Mike Levine - CEO, Planet Mojo

Our guest this week is Kanpai Pandas CEO, Ice Bagz. Kanpai Pandas is an omnichain NFT project built on layer zero tech that just launched their latest collection on Solana. With collectibles spanning across 8 different networks, a media business, clothing line, events, and high-profile ambassadors in the contact sports industry, Kanpai Pandas is more than an NFT project, it’s a movement.

Show Notes:

00:52 - Kanpai Pandas / Origin story

04:22 - How does learning from building businesses translate into the Web3 space

06:45 - From Roblox to the Panda project

09:10 - UFC

10:53 - Streetwear and theNFT space.    

14:07 - Reaching a broader audience

15:49 -  Revenue, general growth, and the state of the NFT industry

17:47 - Why mint a Kanpai panda?

20:31 - Multichain

21:25 -  How does Solana fit / Solana specific projects.  

22:18 -  A builder he admires in the Web3 space

Full Transcript:

Brian Friel (00:00):

Hey everyone, and welcome to The Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the Web 3.0 space forward. I'm Brian Friel, developer relations at Phantom, and I'm super excited to introduce our guests, Ice Bagz, the CEO of Kanpai Pandas. Ice Bagz, welcome to the show.

Ice Bagz (00:22):

Appreciate you, Brian. Glad to be here, man.

Brian Friel (00:25):

Yeah, we're glad to have you too. And if no one from Phantom or Solana has told you yet, officially welcome to Solana. We're super stoked to have you guys.

Ice Bagz (00:33):

Appreciate it.

Brian Friel (00:34):

Maybe we could start there. There's a lot of folks in Solana who are in the NFT space. There's an NFT ecosystem I'd say that's very much unique to Solana. You guys are coming from this from a lot of different angles. This is your eighth different chain. Can you tell us a little bit about Kanpai Pandas? What's the origin story there and what is Kanpai Pandas?

Ice Bagz (00:54):

Pandas in general is originally an Omnichain project built on layer zero tech. That's why we're now coming to Solana. Originally we had planned Solana as the eighth chain. It just took longer than expected with layer zero building the bridge out. Of course, everything with FTX and all that stuff happened a year ago and it kind of stalled out the processes and the way people were spending money. So we went back and forth quite a bit, like do we just go ahead and do the rest of it on Eth or do we hold off? Do we wait to get into the Solana ecosystem? And I made the decision, let's just wait, even though it's a long time, because this has been probably eight months coming, but I just wanted to get into another ecosystem. The cool thing about our project being Omnichain is we mint it on Optimism, and BSC, and Eth, and Arbitrum, and AVAX and all these other chains, and it helps you kind of bring those communities in too, right? Because people become so kind of stuck in one chain or one FT project or whatever it may be.

(01:47):

That's just not my belief in crypto, my belief in crypto is people should be trying and experimenting, and I think in a couple of years from now, hopefully you won't even know that you're moving from one chain to another chain. Hopefully it's a much more seamless process. That's kind of the goal here. So, we were one of the very first ones that really used that tech. I think Lil Pudgys ended up switching over and re-dropping an Omnichain contract as well. But I think more projects should be. I'm excited to come to the Solana ecosystem. Like you said, it's very different. It's very kind of tunnel vision and closed off compared to some of the other chains, for sure. But that's the way it is and that's why it interests me to get in there, because if you look at what they've done, they made DeGods, they made y00ts, they made some of these bigger projects, I would say even more so than the founders.

(02:31):

It was really the ecosystem and the hype and just kind of that grit of, "We are Solana," that built this stuff. And so I'm like, well, fuck it, why would I not want to be a part of that? You know what I mean? With my project. Very early on I was involved in helping with the honoraries, things like that. That was the meta back then. This is still in the bear market, April of '22. So it was still bear market, but I'd helped do this. The mint was pretty hyped up and then the contract broke, all kinds of shit happened. Shit hits the fan. I'd never spent any time in Discord before until that moment.

Brian Friel (03:01):

It's eyeopening.

Ice Bagz (03:02):

And yeah, I didn't know if I ever wanted to get back in, because it was just "Rug, rug, rug." And I'm like, "What the fuck is everybody talking about?" So, eventually I ended up taking over the project very early on, hadn't minted out, took us seven months to mint out. I'd say we're probably the only project that actually stuck around and built, A, during the bear and then, B, during a seven-month mint. Most founders would've just hit the fucking road by then. I don't think anybody can argue that fact. So I pulled about 600 K out of my own pocket to build the business, to get something going, to prove myself, prove the project. So we did that, worked endlessly for seven months, finally minted out the seventh chain at that time, and we've been building ever since. So that's kind of the origin story to it. But yeah, it's one of those things that I'm glad I did it now, but there was a long period of time where I was like, what the hell am I doing?

Brian Friel (03:49):

Yeah, no, I totally understand that. I think there's a lot of interesting things there that we can go into. I mean, you guys are doing things your own way in a very unique way. I mean the Omnichain thing on its own. But one thing I want to hit on is what you talked about where you didn't actually found the project yourself. You came in through the honorary process, you saw an opportunity here and you basically took a project that you saw its potential and took it to the next level. Just briefly, I want to learn a little bit more too about your background. So you're an entrepreneur, you've built businesses yourself. How do those learnings translate to the Web 3.0 space?

Ice Bagz (04:23):

So it's massive and we actually had a space about it this morning and I had my whole team up talking. And we're seeing this seismic shift right now from hype and marketing and all this other stuff to what are they actually building and what are they actually doing and do they have actual goals and business plans and people in place that can execute? And I think that we're going to continue to see that. So I'm a lifelong entrepreneur. 20 years old, moved to Mexico, worked in the manufacturing business for five years. Came back, did sales for a couple of years, and then decided to start my own business. I was very good at sales. I could talk and I was very good at it. I made good money, but I hated it. I hated getting up and going and doing it every day. So my wife was pregnant at the time, we didn't have much money.

(05:07):

I'm like, "Babe, I've got an idea for a business here it is." Literally that night we sat down and drew it up on a napkin. She made the logo and everything, and I literally quit the next day and went and started knocking on doors and that's how I started my business. So my first year, I think I made $32,000. My second year I made like $55,000 and many years later I built it into a multiple eight figure business, and I've launched other stuff since then. Really got bored of managing big companies, 50, a hundred employees. It got exhausting to me and I wasn't having fun anymore. So I put people in those places to handle those businesses. I started in crypto full-time in early '18, so I've been around for longer than most of the people in the space. Got into that. I was trading coins and advising on projects and things like that.

(05:49):

And then in '21, I guess is when I started getting into the NFT space and didn't really understand it at all. The funny thing is the thing that made it click with me was my son constantly fucking swiping our credit card on Roblox, and I'm like, "What are you doing?" I'm like, "Show me," right? And he's like buying Roblox and he's getting these skins and he's changing his skins into every game he goes into and I'm like, all right, this is starting to click a little bit here. And if you look at what we've built, we took a lot of the Roblox mechanics with the trait swapping and the point system and things like that because it's proven and it works.

Brian Friel (06:24):

Yeah. So let's talk a little bit about that too. So you guys have everything that you're doing in the digital world, the trait swapping everything there, and then you have all this other stuff that you guys are doing, I'd say in the real world too, your activations there. Maybe let's hone in on the digital to start. So you saw your son swiping on Roblox. How did that influence where you took this Panda project?

Ice Bagz (06:44):

For sure. So kind of where we started was in real life experiences, networking, highly important, that type of stuff. We have a suite at Allegiance Stadium in Vegas for 15 years. So we have all the football games, all the concerts, everything that goes on the shows, et cetera, there. We do UFC events, we throw Pandamonium, which is a huge festival, day long and night long festival. So it started off with that and then I was like, all right, we've really got to branch out and build this project out a little more and be able to capture an audience that's much wider than people that want to go to physical events. We started building this point system out. We spent about seven months on this. We spent probably about three months in planning and about four months in building, but we built out a centralized point system.

(07:24):

We call it the PPDEX, but it's got your point system, it's got a casino integrated, a sports book integrated, poker room, et cetera. So you can use those points that Japandas earned on a daily basis to play games, play against your friends, whatever. Then you can also buy traits. We can drop trait packs whenever we want to. We can do it for things that are culturally relevant and it doesn't become stale. And there's always this ongoing debate of like, well, should you maintain the metadata of an NFT or should it be changeable? You should have trait swapping. And I say, look, unless you're fucking Punks, right? We're building something here that's innovative and that's going to continue to grow for the next 10, 20 years, whatever. I think it's silly to think otherwise and to think that that's going to hurt the project because able to now not only do traits, keep it fresh and keep the community engaged, but it also allows us a massive opportunity down the road to partner up with other companies.

(08:14):

They can drop their own trait packs within our system. We released what we call DRIP. It's a digital plus real items for pandas. So what we did there was we came up with a collection of items and one's like a diamond encrusted pendant, one's a t-shirt, one's a hat. And then what you do is when you buy that, you get the physical, you get the digital trait that you can put on your panda, and that way everybody knows you own this limited edition run, but in the virtual world. And then you also receive an NFT showing digital ownership, so it's got an NFC chip embedded in it. And so some of those things I think is where it's really going to lend itself to large collaborations for us down the road we're already working on. Our first drop is going to be with Bo Nickal, the UFC star. He's got a ScrapLife clothing line, and so we're big into the UFC scene and the combat sports scene. So we're going to collab with him and come up with an item drop there.

Brian Friel (09:01):

Talk a little bit more about that. So you guys do a lot in UFC actually. So in addition to that, you guys work with Jon Jones, Roy Jones Jr. What led you to the UFC in particular?

Ice Bagz (09:10):

So it's such a massively growing market that's underutilized from a marketing perspective, in my opinion. Over the last couple of years. If you pay attention and you go to the fights or you watch the fights on TV, you see the front rows are nothing but the biggest soccer stars, the biggest football stars, the biggest basketball stars, and these guys are like... It's just something they can't do. And now it's exploding globally. I mean outside of soccer, it's probably one of those really global, global sports and people just don't pay enough attention to it. And the stuff that's come out of there... I don't know how old you are, but I don't know if you know Tapout and Affliction and all these fucking lines that were geared towards that arena. They were just all awful.

(09:49):

And so I was like, why don't we create... It doesn't even have to be an athletic wear line, just a fresh street wear line that's geared towards marketing to those people. And it's been very successful. Like you said, we've got Jon, we've got Mighty Mouse, we've got Bo Nickal, we've got Mike Perry. I mean, we've got probably 50 athletes on a roster. Part of it is one of my advisors and stakeholders as Malki Kawa who owns First Round Management and they're one of the top three management companies on the planet.

Brian Friel (10:13):

So that seems like an insight that's almost completely separate from everything you're doing in NFT land is you notice this sport that's up and coming, UFC. I mean I'm 30, for reference, but 15 years ago when I was a kid in high school, it was very fringe. And now I'd say it's completely blown up, but there aren't clear ways to tap into. Those audiences I think are still forming as everything's moving digital, there's not clear connections there. It sounds like though what you guys are doing, at least in the short term too, is even just focusing on just pure, real world street wear. Are these even tied to the NFTs currently? I mean some of them feature the pandas for sure, but how is that audience resonating with what you guys are building in parallel with everything you're doing in the NFT space?

Ice Bagz (10:53):

So it's really a twofold answer. One is you've got to be able to build revenue sources or your NFT project's dead. You can't just continue to mint, mint, mint. That meta is long gone. Yuga was probably the last one to successfully do that. We've seen Azuki failed miserably trying to do it. I don't see that meta coming back. Royalties are in the toilet. So you've got to build a business around this, right? And I'm sorry, but let's be realistic here. With $2 million mint, you're not going to go build some kind of Web 3.0 game that millions of people are going to play. It's not going to happen. So you've got to come up with, okay, what can we do that our community likes that can also generate money but also not generate money off the backs of them at all times. And so clothing line was like number one. We're like, okay, but let's do this right.

(11:34):

Not just bullshit merch drops, let's actually build out a clothing line with an actual campaign with people wearing it and build something out of it. And so when I lived in Mexico when I was 20 to 25, I was in the manufacturing industry, so I've been in that industry for a long time, but that's one. Number two is we're building out Kanpai media right now. We just launched our first podcast called Overdogs. We've had Sean Strickland on, Mighty Mouse on, Bo Nickal on, Mike Perry on. We're filming with Jon Jones on Friday. It's been highly successful. Our third episode was Mighty Mouse and it's already done 130,000 views between Spotify and YouTube. So wildly successful start to that. Obviously it's very hard to get those kind of high caliber players on every time, but we're able to do it and that gives us a major edge on the competition.

(12:18):

I mean just also the way we approach it versus other shows, et cetera, et cetera. But now we're in talks too with some of the biggest players on the planet as far as sponsorships go in that show. So you got to find ways like that A, expands your audience, and then B, also drive revenue so that you can do stuff for the community five years from now and you're not just dead in the water. I mean, believe me, there's so many projects right now that are dead, they just don't know it yet, and we're not going to be one of those. When it comes back to tying the NFTs to these brands with clothing, for example, you've either got a chip embedded that goes back to the website and teaches people about who Kanpai Pandas are, or you've got QR codes on them. So you're essentially building this big funnel, you're projecting it to the masses, but you can't shove NFTs down normies' throats.

(13:04):

When Jon Jones and I first met, it was like March 4th week, he was fighting Ciryl Gane, and I remember we were in the elevator and he was like, "Yo, how do you want me to explain this?" And I was like, "Don't. I don't want you talking about fucking NFTs on Twitter and Instagram and all this stuff. You're going to get flamed," right?

Brian Friel (13:21):

Yeah.

Ice Bagz (13:22):

So you take a smarter approach. You say, "Okay, it's the clothing line, Jon. That's all it is." Now people start to fall in love with the clothing line, and then as you progress down the road, now you're introducing them into this system. Now it's like, "Okay, I love this brand and what these guys are about, and oh, there's a membership pass that I can buy and get access to all this cool shit that's also part of their community?" That's where you start to convert people. It's not upfront.

Brian Friel (13:46):

Yeah, no, that makes a lot of sense. It's like starting with the user. What do they actually want? Building something that people actually want and building your audience that way. I think the UFC angle is really interesting. I don't know of any other project out there that's focusing on that. Would you say that that's your main focus right now at Kanpai, or are you guys also exploring other avenues to reach a broader audience to basically expand your top of funnel?

Ice Bagz (14:07):

So right now it's combat sports. We've done some with NFL players, things like that, but right now it's working, right? And so when you have something that's so young and it's working, you don't pivot.

Brian Friel (14:16):

Yeah.

Ice Bagz (14:17):

Believe me, I'm an experienced business leader. I've had plenty of successes, plenty of failures, and I know when to pivot and you don't pivot when you're having success. You pivot when you're not having success and you pivot quickly. But when you're having success through combat sports, and it's not even just UFC, right? If you look at PFL, PFL is now massively growing. They're on ESPN. You've got One Championship where Mighty Mouse is, you've got Bellator. All these up and coming leagues, bare knuckle boxing is exploding. If you look at what Mike Perry did from converting to the UFC over to bare knuckle boxing, his worth is exploding right now, and that's what we're focusing on. We're looking at all this stuff that's up and coming that's bringing in huge crowds and huge viewerships, and we're saying, okay, well how can we work this angle to get our brand in there and be the brand that people recognize when it comes to these sports?

Brian Friel (15:01):

Yeah. No, that makes a lot of sense. You mentioned a couple of things throughout these stories of revenue as a constant theme. We started with your background as an entrepreneur building businesses. You mentioned you were in the manufacturing industry. Is that correct when you got your start?

Ice Bagz (15:14):

Yeah.

Brian Friel (15:15):

And as we're recording, this is August 2023. The NFT ecosystem, I would say, is going through a tough time as a whole of figuring out what is the future of this ecosystem, especially as it relates to revenue and sustainability. How do you think about that as it relates to NFTs in particular? You guys are doing everything you're doing right now with the street wear. Is revenue a top focus for you right now or are you more focused on general growth, expanding top of funnel? How does your business experience guide your instincts of what's important right now given the state of the NFT industry?

Ice Bagz (15:49):

So the good thing is I've got a really experienced team and a really experienced advisory board and stakeholders because I'm much more of a creative. I like to kind of test the waters and see what we could do here and there, what would be unique that we could develop. And then I've got the guy that kind of runs project management for us, was managing nine figure projects and hundreds of people. The guy that runs Kanpai Media for us was an exec at Red Bull Music. The thing is, when you're building a business, you got to surround yourself with the right people. Our advisory board is like, it's fucking phenomenal. It would be killer for a Fortune 1000 company, and we've got it in the NFT space, which is super unique. It gives us access to whatever we need and whoever we need. Revenue is always going to be a top priority.

(16:29):

I don't look at this as like an NFT project. I look at this as a business that we're building. It's really a large media business, but it's got a clothing line and it's got its fingers into the UFC space and the combat sports space, and that'll eventually grow into a broader sports space. The thing is content creation and revenue sources and driving the community and giving them fun things to do is probably the top three for me. And that's why we do a lot of stuff like Premier Fantasy Soccer League right now. The winner gets tickets to the Champions League finals at Wembley Stadium. We're about to drop NFL, winner gets two Super Bowl tickets. We're about to drop a poker circuit in our poker room. Winner gets a WSOP seat. So those type of things right there, especially in a bear market, it's just engaging as hell.

Brian Friel (17:13):

Yeah. No, that makes a lot of sense. From everything that you guys are doing in the business, switching back to the community as a whole and what people can expect. You just launched on Solana this week. You currently are minting right now as the time of this recording. We'll try to get something out there just in time. But for everyone who's been in the Solana ecosystem these past two years, they're focused almost exclusively on Solana. I'd say that everything you've talked about is pretty much a breath of fresh air. You guys are doing a lot of stuff outside of crypto, but for those people, if you were to talk to them, what should they be thinking about as it comes to Kanpai Pandas? Why should somebody go and mint a Kanpai Panda today?

Ice Bagz (17:47):

I'm going to hit on the point that you asked earlier that I don't think I really responded to, but having a competent leadership team that has experience in navigating tough markets, whether it be a bear market and NFTs or it be a bear market in real estate or stocks or whatever, it's all the same shit. So it's like we've all been there and done that. For that reason, we've been able to flourish and it hasn't been able to bother us as much because we just continue building and building and building because I know the end of the bear market's going to come and all the groundwork and foundation and everything that we're working on is going to be laid for the bull market. So then we'll reap the rewards then. So that's not really a major focus of ours. Ours is doing what we say, laying out a solid game plan, having the steps in place to accomplish those plans, and most people don't.

