's, I think, okay, there's situations where I'd be like, oh, that's a three

and situations where I'm like, I don't know, there's something wrong. Like, he's negative two. What is negative two about Vatelic? He's too chill sometimes. Like in the face of like being as close to a celebrity as it gets in the industry Like how down to earth he is and how like But that's good That sounds like a good that sounds like an unhinged kind of I think it's pretty hinged

I mean that's that was also what SBF did And that seemed also quite a hint when SBF is doing that Obviously fake like if you if you talk to him for five seconds in person It was like kind of no no but I mean his his indifference to celebrity Seemed quite unhinged. Oh yeah but but but But, you know. Which is what you're talking about with it.

Vitalik wasn't going to try to get built. Yeah, Vitalik has a real indifference. I think SBF had an illusionary. Yeah, I think even in the bug they were talking about the Krola thing. The Krolet had like an act. Yeah. I mean, you know, it's like, hey. Yeah, but there's a story about Anna Wintour where he's like, who is this, but I don't really care who this person is.

Like, whatever. I'm playing my legal legends, whatever. I know. The Michael Kive's thing was all clearly like he invested in that fund just to like meet celebrities. Come on. Yeah. Yeah. Yes, but in a, but in a, not because they're celebrities,

but because they're useful to his other. I would say Vitolic is more unhinged for reasons. Like he likes drinking green tea and white red wine. Yeah. That shit is unhinged to me. That combo is like fucking crazy. Yeah. So I'd say I like the three.

I'd buy the three. Okay. Let's do some other. Who else? Who else? Anatoly. He's more hinged. He's probably like.

Very reasonable. One and a half? One half, two. Yeah. One and a half. Arthur Hayes. Oh, he's up there. I mean, he's in the four camp. Okay.

Yeah, yeah, he's intense. Brian Armstrong. He's intense guy. Brian, I put lower, maybe two. He loves crazy longevity stuff. So you got to give him a little bit of... Yeah, but if you normalize for SF, yeah, if you normalize for SF, I think he's like a one. Yeah, but like, I mean, that's still...

Each standard deviation gets harder and harder. That's true. There's less and less people there. Yeah, yeah. Who else are we... It's true. Who else is worth kind of... It's easy?

I mean, it's got to be pretty high. I feel like a public appearance is like a two, but like reality is like a five. You know what I mean? Like he like tries really hard to have like a very hinged appearance, but like I don't know. It's got to be the craziest business in the world to be running. That is true. Yeah, it's true. And he's been on the run and more or less itinerant for like the last decade of his life. Yeah. He's got to be four and a half.

Yeah, that sounds right. Well, we're going to be releasing the actual framework for this in the future. You make sure you comment and tell us how much you disagree. We'll have a comment period. We're going to obey all the rules on like the SEC. And the real question you should be asking everyone is like, how the fuck are these four people working in crypto? And instead of suggesting just a prediction market for this thing,

they somehow are like giving people single grades. Shame on us. So in this period, give us a single grades. I think you reiterated them on. on our dinner the other night. For us? For us. Four of us.

I think Tarun, what were you, a three? Wait, Tarun was a three? Yeah. I mean, he has purple hair. That adds some points right away. Yeah, yeah. I say that surprised that it's that low. Oh.

Wow. Well. Oh, yeah. Okay, okay. Turun is a three. All right. Terun is a three. Who else was a three?

You, okay, so Haseeb might appear to be a one and a half, but nobody has argued more vehemently that they should be ranked higher than Haseeb, which led me to believe that the number had to be higher than initially perceived. So I think Haseeb is also at 3 and Tom and I are. You think I'm double? Yeah. Well, it's not really double. Wait, hold on.

You think I'm as unhinged as true. It's not really double, right? Because if it's normally destroyed, it's 95. That's true. Yeah, that's true. It's only 4.7%. Okay, fine. Sorry, just to be.

All right, I appreciate that. Thank you. Very unhinged. Yeah. The fact that you live in Seattle. stretches the number like. Okay. Stretches?

Yeah. Seattle's like the most normcore place in the world. Yeah, it is kind of. Yeah, exactly. I think this is true. In fact, I think it pulls you down. But the norm core is like, it's specifically it's affected, right? It's like you're not actual normal.

You're like, you know, pretending to be normal, which is the choice of living in Seattle. So I think that actually, you know, to, to Robert's credit kind of supports the idea. I just, I don't know. I feel like Seattle is like a place people go to retire. Yeah. Right, which is why if you're there at the young age of his seat, it's a little bit questionable. To be clear, I'm only there about half the year, so I'm in not Seattle for more than I'm in Seattle. But I would argue that I'm a two, I think.

I think, there's no way that I'm at the same as. Where is Caroline Ellison? Oh, it's really high. New York? No, no, I'm sorry. Yeah, I mean, based on her blog posts and some of the things that she wrote publicly. But is she of five or four? Four and a half.

Four and a half. I mean, the whole Chinese harem stuff was... Oh, yeah, yeah, yeah. So the thing is, like, I think mentally, she might be like a five, whereas, like, in terms of her actual behavior, she's like a two. You know what I mean? I don't know, perpetrating a fraud to the... Well, but, like, perpetrating a fraud out of compliance toward your, like, a weird, abusive boyfriend. I don't know. Like, it's kind of, you know... Four and a half. I mean, it's up there.

Okay. It takes quite the personality to pull that off. All right. All right, fine. I'll take that. So what about Tom? Two. Two?

Yeah. Yeah. Yeah. He's wearing an arctic shirt. That's true. That's true. Does that make me hinged? That's like SF norm course.

Yeah. That's quite hinged. That's quite hinged closing choices. Okay, well, I'm hoping that this scale takes off, even though I don't totally understand it. But I'm sure everyone listening perfectly understood. Yeah. I'm actually looking forward to one day. Do you guys remember, like, D-Gen score?

Yeah. Yeah. I hope somebody, like, on crypto Twitter takes this idea and actually like productizes it in some way and comes up with some way of like prediction market so I actually met the dex blue team in duncan and the team was there and it was also kind of one of those things where de jans scores it was supposed to be like a marketing tool for dex blue which was like this decks aggregator but then like took on this life of its own like way beyond dex blue which i don't know is if it's still active or so thing but yeah i mean you're right that like that was actually the product not the decks aggregator but yeah i mean you're right like that was actually the product not the decks aggregator So, yeah, it was crazy. That was like a whole thing. And then, yeah. Yeah.

You should be able to look at a wallet and figure out how unhinged they are. That seems hard. Yeah, it's like D-Gen score. Yeah, yeah. Permissionless universes are supposed to make it hard to do that, right? Turns out, yeah, people put a lot of information on chain as well as online that lets you suss out all that stuff. That's true. Well, you can have like a Chet GPT model, a GPT model to actually determine this based on publicly available information.

Now it would actually be a really interesting. Actually, I want to know what chat GPT thinks about this metric. All right, well, we can go home and ask. All right, so let's get on to Crypto News, besides obviously this release of this new metric. So it hasn't been a super busy news week, but one of the news of the week is that there's been a string of layoffs. Obviously, this has been a theme of the last year, but it seems like there are a few stragglers in this layoff season. So OpenC, the largest, or at least at one time, the largest NFT exchange. Right now, they just announced that they are laying off about 50% of their workforce.

Credo, which is like a decentralized custody product. They also laid off 50% Ava Labs, the company behind Avalanche laid off about 12%. It is layoff season again. I don't know if anybody's seeing any dynamics that seem different. Is this like a new wave of layoffs? Is this tightening further? Or is this just kind of delayed response to what otherwise is. has been a tightening of the belt.

I think it's delayed. I mean, if you think about it, you know, and I don't know the innards of a company like OpenC or Crito or Avalabs, but, you know, it seems like you could have made this decision a year ago when you knew that the market was going to be incredibly challenging for the 12 months we just experienced. You know, if you're someone like an OpenC, you know, you probably knew a year ago that volumes were down.

We were entering, you know, choppy waters. almost everybody had blown up. I think that would have been the time to downsize. I feel like if you're doing it now, it was probably just waiting to see if there was going to be an earlier rapid turnaround. And I think any of those organizations could have made the call. I mean, I remember a year ago I was like expecting most companies

to start making major layoffs that and some did. Oh, yeah. Who actually, who would you put Coinbase, I guess, right? Yeah. Yeah. Well, I think, you know, a lot of even non-cryphrine tech companies obviously got hit with sort of, you know, poor macro outlook, stock price is declining. But then weirdly, like, there was actually whipsod and they started like hiring again within the same year, like Meta was hiring again, Google was hiring again.

But I think, you know, for crypto companies, it's, it is cyclical. But I think a lot of companies, frankly, just struggle with like PMF and revenue. And it's like you can sort of hire a bunch of people and sort of assume you, hey, be able to raise your next round or figure your business model. And when that doesn't really happen, like you have this enormous. load and hiring is like a one-way ratchet too. Like ideally you know you think of your company like a machine and it's like okay we you know turn up the input when you know times are good and we turn it down when when times are bad but like people don't want to turn it down right. It's like a really painful process. So inherently there's like some inefficiencies

in the market and that kind of gets get shown now. Yeah this the current batch of layoffs sort of feel yeah I agree that it's kind of late but there's also this sort of weird thing of like there's so much press around these layoffs. I feel like OpenC, I kind of almost feel bad for them because they're just so many, like, all these stories of crazy bull market parties they had. I guess like disgruntled employees must be leaking them,

but there's just like 20 stories I've seen in the last two days. And I kind of feel like they don't, they're getting a little too much shit. I don't feel like they kind of deserve as much as they're getting, but they're really getting thrown onto a bus. And I think the excesses of 2021, oftentimes we're like, you know, because it's such an industry of like feast or famine and in like the feast in the famine times, you know, people are like extremely careful when they're, especially

if they're just starting about hiring. And then like as soon as it feels like super cycle, not to use a band word, people suddenly are like, oh my God, we just can't stop growing. So we're going to just, you know, go gangbust. And I think like it's different than the traditional, you know, stereotypical tech company where you have this like, you know, social media type of company where you just have this like straight up growth curve and like you can keep hiring into it. Like the fact that it's more financing and like has these like cyclical cycles means that you kind of have to be ready to do things like this. Yeah, to Tom's point, it's like it is kind of very painful to do. And I think, yeah, I mean, I as a founder definitely understand. Like it's like it's not the thing

that you're ready to do, especially. It's like a very hard thing to type message. I definitely would say that I think people are very harsh on these companies for being late, and I'm not totally sure it's fully deserved. I agree there probably... Yeah, there's a sense in which, like, when a company does layoffs, in a way, like, they have already done the work to stem the bleeding, right? In a way, that's kind of like the problem was before they did the layoffs,

where they were burning money, they were running, like, things were totally unsustainable. and they were just delusional about the state of their industry. If you were OpenC and you didn't do layoffs, like you said, a year ago, when volumes plummeted through the floor, fees were being cut down, there was basically like a price war between Blur and OpenC, and OpenC just kind of like pretended it wasn't happening. Like that was when it was a problem. And after you normalize it, say, okay, we're in a new world now.

And we don't have crazy high margins. I mean, that was the craziest thing, which is that OpenC was getting, what was it, seven and a half? Two and a half. Sorry, two and a half. They were getting two and a half percent margin on selling JPEGs. On crazy numbers.

Right? Yeah, on insane numbers selling JPEGs, and they had no competition. And they're not that company anymore. Well, so a discussion I'd seen on the internet a lot was like, would OpenC have stemmed the tide if they launched the token right after? Just like Uniswap launched their token in response to sushi swap? I'm kind of curious what you think. Do you think they could have?

I think the more. important thing is like, what's the actual market size, right? And NFTs is as a market collapsed for the most part. And this is why I actually have a lot of sympathy for OpenC and pretty much any company in the space going through this is because the market size itself can change underneath your feet incredibly quickly. Right? If I'm selling SaaS software, the market for it's not going to like double or like have in a year. Not according to all the open AI killed my startup memes. True. That's a fair counterpoint. But if I'm an OpenC, the market for NFTs literally can 20x and then drop by 95% in a year on both directions.

Yes. Yeah. Yeah. It is. True. Yeah. Can go up 20x and then drop 95%. Right.

And that's roughly what's happened. And like, that's a really like max difficulty environment for any company to operate, period. Like, you know, crypto in that sense is so much harder mode than most other industries. And so I have a lot of sympathy with them. I mean, like, you throw this at your standard San Francisco startup, and it would be like gut renter. Yeah. You know, they just struggle to get product market fit in the first place, generally.

Right. And once they have it, they keep growing. So it's interesting. You asked the question about, like, okay, what would happen if OconC launched their token? I more or less agree. I don't think it would have mattered. It might have helped them this one firm. Well, do you think, like, the competitive equilibrium we see now where it's like blur is like 60 plus percent market share?

Do you think that would be, yeah, where would you? Possibly. But, I mean, at the end of the day, like, a token is just a subsidy. Right. Like you can sell like OpenC had raised the amount of capital that if they wanted to pay out subsidies they could now instead they ended up paying subsidies to their employees, I guess and hiring a bunch of people who clearly were not needed to launch the current product, which is struggling. Right. I'm also like what were all these people doing that OpenCC like I feel like OpenC has been remarkably uninvative. Yeah. I mean I guess they've launched well they did. Well they did it. Devin's credit his tweets announcing the Lilliof said everyone is telling us for a follower. So we're not going to be. to be a follower. Yeah, yeah. And they acknowledge it.