(18:29):

In the NFT space, I've never seen anything more disorganized and with poorer teams, I guess, leading projects and large amounts of money in my life, and I've been in all kinds of different business sectors. So to me, it's a positive for us. We're seeing this a lot more now, but you've got to have a team in place that has experience that knows what the fuck they're doing and can actually execute on what they say they're going to do. But at the same time, besides that, we just do a lot of cool shit. You've got this cool trait swapping mechanism, and we have this game within a game where you can add to your rarity based on traits that you add in and things like that and earn more points. Or you can go into the raffle section and use those points to win concert tickets and football tickets and sports memorabilia and shit, we just gave away a four-day trip to my town and we're going out on the boat. They get to bring 10 people. We're going out on the boat for four days, but that's great networking. It's a free vacation. We do a lot of cool stuff like that to keep people engaged.

Brian Friel (19:24):

That makes a lot of sense. It's like an internet native club for everyone who's already into everything that you guys are doing outside of this. They're loyal people who use your brand, they love your street wear and they want to connect digitally with everyone else. It feels the same way.

Ice Bagz (19:35):

Yeah, I mean, if you look at NFTs in general, right? What's the main use case for NFTs right now? It's really a membership pass. I've been a member of 20 golf clubs in my life, and you go and you pay this fee to join the club, and then you pay a monthly fee to be a part of the club, and then you pay a cart fee just every time you go play. And when you leave the club, you don't get shit back because you don't own it. And so that's really what NFTs are right now. They're social membership passes. You have access to all of this stuff except you own the fucking rights to it. So when you sell it, you can sell it, which is so different than the old business models of these clubs. To me, that's what NFTs are right now outside of digital collectible, digital art, there's some decent gaming stuff out there, but not much.

Brian Friel (20:19):

Yeah. No, that makes sense. Bringing it back to where you guys are at now, this is the eighth and final chain. You guys are here at Solana, I take it, there's no more change expansions from here. Eight is the number that you guys are sticking with, is that right?

Ice Bagz (20:31):

It's a 10,000 set collection, and so this is the last thousand. So we've minted out, I think 530 of the last thousand right now, which in less than two days is not bad. Considering it's the most expensive mint ever to be on Solana and the fucking market conditions are laughable, right? I feel like we've been highly successful already, and I personally think we actually mint it out by Sunday evening. And if that does, I think it's a super bullish catalyst for what we're building because it tells me even in these conditions, people are still digging what we're doing.

Brian Friel (21:02):

So where does Solana fit in with everything else you guys are doing from here? You guys have eight chains. Managing a project on eight different chains is a lot of work in its own right. Outside of everything you guys are doing in the physical world, how do you think about what you're doing in just the pure digital world going forward? Is there anything specific to Solana that you are really excited about, especially as it relates to tapping into everything you're doing with your business side of things?

Ice Bagz (21:25):

Yeah, so I think there's a lot of innovation going on in Solana, right? And I've spent the last few months talking to a lot of the big builders in the Solana ecosystem. So I think there's actually probably some cooler stuff being built on Solana than even on Ethereum, personally. So yeah, we're going to look and talk to all these guys that are building over in Solana and see what they offer and see if there's something that integrates with what we're doing at this time or anything that potentially integrates with what we do in the future. That's always something that we're looking at. If you stop innovating, you're dead. So we're always looking at like, here's the next three-month plan that we need to execute, but what is the six-month plan? By the time you get month six or something out, you may find something else by then that may be more pressing or have bigger potential.

Brian Friel (22:05):

Well, Bagz, it's been awesome. Love hearing your story. Love hearing the Kanpai Panda story as well. One closing question that we ask all our guests, and I want to hear this answer from you as well, is, who is a builder that you admire in the Web 3.0 space?

Ice Bagz (22:18):

In the Web 3.0 space? I like what the guys over at Mad Lads are doing. I like what the guys at Tensor are doing. I like what Degen Ape Academy is doing. I like what Luca is doing with the toys and the IP. Again, that's one of the biggest things that I think people need to understand is revenue. If you can't drive revenue, you can't run a fucking business. So I'd say that's probably a pretty good roundup. There's more out there for sure. That's a good start.

Brian Friel (22:41):

Bagz, this has been awesome. Where can people go to learn more about Kanpai Pandas?

Ice Bagz (22:46):

Go to kanpaipandas.io.

Brian Friel (22:47):

Ice Bagz, the CEO of Kanpai Pandas, thanks so much for coming on Zeitgeist and sharing your story.

Ice Bagz (22:52):

Yeah, appreciate it, man.

Our guest this week is Alex.BSL, the co-CEO at Blocksmith Labs, the company behind the Smyths NFT collection.

Alex.BSL joins Brian Friel to discuss the origin story of Blocksmith Labs and how they started with the goal of creating NFT collections that provide real value, not just hype. He talks about their different products, including Mercury, a pre-mint tool, and Atlas, a hub for NFT activity. Alex also mentions their focus on solving problems and how they build products based on metas.

Brian and Alex dive into Smyths, Blocksmith Labs' classic early PFP collection, and its ascension to a premium collection. They talk about the launch of Megos, a new collection that will target a different demographic, with a focus on casual mobile gaming. Alex highlights the importance of building IP and how it takes more than dropping an NFT collection to create a brand.

Show Notes:  

0:49  - Who is Alex.BSL / Starting on Solana?                        

2:04 -  Transitioning to Web3

4:55 -   The initial goal for Blocksmith Labs                          

7:15 -   Who is Blocksmith Labs working with / Some of the early products                                

9:32  -  Process for building /  what the market needs                            

11:58 -  Origin story of Smiths

13:12 - Evolution of Smyths in the future      

17:05 - The Meegos collection                              

21:02 -   How to unblock crypto to make a mainstream splash in gaming                            

23:57 -   When is Migos coming                                

25:20 -   Where can people find out more about MeeJump/Meegos?

26:21 -   A builder he admires in the Solana ecosystem 

Full Transcript:

Brian Friel (00:06):

Hey, everyone, and welcome to The Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the Web 3.0 space forward. I'm Brian Friel, Developer Relations at Phantom, and I'm super excited to introduce our guest, Alex.BSL, the co-CEO at Blocksmith Labs, the company behind the Smyths NFT collection. Alex, welcome to the show.

Alex.BSL (00:28):

Hey, glad to be here.

Brian Friel (00:29):

Really excited to talk with you today. I've seen you over the years, my time on Solana, all across the crypto Twitter sphere. You guys have built a lot in the last couple of years that I want to get into. But maybe before we start talking about Blocksmith Labs and everything you're up to, I'd love to learn a little bit about you. Who is Alex.BSL and how did you get started in Solana?

Alex.BSL (00:49):

I think a lot of people know this, but my Web 2.0 career has been 10 years of shipping products for top tech companies. Over the last 10 years, I've worked with Apple, Cisco, Coinbase. Coinbase was my last Web 2.0 job. And then my first Web 3.0 job was DeGods. I started there as a mod just out of accident, and then lead dev. And then I started my own thing, Blocksmith Labs, because I wanted to do different things with Blocksmith Labs. It didn't really align with the incentives and what they wanted to do with DeGods. Yeah, that's the light version of it. We can go deeper.

Brian Friel (01:28):

Yeah. When you said you were working with all these Web 2.0 companies, was that in a technical capacity? You mentioned you were lead dev for DeGods at one point, but you also have experience running projects as well from an operational standpoint.

Alex.BSL (01:40):

I was a full stack engineer for the last 10 years. I led teams. I also did dev work over the last 10 years at different levels and capacities, but I've been mostly a dev for a decade.

Brian Friel (01:55):

Love it. What was the moment then when you're working in these Web 2.0 capacities, working with great companies, that made you decide, "Hey, Web 3.0 is something I need to jump into"?

Alex.BSL (02:05):

Web 3.0 just started out of curiosity. Because when you're a Web 2.0 dev and if you're a dev that's working with big companies, you got to stay on the cutting edge of the technology. Otherwise, someone with one year, two years of experience will come over and take your position. So you got to always be on the cutting edge. That's why I think around 2020, the huge high brand blockchain and crypto, it was all around. Just out of curiosity, I started learning about Eth and Bitcoin. I researched every single token and coin under 100 market cap. That's how I started this. It was just educational for me in the beginning. I started on Eth, started learning Solidity, and then I built some tabs. It was fun. It was fine. I ended up in Solana just by pure accident. Like I said, I was learning about every single thing every single day.

(02:58):

And then one day on Decrypt, I saw this article about Degen Apes mint and how it's going to be a huge thing and how it's going to break Solana. Just out of curiosity, I ended up and then I minted. But in Solana, once you click mint, it hits you different. You can't go back. Because when I was on Eth, I was minting stuff, I was doing shit, but it felt so backward to me. I'm going to be a 100% honest with you on this. Because imagine the next billion people, you're asking for them to pay $10, $20. Imagine you, going and buying a salad and there's a tax of 10 more dollars. It felt so backward to me. I understood what B2C meant and why it's the way it is, but it didn't make sense to me. But I was still going on with it.

(03:40):

But once I hit mint on Solana, it just hit me. "Oh, this is the closest thing people are used to in terms of experience." I haven't looked back since then. I've been in Solana. I've just done everything to add value to the ecosystem, and the ecosystem has given me so much back.

Brian Friel (03:56):

Yeah, I think that story resonates with a lot of people, the Degen Ape mint being that flagship moment where everyone realized, why do we need to settle for subpar user experiences? The mint itself was, I remember, chaotic, which is true Degen Ape form, which is great, but the network was held enough. Great.

Alex.BSL (04:14):

Yeah, I was up until 6:00 AM to mint, and it was chaotic. There was no Candy Machine by then. I remember that. Yeah. Candy Machine was born out of necessity from that mint. Yeah, I remember that in those days.

Brian Friel (04:27):

Yeah, we've come a long way. It can be easy to forget how much has been built.

Alex.BSL (04:32):

Now, you can just mint and it'll drop 150K NFTs out of nowhere with $100.

Brian Friel (04:37):

Yeah, and it's only going to get crazier, I imagine. Let's go back to that time. You've already researched crypto. You just made the Degen Ape mint. You have all this wealth of experience. You mentioned that you briefly worked with DeGods, but when you were ready to start Blocksmith Labs, what was it that you were pursuing? What was it that you set out to do with Blocksmith Labs?

Alex.BSL (04:55):

I always see new technologies and new industries. What problem are they solving? What is this adding to the society that people would need? That's how I see things. By then, I've not seen any NFT collection doing anything more than minting more collections, airdropping hype there was about NFTs. I wanted Blocksmith Labs to be a blueprint for the next generation of NFTs, or at least a new category of NFTs that can actually provide real value. It's not just hype. It's not just, "Oh, this is going to go to the moon." We have seen that a lot. Because 99% of those projects that are just solely based on hype, they mint and then they drop. I don't know if you remember, there was a time in Solana where there were 10 projects minting at the same day. It was like, you hit something. Oh, it hits? It's fine. You're ragged? You move on.

(05:47):

The reason none of them last is that first thing, the NFT business model, I think it's not set up in a way to last long. Some projects realize this over time, like Pudgy Penguins. Now, they're trying to sell physical products so that they can use the brand, use the IP, sell products, make revenue and last longer as a company. But I realized this back two years ago, and that is why BSL started in a different way. Oh, we are going to create products, have users, create value, and then we are going to drive them back to Smyths, our first NFT collection. I don't want to take too much credit for this, but since then, you have seen this new kind of NFT projects who are actually building products, who are using this as a seed round to build their own products, services, and bring value back.

(06:39):

It's not really just about hype or just about pumping bags. It's also about contributing to the ecosystem, building relationships, helping other NFT projects. I'd like to think we have been successful in that, and now, you have been seeing that a lot of projects mention us as their favorite builders. Maybe we are successful in doing that.

Brian Friel (06:57):

Let's dive into that. You mentioned that you guys have taken a real builder-first mentality. I think you guys describe yourself as a Web 3.0 or crypto B2B SaaS company. What is the other businesses in this B2B relationship? Who are you guys working with, and what are some of these early products that you guys have started to build for them?

Alex.BSL (07:15):

Our first product was Mercury. We have onboarded over 1100 projects on Mercury. I think it was the defining moment on Solana where projects, you realized, you could do actual things, create products, create services, being the hype cycle, being the attention cycle. Because now, you see projects doing a lot of other things to stay in the hype cycle, to stay in the attention. Back then, Mercury was all we needed because every time a hype project was on Mercury, we also monetized it in a clever way. We didn't take money from those projects. We took percentage of white list spots and auctioned them, and raffled them in our own token called Forge. That helped add a lot of value to Forge, which, in turn, added value to our NFT, Smyths.

(08:02):

Before Mercury was a thing, the way you submitted wallets was literally manual. You had to either give your wallet, or you had to give your Discord accounts and then give wallets. We automated all of that. No, we cannot take it for granted. Now, there is Atlas, a lot of other tools. But then, it was a huge thing. We solved a problem. Like I said early on, that's my core belief, that you have to solve a problem. That is why even in Atlas, we have something called a white list marketplace. That only came up because people were selling white lists as spots, but they were selling on shady Discord accounts. You had to give up your wallet, and then there was a middleman. You had to put collateral, all kinds of shit.

(08:44):

But that is why we know there is a problem and we solved it. And then it was a huge success. That is how I see our products adding value to the ecosystem and us getting back value.

Brian Friel (08:54):

You mentioned two products there I just want to hit on. Mercury, which is a white list management tool-

Alex.BSL (08:59):

We have a ton more.

Brian Friel (09:00):

Right. ... Atlas, which is this hub for NFT activity. You guys have built a ton more. You guys, list them off here. I know Bifrost, which is a price discovery launchpad. You guys have Raven and Shift. You guys have basically built out this entire suite of tools and infrastructure for other NFT projects to leverage and build their own brands and communities based on them.

(09:23):

I guess, zooming out on everything that you guys have built, how do you decide what is your process there? Who do you talk to first, and how do you realize that this is what the market needs?

Alex.BSL (09:33):

That's a good question. You know what? We are only a four-member full-time team for the past one-and-a-half years, and with the extended team, it's around 20, 21, the full team. But since the inception, there are only four full-time members in Blocksmith Labs. It's crazy how much we've been able to achieve with just four full-time members. It makes it even harder to make a decision, and that is why you don't see Bifrost running now. You don't see Shift running now. Raven is still there. It's self-service. It goes on by itself there, but we haven't made really significant changes to Raven. We are completely focusing on Atlas now.

(10:09):

The way I see it is, the space moves so fast and people need stuff based on a meta. There was a meta of needing a good, premium launchpad when Bifrost was a thing. It was a natural extension in the NFT lifecycle. We had Mercury, which is a pre-mint tool, and then we built a mint tool, which is a launchpad. And then we built post-mint tools, which is Raven and Shift. That was the thinking behind. "Oh, we are going to build everything around NFT lifecycle. Oh, there's going to be pre-mint tools, mint tools, post-mint tools." That was the thinking. But over time, we realized that we have our shit in way too many products. We need to focus on a single product and go deep, instead of going wide. That is why we turned off a lot of products.

(10:58):

Now, we are solely focusing on Atlas, if there's anything that we want to add. We are planning to integrate Raven even into Atlas, so that's our mentality now. Yeah. Before then, it was just building products and seeing what works, and I believe that's also helped us keeping the attention for a long time. Because if we didn't build all those products, we wouldn't have the same reputation that we have today. We wouldn't be in people's minds today. I think that helped us. They were cool experiments, but we've found our footing now, and we are happy with focusing on Atlas completely now.

Brian Friel (11:35):

That's great to hear. You mentioned some of the other things that you guys offer as well. You mentioned the Forge token, which we can talk about some of the synergies there with what you're building. But you guys also have a couple NFT collections to talk about. First off being Smyths. Smyths, I would say, is what most people think of when they think of Blocksmith Labs. Can you walk us through some of the origin story of how Smyths came to be?

Alex.BSL (11:58):

It was me and Harmy. Harmy and I were in DeGods. He was also doing some dev work for DeGods. And then we were both just discussing tech stuff and we realized that we have had the same thought process about how NFT should be like and what the future of NFT should be like. That's the only reason we started this.

(12:20):

Since we're also good with the execution speed, a lot of this stuff that you see, probably from idea to execution, none of it would've taken more than three months. I think there was something, that they built something for the TIROCULAR donations. From idea to execution, it was just three hours.

(12:38):

Since we're able to execute things fast, we have the capability, even with a smaller team, to make decisions on the fly. Not just think about something now and wait for six months and the meta is gone and no one cares about it anymore. It's not like that.

Brian Friel (12:54):

You had mentioned a lot about metas there. Smyths being one of those classic early PFP collections and have since gone through an as ascension, so to speak, I think you guys went from OG Smyths to ascended Smyths, talk a little bit about that process. Is that something that might continue to evolve in the future?

Alex.BSL (13:12):

Yeah, 100%. The next thing coming up after Megos Mint, which is our second collection, is Fund of Youth for Smyths. That's going to fix more problems, I think, that Smyths has now, which is to do with rarity, top ranks not being top-rank-looking. A lot of stuff like that will be fixed. We are in a very specific niche. It's strong, muscular Norse men. We want the art to be more accessible, more relatable for a lot more people, so we'll be doing something around that as well.

Brian Friel (13:47):

Oh, yeah. If you haven't seen these, these are strong Norse men that are true builders. They're all holding hammers and wrenches.

Alex.BSL (13:55):

Yeah. Hammers and weapons and all kinds of shit. Actually, to your question, we needed that ascension upgrade to be honest. It just came out of necessary. Because when we minted, Harmy and I, my co-founder, we were both devs. We didn't really care about art a lot. To be honest, we left all the art decisions to the artists, and obviously, he didn't care about the collection as much as us. So he did his best. But then, I think in a month, we realized that, oh, this needs to change. If you're really serious about making a PFP collection, we should go all in. This half-arsing two things is not working. We've got to full-arse this thing. That is why we had to do it.

(14:37):

Actually, there was a point where we wanted to do cards with three different kinds of rarities. I'm glad we didn't do that. I'm glad I made the decision to stick with PFP. It was born out of necessity and I'm glad we did that. It helped a lot of people, and it also helped us distinguish between different Smyths. Because the early versions were a lot more zoomed out, you couldn't figure them out. Small Twitter, PFP circle. Now, it's all about optimizing that small, little thing that you see on Twitter. Also, with Megos, we are always testing. How is it looking on Twitter in this small size? How is it looking on a huge screen on the Mac size when you print it and stuff like that?

Brian Friel (15:20):

Yeah, it's interesting to think about. If you're running this community or a collection like this, the end goal is you want people representing this picture as their identity on the internet.

Alex.BSL (15:30):

It has to be optimized, yeah.

Brian Friel (15:32):

Yeah, how you come to something that serves a large number of people. There's thousands of people who own these PFPs. I don't even know if there are thousands of strong Norse men on the internet wielding hammers and wrenches, but I think it symbolizes something that people want, that builder mentality.

Alex.BSL (15:50):

Yeah. It also attracted a different kind of user base and that is why out of necessity, we have a second collection. The way we ran Smyths, the way we ran Blocksmith Labs, attracted a demographic of older gentlemen who know how sustainable businesses are run, but they don't have the time to go on Twitter, be active on Twitter. They just want to buy this and just go on and do their own thing, run their own business.

(16:17):

There are a lot of business owners within Smyths who don't really have time for crypto as much, but they bought Smyths because the way we ran things, they understood, "Oh, this is the only legit project that can sustain for a long time, because they have a different business model than all the other NFT collections." It has its pros and cons, and that is why we have a second collection called Megos, which is going to target a different demographic; people who are into gaming, content creation, who are more active on Twitter. Yeah, that is why Megos will exist.

Brian Friel (16:49):

Let's dive into that. Let's talk more about Megos. You mentioned some of the inspiration there, that you want to appeal to a broader audience, potentially a younger crowd. There's also a game involved with Megos as I understand. Can you talk a little bit about everything that you guys have planned for that collection?

Alex.BSL (17:05):

I think there's a niche no one's really focusing, in the NFT space at least, that is casual mobile gaming. It's a huge industry. It's bigger than traditional PC gaming or PS5, Xbox gaming. I tweeted this art earlier today. Candy Crush alone makes more than a billion dollars per year, and it's growing at 15%. PUBG Mobile is making more than a billion dollars. And some games you have not heard of, Clash of Titans is making 500 million. There are so many casual games that makes millions and millions of users. We've also seen the growth of IP from a simple mobile game to a movie with Angry Birds.

(17:49):

It was a super simple mobile game, but it was so successful and they were making so much money, they made so many of those games. They had merchandise, events, products, a movie. I don't even know what other shit they have, but it's a true testament to the fact that if you want to build IP, you really need some product or some service. I think a lot of people in the NFT ecosystem don't really understand when they say, "I want to build an IP." It's not just, "Oh, I'm going to drop this NFT collection and people are going to start caring about me."

(18:21):

It's never like that because it took years and years for, let's say, Harry Potter, for people who care about the IP or the characters. It takes some sort of a movie, a game, some sort of product or a service, or anything like that. That is why we are now focused on the gaming and content creation with Megos. Because gaming is not just a single thing anymore, it's an experience. People stream a lot. People make content around games a lot now, and I consume a lot of that content. I've been watching GTA role-play videos a lot, and they have millions and millions of views. I bet there are more people watching than there are people playing these games. I think they go hand-in-hand, and these niche, no one's really targeting it.

(19:10):

I like what Pudgy is doing. I'm going to bring that back up. They're selling those toys. If they're successful in selling those toys to 100,000 people, a million people, a lot more people are going to know Pudgies. And then the brand and the IP, over years, is going to be valuable. We are targeting this demographic and these gamers and content creators. MeJump is only the first thing, and we are going to have something called MeArcade, different kinds of games and fun game theories involving different types of cutting edge technology. Maybe a year from now, you're going to have a game on Apple Vision Pro because we can do that. We have proven that over time that we can take cutting edge technology and make something out of it.

(19:55):

With MeJump, compress NFTs. We have worked on it. There is no end. In fact, there is no tooling, but we made it work. And now, MeJump is live. The MeCartridges are going to users, they're playing them, they're burning them. It's a fun game mechanic. In the first 24 hours, 3,000 of them were burned, so it's clearly working. That'll be what Megos is about.

Brian Friel (20:16):

Oh, you're going deep on it. I love it because it's an exciting new product that you guys are coming up with. It makes me wonder too, and I want to ask you this, is I'm someone who grew up in this age where, and I think a lot of the younger generation just natively understands, there is a massive market for not only just playing video games, but like you said, watching and consuming content related to video games. Twitch is massive, YouTube Gaming is massive, and it really only feels like this is going to accelerate.

(20:41):

It feels like there's this really natural complimentary pairing with what's happening in crypto and in gaming when you consider, at the end of the day, digital items. There's communities that are being built online, people want to own their assets. I'm curious to hear your perspective. Is there anything that's currently blocking, or would be an unlock for crypto to make a mainstream splash into gaming?

Alex.BSL (21:02):

Oh, into gaming? I truly believe that the missing part are the wallets. Because when you go on to a website in the Web 2.0, you're annoyed if there is no Google sign in or Twitter sign in, or Apple sign in. Oh, I got to put in my email and then have to create a password? It's annoying. Even if you just add two more clicks, it's annoying to the user. Imagine pushing them to create a wallet, understand on-ramp money, transfer it to their wallets and remember their mnemonic phrase, save it somewhere. This is all, I think, a huge blocker when you want to onboard millions and millions of users. I truly think the wallets have the power to make crypto mainstream. Because imagine, a wallet could replace everything from sign in to checkout.

(21:55):

You could be signing in with your Phantom wallet and then you could check out with your Phantom wallet, and everything is seamless. You don't even have to go through all that process of Stripe, and then you're going to have to create a card, debit card. You know how it is. Yeah. To be honest, I think wallets have that capability and in the future, I think there will be versions of these wallets that will do this. I think I saw this. I don't remember the wallet. I think I just saw this today, that they have an option on mobile, sign in with wallet. And when you do that, it creates a wallet for you and then you can download. Something like that.

(22:33):

So I think removing those steps for the next 500 million users who are used to one-click checkouts. You know how Amazon is? It's just one click, done. It gets to your home. Why do we have so many steps in Web 3.0 and on wallets?

Brian Friel (22:49):

No, it's a huge thing We think about too, making these things intuitive. I think there's a lot of layers to all of this. There's the game developers that we need to work with. There's operating systems, app stores, all of that.

Alex.BSL (23:02):

Yeah. To be honest, I believe Phantom has done the best job. I believe a huge part of Solana's success is Phantom. I think everyone's first experience on Solana, at least around Degen Apes mint, was Phantom wallet. And then anyone that's coming from MetaMask, this is fucking 10X upgrade. And then that was really the thing that hooked me into Solana, and you guys have done a great job.

Brian Friel (23:30):

Wow. Very kind. Yeah, thank you so much. Appreciate it. That was my experience, too. I was just a user of Phantom at the time with the Degen Ape mint. Wasn't working for the team, but-

Alex.BSL (23:38):

Crazy.

Brian Friel (23:38):

Yeah. No, I definitely resonate with that. Well, Alex, I guess turning back real quick just to Megos, we talked about a lot there with gaming and what you guys have upcoming. But what can you tell people about when Megos is coming, what they can expect when MeJump is launching? Is there anything you can share, or what people should be thinking about in the next couple months?

Alex.BSL (23:58):

Oh, MeJump is live right now. You can go on and play.

Brian Friel (24:00):

Oh, I love it.

Alex.BSL (24:01):

We went live yesterday. That's what I was saying. We have 150K compressed NFTs. It dropped to a lot of communities in the ecosystem and the first 24 hours, I think just half an hour ago, it was 24 hours, they burned around 3000 compressed NFTs out of 150K. It's a fun game mechanic usually because I'll tell you how we use compressed NFTs. There's something called MeCartridge. The supply is 150K and then we drop them, and it's used as an in-game item. You're going for a run in the game, so it's an endless jumper. If you die somewhere, to continue the game, you have to burn the NFT. That's how it works. We have up to five per run.

(24:45):

Usually, I think in the Web 2.0 world, you see buy some sort of credits in that place. In Candy Crush when you couldn't do it, you click on something. Buy using real money, and then you continue the game. We have seen this model work in a lot of Web 2.0 games. We have adopted that same model and we're using Web 3.0 compressed NFTs with this. It's been fun. The people are having a lot of fun. It's addictive. People are raging and also having fun at the same time. Yeah, it's a good sign.

Brian Friel (25:14):

Oh, that's great to hear. Well, where can people then go, I'd say, to learn more about Megos in particular, or MeJump?

Alex.BSL (25:20):

Oh, everything we have is on Megos NFT Twitter. All the information is right there. You can go, or you can come to Megos' Discord, discord.gg/megos, and then you can ask any questions. We have a team all the time answering all kinds of questions.

(25:36):

Yeah. We have one more thing after MeJump. MeJump is going to run for four weeks, and we are distributing 1000 white list spots through MeJump. We distributed 3,000 through MeBoard, which was our first experience. Yeah, third is going to be MeList. It's not what you think it is. It's going to come later, and we are going to mint a claim after the MeList ends.

Brian Friel (26:04):

Awesome. We've got a lot of stuff coming down the pipe here to be excited about. Well, Alex, this has been an awesome discussion. I got to ask this question because Blocksmith Labs has a reputation for being builders. We would love to know, who is a builder that you admire in the Solana ecosystem?

Alex.BSL (26:22):

That's a tough question. I like Famous Foxes. I think we both are at the same level, but we sit in our own space and don't really bother each other. Yeah, I like them.

Brian Friel (26:35):

Okay. Awesome.

Alex.BSL (26:35):

Maybe you've had that answer as well.

Brian Friel (26:37):

Yeah, we've had Drax TS on the show as well. I think he actually might have been the one that shouted you guys out as well, so there's a mutual respect there for the NFT builders.

Alex.BSL (26:45):

Yeah, 100% we do. Yeah.

Brian Friel (26:46):

Well, maybe we'll have to do a follow-up episode, get you and Drax on, and see what you guys are all up to in a year from now. You guys have been putting out a lot, and I know the Solana ecosystem is very thankful to have you guys involved.

Alex.BSL (26:58):

I appreciate it. Thank you.

Brian Friel (26:59):

Alex.BSL, the co-CEO of Blocksmith Labs. Thanks so much for coming on The Zeitgeist.

Alex.BSL (27:03):

Thanks for having me, Brian.

Our guests this week are Vibhu Norby and Degen Poet. Vibhu is the founder of DRiP, a platform that allows users to receive free NFT collectibles, commissioned from artists and projects across the landscape of crypto. The project has grown exponentially since its inception, with over 300,000 wallets receiving at least one NFT a week. Degen Poet, a prolific artist on Solana, has been a key collaborator on the project. 

Vibhu and Degen Poet discuss how DRiP is changing the game for NFTs and why the first experience people have with blockchain should be through art. Plus, they share their unique processes for creating and distributing NFTs, and why they choose to plant their flag in Solana.

Show Notes:

0:56 - Latest News

3:05 - What is Drip?        

5:22 - Origin story of Degen Poet, starting working in Solana and Vibh

10:13 - Workflow with NFTs

12:54 - Working with other artists

16:01 - How Drip helps Degen Poet’s work

17:51 - Only on Solana

21:42 - How is drip breaking phantom?

22:50 - Future looking like Instagram

26:53 - Platforms like Drip vs. traditional mediums

30:40 - Things to change /have changed in the industry    

33:52 - A builder they admire in the Solana ecosystem?

Full Transcript:

Brian Friel (00:00):

Hey, everyone and welcome to the Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the Web 3.0 Space forward. I'm Brian Friel, developer relations at Phantom. And I'm super excited to reintroduce our first repeat guest, Vibhu Norby, as well as Solana's very own Degen poet, Vibhu and DP, welcome to the show.

Vibhu Norby (00:27):

What's up? Thanks for having me back.

Degen Poet (00:30):

Hey, thanks so much for having us.

Brian Friel (00:32):

Vibhu, I mentioned this before recording, but you're a friend of the pod. You're the first official repeat guest of the Zeitgeist, and the last time we had you on was October of last year and you were working on Solana Spaces, which was a really big and audacious project I'd say, and a lot has happened since then and you're still working on big and audacious projects on Solana. Can you walk us through what has changed in the last couple months and what are you working on today?

Vibhu Norby (00:56):

Good times, good memories. Yeah. What happened in between October and now? What changed? Funnily enough, Drip actually started that same month. We actually started sending NFTs to people starting with Vincenzo in late October. I think we did two drop before Breakpoint. Yeah, things were going fine and then our world got flipped upside down once again by those who must not be named. For a couple months there, I think we were trying to figure out how we were going to continue to operate the stores. Obviously Phantom was a major benefactor of spaces along with Solana Foundation, but they who must not be named were also major sponsors and it was kind of the three pillars of our business and one of them got pulled out. And simultaneously with all of that, Drip was blowing up and changing everything for us internally. Coming into January, every single week we were stacking at 15, 20% week-over-week growth on the list organically.

(01:51):

And between December 1st and the shutdown of Spaces, our Twitter following more than doubled and all of the new growth were people coming to us for stuff related to Drip. And so I was spending my time going between doing customer service for Drip, talking to artists, and then the store was starting to feel like it was losing its voice a bit kind of naturally in that. Yeah. I mean as much as we loved it for a bunch of different reasons, it just made sense for us to take this traumatic pivot from physical retail stores to free NFTs. I think it was a really good decision. I think one of my best decisions so far in life because since we closed down Spaces, Drip has grown five, six x since then. We've really greatly expanded the product and kind of the vision for it and I think we're making a big impact on Solana and crypto in general.

Brian Friel (02:45):

You mentioned that this was born out of Solana Spaces originally, it was almost just this separate side thing you were doing and became this absolute beast that had to be unleashed. For those who aren't familiar with what Drip is, can you describe what Drip is, how it operates today, and then maybe talk a little bit about the scale that you guys are currently operating at?

Vibhu Norby (03:05):

Yeah, sure. Really simple value prop. You sign in with Phantom, you get an invite code and you start getting free collectibles. You can kind of engage with the product as much or as little as you want. By default, you get a free collectible from us every Wednesday and those collectibles are NFTs and they're real on chain Solana NFTs and we commission those pieces from artists and projects, not just now within Solana but across the landscape of crypto. And we pay for the airdrop costs and it's totally free. It's one of the few things in all of our industry that starts at free, ends at free. You don't need any tokens in your wallet, you don't have to go through KYC with an exchange. More recently, a couple months ago in March, we started adding these additional lists that you could subscribe to. Degen Poet was number one, but since then we've added another seven creators and we launched two new streams every Friday.

(03:57):

Those work the same way. You sign up for an individual creator that you love, can be an artist, could be a brand, could be NFT project, a video creator, influencer. They send you free collectibles on some regular basis and you can collect them, you can trade them, you can hold them, you can brag to your friends about what you got. In terms of growth, we've continued to grow 10, 15% a week even at a very big size now. There's two kind of stats that kind of matter. One is we consider non-fraudulent wallets as many people tried to farm Drip in the past. That number in real time right now is 300,000 and we're sending out at least 300,000 NFTs a week on showcase right now. But in total, every single week across all of our creators now, we're sending well over a million collectibles every single week. This is unbelievable groundbreaking stuff. It's not happening anywhere else in our industry, but people fall in love with Drip every single day. It's been awesome.

Brian Friel (04:49):

Yeah. I've been a day one subscriber of Drip. I love it. It's such a delightful thing to have all this new art coming in your inbox every day. You kind of hinted at this only possible at Solana, which I want to dive into too. But you did mention there, Degen Poet, and I'd be remiss if we didn't introduce Degen Poet now to the show. I think if you're a listener and you've been around the Solana space, especially on Twitter, you've seen Degen Poet, I'd say one of the most prolific artists on Solana for some time now. Degen Poet, for those who don't know, can you introduce who you are, how you got started on Solana, and then how you also started working with Vibhu?

Degen Poet (05:22):

I guess I'm Degen Poet. I live in Chicago with my wife and a couple dogs. I got started in Solana in the summer of 2021. I was just basically doing trading and stuff in Bitcoin and then trading all the other coins. I did some leverage trading on CuCoin and then found Solana through the whole Sam Coins DeFi on Solana first. I think Radium was my first stop. That's kind of my first experience with it all. I thought NFTs were garbage and a silly idea and all those things. I had probably been out of poetry for, I don't know, seven or eight years at that point. I did all of my college education and got an MFA in poetry and then just decided that it wasn't a great career path as far as the money you could make and what you had to do to support yourself as a poet is pretty difficult in the real world.

(06:16):

I gave that up and just kind of did business for a living, did computers, Excel, stuff like that. That's how I kind of made a living and then found Solana through all this. I started buying some stuff on Digitalize. I bought a Solana Monkey, a viking I think pretty early on and papered it way too early. But I think it was at that point where I decided maybe I should try poems as NFTs just because nobody else was doing it. I figured it'd at least be a unique way to try. The first thing I got started on was gmu poems, which was basically an NFT, which was a list of words. And at the time they were going really hot because they were based on this Eth derivative of something called Loot, I think. But I was mad at it because I was like, how is it worth so much money and doing so great? And it's literally just a random list of words, but instead of being mad at it, I decided to kind of embrace it and then just filled in the spaces between the words with poems.

(07:11):

And I did 200 of those in a month and that's how I got my start on Solana. And then just was making NFTs nonstop ever since, mainly through Exchange Art, doing one of one art. And then over the last year or so since Editions opened up, did additions on exchange art, and then that all just kind of led me to Vibhu and Drip. I really like serving a large audience with art. I mean that was always really fun with Editions. And then with Additions, I wanted to deliver them at a low cost, but that just invites bots to basically come in and flip your stuff. Bots were making way more money than I was off my art just because of the setup, you know what I mean? That's, I think, what intrigued me about Drip is I could achieve this thing that I wanted, which was giving art to all these people on Solana for free basically. And then there's no real bots, everyone's trying to sign up as an individual and gets it airdropped. It's not like a mint. Yeah, I think that's kind of where it all started and how it all made sense for the way that I was distributing my art.

Brian Friel (08:12):

Yeah, you hit on a lot there. I think that journey of trying out Solana for the first time, this new primordial soup of ecosystem projects and then this totally irrational NFT market, everyone gets dive into it. I think a lot of people can resonate that picture.