They acknowledge it, which I respect, right? I respect the layoffs. And my heart goes out to the people who were affected by the layoffs because that fucking sucks. But it was right for the company to do the layoffs is the point that I'm making. Now, one question that I've heard a lot, kind of looking back on the NFT market over the last year, because I think you raise an interesting perspective. I've heard from some people that they think the reason why, or a major contributor to

the decline of the NFT market was blur. I don't know if you guys have heard this argument before. I disagree. Yeah, I've heard this. Personal. Okay, okay. So I want to give the devil's advocate because this is my understanding of why people say this, because I also disagree.

I don't think it makes sense, but this is what people have claimed, is that so Blur. So Blur is an NFT aggregator, but also has their own order book so you can trade NFTs like on OpenC directly on Blur. So prior chopping block up. Also, full disclosure, we're investors in Blur. We are just investors in Blur. So Blur, the way that it, one of the ways in which it initially got a lot of traction was by appealing to professional traders

and making it seem more like you're trading tokens rather than trading NFTs. So kind of commoditizing NFTs a little bit more and encouraging people to sort of farm NFTs, provide more liquidity on NFTs, and increase the liquidity of NFTs in general, especially for floor NFTs. And the argument goes that before the market was very illiquid

and that made the market feel more like collecting. And when Blur increased the liquidity of these NFTs, it made them more like shit coins, which made them more volatile, which made them subject to a bigger market cycle, which ultimately devalued NFTs on the whole by making them more like financial assets instead of like collectibles. That's the argument that people make for why this caused people to want to dump, and it made NFTs less valuable on the whole. That's the story. Why do you guys disagree with that story? So, I mean, I think maybe going back to the token question, I think there's actually a good sort of counterfactual here with Gem, which was when the original NFT aggregated, which were also investors in, which was acquired by OpenC.

And, like, Gem was a pure aggregator, right? So it didn't actually, you know, have its own order book. But it was already eating market share from OpenC by the time we got acquired. So I think, you know, at face, you know, I think that sort of speaks to the idea that just building a superior product in this market, you can win market share. It's not pure sort of network effects, which is, I think, what, you know, most marketplaces are based on. There's room for disruption in the market.

I think for Blur, like, I agree. I think there's, that's already how I think how most people were treating, yeah, NFTs, right? Certainly there were people who were going to South Abis to buy a rare one-of-one art blocks. But for most people, they just wanted to trade them back and forth, right? That's the whole concept of floor, like, was invented in NFTs. There aren't floor Picasso's. Like, that's not an idea. I mean, there are.

Well, there are, but that was not a point. Are there floor Picasso? No, no, no. Any Picasso? The etchings are like the flow? As in the function minimum over sets of prices exist. Yes, yes, yes. I agree.

But like that was not, you know, if you go to like an art gallery, your website, they're not like, oh, here's the floor to get like a Twombly. And they're not 7,000 of them. Yeah, yeah, yeah, exactly. Exactly. Although prints might actually fit into that. Yeah, that's true. That's true.

But, you know, anyway, I think NFT, this is, it's almost sort of like your meeting reality where this already existed in the minds of NFT traders, but no one wanted to come out explicitly and say it. And so here is a sort of pure, full accelerationist, like, NFT marketplace, come and get it. And like, you know, this is kind of what you're. get as a result, but it was already effectively, I think, happening. This is just sort of meeting reality. Well, the thing that didn't really exist prior to Blur was there was no bid side of the order book. So all the markets existed in basically an offer only one side of marketplace where it was like,

okay, I'm going to list for sale different NFTs at different prices. And you only saw one side of the market, which was the offer side. And Blur, using their token, incentivized liquidity on the bid side, four floors, but they built the bid side of the order book. So there was like, you know, you can see for any project, you know, well, here's the bid for a floor and what the amount of demand is. And in my mind, it created for the first time the ability for people to essentially liquidate at the floor easily, as opposed to listing at the floor and hoping that somebody would like lift the offer, they were able to actually sell into a bid. And I take that as something new. And when you hear people like talking about like, oh, it allowed anyone to

sell their NFTs, which is why NFT prices fell. Like, there is a amount of truth to that. And that they functionally gave people the ability to offload a collection. You had significant holders of different collections. The first... Yes. Dump 100 at once, which was never possible before. You'd have to wait for there to be enough demand for people to buy 100.

And this enabled someone for the first time to sell 100. And it did change the dynamic, I think, functionally. but, you know, I don't think it would have had that big of an effect on prices. I think, you know, at the end of the day, creating more liquidity for something is only good for it. And it's not like, you know, the value of board apes dropped in half because you could sell them more easily. The ability to sell something more easily also makes it more appealing to buy in the first place, knowing that you don't know. Yeah, that seems right to me. Is that like liquidity makes something more valuable than less valuable?

Yeah. And so, like, they strictly increased liquidity, like undeniably increased liquidity for NFTA. It is so much easier to buy and sell NFTs because of blur than it was before. And maybe the first order effect of that is like a short term like, wow, you can sell them and you never could do that. Therefore, price go down. But by fundamentally improving the liquidity for these assets, I think it makes them on an equilibrium basis more valuable. And so I think their story just got caught at the wrong time of, you know, they got popular as pretty much the whole market for everything was collapsing. Right.

Well, I will say one thing, at least, like, team-wise, if you, like, compare the two teams. Like, OpenC was, like, on the development side, like, had, like, literally the best, a lot of the best application-level smart contract engineers, like, people who wrote a ton of ERCs. But they were, like, not traders at all. Like, if you ask them to, like, even make this argument about the offer and bid, like, all of them would just be, like, too much finance talk, go away. And so... Other than Nathan Chastain, I heard he was... Well, yes, yes. Well, yeah, yeah, sure, sure.

But, I mean, I basically just think, like, the problem with the NFT market was that it initially started off, like, vibes only, right? It was like, oh, like, hey, everything's going to go up forever. So, like, we don't need to think about market structure. Fuck that. Like, why do you need to offer one side of the market? Like, fuck the floor people, right? Like, the entire thing is going to go up. And there's Opency kind of, like, hung their hat on that for a really long time.

and there were all these attempts at like disintermediating that and then it just turned out that the right combination of token incentives and lending sort of worked in that favor, in the favor of that. And I just feel like they were unwilling to accept the financialization of NFTs because they were so bought into the creator royalty thing which is like obviously illusory and fake, as we all know.