Vibhu Norby (08:26):

Right. I got to interject here because Degen Poet just introduced himself for five minutes and not one time did he mention the word typewriter, which is what he's most famous for of all things is that he didn't say the word typewriter.

Brian Friel (08:42):

Yeah.

Vibhu Norby (08:43):

But how did you find a typewriter? Just tell us that quickly.

Degen Poet (08:47):

Let's see here. I was cleaning out my sister's ex-husband's parents' basement and we found a typewriter when I was in college, and I think I just got really into them at that point because I was doing poetry and stuff and just would smoke tobacco pipes and type on a typewriter pretending I was some guy. I think that's where it all started. And then it picked back up again around Solana or whatever. My wife bought me a typewriter as an anniversary present. That was the first one that I really beat the crap out of for Solana. That's, I guess, what started it. From poems to trying to make something visually more appealing is really what it all clicked with. With NFTs specifically, I started out with just Photoshop and text and I needed some way of making it visually more appealing because that's how you get sales. But that basically took me from a poet to someone who makes art with a typewriter was kind of because people really pretty pictures on NFTs and turns out I like making them. There you go.

Brian Friel (09:51):

I think Vibhu brings up a great point there. I mean, Degen Poet I think is prolific and well known for having this unique process with a typewriter. If you could expand a little bit on that, Degen Poet, how do you go about creating these collections and is there anything that you do with Drip in particular that is different from either your normal flow or other flows that you know of of NFT artists on Solana?

Degen Poet (10:13):

Yeah. I mean I guess one of my main things that I've sort of been consistent with are the profile pictures. As a legendary, I'll take an existing Solana profile picture and just kind of do a typewriter version of those. For that process, I basically sketch a version of the profile picture with a pen, and then those were sort of my guides for the typewriter. I've done it freehand on the typewriter before, but you're only exposing a small portion of the paper at a time and it's really hard to get the proportions right. It's helpful to kind of map them out with a pen or marker sketch first. And then I do go through with a detailed typewriter version of it. I try to pull in words or traits or something to do with the NFT as part of the words that make up the image just as a piece of interest if you zoomed in.

(11:03):

And then I'll print out another copy of that. I'll do another sketch or sometimes I'll just paint on the typewriter piece itself and I'll use oil pastels or watercolor. At the end of the day I'm layering two scans. One of them is basically just the typewriter ink and then another one is this sort of painted version and I layered them on top of each other so you get a colored version of a typewriter piece, and that's kind of how all the profile pictures start. I think that's definitely pretty unique, just using all the physical pieces and really trying to make it all from physical scans versus any sort of digital pieces. And then anything digital is really for animation. Sometimes I'll type out every single frame and I'll make individual frames physically for everything that I'm animating. Other times I'll just cut out a piece of the eye or a piece of a lip or something like that on Photoshop and move it around, save a few different images or change colors or something. I do some Photoshopping to get the pieces animated, which I think just kind of adds another level to it. Typewriter is such an old physical looking thing. And so it's interesting, I think, to see it in an animation style. That's something I've really leveled up with Drip. I feel like I've done way more animations with Drip than any of my art sort of previously.

Brian Friel (12:22):

You hit a lot there throughout the intro and throughout describing your process, but basically this journey, I think a lot of people resonate with coming to Solana, seeing this fragmented NFT landscape ripe with speculation. That doesn't always make sense, but I think Drip's unique in that it's changing all these models, it's flipping them on their head. Vibhu, can you speak a little bit to who you're working with? Who are these artists that are now reaching out to you? I think you've proven this model with the Degen Poet, but when you talk to artists on Solana, what's attractive to Drip for them?

Vibhu Norby (12:54):

Yeah. I want to touch on something that you reminded me of, which is that the transition from Spaces to Drip, although on the surface is very jarring, the thing that kind of ties them together was that when we were meeting people in real life trying to introduce them to blockchains, what we found time and time again was that it was the art and the PFPs that were resonating with people in the store. It wasn't all the other stuff. And yet the way that most people have gotten into here is through an exchange where it's all about trading. And so I put this on Twitter many times, but things would be different today and they will be different in the future if the first experience that people have of this amazing technology is art, right? It's la piece from Degen Poet. It just changed everything. What am I looking for in artists?n

(13:38):

I probably talk to between 20 and 30 artists every single week, artists, projects, creators, and we probably filled about 100 requests per week, I would say right now. We have a really high bar. There's only three slots per week now. There's a showcase and there's two channels. And we book these things out for months in advance. The thing that resonates to me the most is artists that see themselves as more than just putting their pen or their paintbrush on paper, whatever their medium is, but as content creators as well. I think what attracted me to Degen Poet for a long time and I think why people love Degen Poet, yeah, the art is really good and I think that has to be there, but there's a lot of really good art. It's Degen Poet's personality. It's how that comes out in his work.

(14:22):

It's how he tells a story around his pieces. He publishes videos of the typewriter itself and the creation process. To me, we definitely have an eye for these kind of super artists who are brand building for themselves and have a vision for how to take care of their community in addition. To me, I mean, there's a lot of amazing artists in the world and if you just take blockchain out of it, you can walk into any gallery and see these incredible things. But there's this disconnect between the thing that you're buying and the person that made it and you. And in crypto, it gives this opportunity to cut out that piece and just connect directly with the creator. And if the creator takes advantage of that, that's very attractive to us. That tells me that they're thinking differently about what crypto can add to them. We have a pretty high bar, to be honest.

(15:08):

I mean I think we could fill up Drip with illustration and other techniques. There's a lot of amazing photographers, but I think at least in the early stages here, we have the opportunity to be curatorial a bit and relentlessly, we've been programming out our new channels trying to bring something different to the table each week. I think if you fast forwarded a year, it's going to be full of the same stuff that Instagram is full of and other big networks, it's just kind of natural. But right now we have an opportunity to keep a vision for what a collectible can kind of be. I don't know. I kind of know when I see it, but that's probably my framework.

Brian Friel (15:44):

Yeah. You hit on a couple things there with, not just just filling with great art, but the way that this can change the relationship between an artist and their fans. Degen Poet, from your experience, how has working with Drip influenced both the way that people discover your content, but also the relationships that you have with your collectors? Yeah,

Degen Poet (16:01):

Yeah. I mean it definitely makes it a much wider net, which is nice. They have a larger community to gather around. It feels like everyone who's kind of a channel in Drip is part of a little club or group or something. And so a lot of the same collectors will collect from multiple channels across Drip and things like that. There's more going on than just my art, but it still feels like a piece of a larger community. Everyone's kind of bringing a different style of Drip to the table. It takes less pressure off of my shoulders where I have to have my own Discord or be so focused and all these things. I could do that if I wanted, but I don't have to. Drip is big enough and has enough engagement from the tools that they provide that it helps sustain that better than I could than when I was alone.

(16:47):

And yeah, I guess you get a lot more people, right. You really do get people who would never have bought my art. And it's not because they didn't like it, they probably couldn't afford it or they didn't really know about it, but they happened to get in through Drip. And so get new people who earnestly really enjoy the art because that's how they found it. They found it from something free, they weren't trying to flip it and that's how they found it. Yeah, I don't know. It definitely casts a wider net and I feel you do boil up more people that just truly enjoy what you do versus the other side. Yeah, that's been great for that.

Brian Friel (17:23):

Yeah. I want to pause here and just dive into a topic that we mentioned briefly at the start, which is Solana. Degen Poet, you described your journey to finding Solana and I mentioned that I think if anyone's been around crypto Twitter, they know who you are. Prolific typewriter artist of Solana. Vibhu, you've been deeply involved with Solana for over a year and now. Why do you guys plant your flag in Solana, and what about Solana is able to make this a reality where no other blockchain can really do what Drip is doing?

Vibhu Norby (17:51):

I'm trying to refashion myself a little bit in our narrative because I mean you'll see on our Twitter page and on our site, occasionally we'll talk about Solana, but we've been trying to focus on the collectibles. I mean even with NFTs, I've eliminated using that word on our corporate account entirely in very specific cases. I don't think anybody on the consumer side really cares about that. But from the builder's perspective, two aspects. One is that they pioneered the state compression model, which allows us to do NFTs at a very, very big scale relative to the old version for a very low cost, a couple $100 per million, totally affordable for a business like us. And I think the second thing is that Solana has a really active developer community and some really amazing devs inside of it that are hunting for things to build.

(18:35):

And it's really competitive too. All the infrastructure around anything new on Solana develops fast. Perfect example of that is Tensor. We went live with it March 22nd, three months ago, and it's certainly been a couple weeks, maybe two or three weeks because they went live with trading on there. And it's an amazing experience and people can trade these compressed NFTs, 200 at a time and there's a brand new kind of thing, right. But it's not just them, there's B Man who built this tool called PopKey, it's Keerel who built the Drip tracker. There's just all these amazing 10X engineers, if you will, itching to be involved and be part of the Solana community. And we feel like anything that we can't get to, someone else is just going to build anyway. And hey, when we're ready, maybe we'll pick it up. Or maybe that tool just kind of develops its own path and we don't have to touch it.

(19:28):

And that thing is unique to crypto too because all of our NFTs are composable. It just really does. We're kept to such a high bar of development 'cause if we don't reach that bar, then three other companies are going to recreate what we're doing, do it better, and then people also going to just take our content and then do it better on top of our content and our data. I don't know about other chains, maybe they have that too, but I've just observed that Solana is, because of the size of our community and the energy there, seems to attack these things with a lot of vigor that I didn't see, at least in Ethereum when I was first getting into this space.

Brian Friel (20:02):

No, I couldn't agree more. I think Solana has carved out its own kernel of a genuine dev community. It's a double-edged sword like you say, because it's highly composable and you have this great force everyone will want to build with you, but it invites a lot of competition where if you do slack, there will be people who will take what you do and run with it. But I think so far you guys have done a really great job of really leading in this vertical of Solana. DP, do you have anything to add to what Vibhu said with respect to Solana, maybe from an artist's perspective?

Degen Poet (20:31):

As far as only possible on Solana, I definitely think it comes down to the compressed NFT. You can't cost effectively drop a million NFTs a week on any other blockchain, not even close to a 1,000X, not even close. I think that's the core of it that allows us to be different on Solana. But then all that other stuff, the unspoken kind of stuff is just the energy of the people here on the chain and the fact that Tensor and all the rest, not only do you have to be able to mint one million NFTs a week for low cost, but you also have to have people that can build stuff to do with them. And that is, I think, an underappreciated aspect of Solana. And I feel like Drip, from my perspective, all we have to do is just kind of continue growing the market for compressed NFTs, continue add channels and add people kind of doing stuff with compressed NFTs and then Solana will provide. As you get bigger and there's more market, more people want something, then Solana starts to make those things happen. I think we'll see that and that will be incredible.

Vibhu Norby (21:32):

I'm going to flip it back to you, Brian, as well. How is Drip breaking Phantom and what does Phantom need to address?

Degen Poet (21:37):

Yeah. When can I hold 5,000 NFTs please?

Vibhu Norby (21:38):

There you go.

Brian Friel (21:41):

Yeah, no, I would say from a dev perspective at Phantom side, we were early to support compressed NFTs, but it's almost a naive assumption that hey, we ship support and we'll be good because it basically is opening Pandora's box where now people just go wild whenever they're given a new medium to express with this kind of stuff. And we saw it firsthand with Tensor launching their NFT marketplace. We're getting requests, why can't I sign 5,000 transactions at once? You guys can't simulate 5,000 different transactions, but it makes us go back to basically first principles and what is the wallet being used for here? How should we be basically specializing the wallet and what do our users really want this for? And I think, Vibhu, you painted a great story at the start of this where eight months ago, the world was ending for all of Solana, they who should not be named. And in six to eight months, you've gone from that state to completely bootstrapping an organic network with hundreds of thousands of users who love and use this product every day.

(22:34):

How do we stay adaptable enough for that, huge question and a huge challenge and was really the fun of what's working in this space I think is all about. Vibhu, you mentioned a little bit too on the future of, I think you hinted a year out from now looking like Instagram. Can you say more about that?

Vibhu Norby (22:49):

Yeah. Depending on the day I wake up and I think about YouTube or Instagram or Twitch or Patreon or Roblox or you name it. There isn't a perfect analogy for this stuff because it kind of is a blend of a lot of different things. I mean literally every single day we're trying to address a problem in our product and we search for some mental model from some other place and see if that kind of makes sense. And not all of it does, but Instagram is such a simple product to talk about because it is a simple product. Everybody, not just creators, but normal people post photos to their feed or stories and then you follow their friends and you follow the celebrities or influencer, whatever that you like and that stuff shows up in your feed. And you think nothing of it. Okay, I go about my day, I open the app, I click something and I'm good, I'm happy, I close it.

(23:43):

But what's sitting underneath of Instagram is this advertising industrial complex that is calculating an enormous amount of data for every single thing that you do on the app. You open the story, how long did you open the story for? How many people are you connected to that also did the same thing? They're building profiles. I used to work on this stuff. I know this is what we do. Yeah, there's a reason for it. I don't think it's bad. I don't think advertising is bad. I want to put that out there. I know Anatolia thinks it's evil and it's part of the reason why he talks about Solana as the anti-spam control network, but it is good for small businesses, but the group that gets abused in that situation are the users and the creators that actually use the app. You go talk to any creator on any network that's not on the top 1% and they're making almost no money from these things.

(24:33):

We have an artist that's launching tomorrow called Bangers. He has 200,000 on Instagram. He has three and a half billion views of her content on Giffy. 'Cause she makes all these animated gifs and she told me that she made $20 from Giffy and almost nothing from Instagram ever. I mean we just don't think about it. But people build their livelihoods and businesses on these social platforms and increasingly so. I mean young people today, you ask them what they want to be when they grow up, it's not a firefighter. They want to be content creators, they want to be YouTubers, they want to be TikTokers, literally what they want to do. But when we examine these platforms and how they treat all of the kind of participants in that ecosystem, you just see this thing where all the power and all the money is aggregating inside of these couple of companies, ByteDance with TikTok, Facebook, Google, Amazon.

(25:28):

The trifecta of these trillion-dollar companies. Where I want to take Drip is, hey, let's take that model that we know people because people like to just follow someone and see their content, but let's start to tweak the internal economics of each of these components and do it in a way that over the next couple years, creators can make more money from this stuff. Even users might be able to make money, which is a very new concept, but it's something that is normal in crypto and just not normal in Web 2.0. If we can successfully build a model that's better, there's no reason why creators won't come over, it's just an awareness thing. Can we get the word out and can we make this easy to use and safe? I don't know if that's Instagram or it's YouTube or whatever. Instagram is the easiest thing to talk about. I think Drip is a really big idea. I hope that there's many other entrepreneurs that are looking at what we're doing and thinking, hey, maybe this kind of thing could apply in other categories too, and together we can come after these conglomerates, give the power back to the people and that would be a beautiful thing.

Brian Friel (26:31):

I couldn't agree more. Degen Poet, when you hear that and you take into consideration everything you told us about your journey starting on these fragmented marketplaces and everything and now everything that you've been doing with Drip, how do you think your relationship with Drip will evolve? Do you foresee the majority of your art being now distributed via platforms like these versus traditional mediums?

Degen Poet (26:52):

Yeah, for sure. Solana NFTs in the first place gave me a place for my art. I tried to be a poet in the real world and didn't really see the value in it even to publish a book and to get nothing back and to spend all the money to publish it, that kind of thing. Just NFTs and Solana in general as a first step was incredible to me to be able to make any kind of money off of my art period. And then that is what led me to become an artist. I wasn't making pictures or whatever before this, so it allowed me to exist as an artist in the first place. And then I guess I got hungry for the idea that you could live off this as a career or something. For me, I guess, I just want to create a space where people after me, people around me can do this seriously as 50% or more of their income for their lives.

(27:45):

I guess that's what I want to continue to push on at Drip, things like donations, et cetera, but finding a way to make them work and have them be something on a consistent basis that again, another artist can use that model and create a source of income that's reasonably dependable. A weekly Drip of donations I think is way more sustainable and understandable than when you're going to sell in your next auction. You sort of have a steady growth than all the rest of it. And so I don't know, it's just a better model to actually build a true career off of. Yeah, I don't know. For me, continue to find ways to take advantage of Drip and put all my work there that makes sense. I still have some one-on-ones outside of Drip, but I might even incorporate those into Drip someday. Yeah. I mean for me, as long as they let me Drip, I'm dripping. As long as the door is open for me, that's what I'm going to do for sure. Yeah.

Vibhu Norby (28:43):

Degen Poet is actually more close to the prototypical Solana artist than you would think. When I'm talking to an artist, I always ask, what's your full-time job? Very few of them are artists full-time. I mean that is really uncommon and it's really hard to make a living that way. Most of the artists that we work with are graphic designers and they make websites for clients and they're being creative maybe in some other way, but it isn't their source of income. And I don't think that if you look at this generation that wants to be content creators, that all of them can be content creators and make a living. Someone has to put food on the table, right. But you can add a little bit of extra for some of these folks and for the top 1% of them, or top 5% or top 10% of them to be able to make a reasonable living from doing this, I think is possible.

(29:33):

And my gold star metric for, I'm going to use Degen poet as our test baby, is how close can we get to replacing the income from his W2 job over the next year? We're actually not that far away. We're making progress and we continue to tweak that and it will pay back dividends. If he can be full-time on this and he'll be able to have, I don't know how he has a full-time job already. That part's a mystery to me, but in theory, more art, more content, more delight for people, that will help us grow too. DP and I are very aligned on that as a kind of a side quest to just getting art into people's hands.

Brian Friel (30:08):

Yeah. I think that's a great first goal. When you guys think about how we get to a world where the Degen Poets of the world can do this full time no questions asked, it's like an afterthought to even consider another job. Are there anything that you think that we need to change as an industry, something we should stop doing? And I ask this question because last time we had you on the show, Vibhu, you had a couple hot takes that you dropped, mostly around how a number grow up is very bad for the industry. I want to ask, has that thinking evolved at all for you, Vibhu? And then I also later want to hear some Degen Poet has any ideas on that as well.