Right, right. Yeah, it seems very true that like the character, the NFT market definitely changed. It became a lot more about floors. And the other thing, too, is that the sense that everyone had that the prices were going up and therefore the net worth was going up was also a little bit illusory. Right.

Like in an extremely illiquid market, you are not allowed to just mark your entire portfolio. I mean, this is the whole argument that we made about SBF and the bullshit accounting he was doing. Super illiquid market, you can't just mark your entire net worth to what the last trade was cleared at. You have to take a discount based on the cost of liquidating, right? And so if you have a big pile of floor punks or floor apes or whatever, and you're like, wow, I'm a 40 millionaire now,

it's like, well, but you can't actually sell that without something like Blur. So the reality is that you may have had the illusion that you were richer at a certain time when you couldn't actually liquidate things in a timely manner. Like the reality of your net worth became real when Blur created that liquidity for you. Now, I agree with you, though, that there's the confounder of time, which is that as time went on, interest rates went up, Crypto went down. All this stuff happened around the same time.

And so it's hard to really, we can't really run it back and say, how would that crazy NFT bull market have played out differently? But we can look at all the attempts at like doing what Blur did along the way, right? The gems, the pseudo swaps. And like they all missed some facet of the microstructure, but they were all like taking a hammer and trying to like chisel at it. And so there is a sense in which you can see that OpenC never really, they didn't really try to make defense.

against other than maybe acquiring it, right? And that was sort of to me the thing that... I mean, they did in the very literal sense. They just weren't effective defenses, right? I mean, they were trying to like block lists and all this kind of stuff. Or like... Or acquiring gem. ...supply-friendly than demand-side friendly.

Yes. In a upmarket, you want to be supply-side friendly, right? Right. Because you need supply to get like inventory to make the kind of marketplace work. But then down the market, it's a complete demand-driven thing. And like, if you don't understand that, you're... immediately going to just get complete. So I remember getting this argument with Laura

is that I've always believed that the demand side was more important than the supply side in NFTs. Except during 2021. I think even then, it's like when the celebrities were showing up to sell like random dog shit NFTs to people, it was because of the demand side.

Like people, like the creators could make so little money anywhere else relative to the NFT world. They were going to show up and say like, what do you want me to make? I will poop on a piece of paper and put it up if that's what you will pay, you know, like $5,000 a pop for. Not on a piece of paper on a pointer. That's right.

Yeah. On a blockchain. Exactly. Exactly. I guess like there is some truth that, but a lot of the demand was driven also by, A, speculation, and B, this narrative of like this is the future of art, whatever. Totally. And there's always some reflexivity between the two. It's never just one of the other.

And I just like, I would love to, in hindsight, look at the portfolios of all the artists. who like successfully sold then to find out if they're D-Gen gamblers or they're just like sitting in stable coins. So like I would love to see like the relative portfolios of the NFT buyers versus the artists over time. Like that would be like the most amazing chart to ever. As long as the artist didn't recycle it back into crypto, I would guess. I kind of think a lot of them more than you think.

I'm sure. I know some of them that really, I feel like they like once they got ether, they're like, ooh, I know how to, I can gamble with this. now. It was like a change. Their psychology changed from like humble artists to like, I'm a really great investor. And I saw that trope at least three or four times. Not good. Not good. Well, okay. Speaking of NFTs, there was another interesting story from the NFT world, which is there's a event called ApeFest in Hong Kong, which is an event you can go to if you'd like to congregate with other holders of the board apia club, Yuga Labs universe. And apparently there was like some

There's some club. They were out clubbing, some rave. I don't know what, something. And apparently they had some UV lights that they were shining somehow in the overall presentation of this light show. This is how you know Haseeb has never gone to a nightclub. He talks about the overall presentation.

I don't know. I didn't actually see any pictures of what it looked like. All I know, there were UV lights. And photoceratopsis or something like that. Some kind of eye damage that apparently happened to a significant number of people who attended this, you know, like a small percentage of people who were at this club, I guess, event.

Let's call an event. Is that work? I think I'm a 1.5 after that explanation of a night club. Yeah, you're going down. Yeah, exactly. I'm going close to one now. Yeah, we'll see. We'll see. Anyway, all right. I think that's a story. So I will say

I have helped produce events that had, you know, projection mapping and other types of light shows. And I worked in, I kind of did some, you know, played music at some of those things. And all I got to say is

how the fuck do you have disinfecting UV lights anywhere near this place? Like literally no venue. I've been to the most illegal ratchet venues in the US and none of them have anything close to this. How is this fancy Hong Kong venue for like people who have to spend

100K to get in effectively or whatever the price of a Bourdap is now? How the fuck does that place have this and like no checks for that? I'm telling you like really shit venues never have anything like this. This is like this has got to be one the most ridiculous thing. Like I almost feel like I hate to sound like Reddit conspiratorialist, but I kind of feel like someone did this. You think someone's sabotaged? I think it's sabotaged. The board ape

meetup. Yeah. Do you think it's a world of women? Who could have been? I don't know. Machi. You think it was the crypto bunch? No, I'm kidding. Machi, please don't come after me. But like I I just mean like clearly it's someone like that how the fuck does that happen? That's like I've never heard of anything like that happened in nightlife and I've been to a lot of fucking venues. Well, I assume the lights weren't done by the venue itself. Usually they are. Yeah. I saw one tweet that could be totally misinformation, but it was like somebody said, oh, I found a photo of where the lights were being used incorrectly.

And they were being used to create a black light effect on some like, board ape art. Oh, oh, I see. Specifically for some NFT presentation thing. Specifically for, you know, these like cardboard cutouts of... Wow, the social Darwinism of... Ford ape holders really is

even more true. Darwinism is a very good, very appropriate analogy for this as well. So it's possible it was just like part of like an art, like exhibit. Yeah. But I'm saying like, like, like, okay, so if you do projection mapping, so projection mapping is like, I have a 3D space, I map the space and I'm projecting lights on it and I'm attaching it to the sound source

so that the light's moving, you know, the projection is moving with the sound. You bring your own stuff there, but like almost all the venues check, like what lights you have and what you're, like even these really dog shit illegal venues will be like you can't use certain types of lights. So I'm like shocked to that no one said anything.

I don't even really understand like the idea of ape fest. Like if you go to breakpoint, great. You love the Salana vision, the religion. you're into it. If you go to, you know, DefConnac, great. You're like in the Ethereum. Like, what do the ape stand for? Like, what do you, like, what is, what is the purpose of that ape fest? You stood for having made money in 2021 by accident.

You could go to a bunch of crypto conferences and do that. And I'm guessing, actually, a lot of ape holders have lost money as well. Like, I don't, that is true. You go to ape fest and it's like what, like, you know. The community of morons. Like, I don't know what else. Like, other than that, there's like nothing. The weird thing, too, is I saw, I saw some photos of people.

there and it's all men. And I'm like, why would you? It is the moronic insult club that they should change from Borde A Piat Club to that. All right. Well, we were just talking about Salana. Interestingly, so Solana has been ripping. It's up something like three X this year. It's up to 45, I think I saw as of today. It's been outperforming pretty much almost everything else in the top 100. It's been very impressive, the run up. A lot of people were afraid during the FTX liquidation that the FTAX estate was going to be selling much of Solana, and that was originally could perceive to be bearish, but apparently it's selling less than people expected,

and a lot of their salinas locked up for much longer than was understood. So Salada has just gone nuts. It's up more than 2x in the span of about a month. So there was, of course, just breakpoint, which is the big Salana gathering. I think it was in Lisbon. No, Amsterdam. Oh, Amsterdam, sorry.

It was in Amsterdam. You were there. Tell us about your observations from Amsterdam. What was the vibe? Yeah, I mean, you know, I sort of am, you know, I know how Tom is just like, oh, if you go to X conference, you're like part of the X tribe and what I don't. I'm just a salon, no, no, no, no, no, I have no maxiism. I just kind of, I think every ecosystem has its pros and cons and there's like obviously certain things that some of them do better than others. What are the pros of the Cardana ecosystem? They wrote the first paper that proved why Bitcoin has achieved safety and liveness in 2015.

Good job, Cardana Community. Yes. Unfortunately, everything else maybe not so good. But, okay, I think the interesting thing about Solana is, for the first time ever, since 2018 or 2019, did I meet, like, developers who were like, I never, you sent a transaction or wrote code for the legacy platforms. where in 2018, it was like all the ETH developers, like the Hayden for Minoswops of the world,

where like, I've never sent a Bitcoin transaction, but like, of course I sent ETH transactions. And at the Salana conference, unlike, say, like, some of the other L ones, I met people who are like, I've never sent an ETH transaction. I've never sent a Bitcoin transaction, but I, like, I've used Solana on there, right, slon. And I was, like, shocked at how many of those. And what do they do on Solana?

So, weirdly, it's like really crappy NFTs. like really crappy, like cheap but crappy NFTs. It's a lot of like, so the thing is Solana doesn't have many tokens. So actually it had a ton of tokens in 2021, 2021, those were all the stamp coins as described in in the trial, all worthless and zero. And so then Solana kind of had this like, clearly there was no other token other than Seoul realistically. Like there are a few of them.

But Salana's staking yield was actually quite high. They still have relatively high inflation, and they had this kind of weird competitive staking market. But recently, sort of Gito has sort of, with disclaimer, disclosure, were investors in it, has sort of like started to really kind of take over the market there. So I think there's much more accessible Thelana yield, which has helped make the ecosystem a bit have a little more like defy related stuff working out. And what was interesting is a lot of the projects that I would call like the cockroaches, they like maybe raise in 2021, they didn't pivot to AI, they didn't die due to FTCS, taking all their funds, which a non-tributorily hard. Yeah, like there's a lot of things you could have fucked up very easily.

And like being in the bubble, you would be very high chance of dying. But the projects that survived, you know, like the margin drift, Gito, et cetera. they all are pith are all getting ready so it seemed and some of them had announcements of tokens to start having tokens. So I think there's also this thing where people are getting ready for the retro airdrops of Solana. And I think whoever survived is sort of like the cockroach that survived the nuclear explosion and they seem to be like kind of doing well. So there's that. The second thing is like I've never in Ethereum conference and hackathons, you often meet really awesome developers, but like you don't meet that many who are like, I want to work on payments, which, you know, it sounds like the most boring application, right? You may be used to in 2019, but now if you go, it's like everyone wants to do ZK Identity, they want to do some like kind of complicated type of thing. But in Solana, there's a lot of like, like, we want to do like USDC payments in like a weird wallet for Zimbabwe. Like, like, it's very, it is actually like it reminds me of Ethereum hackathon.

in 2019, whereas Ethereum hackathons now are way more focused on higher-end technology ideas. And so I think there's kind of this baseline of people who just are completely coming new to who were only brought into crypto by 2021. And Solana happened to be the place they went. And they have no, I guess they don't, they're not like, they don't talk to other people who are in other parts of crypto. And so they're just in that ecosystem. So it's like the only L1 that I feel like has this completely organic.

unique ecosystem because like the EVML ones, so the ones that are compatible with Ethereum, they have a lot more like founders who just like moved around, right? It's like Trader Joe moved from Avalanche to Arbitrum and then they had more success in Arbitrams then like the EVM people didn't really have much. There's no stickiness other than ETHMana because they all deployed eventually to ETHMana. But in Solana like there's nowhere else to go. There's nowhere else to go. But like if you look at other ecosystems, you know, I, and And I didn't go to the near conference, which is right now. Otherwise, I would have been able to give a comparison.

But it doesn't feel, there is like this real notion of people go in, and this is their first experience. And it must have been, it reminds me so much of 2018 Ethereum where people are like, I bought some shit coin in 2017. And then I, like, decided to work on a project. Like the Solano wealth effect of like, I bought Seoul and I, like, made a bunch of money. And now I'm just going to, like, work on Solana projects. The wealth effect is real there. I mean, that's a little bit curious to me too, because it must be just sort of time-weighted that most people, even in Solana, have lost money, right?

Because, like, it moved so rapidly, and it had such a dramatic assent, both in terms of price and in terms of notoriety. When it was shot all the way to 200 and then gradually it was kind of ticking its way down. And that was like when Sam was at the top of his empire and he was really pushing the Salana narrative, it must be that most people have actually not made money on net. right. We're in a bare, more or less and a bit. Yeah, but my point is, like, I'm looking at the conditional distribution of the ones who did. And those are the ones who are, that my point is that's a large enough subset.

Yeah, yeah. So I get it for NFTs. I get it for a lot of other things, but for developers, it seems surprising to me that, like, where I made money is coupled with where I am because a lot of people buy a lot of tokens. One way of thinking about this, which is slightly different, which is where I made money means

I can quit my job, my normal, dev job for like one year, two years, three years. And so I've bought myself like a few years of like not doing things. And that's, and that thing that bought me that, I spend time reading a lot of the docs, I spend time meeting people at these conferences, and then I start writing code for it. And I think there is this effect that Solana seems to be the only ecosystem I can for sure know, like I said, I didn't go to Nearest conference, so I don't know right now. But Sons definitely has this.