Vibhu Norby (30:41):

I'm still on the same train. Number go up, number go down both equally bad in many different ways. The only thing is I really feel it when if you're sitting on Twitter all day, you really feel the price. You don't even have to look at the tweets. When Bitcoin was over 30K yesterday, I felt it. I didn't even have to look at my app. When Solana's down, you feel it. For better or for worse, the audience there is highly effective. And so I can't help but be empathetic to it, but it's actually an imperative for our industry to survive, especially in the US for us to move past the tokens, we have to. I strongly feel that, this is going to offend some people. I'm just trying to be careful how I say this. I think that the OG crypto community who was here in 2015 to 2017, the ICO era and these people are holding our industry back in a lot of ways.

(31:37):

I think they're all over our biggest applications and our biggest exchanges and this and that. And I think somewhere in the back of all these folks heads, they can't get over the fact that the bull market's going to come back again and they're going to have a Lambo. And it just doesn't make sense if we're serious about this being in the hands of billions of people, sorry, we can't make a Lambo for all seven, eight billion people on earth. Some of us have to drive a Honda Civic, some of us have to drive a bike. Can we get bike money for everybody? Can we get there first and let go of the kind of grasp of all the token people? That's where I'm at. I could be wrong. Maybe I'm flawed, maybe everyone can have a Lambo. I would love one, but that's not where I see the future.

Degen Poet (32:20):

Yeah. I mean I guess I feel similarly. I guess you want to create a space in the blockchain where the number go up and down doesn't really affect your day to day of enjoyment. You don't think about the price of a t-shirt or a box of Legos or whatever it is going up and down. You still just consume them because you want it or you like it here and there. I think of the Pokemon card analogy when it comes to this. I think with Drip House where they're just cards in general. I think there's a space for the legendaries or whatever it is, smaller supplies, having numbers go up. I do think that creates a lot of fun and excitement, brings people on, all that, but it really needs to be balanced with the day to day. Your reason for being here can't be that, because if it is, then it's like yeah, it doesn't feel sustainable and you're just building a system where there's a small amount of winners and most people are losers. And so it's like what are you really doing for the world at that point? We need to find a way to create value for digital assets that's just inherent in whatever the object is. It's not because of a price or a speculation, it's just because you value whatever the thing is.

Brian Friel (33:31):

Yeah, I couldn't agree more. I think you guys are on the right path here and I think a lot of people who use Drip every day are resonating with what you guys are doing. Well, guys, this has been a really awesome conversation. One question we always ask our guests, I'd love to hear this from each of you, maybe starting with Degen Poet, is who is a fellow builder that you admire in the Solana ecosystem?

Degen Poet (33:52):

I really like the Foxes a lot. I like drags and I like the Foxy Dev. I think that they've done an awesome job of trying to find actually useful stuff that people could use on Solana and bringing it into their system and I've seen them do some stuff overnight for people and all the rest of it. Really like them. Really like the guys at Tenor too. I mean the stuff that they've done for us in compressed NFTs is pretty incredible. Everyone on those teams is great.

Brian Friel (34:21):

I agree. Vibhu.

Vibhu Norby (34:22):

I'm going to recall 'cause I'm a second time guest, the answers I gave last time, 'cause it's kind of funny in retrospect. I think I mentioned Ahkshe from Super Team who I would give again and again. He's been such an amazing supporter of me and Drip and places before that. And I think at the time I also gave Frank Deca as my other answer. I still have a soft spot for him. I know he left Solana, but I can't help but admire the fanatical community building that he has. But yeah, I mean today, the couple of people that came to mind for me were, yeah, I mean the Tensor guys are amazing. These guys are just... A hilarious story. I pinged Ilia, the founder, yesterday and I asked them, hey, can I have a vector version of your logo? And I kid you'd not. The second I typed that, I see Ilia is typing and then three seconds later the vector file was there and I was like, did you just have this sitting on your desktop ready to drop into this?

Brian Friel (35:15):

Copied on the clipboard already? Yeah.

Vibhu Norby (35:17):

They really don't like that. Just really responsive. I respect that a lot. I want to give a shout-out to a guy named Carol who I won't dox him. He's a really impressive guy in real life and I got to know that after I spoke to him. There's these people in our community that are anonymous. I think he's an OK Bear or whatever, maybe a monkey business, and you find out their real life and they're like some VP of some big company. You just never know who you're talking to. But he's been, both for Drip and for Dialect, who I also listed as my admiration for, he's just been building stuff for free that benefit our communities and hundreds of thousands of people use those tools every single week to track their Drip collection. He's KIRYL_SOL, I believe he is his Twitter handle. Yeah, huge ups to that guy for carrying collectibles into the future.

Brian Friel (36:06):

I love it. These are all future guests of the podcast we're naming here. We have to get these guys on, have them tell their story as well. But yeah, Vibhu, Degen Poet, I just want to thank you guys from the Phantom team. We love everything that you guys are up to. We really think that Drip House arose at a time when Solana needed it most. We think you guys really carry a light forward for a way that pioneer's a new model for art on Solana, for artists making a living. Really excited for everything that you guys have to come. Thank you so much for your time on Zeitgeist.

Degen Poet (36:33):

Thanks for having us.

Vibhu Norby (36:34):

Thanks. Bye.

Our guests this week are Trevor Bacon and Kellan Grenier, co-founders of Parcl. 

Parcl is a blockchain-native platform that allows users to trade real estate on Solana, democratizing access to the world's largest asset class. Parcl offers a unique architecture that enables users to make perpetual predictions on the median price per square foot of real estate in different markets across the US. Parcl also allows users to take long or short positions and provides a novel architecture that is purpose-built for low volatility assets without a liquid spot market. 

Show Notes:

01:00 - Background / Origin Story

04:33 - Why Solana?                    

06:20 - Who is Parcl built for?

08:29 -  How does Parcl work?

10:59 - How can Parcl help more traditional real estate users?

13:28 - Permission-less and composable

14:50 - Spinning up a new market

17:38 -  Real estate royale.

19:13 - What's next for Parcel?

20:56 - A builder they admire in the Solana ecosystem

Full Transcript:

Brian Friel (00:00):

Hey everyone, and welcome to The Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the web three space forward. I'm Brian Friel, developer relations at Phantom. I'm super excited to introduce our guest, Trevor Bacon and Kellan Grenier, the co-founders of Parcl. Parcl is a synthetic asset protocol built on Solana, that allows users to invest in a digital square foot of real estate in neighborhoods worldwide. Trevor and Kellan, welcome to the show.

Trevor Bacon (00:33):

Thanks for having us. Appreciate it.

Kellan Grenier (00:35):

Great to be here, Brian.

Brian Friel (00:36):

Super excited to talk to you guys today. I just checked out Parcl app, and seeing all the feeds across the US, New York, Brooklyn, all these really awesome areas where you can trade. I think it makes perfect sense with what Solana was built for, has totally [inaudible 00:00:51] NASDAQ at blockchain speed. Before we dive into everything about Parcl, I'd love to learn a little bit about you guys. Who are you guys, and what made you start Parcl?

Trevor Bacon (01:00):

Thanks, again, for having us, Brian. I'll start. I'll pass it to Kellan. So prior to starting Parcl, Kellan and I worked together at a hedge fund focused on technology equities, internet software payments, semiconductors. And during COVID, there was a lot of real estate volatility, and there was, really, no way to trade real estate like we were trading stocks. And so we started to look into ways in which we could do that. There were options, like fractionalized real estate, or tokenized real estate, but they're limited by scale, because you need capital to buy properties that are fractionalized, and you need time to close those deals.

(01:36):

So we took a different approach, which is a top-down approach. We have created indexes that track the price per square foot, based on public real estate information and real estate transactions, basically, listings and sales. Those go into a database, and outcomes... A price per square foot, or a market price for neighborhoods and cities across the country today, in the US. Over time, we are going to be expanding into international geographies. And so that price goes out to the blockchain, and traders can, long or short, see these, based on their view of various locations.

Kellan Grenier (02:11):

I'll quickly give my background, Trevor covered most of it, but... Traditional finance background, most recently, at a hedge fund, before that, at a Japanese bank, and then at a market research firm before that, always covering tech hardware. That's how I got indoctrinated into blockchain, was modeling, how many, GPUs... The networks we're going to consume. And then, around COVID, with all the real estate volatility, and volatility across all assets, and no way to express a trade, that's what led to Parcl. It seems so obvious. Missing from the structure of markets was a liquidity venue for residential real estate.

Brian Friel (02:46):

Yeah, I think, myself and many others can resonate with that, especially with the amount of capital involved to get involved with real estate as a young person. It's very prohibitive. Trevor, maybe starting with you guys, you mentioned that you were at a hedge fund before this. Had either of you guys interacted with crypto before this? And was crypto one of the first things that came to mind? Kellan, you just said, this was obvious in hindsight, but was crypto the first tool that you reached for, or did you actually attempt... To be able to trade this with other methods?

Trevor Bacon (03:15):

Yeah. As Kellan mentioned, he had been indoctrinating the crypto for about five years, I as well. When you're on Wall Street, and there's trends, the banks, typically, showcase the companies that are prevalent in those trends. So I got early access to the management teams of consensus, and Ripple, amongst others. That's how it worked, but that's... When I got introduced to blockchain, that was the 2017 timeframe. So we refer to ourselves as using blockchain rails. The primary collateral on the Parcl protocol is USDC. And so it's, basically, dollars versus real estate prices.

(03:51):

For us, blockchain introduces an efficient exchange layer, and a settlement layer, that is scalable, and you can create a product like ours, with relatively, substantially, less resources than you would a traditional centralized exchange. And so at the same time we were starting this, DeFi was becoming much more prevalent, on the heels of DeFi Summer, which led us to start to explore the various ways in which you can pull capital in a distributed fashion. For us, it made sense. I think that's the main point of technology, is to drive efficiency. And blockchain really does that, for our use case, in particular.

Brian Friel (04:29):

On that note, was there anything in particular about Solana... Bright start on Solana?

Trevor Bacon (04:33):

Yeah. The technology thesis on Solana, which, I think, still holds true today is, it's fast, it's cheap, it's scalable. And we viewed that as something that would persist into the future. And so that fit well in this model, especially for real estate, given... It has lower volatility, and therefore, a lower return profile. So at the time, there weren't many viable EVM scaling solutions in the market. So this was in summer of 2021, arbitrary and optimism weren't quite there yet. And so that's why we decided to go on Solana.

Brian Friel (05:08):

That's awesome.

Kellan Grenier (05:09):

One thing I want to add there is, real estate is lower volatility, and therefore, has a lower return profile, but we've ran and done all sorts of analysis. It's sharp ratio, which is a measure of risk adjusted returns, is through the roof, in any given year, especially over the past two decades, it's just blowing everything else away. And it's really interesting, because residential real estate is the only asset that the majority of the population... Nearly everyone has access to a 5X leverage, through a mortgage. That's the gate to participate in the market, but you need the down payment, still. That's a pretty big gate. So introduce Parcl, basically, create the exact same return profile, tracking these underlying price feeds, the prices in these markets that are transactions in real world homes, and offer that to the masses. It's a pretty powerful product.

Brian Friel (05:53):

Yeah, let's dig into that a little more. That's a really great point you raised, Kellan. You have this background on Wall Street, you know what pro traders are looking for, you talk about sharp ratios of how sophisticated investors are looking access to this. But really, at the end of the day, I would argue that it's the little guy, it's young people, probably a lot of people who are interested in crypto too, who just want access to these markets, don't have the capital. You guys have clearly built a lot, but is there a particular type of user that you guys are looking to serve at Parcl?

Kellan Grenier (06:20):

Yes and no. There's a curve in terms of who would be interested in using this product. And obviously, it's fairly blockchain native today, especially in how it's delivered. You have a Phantom wallet, you have assets on Solana's blockchain, you connect to the dApp, and you interact with a smart contract. So small pool of people, but growing, hopefully, growing a lot over the next couple of years. But over time, this is a product that can onboard millions, and hundreds of millions, and maybe, eventually, billions of people into this ecosystem, because it's such a compelling offering. Everyone has a relationship with real estate, everyone's off sides, either they're too long, if they own their home, or they're too underexposed, if they rent. I think that opens up the aperture to who the core user is, right? Today, it's blockchain-native folks that have an interest in trading anything, but many of them in trading real estate, specifically.

(07:07):

Over time, it's going to be, very, much more like a tailored offering for people that are seeking this exact exposure, that, maybe, this is the first time they've ever interacted with a blockchain. And I think that that is what has everyone so excited, whether it's folks on Solana's team... You mentioned that you just started digging in, and as... You pretty excited, Brian. So it's truly like a killer app, consumer app for blockchain. And then eventually, institutions will use it, right? Because there's no venue for liquidity, in any scale, in residential real estate, it's just... There's definitely no short-side or sell-side liquidity. All the liquidity is long, and it takes forever, and high barriers to entry. So if you play that all out, there's a very large group of users in capital that is interacting with this product.

Brian Friel (07:50):

That's great. Yeah, let's go through that user journey there. You mentioned... Someone shows up for the first time, they have a Phantom wallet, maybe they're a longtime crypto user, and they're excited to participate in their first form of real estate, or maybe, this is, really, just a means to an end, they get a Phantom wallet just to purely go through this. What are some of the particular intricacies of the Parcl model? So you mentioned, this is a lot different from REITs, or fractional ownership. When a user connects a wallet, and they hit "Buy," and say they want to purchase real estate, essentially, in New York, or in the Brooklyn area, they think that area is going up, what are the terms of that purchase? What does the liquidity look like there? What do they need to know after they've decided to hit "Buy?"

Kellan Grenier (08:29):

It's a perpetual prediction, Brian. So these pools, every day, the prices update. And the price that you are trading is the median price per square foot in... I'll use New York as an example. What does that composed of? All five boroughs, every transaction, every sale that hits the county records, and then all listings, which represent the asking price, and that... All converges on this median, which is meant to be the market price. Every day, that price updates. There's a new price based on all the transactions that happened yesterday, and over the trailing couple weeks. And now, you have a new price. What you've noticed is that real estate, actually, moves on a daily basis, and perhaps, even hour by hour. An agent closes a home, they tell their other agent, now there's a new market price. So when people go to trade, that's what they're trading. And they're effectively making a perpetual prediction.

(09:16):

I believe I'm getting long New York at 600 and whatever dollars. And maybe I put in exactly 600, and whatever USDC. So now, I own one square foot of New York. And I can leave that open as long as I want. I could close it tomorrow, I could close it in a week. I'm effectively trading, investing, betting, however you want to define it, that that price will rise. On the other side, there's someone taking the other side of that. There's someone that's short. And what we found is that these markets, over time, generally, balance out. There's people that have different views on real estate. Sometimes, they tilt very long, and others, they tilt short. Everyone's short San Francisco right now, and it's tilted fairly short since this product launch.

Brian Friel (09:53):

I need to sign up for Parcl now, as I'm recording this from San Francisco. You guys are the ones in New York.

Kellan Grenier (09:59):

And Boston and Chicago, which have performed really well over the past couple months, are the two most long right now. And then, the rest of the markets are fairly balanced, but that can change overnight. The market reacts pretty quickly to changes in price, and changes in sentiment and news, and whatnot. So it's a really cool product. And in the simplest terms, you are effectively predicting that price will either rise or fall, and placing your wager accordingly.

Brian Friel (10:23):

That's an awesome picture you paint. And yeah, to that point, I'm going to need to load up my wallet here, and protect myself a little bit, from being in San Francisco. But you mentioned the idea of, prices are updating on a 24-hour basis here. Part of Solana's key advantages are that... It actually allows a product like this to exist, but there's another type of user that you alluded to a little bit prior, someone who's, maybe, already long real estate in the form of a big mortgage, and they're afraid that, maybe, they bid off a little more than they can chew, and they lever it up on a place in SF, before the tech crash, and they want to protect that. How can Parcl help a user like that?

Trevor Bacon (10:58):

That's a great question. I forgot the one other reason why we chose Solana with the wallet infrastructure. So shout out to Phantom, the plug, but it's actually true. What Parcl offers is native short exposure, if one so chooses. And today, there really aren't many ways in which... The short specific geographies. REITs are a common example of a real estate investment. However, REITs are usually types of assets spread across the country, think of data centers or apartment buildings. There's no geographic specificity. And so what Parcl offers is the ability for people to have specific geographies that they'd like to invest in, long or short. And therefore, you can make much more targeted investments, either for or against.

Kellan Grenier (11:43):

I would just add, this is so composable, and it's in the eye of the beholder, what this product can do. If you own a home, like we said earlier, and you just said, Brian, you're way overweight real estate, as a percentage of your net assets, most likely, and you have a big mortgage, it's your largest asset, it also is your largest liability. What if you wanted to hedge? How would you do that? You really cannot. There's really no way to do that without touching your loan structure, and that wouldn't be a perfect hedge anyway. So this is a product where you can get that short exposure whenever you feel like... You're offsides more than you want to be, you can come to this product, assuming you're eligible to use it, connect your wallet, place that short bet, lock in your paper gains, or protect yourself on the downside.

(12:25):

We talk to a lot of people, and they hear that, and they say, "Well, isn't this also like a synthetic insurance?" Say that there's a hurricane bearing down on Miami, no insurer would write you a policy in that situation. You could short Miami real estate to protect yourself. Obviously, you probably won't be alone. And the market's going to skew. And you might have to pay some funding fees, but it's available to you as a product. So there's so many novel elements that introduces... Like exposure that you just can't get anywhere else, whether it's protecting the gains that you've realized in your home, you don't want to sell it and move, or as an insurance product. It's limitless, how you can use it.

Brian Friel (13:04):

Kellan, you bring up a good point there, about the composable nature of this. And earlier, you guys mentioned, for every buyer, there's a seller. And obviously, this is a provision marketplace, anyone come up with a wallet, and connect wallet, and get started. So under the hood, how is that facilitated? I believe you guys are using an AMM. And some part of this... Because I see a section on your site about providing liquidity. Can you speak a little bit more of the mechanics behind that?

Trevor Bacon (13:29):

We permission the pools ourselves, Parcl, as the development company permissions the pools. And so we have the authority to launch pools. Over time, we see a potential path, where it's more permissionless, and people can use the AMM to spin up their own pools, have their own front ends, and have their own products. So I think one of the beautiful things about the protocol is that it can facilitate a lot of different types of products that we can't, or don't have the interest in creating, such as structured products options, as Kellan mentioned, insurance. So there's a whole ecosystem here, to be built. And I think it's incumbent upon us to facilitate developers over time, and once we think that the product's ready to release into a more permissionless environment, to facilitate that developer ecosystem, that we can underpin.