There is really clearly this, like, whoever survived is, like, doing well. Like, they're still working on stuff. It's like, it doesn't feel like zombie land, which is, like, a very unique thing to them as far as I can tell. Whereas, like, you know, I think in other L1 ecosystems, it's usually what happens is, like, when things crash, it becomes extremely adversarial and dog-ne-dog, and everyone's trying to undercut each other. And then, like, they kind of kill their ecosystem, right? I think you've seen this in a bunch of other places. I won't name them so their armies don't go after me. But you've seen that kind of like the bear market leads to like all the projects

fighting with each other. And then there's a zero-sum thing and like the ecosystem. And Solana somehow doesn't have that zero-sum mindset as much. It's like very- Well, I think all that zero-sum mindset was encapsulated into SBF. Yes. And he was defenestrated all the last. And everyone who survived is like, oh, we survived despite that.

And so they're way less. They don't have it. It is definitely the most incredible story in the history of L1s is Solana's reversal from being basically this more or less exchange chain of FTX and being completely under their thumb and subject to their distribution, surviving the biggest fraud basically in the last decade being at the center of their blockchain and still nevertheless. I mean, it was the Dow hack. Victoria. And if you survive it, I feel like almost like religious texts. A chain needs to have like this one like Gilgamesh flood moment.

Totally. And like that's the thing that keeps you. Yeah. And everyone who survives that, that's like the branding of like you've made it into the, the real league of the real league. I don't know what else called. The real L1 league.

But like, how many, how many L1s are real? Four? I don't know. I don't. That's a good question. It's hard to say.

Like I definitely think Solana makes it to that. It's like it really, they really somehow, the stripes from that extinction level, nuclear extinction level event. And the way people are so optimistic and are not zero-sum about like, just like, oh, there's like this much of, there's this much Tam and the eco-stem, like, I'm going to try to kill my competitor over it, is very surprising. Like, like, it really is like ETH, 2018, 2019. And I think, like, you can get mad at them for, like, not being able to run a full node, whatever. Maybe they don't have like clients yet, but they're trying. The technical, like, all the people fighting on Twitter about the shit, I'm always like, yeah, but, like, arguably Ethereum wasn't as easy to run in 2018 either, right? Like, there's so much stuff that went into it to make it what it is.

And obviously, it is a really amazing place because it's survived. it has all these assets, has all liquidity. But I do feel like you have to give Sala a lot of respect. You have to really treat it like it's earned its stripes. And I think like that's something that people sort of miss in the L1 war, right? And yeah, like I said, like I said, their defy, you know, a lot, another argument you see a lot on Twitter's. Their defy TVL is so small and like how could they really kind of be a thing? And it's like, yeah, they have no fucking tokens.

The only tokens are really sole. Everything is soul, right? But they've somehow still been able to not go to zero. Just might that. And you have to give that, I don't know. I think that this extinction event thing is almost like a necessary thing. It's like why do people who follow religions like, like religion is like the narrative always has some like hardship hero's journey type thing. Right.

And like somehow this is also true for these chains. What's your take? Yeah, I mean, I agree with sort of the story of being forged in a crucible and sort of coming at the other side. Like, that is true for like a lot of companies as well. And I think it kind of goes back to a saying around like, if you're part of the Salana tribe, you follow the Salonagana. It doesn't matter if you can't run a phone.

It's not part of our religion. That's not part of our code of ethics. Like, that's somebody else. I think going back to what you're saying, though, around like, what's happening on chain, I'm still like a little bit confused by. Because when I look, it's like, okay, I mean, frankly, you know, even a lot of the top project activity, like they do have tokens, right? Like, like, Maronade, Drift, like, Orca, Solend. And it's like, okay, so people are doing, like, Gito's obviously been, you know, ripping in terms of TVL.

It makes sense. Like, it's a very interesting play on sort of the whole MEP space, the LST space. But, like, that's, it's sort of like, you know, building a great operating system, but there's no applications. And it's like, okay, what else are people doing? Like, what else is happening? Like, I think that that's kind of thing that that's missing for me. I think the weird thing to me, actually, about the 2021, like, bull market stupidity, Solana was, like, people were raising for, like, some of these public raises raised, like, $80 to $100 million for where they sold you in-game items before the game was made as, like, their raise. And, like, that stuff is obviously dog shit, dog shit scam, whatever.

But, like, this AAA game on Solana thing was, like, just kind of obviously a dumb fucking. But it does feel like people are focusing way more on these like consumer social payments stuff. That was like the number one thing. Honestly, I am so traumatized by the term AAA. Like I've, anything that I, any game I've ever been pitched has always been described as AAA. I think I will fundamentally. I'll settle for a double A game. Yeah, I'll settle for a single A to be honest.

I will say the following. I will say the following. I've talked to a lot of people who are LPs who this week and, and, and, and, you know, who are in crypto. And the number one thing that I ever, I asked them is I'm like, oh, like, what do you think about like funds, gaming funds, like gaming specific funds? And they're just like, yeah, you know, like you got to wait five to seven years

for seeing if crypto will make a real AAA game. And I just fundamentally don't think that such a thing exists for crypto. I think crypto is the world of 500 shitty games. There's going to be tons of Angry Birds. 100%. Yeah, that's the other thing that somehow, I think, think people don't understand about the gaming industry is that it's not primarily about AAA games.

Triple-A games are like- Crazy mobile games in China. Yeah, absolutely. The most of the revenue in this industry does not come from AAA games. AAA games are just the most appealing to look at, but the games that actually make a lot of money monetize extremely well are often very stupid and not visually impressive. I don't think that's fair to say the majority of the revenue, but you're right that it's a lot. These are very, very sizable portions. And by user base, absolutely.

Well, I just think... That's what most people think of when they think of the game. They're more... It's much easier to do that on chain of crypto than to try to do like the entire... Like that's what... I should say rather the R-O-I. Yes. Yeah, the R-A.

That's true. Like when you're building a AAA game, you spend an enormous amount of money and you make it an enormous amount of money and you have a small margin. It's like movies, right? It's like Hollywood. Yeah, you spend $200 million to make a game that you bring in $1.5 billion. And there's a lot of marketing costs and a lot of costs and... I mean, that's a smashing success if you actually do that, right?

But, like, for a lot of these games, they spend $2 billion and they make $2.1 billion. Well, I think the thing for AAA is, like, it makes a lot more sense in the, like, holding company style structure, like the 10-cent owning a bunch of different studios and, like, derisking it that way. But the idea of a venture equity investment in a game just sounds so dumb.

This is a very new thing. This really arose basically in the last, like, three years. It doesn't make any sense to me. Like, you're taking something that's already really high risk and making it a riskier investment via this equity. investment versus like something where you risk share across multiple. It's not even that. It's also that, you know, if you are 10 cent or one of these game distributors, you have,

one, there are a lot of synergies across your portfolio. There are a lot of things that you can do in order to make sure that you're using your market information from other properties that you have to kill projects early, to, you know, shift capital from here to there. A lot of the gaming VCs don't have that, which is why, generally speaking, a lot of the gaming VC investments that have been successful are not AAA. they're games that, yes, you want to have a portfolio and you want diversification or whatever, but they're lower cost games that can also be, you know, be really high margin and high grossing.

So it's just like it's different. So like I think with the advent of these really mega gaming funds, the only way they can make these economics work is these AAA bets, right? Where they bet huge amounts of money at, you know, pre-launch games with just, you know, basically on designs and teams, which is traditionally not the way that gaming investing was ever done. Well, I think an interesting example of this, which I only heard this week, so forgive me for not knowing exactly the names of this. But the number one app store game in China right now is this game called Kiss or Slap. And it's like you have like a virtual character in this like Metaverse thing, like but not really that high tech.

And you have to pay, you go up to people and you have to pay to kiss or slap them. And then you, you know, if someone does that to you, then you get the right to do it to them back. free. And it's like something extremely stupid. It's like, but it's apparently the number one thing and like it's making a ton of revenue by getting people to pay for the right to, for their virtual character to kiss or slap another virtual character. This sounds great. Yeah. But this thing is making like tons of revenue. This needs crypto. This needs crypto. Five to 10. Exactly. This makes more sense for crypto. This is like that. That's so easy to do on chain. That seems like a perfect game. Like this is what I'm saying. I just did this triple A thesis was just like, I thought I was just, I don't

understand and I'm an idiot in 2021. I was listening to everyone pitch you these fucking stupid AAA gaming funds. And I honestly, in hindsight, I'm like, thank God I never like fell for that. Well, so my thing about gaming, I've been saying this for many years now, is that I do think crypto gaming will be big, but I think it will be difficult to invest in two.

The kiss and slaps. Because it'll be like the kiss and slaps of the world. It'll be like kind of gross and takes off before anyone even. Not only that, but it's like the kind of stuff that I would be too embarrassed to invest to and explain to my LPs what I just did. And it's like, like, I suspect that the first crypto game that becomes really big, like, not X Infinity, but like even bigger than that, is going to be described as a social problem. It's going to be the kind of thing people write op-eds about and, like, they want, like,

how can I get parental controls to stop my kids from, like, it's going to be one of those types of things. Slap 2, Return of the... Exactly, exactly. Return of the Slapper. Sloppers only. The other thing that I think a lot about, cryptos are. games is that I think there's a big intersection between crypto gaming and gambling,

which again is like kind of dirty, kind of gross. But this kiss and slap thing is almost gambling. Is it? Doesn't sound like gambling. Because I have to like pay for the right to slap. And I think there's some. That's the surface. Yeah, sounds a little bit like slightly like sex work, actually, if I think about it.

Flaps tradable? Are they securities? Is that the, is there a slap exchange? I, I, I only heard this secondhand and someone showed me on their phone. I haven't played. Okay. All right, I'm going to download this later. Yeah, it might be Chinese only, that's the first.

Yeah, it might be Chinese only. Yeah, yeah. I saw it on someone's phone. It was actually at the SalaConnor's when someone was from China. It was like, here's this game. In what context would they explain to you kiss and slap at breakpoint? Because I was like, oh, because they were like, oh, we're working on Solano like games. I was like, oh, cool.

Were they building a kiss or slap clone? Well, basically the hack thumb project was something. Can you introduce them to us? Yeah, yeah, it was like something. I think I have a new thesis on crypto gaming is kiss or slap. This is what they were like. saying they were going to do. I didn't stay the whole week, so I didn't see that. Somebody who actually knows this game is going to explain to us how incredibly stupid.

Yeah, yeah, yeah. I think I get it. You have avatars, and I assume they either look kissable or slapable. Yeah. And they live in this little world, and you can go up to someone, you can pay money to have your avatar kiss the other avatar or to slap the other avatar. And it's probably like a news feed, like you got slapped, you know? I agree. There's a sex work. This is why Roberts a won. Yeah. On the on hinge scale. Yeah.

It's just very earnestly, I think you can go around and kiss or slap people. Right. Yeah. No, nothing weird. So, okay, this other part of my thought, I don't know if it's a thesis, but a thought about crypto gaming. So I think many people know, back in a form of life, I used to be a professional poker player.

And one thing that's interesting to me about casinos is that if you go into casino, like if you'd gone into casino 50 years ago or even 70 years ago and you go into casino today, the games that you see available in casinos are basically the same. Right now, if you go to, if you go to a slot machine, like, okay, there's video and there's sound and there's like all this new stuff, new IP, but like the actual mechanics of the games are the same. Yeah, Blackjack hasn't changed. Exactly. Why has there been so little innovation in casino games when there's been so much innovation in every other form of gaming? Well, I can answer this with another simple analogy. Please. I like chess. Chess hasn't changed in a really long time. Just because

you can make a new game, doesn't mean it's going to be more fun. What about like bullet chess and like speed chess and all these things? I mean, these are pretty new. I agree. Same game, slightly different approach to playing the same game. Right, right. You could have speed blackjack. Only have three seconds.

Sure, sure. Latency is like kind of a bad mechanic for games, I feel like, because like it's not like people like the faster play sometimes. It's like it works until a point, but then if it's too fast, I feel like people just. I think with chess, it does help. Because bullet chess is very popular now, right? Yeah, it's super popular. Yeah.

Well, it's because, like, if you sit down for an hour. Yeah, exactly. It's like, it's like the kind of thing you can play in the train, right? It's like, that's a big part of why. Well, that's my point is, a crypto is made for games you can play on the train. That should only be that. Like, forget this like, oh. Yeah, 100%.

Like, e-sports, dog shit. Or sit down for three hours and have this immersive life experience or whatever. I mean, like, yeah, there's a place for that. I just don't think. I think the ayahuasca trip on chain shouldn't come from the game. It should come from other things. My high-level theory is a big part of the reason why they're so little innovation in casino games is because casinos are seen as gross.

And the most brilliant creative people don't want to work there. They don't want to create casino games. They want to create, they want to go work for Rockstar and for Blizzard and whatever because they see that as being a more, sort of more respectable place to create these really immersive, fascinating, creative experiences. I'm not sure that's... You go to a casino and Macau. It's the same thing. No, no, no, I just mean, like, I'm not...

Would you say that like a Chinese graduate of like Chingwah, let's say, like CS graduate, like deciding between one or the other? Would you say that their probability of choosing one or the other is the same as the Western one? I don't think so. I think they're more much more. What are you talking about? I think like in China, gaming is huge.