Brian Friel (14:16):

Yeah. I could see this whole world, where... It's already on chain, like you said, Solana is this giant, composable state machine. And it'd be really awesome to plug this, also, just into existing DeFi protocols, I'm thinking. You're on a drift, or you're on Jupiter, and you want to be making multiple swaps at once, you can, basically, bundle these into the existing DeFi activities you're already making on Solana. Maybe talk a little bit about that process of... What it's like today, to spin up a new market. What are all the pieces that are involved, both from a technical side... But I'm sure there's also, probably, a lot on the operational side as well. Maybe, Trevor, can you speak to that?

Trevor Bacon (14:51):

So now that we have the infrastructure in place, it's not terribly hard to spin up a new market. One thing to consider is that the data comes from a entity called Parcl Labs. And Parcl Labs has an API that has all the price feeds available to the public, and also for the Parcl protocols, Oracle, to consume. So if we were going to, let's say, launch a Paris price feed, so the price feed gets enabled in the API, on the Parcl lab side, the API connects to the Oracle, the Oracle connects to the smart contract, and there's the pool for traders to trade. So it's relatively simple. It's not without work, but we have the infrastructure in place to spin up. Currently, we have 15 markets we're launching, Austin, and then, I think we'll be in the international realm later this month.

Kellan Grenier (15:39):

This is a novel architecture. It is purpose-built for a low volatility asset without a liquid spot market. That defines real estate, that create redeem... Arbitrage isn't explicitly there. You could create a new house, I guess, and then come and hedge it on Parcl, like we just discussed, but that's a pretty elaborate process, way more complex than buying Solana on Jupiter, and then hedging the purp, or whatever. So what's great about the structure is that every participant in the pool is a liquidity provider. So you come in, and you make a trade, you're getting long. What happens is that, atomically, you're depositing USDC into the pool, and you're minting a liquidity token that represents your ownership interest in that pool. And then, simultaneously that notional value is getting locked into a smart contract, a decentralized smart contract, and that, effectively, recognizes where you entered the trade, what your price was, how much leverage you used, all of the elements of the trade that's relevant. And it stays locked in that contract until you, as the authority, comes in and closes the position effectively.

(16:36):

So that's how it works. And what's cool about that is that a new pool could be launched tomorrow, and start from zero. And then, Brian, you could come in and be the first trade. You could be a liquidity provider, or you could get long, you could get short. And you would be skewing that pool 100%, right? So unless someone else came in, you would, effectively, be paying yourself funding, perpetually, such that there was no gains to recognize or lose. But as soon as someone else comes in, that calculus changes, and now, you have a market. Now, it's a perpetual prediction market, a perpetual prediction AMM. And now, you have longs and shorts, effectively, paying each other. That's not exactly how it works, technically, but to the late person, that would be how it would work. So the beauty of that is, you can have a new pool every minute. And the main constraint is liquidity, but it's not, actually, a constraint, technically. So it's a really neat architecture.

Brian Friel (17:21):

The possibilities here are really exciting. And you mentioned one of the main constraints, not technically a constraint, but it is, is liquidity. So let's talk about some of the initiatives that we have, going on, to improve that. So I see that there's a new initiative here, called Real Estate Royale. Trevor, can you speak a little bit to what that is?

Trevor Bacon (17:38):

Yeah, so the Real Estate Royale is a contest series that we have, to familiarize people with the asset class, which is real estate, getting them to understand the product, how to use it. Every week, we have various prizes. And then, we have a monthly prize at the end, which is... USDC paid out to the winners. We've seen some pretty substantial gains with respect to monthly return percentages. I think last month, the winner, I think he was up 30%, which is pretty impressive, given that it's a relatively low volatility asset class. It's a way for us... Because it's a novel product, and it doesn't have, really, an analog in the real world, or something that's existing, it's a way for us to reach out to our users, get them excited and engaged, and then hear their feedback. So we conduct user interviews all the time, understand what folks need to get better educated, with tools they need to make their investment decisions. And our product team, which is excellent, is listening to that feedback and building for the user.

Brian Friel (18:34):

That's awesome. And I think now's a great time, on that note of the contest that are going on, to announce that. By the time that this episode's going to be going live, we have a special promotion with Parcl, which we're really excited to share. For the rest of the month, the first 500 new traders to Parcl, so you got to use a new address on Phantom when signing up, will receive a 10% discount for their first trade. You can learn more about that at parcl.cc/phantom. Trevor and Kellan, what's next for Parcl? You got, potentially, all these new markets coming out. Trevor, you mentioned Austin's coming live soon, potentially international. Where is your guys' focus? Maybe starting with you, Kellan. What's on the horizon?

Kellan Grenier (19:13):

Yeah. I think there are the three main things, is new users and opening up the access to as many people as possible, and helping them understand that this is something that's available to them, except for a couple jurisdictions around the world, unfortunately, the US being one of them. Hopefully, that changes much sooner rather than later. Yeah. New users, top of funnel, just introducing people to this product, letting them know that this is available, and that they can trade real estate just like they would trade anything else.

(19:38):

The other thing is expanding the offering. Trevor was teasing a couple new cities, new metros, some globally recognizable names, you can think, Paris, France, eventually, the United Kingdom, London, and then developed Asia. Eventually, it'll blanket the world, right? There will be a Parcl market wherever you live. So that's another thing that's super exciting. Trevor can touch on this, but how many different chains are, potentially, able to use this product as well? We started on Solana, for all the obvious reasons that we noted, but much larger crypto ecosystem in total, that can be addressed. So I'll pass it to Trevor to talk on that.

Trevor Bacon (20:13):

Yeah. I think, expanding geographically, because you have the ability and the capability to offer products that are dispersed globally, and then expanding the user base in terms of... Stepping into other ecosystems, such as EBM, which have their own pool of people and capital that are native there. So that's what's on the roadmap for the rest of the year.

Brian Friel (20:35):

All exciting things. As I said, we got a special promotion going, so it's a perfect time to check it out. I'll be signing up, protecting myself against the doll drums of living in SF here. Trevor and Kellan, one question I ask all of our guests, I'd love to hear this from each of you, and maybe starting with you, Trevor, is, who is a builder that you admire in the Solana ecosystem?

Trevor Bacon (20:56):

First, I'd like to shout out our team. The team is operating at an exceptionally high level, and they continue to execute against any bar, despite any macro hiccups that we may have, either globally, or in the idiosyncratic crypto space. One builder that... It's not the Solana ecosystem, per se, but I think, given all the scrutiny, Brian Armstrong has stepped up, and has largely become the future of crypto. He hasn't backed down. He's shown a lot of fortitude against the government, which he's asked to be regulated many, many, many times. And it's a tough fight, but he's standing strong. And it's admirable, in my opinion.

Kellan Grenier (21:33):

Yeah, I would totally second that. Coinbase is like the flag carrier right now, and setting the tone for the rest of the industry. And I salute them, and wish them all the luck in the world. Two quick ones that are top of mind, just because we were on a panel, actually, last week with them, the Home Base DAO team, and it's in the real world assets category, which is one that we care about a ton. Alex and Rodrigo, what they're doing is pretty interesting. They're looking at it more from the fractionalized side, and actually tokenizing real world homes, and putting them on chain, on Solana specifically, but they're doing great work, really talented team. And then, Tom at Credics. What Credics has done is really inspiring. They've been at it for a while now, really institutional friendly offering that can help onboard billions and billions of dollars into the ecosystem. So hats off to both of those teams. And there's infinitely more beyond that. And then, obviously, Parcl's development team, we think, is best in class.

Brian Friel (22:23):

Couldn't agree more. Home Base DAO was, actually, just on the podcast just before you guys, so shout out to them, Credics as well. I always see them building. I think we can all say, we're very lucky to have Coinbase representing our industry, and not giving up the good point. Trevor and Kellan, this has been an awesome conversation. Where can people go to learn more about Parcl?

Kellan Grenier (22:41):

You said it, Brian. Running a promotion for Phantom users, and launching that alongside this podcast, the first 500 new traders receive 10% discount on their first trade. There's a unique URL, be sure to use that. It's "Parcl," P-A-R-C-L, ".cc/phantom." And it's "Parcl" without an "E." So P-A-R-C-L.cc/phantom. That's the best place to go, because you'll get 10% off your first trade. Otherwise, just go to parcl.co, P-A-R-C-L.C-O, or follow us on Twitter, @Parcl.

Brian Friel (23:11):

That's awesome. Trevor and Kellan, the co-founders of Parcl, thank you so much for your time, for coming on The Zeitgeist.

Trevor Bacon (23:15):

Thanks a lot, Brian. Thanks for having us.

Kellan Grenier (23:17):

Thanks, Brian.

Our guest this week is Richard Wu, Co-Founder of Tensor, a Solana-based NFT marketplace tailored for professional traders. We explore the origins and journey of Tensor on Solana, and delve into the unique capabilities of their recently launched compressed NFT marketplace. Richard shares insights on the differences between traditional NFTs and Tensor's compressed NFTs, and discusses the innovative trading functionalities and community strategies in place at Tensor. We also touch on Tensor's rewards system, their upcoming NFT collection, and their strategic partnership with Metaplex. 

Show Notes:

00:54 - Starting on Solana

03:37 - From Solana to Tensor

08:17 - Solana hackathons

10:16 - Only possible on Solana        

12:16 - Compressed NFTs and User Experience at Tensor

15:06 - Insights on Compressed NFTs vs. NFTs

17:08 - Tensor’s trading functionalities

20:47 - Tensor’s strategy for the community                              

23:03 - NFT collection

24:35 - The point system

25:29 - The Solana ecosystem / Being a leader in the NFT marketplace

27:13 - Partnership with Metaplex

28:33 - A builder he admires in the Solana ecosystem? 

Full Transcript:

Brian Friel (00:00):

Hey everyone and welcome to The Zeitgeist. The show where we highlight the founders, developers, and designers who are pushing the web 3.0 space forward. I'm Brian Friel, developer relations at Phantom. I'm super excited to introduce our guest, Richard Wu, the co-founder of Tensor. Tensor is the premier NFT marketplace for pro traders on Solana. Richard, welcome to the show.

Richard Wu (00:28):

Thanks for having me on, Brian. Great to be here.

Brian Friel (00:31):

I'm super excited to chat with you today. We got a lot to go into. Obviously you guys are extremely popular recently on Solana, but I think you guys have a really interesting story to tell. Going back to some of your earliest days, you and your co-founder, I remember you guys multiple times either placing highly or winning some of the Solana hackathons. Can you take us back to those early days of how you guys both got started on Solana?

Richard Wu (00:54):

Yeah, of course. Just to give some backstory maybe on myself and on Ilja, so I think not a lot of people know this, but we were both essentially strangers right before we started Tensor. And so we basically met through this co-founding matching portal online, YC Startup School. And that was sort of our first connection. We hadn't worked together before. We basically had no interactions outside of that. So one of the first things we did initially was we basically got on a call, exchanged a bunch of notes on what ideas he wanted to work on, what interests us. And for Ilja specifically, he had been building on Solana for quite some time. I was actually not familiar at all with Solana nor like crypto development in general. And so he sort of red pilled me into giving it a shot. And so our first project that we actually worked together was a hackathon project. That was sort of our NFT pricing oracle that at the time made a lot of sense.

(01:51):

So essentially what an NFT pricing oracle does is it provides price information about NFT collections so that other NFT protocols can actually consume these prices in order to do certain functions. So you can imagine a lending protocol that follows a pool based model would need some price to perform liquidations or for people to... I guess mainly for liquidations.

(02:13):

And NFT Perps, for example, is another type of protocol that would require pricing information on chain. And so that was initially the project that we worked on together. We submitted that to the Solana Riptide hackathon I believe, which I don't know if it was the second or third ever Solana hackathon, but we were pretty early on in the hackathon cycle. We just submitted our project to that hackathon because one, we wanted to win a bit of money so that we can bootstrap ourselves further in the process. And two, we just thought it would be fun to submit something. We ended up placing third in the DeFi category, which was pretty cool and the rest is sort of history.

Brian Friel (02:53):

That's awesome. And so you're famous on Twitter I would say, for being this David versus Goliath set up because you guys have gone from these two devs who just code all day submitting the hackathons to today Tensor is always up there with Magic Eden in people's minds as leading marketplaces, not just in Solana but say in NFTs across crypto. And a lot of people don't know that most of that is really built off the backs of everything that you and your co-founder have built. And starting back to those early days where you guys were just in hackathons chewing glass, so to speak, walk us through that journey. How did you guys go from that initial Solana Riptide hackathon project idea to getting the idea for Tensor, deciding this is something you actually want to build and then sticking it out and then getting product market fit like this?

Richard Wu (03:37):

I would say for us, the biggest strengths that we had as a two person team for the longest time was that we could really spend a lot of our time as founders talking to customers and understanding what their pain points are when it comes to NFT trading. So the initial idea of building an NFT trading product or platform was because Ilja and I, when we were building the NFT oracle, we were both trading NFTs on the side just to understand the market a bit more, try to understand why people are trading NFTs to begin with. And we had sort of this aha moment where I think at the time Okay Bears was minting and it was one of the hottest, if not the hottest, mint of 2022 on Solana. And we went on Magic Eden and we went on Hyperspace and we went on a bunch of other sites and we tried to buy Okay Bears, or at least I tried to buy Okay Bears, right after the mint and it was basically impossible for me to get a transaction through.

(04:32):

And I think the biggest issue then was these marketplaces weren't showing listing data fast enough and that was a huge issue for a lot of these new mints that happened after Okay Bears. There was Tripin Apes, which is also a really hot one. There was a slew of other really hyped collections that sort of faded into existence now. But it was just really difficult for me as a human trader, like NFT trader, to actually put any trades through. And that was sort of the inkling that motivated us to build something better. When we thought about our experience using trading platforms like Binance, like Buy Bit, Coinbase, we were very familiar with the idea of real time data and that speed matters a lot if you're trading in and out really quickly. That was the motivation to bring sort of the Coinbase, the centralized exchange experience, at least the speed, of it to NFT trading.

Brian Friel (05:25):

Yeah. For sure. And I've heard this from you guys before, but some of your thesis around why traders would want that because at the time, going back to those days when there was the Okay Bears hot mint, you mentioned Magic Eden being basically the only game in town to go and see these. I'd say the paradigm around NFT trading was very much you go to a site and you see a picture you like and you click buy and the model that Tensor and you guys have introduced and others like Blur have helped pioneer as well is very much spinning that on its head and making it, I'd say, less about, or maybe potentially less about, the characteristic [inaudible 00:05:59] much more around this pro trading like style interface. What were some of the insights that led you guys to believe  that that was something worth betting on? Because it was very much a contrarian take at the time.

Richard Wu (06:09):

Yep, absolutely. I think at the time when we were trying to fundraise, actually... This was actually during the whole FTX collapse and Solana going to 10 bucks, but a lot of the VCs that we talked to were questioning, "Why would you build a product that is already somewhat niche like NFTs and sort of the grand scheme of crypto for an even more niche group of users?" I think one thing that we saw and we knew just from our experience in sort of TradFi as well as trading fungible tokens was that we knew that with all things trading, it follows this sort of parallel dynamic where the top, let's say, 20% of traders account for 80% of volume for any given market. That's a rough approximation. So the 80/20 rule applies here where most traders are probably not trading in size, but the ones that do are few and far between, but they want something that's more advanced, that's more catered to their style of trading that many other traders might not care for.

(07:11):

We ourselves weren't exactly that for NFT trading, but we knew a lot of people in the ecosystem who did trade NFTs in the hundreds at a time. And the whole NFT sweeping thing is kind of obvious in hindsight now, but at the time there were very few marketplaces that actually had the sweep feature and we made that one of the first features to implement, was being able to bulk sweep, being able to bulk list, being able to bulk de-list. All of that obviously is table stakes now for any marketplace, but at the time we were the only aggregator/marketplace to do it.

Brian Friel (07:44):

So you mentioned the fundraising journey there a little bit. I want to hit on that just a little bit too because you guys recently announced that you closed your first round with placeholder leading as well as a large group of angels, many of which I would say are Solana power users and probably power users of Tensor as well. What was that whole process like for you guys? And going back to when we started this conversation about the hackathons, what helped prepare you for this fundraising journey and if you could depart any wisdom on folks who are now in upcoming Solana hackathons, what would you say to this next generation of builders who are going through that?

Richard Wu (08:18):

The thing that moved the needle for us was having a really good network of both personal connections in the space. We went through this accelerator called Alliance. I think they're called Alliance Dow. They might just go by Alliance now, but they're essentially a Dow that has almost like a YC accelerator for web 3.0 companies and they actually helped us one understand the fundraising ecosystem a bit more. They also provide a tremendous value when it comes to mentorship. But they helped us connect with a lot of investors. I think when it comes to raising in a bear market, even if you have a killer team and potentially a killer product, you can still be overlooked by a lot of VCs and at this point it's just a numbers game. Get in as many calls as you can, try to prioritize the VCs that are showing interest and the ones that actually care about the founding team versus just trying to make a quick buck by flipping your token. A lot of the investors that ultimately invested, including Placeholder, came through either personal connections like other builders in the space or through the Alliance network.

Brian Friel (09:25):

That's awesome. I know many folks who were part of that rounds. I know some Phantom team members were as well very excited to be supporting you guys through that. And at the time I'd say it still was a controversial take, even though I think Blur had, at that time, gotten a decent amount of traction on EVM. You guys I think had launched around the same time Blur launched, but it had taken a little while for that same model to permeate on Solana. I guess focusing on Solana, what made you guys specifically choose to double down on it? You mentioned that your co-founder, Ilja, red pilled you on Solana early on. I'm sure when you guys were talking to VCs, everyone has an opinion on where teams should be building, but you guys have really decided to stick it out, not only double down on Solana but continue to push new features like your compressed marketplace that are only possible on Solana. So can you talk a little bit about that decision?

Richard Wu (10:17):

I think you were spot on in that a lot of VCs, in fact 95% of VCs, basically told us on the first call or asked us, "Why are you still on Solana? What are your plans for moving cross chain? Why haven't you moved off of Solana yet?" And I think for us, we're pretty good at thinking for ourselves and thinking from first principles, but even then this was post FTX and we had doubts ourselves whether or not it was a good move for us to stay on Solana and not build on Ethereum or Polygon. Ordinos wasn't a thing at the time, but the next hot chain.