But they would be fine going to the casino gaming too, right? I don't think so. I think it's the same thing. I think it's probably even worse there where like your parents are going to be like, oh my God, my child instead of going to this great, you know, top tech tier, top tier tech company, instead they're going and working for some shady casino, right? Like, you'd lose so much But you wouldn't really be working for the casino. You'd be working for the people who make the machine. Right, which is like not, which is not that much better. In some way, I think what

crypto enables is like uniting that very kind of open canvas of innovation from gaming with the degenerate, disgusting appeal to the basis human instincts that casinos do. Kissing and slapping. Kissing and slapping, exactly. Well, I think there's like an EV calculation here too, right? Like, you know, 20 years ago, you're very limited in terms of, you know, hey, if you want to go work for, like, MGM, what you can actually get out of this thing, right? Like, it was already public. It's, like, limited to this very thing. Like, there aren't, you know, gambling video games in 1990 or whatever. Now it's a very kind of different story. Like, we actually have some kind of attempts at doing sort of digital casino. So maybe sort of the calculus is changing of, oh, there's actually a bigger

Tam if I want to go invent a new casino game. But, you know, again, to your point, like, there just wasn't enough of an amazing outcome for me if I'm brilliant and smart and motivated. to go work for sort of existing gambling companies. Tom is a roll bit maxi confirmed. Yeah, yeah, right. I'll take a demand side approach to this. I don't know how many people want to play a game that was just made up

where they don't know the odds, they don't know how it works. You feel like you're going to get ripped off. Roulette and blackjack and craps and these things that have been around casinos since like the 50s, I think haven't changed for a reason because like enough people know what they are

and how they work that there's already this like social knowledge about these games. slots have innovated, like, crazy, right, in terms of, like, what's happening on the slot machines. They've gotten more loud and more addicting and more fun and all of these things. But this structure really hasn't changed at all. Like, I don't think there's a job description available at MGM, like, invent brand new game that, like, doesn't exist yet. Yeah. I was actually having this conversation with a friend of mine over dinner who, first of all, he stopped at the dinner,

is talking about casinos, and we were talking about roulette. And he's like, oh, yeah, like, you know, in the UK we have one green and the U.S. You have two greens. I'm like, I don't what you're talking about. And then he was like roasting me for that. I'm like, yeah, Tuesday, I'm like, I never played roulette in my life. Why the fuck would I play roulette? Like that sounds like the most boring spews of my time ever.

Just complete negative EV randomness. Like, they're all negative EV. Yeah, yeah. Except poker. Except poker. Yeah. But also with like blackjack, there's some fun. There's some agency.

I'm just like, fucking literally just like flip a coin and like lose, like that sounds terrible. But the second thing I brought up was, sort of the lottery and the fact that, you know, it's one of the oldest forms of gambling. Every country has one. They're almost all nationalized and they're massive. Like Spain has El Gordo, which is like the national lottery and people form these pool. It's just like, everybody loves the lottery and like every country has the lottery. But there's not really been... It's just a form of taxation on the poor, though, real estate. Sure, sure, sure. But I think

the thing that I was also thinking about was like, I don't know that many like young people who are like buying powerball tickets. Like, you know, my dad likes buying powerball tickets. Like, and doing the little nuggets, it's fun. But, like, I don't, I don't get the sense. Young people buy NFTs. Yeah, yeah, that's their lottery. Powerball. And so, I mean, you do see, like, forms of,

NFT called Powerball. You didn't, that's not financial advice. Yeah, to be clear. You do see forms of gambling popping up elsewhere, though, right? People love, like, loot boxes and like, okay. Yes, yes. So you have stuff like that, but it just, it doesn't, it's, you know, isomorphic, but it just looks different.

And that's why it's getting tamped down so aggressively, because people know that this stuff is crack for human beings. Yeah. No matter where you are, no matter what age you are, like there are obviously a lot of randomization mechanics in games. And the reason why they're there is because they are fun. And they appeal to the whatever it is the part of our brain that loves randomness and what is it, variable reward ratio interactions.

It's really, really powerful. And if you combine that with a rich game, like if I was playing Pokemon and instead of just like, oh, I'm making things, whatever, but there's also fucking loot boxes and I can potentially make money and I have to deposit more money. order to like go catch something. Like there's such a rich design space with games that have real attachments for people beyond just I go to the casino and I flip the roulette wheel and maybe I win, maybe I lose. That design space is definitely very constrained.

And it's constrained in large part by sort of the objects of it and explicitly by regulation. And that's where I think we will see something weird in the design space introduced by crypto. That's not just let's disguise a game. or rather, let's disguise a Ponzi scheme as a game. We did that a bunch of times in 2021. And that works because people love Ponzi schemes. Ponzi schemes are very fun. They're the oldest form of gambling.

Okay. So they're very fun for people on what level of that hinge score. I actually, zero. I actually would make the meme of like the like Ponzi scheme is like the like four or five, you know, like. No, I think like negative two to one. Yeah, exactly. Exactly. Ponzi schemes, like normal people do Ponzi schemes.

That's why there's. so restrictive regulation on them in places like China where they're like, we have to stop these Ponzi schemes from existing because everybody would want to play. All of society gets caught up in it. Right, exactly. And there's just a huge deadweight loss from having these things naturally arise in the world. Right. I mean, there's also, if you zoom out, like other Ponzi-like things that all of society

gets caught up in, like, tech bubbles and real estate bonds. Totally. You know, it's not isolated to one specific implementation. Yeah, everything's a Ponzi if you squint enough. And part of the reason for that is just like humans have no real good predictive power on like longer term growth rates. So they have to make up a narrative for one. And then use short term investment to pump it. There's this one bumper sticker often quote that was, I think somebody had this bumper sticker after the dot com crash.

And the bumper sticker said, please God, give me one more bubble. I'll know what to do this time. Yeah, yeah. And that I think is the apotheosis of why Ponzi schemes are universal. could argue that nature itself is sort of a Ponzi scheme. Because it's like, what's the, what's the motive for reproducing so that you have like progeny? Nature is the Ponzi scheme. Tarun 22 and three. Yeah, we finally have like capped off the chopping blocks philosophical, you know, extremes. But it is, right? Like, why does file. Why do phylogenia? You have to stake and, you know,

to keep your ownership. Why do phylogeny trees keep growing exponentially versus right? And like, until they Where's the collapse? The collapse is when all the resources are gone. But that's like Malthusian, right? But we're not. We've clearly exited that Ponzi scheme. We've escaped the Ponzi scheme. Also, we stopped having so many kids.

So like global population is going to contract. As long as the average is. We solved the Ponzi scheme. We somehow made it a never-ending game. We did the Bitcoin inflation rate, deflation schedule. Exactly. Exactly. No tail emission.

Get out now. Galton Watson cherry that. That's finite. It was a beautiful way to end it. That's it. Thanks, everybody. We'll be back next week.