(10:51):

When it comes to staying on Solana today, I think we have almost like a very strong fundamental belief that there are things that you can do on Solana that you can't do elsewhere that have been untapped when it comes to NFTs. So you mentioned compressed NFTs. I think that is a huge potential for Solana to become the number one digital asset/NFT chain in all of crypto. Just the value prop of being able to mint a million NFTs for less than a hundred dollars and being able to airdrop that for essentially free, it's just like a hundred bucks. Most companies or startups probably spend that on some random AWS service. Being able to do that basically for free is something that is very difficult to find on any other chain and we think that has a potential to onboard the next million users to Solana and even to onboard companies that are a bit hesitant about paying for gas fees on Ethereum L1 or a bit hesitant about spending a lot of money creating NFTs on any given blockchain. I think this is the way to onboard all of those skeptics and all of those people who are hesitant.

Brian Friel (11:57):

Yeah, let's dig into that more. At the time we're recording this, it's June 6th, I think you guys just last week had announced the launch of your compressed NFT marketplace. It's the first one on Solana. How has that launch gone? Who are you guys working with? Where are these compressed NFTs coming from and if I'm a user showing up to Tensor, what is that whole experience? What can I expect?

Richard Wu (12:17):

So we're currently working with a number of key partners. The very first partner that we worked with was Dialect. For those who are not familiar, Dialect is this web 3.0 messaging app. They're primarily on mobile. They essentially integrate... I think of Telegram integrated with a wallet. And so they let you, for example, send solds to your contacts directly in the chat app. They also let you collect these stickers which are minted as compressed NFTs. And the interesting thing here that Dialect did with these stickers was that they essentially gave them out for free and to anyone including those who have nothing in their wallet. The great thing about compressed NFTs is they're so cheap that you can just airdrop them in mass to a ton of users and not have to think about the cost and the users themselves don't have to pay any gas to receive them.

(13:04):

Obviously you need to pay a bit of gas if you want to interact with... Let's say you want to send it to someone else or if you want to list it on the Tensor marketplace or if you want to do peer-to-peer sticker trading. But the big unlock here for Dialect was they were able to essentially give these out for free to all of their mobile app users and they can now trade them on Tensor and perhaps sell it for a bit of Soul and use that Soul to do other things.

(13:27):

Another partner we work with is Drip and they're doing something somewhat similar in that instead of stickers, they're actually doing art drops and they're working with a number of creators like Xeno, maybe not Xeno, but another artist called DJ Poet who creates these art pieces, essentially distributes them through Drip and anyone can come by and claim these art pieces for next to nothing. They just pay for transaction fees. And based on these two use cases, we think that these airdrops, these new ways of distributing essentially digital assets to users for essentially free will become more and more popular. And we may even see non NFT projects like platforms such as Dialect. Drip is technically a platform. Their specialty isn't in compressed NFTs, but that's a huge part of it. They'll start using compressed NFTs as a distribution mechanism and we want to essentially build the trading infrastructure around it and also any infrastructure required to make them successful.

Brian Friel (14:26):

Yeah. The point you hit there about it's almost like a user acquisition cost, but it just turns it on its head and it's so cheap and it's like if you think about subsidizing that to get a user's attention, I think it is something that is a unique unlock that right now it is only possible in Solana, I think is largely overlooked in the rest of the crypto community right now. It's really cool to see. Since this has gone live, how have you guys seen users interacting with this platform? I mean is it pretty much similar behavior to trading and sweeping regular NFTs? I think we're entering into the chewing glass territory of Solana where you guys are building new functionality that's kind of pushing the limits of this. But what are some of the insights you guys have seen from the early launch?

Richard Wu (15:06):

Yeah, it completely blew our expectations. I don't think we one, expected the sheer number of unique wallets or I guess in this case it's a proxy for users, the sheer number of users that actually want to trade these things. So I guess I'll give you some absolute numbers. So in the first four or five days, I think it's been four days since we launched officially, we saw over a hundred thousand sales that occurred within three, four collections. These are literally collections that launched not too long ago, so they're not like the D gods who already have a lot of hype and a massive user base. These are relatively new and upcoming projects that are experimenting with CNFTs such as Dialect, such as Drip. They're going to be massive in the future obviously, but they launched these CNFTs and we saw over a hundred thousand sales actually occur with over 7,000 unique wallets and I think we just crossed a thousand Solana volume.

(16:04):

Obviously there's a long way to go, but just based on these three or four collections that just started trading and how little time that has actually passed since we launched this blew our expectations.

Brian Friel (16:15):

Yeah. And the thousand Soul marker too is pretty wild when you consider that most of these were probably given out for free originally or very much close to free. Like Drip, you can just drop your wallet address, get these for free. Dialect, you said people are getting these stickers even on empty wallets, just being a very early user of the app. It's pretty wild that you guys are basically creating something from nothing here and I think the sheer volume of that probably speaks for itself.

(16:42):

Outside of compressed NFTs, let's talk a little bit more about some of Tenor's unique offerings. You guys cater to this pro style trader. You mentioned the 80/20 rule before that 80% of users might be more casual NFT buyers, but the 20% that are really dedicated are bringing the vast majority of volume to Solana. What are some of those advanced trading functionalities that you guys are proud of that you guys offer at Tensor?

Richard Wu (17:08):

A lot of people know us for our trading view chart if you're in pro mode and you can sort of see the live feed on the side and also an order book view, which is one of few platforms in Solana that offers all three of those. But I think that stuff is kind of table stakes for us now. I think what we're especially proud of and digging more into is sort of more features to enable someone to quickly, let's say, manage their NFTs and be able to list it instantly on Tensor and be able to de-list it instantly and essentially be able to do whatever you can think of as imaginable with their NFTs on Tensor without leaving the platform. To give you a concrete example, right now you can send 200 or 300 NFTs at once to another wallet through Tensor. So this bulk sending feature I don't think too many other marketplaces have yet, but we've essentially implemented that since I think day two or day three.

(18:03):

Obviously as you mentioned, bulk sweeping, bulk listing, bulk de-listing, those are all table stakes. I mean there's not really one specific feature that we have that no one else has besides maybe compressed NFTs, but I think we're just very focused on providing the best possible user experience and that comes with attention to detail. So it's making sure everything runs as fast as possible. There's next to no lag. Everything updates like responsively on the front end. So after you perform a listing or any transaction, the NFT instantly updates with the correct information. And that's hard to get right. It took us a lot of glass chewing to actually perfect. Every time you list a NFT, it shows up almost instantly with a new price on your front end.

Brian Friel (18:48):

Yeah, I see the tweets from you guys, all the data pipelines that you guys are building. So I know that's a lot of glass chewing, a lot of work to be done. And on that note of focusing on UX, making things easy to manage these NFTs, it's probably a good time to announce if we haven't already by the time this is live, that we'll be introducing a new feature called Instant Sell directly from Phantom and you'll be able to click on NFT and be able to instantly sell this NFT and Tensor will be one of the marketplaces that we'll be sourcing liquidity from. And in addition to that, we'll also be introducing list on Tensor directly from FAM as well. Super excited about those integrations to be working with you guys as well as supporting your guys' compressed NFT marketplace as well.

Richard Wu (19:29):

Yeah, I mean we're very excited for that feature because we know that a lot of our users are Phantom Wallet users and they've been asking us like, "Oh, when Tensor listing from Phantom?" And I think having both Instant Sell and Listing from directly and embedded into Phantom would be such a killer feature for all of our users.

Brian Friel (19:49):

Yeah, it's the next win. Ledger Mobile finally shifts so the community needs a new win to yell on Twitter but I'm excited to get this out. I think by the time this episode is live, all the listeners should be able to try it out. If you have Phantom on mobile, you can go directly in there, make your first listing, make your first instant sell all thanks to Tensor's AMMs.

(20:07):

I want to switch gears a little bit and talk about your guys' focus on community. So we might have hit on this early on in the conversation, during your fundraising process you had a huge interest from angels, many of which were power users of you guys. I'd say that you guys have a really strong unique community that's native to Solana that you guys are building for this 20% power user. Talk a little bit about some of the features that you guys have on the community side. I see a lot about rewards. I see a lot about boxes. Yeah, you guys build a lot of really awesome tech, but you guys are also doing a lot to reward your users directly. What's your guys' strategy there?

Richard Wu (20:47):

I think for us taking a step back. We sort of understand that our users are what makes us. While sure we can build a really cool product with a bunch of reliable data pipelines and we can build a really fast trading platform, without users we're nothing. And I think a lot of startups realize this sort of later on, and we understood this from day one, that users and distribution is what matters and we want to do right by our users at every given possible opportunity. I think for us, we're obviously making fees from our marketplace and we want to give that back in some ways to our users. So I'll give you a very concrete example of what we did recently. Mad Lads, obviously one of the biggest NFT mints of this year across all of crypto, they basically blew a lot of the Ethereum 24 hour volume and seven day volume charts out the window.

(21:43):

We actually did this massive giveaway/raffle where we essentially promised and committed to taking all of the marketplace fees that we took from any trading that happened on the Mad Lads collection for the next three months and basically gave it away back to the users in terms of buying back Mad Lads off the market and doing a raffle for anyone who trades Mad Lads on Tensor. And that's just one way that we want to show that we actually do care about the community and you guys are what makes Tensor great and the best way to do that is to essentially give back our fees in terms of these NFTs and these buybacks. I think going forward we want the users to be as much as a part of Tensor's journey as we are a part of Tenor's journey. Obviously that will take some time. Currently, we have the rewards and point system and that's a proxy for us to actually attribute who is the most loyal Tensor fan, who is the most loyal Tensor user. We can give you guys loop boxes, which converts into our NFT collection and other rewards in the future.

Brian Friel (22:49):

Talk a little bit more about that NFT collection. I've seen some rumors about it. The boxes are very cryptic. When I log in I see these mystery boxes, not much I can do yet with them, but there's talks of an upcoming NFT collection. What can you say about that?

Richard Wu (23:03):

So one of the best pixel artists I would say on Solana, Xeno... I think he goes by Xeno sometimes. We reached out to him pretty early on and we basically said, "Hey, you want to do a really cool pixel art PFP collection?" And we want to make that essentially the image of Tensor users. We call Tensor users Tensorians. I think what's unique about this NFT collection is that yes, it can be PFP-able. You can put it on your Twitter profile and it'll look nice because obviously Xeno is a great artist. He knows what he's doing. But two, I think we want to make the NFT collection a first class feature of Tensor. So much like how real time data, these bulk sweeping features are first class features of Tensor, we want to make the NFT collection a first class part of Tensor. So what that means is you may get benefits in the future for having a Tensorian NFT. We're still thinking of the right mechanics to introduce, but one of the things that we're committing to is making this NFT collection actually meaningful to Tensor users.

Brian Friel (24:10):

That's awesome. Well, I'd say you guys have done a really awesome job with the whole point system today. It's just even really fun, I'd say, to make trades and look in and see all the points updated in real time and leaderboards and everything. So I'm excited to see how the NFT collection ties into all that. I have a feeling it's all tied in together and there is a great plan at the works here. Do you guys have a high level ETA on when users might be able to expect more from that?

Richard Wu (24:35):

The biggest technical blocker for us for the next phase to happen was actually the compressed NFT marketplace. So that might give you a bit of a hint on what we're planning on doing. It may involve a couple of compressed NFTs. It may have something to do with these boxes. There's a lot planned for this NFT drop. It's not going to be a typical NFT drop.

Brian Friel (24:54):

Nice.

Richard Wu (24:55):

You don't just show up to Tenor and mint you an NFT. There's going to be a couple of new mechanics that we're going to be trying for the first time.

Brian Friel (25:02):

Exciting. A little bit of alpha drop there on the podcast. I love it.

(25:06):

So from where you guys sit today, just to kind of put everything in perspective, I mentioned this David versus Goliath story where it's two developers, hackathon projects, and you guys end up building the marketplace that caters to these pro users and takes over Solana by volume. How do you guys view your current position in the Solana ecosystem and what does it mean for you to be a leader in the NFT marketplace?

Richard Wu (25:30):

To be completely frank, I don't think we've necessarily won anything, won the market or become the number one marketplace definitively. We think that Magic Eden is... They're a great team. They've done a lot for the space. And I think ultimately we want to grow the entire Solana NFT space together. We don't want to essentially be the ones who takes all the pie and leaves nothing for anyone else. We want Magic Eden to succeed so that all of Solana can succeed.

(26:02):

So I think for us, while having the majority market share at any given point is nice, I think what we want to do is basically close a gap between Solana and all the other blockchains when it comes to NFT market share, which is sort of a loose term. I think compressed NFTs is one of the big bets that we're making, that this will be the reason why Solana NFTs are seen by others as competitive with Ethereum NFTs, even competitive with Ordinos because obviously Ordinos has attracted a lot of attention when it comes to NFTs. So we're going to keep innovating, build an ecosystem around CNFTs so that it's dead simple for a creator or project or platform to come in and create a bunch of CNFTs and actually get value out of it whether it's user acquisition, whether it's a new gaming mechanic that they want to experiment with, we want to make Solana and Solana CNFTs the destination for them to do that.

Brian Friel (27:00):

I love it. It's a great position to be in as a leader. I have to ask as well, I noticed you guys just today announced a new partnership with Metaplex, specifically around launchpads. Can you talk a little bit about that and how that helps grow Solana as well?

Richard Wu (27:13):

So I think the Metaplex partnership made a lot of sense for us because as we've seen with previous experiments, working on a launchpad is difficult and trying to own that all to ourselves is a monumental task, just beyond the technical parameters of building a launchpad and making sure everything runs smoothly, which we can eventually figure out. I think the Metaplex team, one thing that they have that very few teams have is that they're very great liaison between creators and sort of the rest of the ecosystem. They've essentially done quite a lot for the ecosystem, including building the NFT standard, building all the tooling around it, building Candy Machine that enabled this whole explosion of Solana NFTs to begin with. And they've done a lot when it comes to onboarding creators outside of the ecosystem. And we just felt that both of our teams had a lot of alignment here, that we both want to grow the pie together, and so it made sense to partner with them for their launchpad, for their primaries, and we can focus on the secondaries.

Brian Friel (28:14):

I love it. That's great. Well, we're excited to support both you guys. Big fans of Metaplex. Really excited for everything that's in store for you guys in the future, compressed NFTs as well.

(28:23):

Richard, this has been an awesome conversation and one closing question that we ask all our guests, and I'd love to get your take on this as well, is who is a builder that you admire in the Solana ecosystem?

Richard Wu (28:34):

The obvious answer is my co-founder. He taught me a ton. He basically fed me everything I needed to know about Solana. But outside of that, we really respect the guys at Helius a lot because when we were going through the CNFT glass eating, they were the first ones to respond to all of our dumb questions about how do CNFTs work? Why is this breaking? Why is this returning an error? They were one of the first ones to respond and they've been relentless at trying to build out essentially the infrastructure, like the RPC infrastructure for CNFTs. So they have a lot of our respect and we work closely with them. So yeah, they're one of the best builders. Yep. Yeah, he's been fighting for Solana to the ends on crypto Twitter, so a lot of respect for that.

Brian Friel (29:20):

Yeah, murder's a legend, and if you're on crypto Twitter, it's hard to miss him. We're lucky to have him not only as a staunch defender of Solana, but also as the guy who will answer your telegrams frantically at two in the morning when you're trying to eat glass and ship new features. Yeah, great answer. Well, Richard, this has been an awesome conversation. Where can folks go to learn more about Tensor?

Richard Wu (29:41):

The very first place would be our platform Tensor.Trade. That's where you can find the fastest NFT marketplace on Solana. If you want to check out some of our other stuff, we tend to do a couple of tweets every day, and big announcements happen on our Twitter. So that's twitter.com/tensor_hq.

Brian Friel (30:00):

Awesome. Well, Tensorians, you know where to go. Richard, thanks so much for coming on the show. It's Richard Wu, the co-founder of Tensor.

Richard Wu (30:08):

Appreciate the time.

Our guest this week is Andrew Pelekis, CEO of Claynosaurz. Claynosaurz is more than an NFT project, it's a 3D production studio full of artists from Sony, Disney, Dreamworks, Ubisoft, Netflix, Warner Bros, Marvel, Industrial Light & Magic focusing on developing quality entertainment IP in Web3.

Andrew sits down with Brian Friel to discuss the entire Claynosaurz ecosystem, building entertainment IP in Web3, the importance of quality in NFT projects, and the future of Claynosaurz which includes collectibles, toys, and content.

Show Notes:

0:50 - Background / starting in Web3 and a little bit about your background                        

3:30 - How did Claynosaurz start?

5:47 - Web3 vs.Web2 entertainment                        

12:03 - Why Solana?

14:10 - Engaging with the community

18:34 - Learning how to build strong IP native to the internet

20:03 - Who will be spearheading the future NFTs?  

22:44 - Future projects for Claynosaurz

25:04 - A builder he admires in the Solana ecosystem

Full Transcript:

Brian Friel (00:05):

Hey everyone and welcome to The Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the Web3 space forward. I'm Brian Friel, developer relations at Phantom, and I'm super excited to introduce our guest, Andrew Pelekis, the CEO at Claynosaurz. Claynosaurz is a 3D production studio, building original IP in Web3. Andrew, welcome to the show.

Andrew Pelekis (00:27):

Hey, Brian. Thanks for having me.

Brian Friel (00:29):

Really excited to talk to you today. I'm a huge fan of what you guys have built. I know that there's a lot of listeners that are obsessed with the dinosaur NFTs you guys have created, and they are a clear winner of the cutest NFTs on Solana right now. We have a lot to jump into, but before we get into everything related to Claynosaurz, I'd love to know a little bit about you. Tell us where you got started in Web3 and a little bit about your background.

Andrew Pelekis (00:50):

Sure. So my background is probably a little bit more different than anyone else on our team, which is all geared towards creative and creating the cute characters that you're so familiar with. I come from a background in front office investments, so that's hedge funds and private equity style investment. I've done that for a little over 10 years. Most recently, two partners and I raised $250 million under a private equity umbrella fund and invested that over four years twice, so did a little under $500 million of business. We left that job, or I left that job in 2021 to pursue my own endeavors. Part of that and part of what I was doing earlier that is Web3 geared was working on attaching inventory and collateralized assets using NFTs or tokenizing those types of assets. And I had been working on that loosely in Eastern Europe, but we did a lot of work and a lot of background work on Web3 and all the different aspects of smart contracts, blockchain, and applying those things to real assets.

(01:55):

And in that pursuit, recognized there's a ton of opportunity here, a ton of great use cases. And along that path, I was advising Claynosaurz from afar for about a year before they got to mint. And realized that once they minted, they needed some help on the stuff that I'm an expert in. And I thought there was a lot of opportunity in that, especially when you consider how early on we are in the life cycle, thinking on about what I was doing in my previous job, that is to say attaching real assets via tokens. I think we're going to get there, but there's a great opportunity in the low-hanging fruit that exists in digital assets where the use case is much more applicable for the time being, and therefore a ton of use cases in the entertainment sector in particular. So jumped onto Claynosaurz late 2022, literally hours after the mint I was talking to those guys, and then the very next week, jumping in headfirst.

Brian Friel (02:50):

Oh, that's awesome. It's a unique perspective too. I think you're the first NFT CEO I should say, who comes from a professional investment, more institutional side background. I actually, myself used to work at a [inaudible 00:03:02] before I joined Phantom, and I know that that world doesn't always mesh super well with the NFT world. So you bring a pretty unique perspective to how this whole industry is shaping. But going a little bit back in time, you said you joined the team November, 2022, right around the mint. How did the Clayno team originally start? What was the vision that they got set out to do and who did they build this team with? You guys have some incredible assets. I imagine that you guys have quite a wealth of experience to have put all that stuff together.

Andrew Pelekis (03:31):

Yeah, there's actually somewhere around a dozen founders because of the amount of work it takes to develop this 3D quality asset that we're developing. So it starts though with Nick and Dan, who are our two founders who began developing the IP with, I wouldn't say no objective in mind, but they didn't necessarily solve for distribution, right? This is a creative team who had a ton of great ideas and just said, "Hey, let's start developing them. Let's just start building IP. And people do that, they develop IP and they maybe curate and sell it to a big studio. And this is in a world in which there's no opportunity in NFTs or Web3, right? So that's a traditional path and it's quite long and laborious and a lot of late nights working with no real idea of how you're succeeding or if you're succeeding at all. And along that path, a few months later, NFTs started to blow up.

(04:22):

So this is early 2022, late 2021, the news starts picking up on NFTs. I mean, I think everyone listening will be familiar with that news cycle, and they picked up on that. Some close friends of theirs who were well acquainted with business development and marketing and Web3, basically approached them and said, "Hey, this is a great project. Why don't you test that product you're building in Web3? Why don't you curate this to be an NFT collection? And you can still build the IP beyond that once you've done that, but at least you can test early on in the life cycle. You can monetize the product before you normally would be able to and get all this active feedback."

(05:00):

And so in early 2022, I believe February, they brought on this business development team, expanded the creative team to get to this objective, which was a mint, and built from there. And eventually minted in November 2022.

Brian Friel (05:15):

That's awesome. I think a lot of people might not be familiar with that grind. The traditional, you're a creative team, you're coming from the works of Sony, Disney, Dreamworks, you want to set out on your own adventure and how do you actually take the creative ideas you have and get distribution, like you say, turn that into reality? Can you talk a little bit more about the approach that you guys are doing, building entertainment IP in Web3 and just how that differs from those traditional approaches, what those cycles are like and some of your guys' strategy in Web3 in particular?

Andrew Pelekis (05:46):

Yeah, for sure. So I think the main thing is sort of what I just touched on, which is that typically you would have to build a product to a minimum point at which you could sell it to someone. And in that environment, that minimum point with a team of, by example, our team of 12 to 14 people, if you include contractors, it's a little bit bigger, but it's a small team compared to a studio that might have hundreds or thousands of people, it takes a while to get there. And then if you've got success, if you've built something that's worthwhile to these studios, then they'll participate, right? They'll say, "Okay, well..." But that deal does not look very good because you haven't proven the product beyond this one meeting, and getting that meeting might be tough in the first place. So you sort of get taken to the bank, if you will.

(06:30):

In the environment that Web3 offers, you can test the product early on in the lifecycle. So by example, we had, like I said, a dozen or so people working on our product for about a year to get to this MVP that was in November 2022, and you're testing the product, right? Because that mint tells you, are people interested? What's the feedback like? Are we able to sell this product? So you have all this great testing environment. And then of course, as you know, crypto Twitter is very active in telling you what you are doing right and what you are doing wrong, and you get this great feedback loop. And so you get all of these things that are going on that typically would never arise at all in a traditional environment. And the only time at which it would arise would be long after you've given up the ability to creatively control your own product. You'd have given it up to a studio at some point and struck a deal and been put to the side.

Brian Friel (07:26):

Yeah, it almost seems like a total win-win because it's like you're getting these faster product development cycles. Like you said, you're getting in the hands of the users, you're figuring out really fast if this is worth investing in long term or not, but you're also getting more control of your own destiny. You don't have to grind for years and then take whatever deal comes your way. You're cutting out some of these middle men just going directly to these consumers. It's pretty cool.

(07:47):

So let's change a little bit and talk about the ecosystem that you guys have built out today. So like I said at the start, everyone remembers, I think, the mint that happened in November 2022. It was a time that I think working at Phantom, you would see a ton of these profile picture collection NFTs, where it's these static images, looking the same. And then all of a sudden, it was like a breath of fresh air seeing these fully animated, smiling dinosaurs, wacky craziness. I think you guys definitely stood out. Talk a little bit about everything that exists in the Claynosaurz ecosystem today.

Andrew Pelekis (08:20):

So there's a lot that exists today, but I would say that everything is complimentary. These are not supplementary things. So the first and most important thing is our Genesis collection. So that is the Claynosaurz collection, that is the characters we're describing. There's six species inside of that collection, and I think everyone understands those. Beyond that, we've also got a few items that exist. And so these are things that we did as a guerilla marketing effect at a number of Web3 events over the last six, seven months. Actually, the first one took place before our mint, which was the Sardinhas, which we dropped in Breakpoint Lisbon in early November 2022. And those turned into Pterodactyls now. And so those holders who were sort of pro-Clayno before we minted, they got rewarded with this very unique species that is only a set of 222. Actually, we've got that mechanism now, that kind of is a good way to explain some of the other items, which is the Claymaker and the clay, which we airdropped to all the holders I believe December and January.

(09:21):

And the Claymaker and the clay are again parts of our world that we would use to develop the product further. So the Claynosaur is the character, the Claymaker is something of a transmuter. So just like a kid playing with clay, you've got different toys that you can use to mold your clay. So the Claymaker is this all-encompassing molder, if you will. And then the clay is the stuff you mold. It's the resource which we use to mold things. To get from the Sardinha to the Pterodactyl. We have on our website, you burn the Sardinha with the Claymaker and the clay to create an egg. And then again, you take the egg and you burn that into the Pterodactyl. And so that explains the Claymaker and the clay, and those items will be used in perpetuity in our world.

(10:05):

Clay is going to be a resource that continues to be used, and the Claymaker will be something that is required to transmute these different objects or to mold these different items in our game. And then you've got other similar drops that we did. In Paris, we did the croissant, NFT Paris. In LA, we did the taco. And most recently, in New York we've done the pizza slice. And all of these things are going to be items or companions that accompany your character. So the croissant will be an item that you can put on top of your Claynosaur. The taco will similarly be an item with a similar utility. And the pizza slice is going to be a companion that will sort of follow your Claynosaur around. So all of these things are different ways to make your Claynosaur ever more unique for the user, to make it more of your own. And so they're complimentary, right? They're not supplementary.

(10:58):

Lastly, and I know I'm going through a lot of things here, we've got the most recent collection, which is the Call of Saga collection.

Brian Friel (11:05):

That's right.

Andrew Pelekis (11:05):

That's being minted on the new Solana Mobile Phone, and that's a really cool initiative. That will be a collection of Claynos. It's not part of the Genesis collection. Think of it as an expansion pack. New collection, two new species. And that's going to be exclusive to the Solana Mobile Phone. Obviously, once you mint it on the phone, you can then trade it and everyone can participate.

Brian Friel (11:28):

Yeah, I'm excited for that. I personally just got my Saga, I think two days ago, right before we're recording this in May 2023. So I got my Genesis sticker, now I'm in line for the mint. I can't wait for that. I'll be a lot of fun.

Andrew Pelekis (11:40):

Very cool.

Brian Friel (11:40):

That might be a good segue too, to talk a little bit about Solana more broadly. You kicked all this off November 2022. At that time, it was probably not the most mainstream bet to bet on Solana as an NFT ecosystem, but I think you and I both know that Solana has a lot of upside that I think a lot of people maybe aren't aware of. What in particular drew you guys to Solana?

Andrew Pelekis (12:03):

I think it's two things. The two main things are that you have to have a good transaction time, like reliable transaction time, so that when you click a button, something happens right away. I think there's research that shows that even more than one second, the user can kind of feel this lag. And the second one is a reliable transaction cost, so that there isn't an immense amount of cost to the user, so that they can freely click on things as they participate in our world.

(12:29):

And all of that goes layer backwards, which is that we're building IP. Part of building IP is building an experience that people enjoy. And for us it was very important that if we're going to expand in this web three direction. And if you're bullish on Web3 in general, you've got to be on a chain or on this platform that offers this resource in such a way that allows the entertainment not to feel laborious, right? It's got to feel seamless.

(12:57):

And so that decision was made actually before my time, which I absolutely support and I think is the correct decision, to be on Solana because you need to have that seamless entertainment experience. And I think that's where it comes from. That's the most important thing for us. And keeping in mind that we're trying to build an IP that is built on Web3, continues to build on this Web3 channel, but permeates into all of these other traditional distribution channels. And if you fast-forward 3, 4, 5 years from now, you'll probably find that the chains that succeed are the ones that are able to bring the most frictionless experience to the users, right?

Brian Friel (13:31):

Absolutely. And I think a lot of that also kind of dovetails to what you were mentioning earlier about these in-person events. You guys are giving these activations to your community live and they can use these complimentary NFTs, the croissants, the tacos that you mentioned, interact with them. It probably builds deeper relationships with these collectibles that they have. Can you talk a little bit about that strategy? I think you guys are doing a lot of unique things both on the in-person event side, but also on your guys' social media presence. Like you said, crypto Twitter, it's very active. I think you guys have a pretty amazing social media presence there. Does this all tie in together into a broader strategy? And if so, what are you guys working towards when engaging with a community like that?

Andrew Pelekis (14:11):

Yeah, this does definitely tie into a broader strategy. To talk about that strategy very quickly. Our view is that in 2023, and probably for the last five to 10 years, entertainment has shifted so drastically onto so many different formats and so many different places, where I'm sitting in front of a few screens right now, I've got my phone, I used to have two or three phones actually, and I'm sure people still have that today, and then you've got your TV and people watch all kinds of different things. And then on these computer screens, you've also got all kinds of platforms on which you can participate in.

(14:44):

So our view is an entertainment experience in 2023 and going forward has to have a very holistic approach, such that the user is able to see you in all these different places. And Twitter is one of those places, especially if you're in Web3, I think Twitter is definitely the right place to start. And so our approach to Twitter was, well, instead of just being this microphone to announce the big things that the traditional studio PR team would do, we can make this an engaging form of entertainment that speaks to our brand, that speaks to Web3, and is able to also engage the community on an ongoing basis.

(15:23):

And so we have a team that works on Twitter, headed by one of our founders, and he does most of the Twitter posting over the last year, year and a half, but it's a dedicated job for us. We take it very seriously. Similarly, we spoke about all these different items and things like that that go inside of this gamified experience. That's a whole other tangent that we think is a great place to distribute, where we think that there's a whole opportunity in building that out. And then across the content strategy, you've got, again, a lot of distribution channels in that there's micro short form if you will. We call those the two to five-second little vignettes you see on TikTok or YouTube Shorts or Instagram Reels. There's a big market in that.

(16:03):

Then you've got short-form, call it trailer-length video, which is one to two minutes, and you could tell a story in that time, but it's not a whole story. And I think a lot of that stuff often lives on YouTube and there's other platforms that are similar to that. And then you've got what's more traditional, you've got 20 plus minute shows or a movie at length, and there's a whole slug of opportunities in there as well. So our content strategy is to permeate across all these different avenues, such that a user can enjoy and sort of familiarize themselves with Claynosaurz regardless of where they are.

(16:38):

And now the last bridge to cross, which is interesting because you would think it's the most obvious one, is the one you touched on with the booster packs and all these activations in-person at these different events. And our view is that there is going to be, and I think we're working on it and trying to push the boundaries on this as much as we can with the resources that we have, especially those that are on Solana, is to bridge the gap between the physical and the digital. So the packs that we were doing in LA and York were sort of an homage to those Yu-Gi-Oh or Pokemon packs where you rip it open, you don't know what you're going to get, and there's this real sense of excitement in that. So we wanted to bring that feeling to these events in-person, and we also wanted to use that as a onboarding for people who aren't familiar with Claynosaurz yet.

(17:22):

So now, you've got this feeling of excitement and now you have a simple interaction with your phone, where you tap the card on your phone and you have these NFTs. And so what we were trying to do is physically onboard people, bridge this physical digital gap, and we're going to continue pushing in that direction on the physical side as well. So that's one of many legs to this larger content strategy.

Brian Friel (17:43):

I think you're painting this really awesome picture of the future. Because I keep going back to this tweet in my mind where Annatoli tweeted where he said, "Claynosaurz is building the next Disney." And in my head, I think of the early days of Disney, like Mickey Mouse on his steamboat, and how it was just this total game of distribution. You had movies going out, the whole country would watch the same movie, and everyone saw the same experience. And this world you're painting here is almost turning everything on its head. It's like now you guys can go out, strike your own destiny without having to set up these massive distribution lines. And it permeates everything. It's Twitter, it's YouTube, it's in-person events as well, these activations. It's an exciting world and it seems like it could go a lot of different directions from here.

(18:23):

If you had to speak to other NFT projects right now, with everything that you guys have learned so far, what kind of learnings would you share about building strong IP that's native to the internet?

Andrew Pelekis (18:35):

Quality has to come first. I think that's the most important thing. And what's important about that is that we're at a point where Web3, and NFT products in particular, get a lot of slack. Regular media, traditional media, whether that be the newspaper or just on other platforms, they're not taking us seriously. And I think a lot of that has to do with quality. Because you can say things like you're going to be the next Disney, but if you put up a picture of one NFT and then a Disney product and the two are obviously different, you're really making a tough argument because this is a product that goes to consumers. We're all consumers, so everybody can understand this. There's nobody that doesn't understand this. The quality speaks for itself.

(19:17):

So the most important thing I think at this stage, now that we're past the early days of NFTs, I'd say, where you're just sort of testing how this will work, and perhaps you're not going to invest time or money in developing and curating IP at this level, I think we're past that. And I think it's important now that focus on quality is of the utmost importance, right? Because you've got to get there and be able to compare Web3 entertainment products to traditional or Web2 entertainment products, because otherwise you're never going to onboard anybody.

Brian Friel (19:50):

Do you see a world where these traditional players, like a Disney, make their own NFT collection in the short term? Or do you think it will be mostly spearheaded by projects like Claynosaurz that are really pushing the envelope? How much do you see that those [inaudible 00:20:02] going in the next couple of years?

Andrew Pelekis (20:03):

I think Disney probably has a lot on his plate. I think a lot of studios are probably stuck in traditional models, but let's not be silly either. These are massive institutions that have been here for, in some cases, dozens and dozens of years. They've got the brand power and they've got the resources to make a good push into Web3 when and if they wanted to. And I think what they're lacking perhaps is an understanding of the community that exists in Web3 and how to interact and market in Web3. And so you sort of touched on it earlier, where you mentioned Disney back in the early days, everyone went and watched Disney because they had solved for distribution.

(20:45):

And that was a world in which distribution was super expensive. You could not distribute anything yourself as an artist, whether that was music or a movie or whatever the case may be. And so a big company like Disney is able to distribute and the consumer eats it because there's no competition. And I would say even up until maybe 15 years ago, streaming was not at the level it's at today, and distribution had just been solved in the last 10 to 15 years. Where 15 years ago, we weren't going through all these different streaming channels trying to find things, and there wasn't all these different opportunities for the consumer to look at things.

(21:24):

So I think that a lot of these big studios are stuck where they're like, "Well, our oligopolistic framework in which we control distribution no longer exists." And now they're sort of lost in this world where everyone can distribute. You and I are doing a podcast right now, this was not possible 30 years ago. And they don't know how to market in that environment, but they do have the resources to do this quickly if they wanted to. But it's that understanding of marketing and that holistic experience that I think they haven't solved for yet.

Brian Friel (21:53):

Yeah, I agree. It's crazy to think back too, like you said, the streaming is a great example. You're watching your favorite TV show this week. You take it for granted that you can just peruse Netflix or Hulu or Amazon Prime Video and all this stuff, but it was not that long ago where you didn't have any of those options. And like you said, you just consume whatever was given to you. You didn't have that choice. It's pretty cool to see that playing out in Web3 now too, or you can kind of sense that it's coming. And I'm hopeful that we'll have that same sort of aha moment in the future where we look back and say, "I can't believe that this was the way things were."

(22:24):

We talked a lot about crypto Twitter in this episode. I think crypto Twitter would kill me if I didn't ask this question, so I have to ask it. But now that we've covered everything that Claynosaurz is up to, looking ahead, is there anything you can share with the fans in particular? Anything that maybe you guys haven't discussed publicly or things that your fans can be looking forward to from the Claynosaurz ecosystem?

Andrew Pelekis (22:44):

Yeah, absolutely. So we're working on all these different tangents, and so all of those things are active. I would say one of the things we're doing first and foremost is developing our website. We need this to be a repository of all the things I've just described to you. So for those who are already active in the Claynosaurz community, there won't be anything new there necessarily. However, there will be this repository of information to onboard people and to bring people into the ecosystem. That's probably the least interesting of the things I'm going to say.

(23:10):

So going beyond that, we're working on entertainment experience, which will also live on the website. This will be a gamified experience, where people can engage with their Claynosaurz, discover part of the Claynotopia land, figure out the lore as we develop into these different regions. And also, begin to accrue drops and different things in the game that they'll be able to itemize and make those Claynosaurz more unique. That's going to be, I think, a really fun addition to our Web3 track.

(23:39):

I think on the other tracks, it's very important to note that we're starting to permeate into TikTok and into Instagram and into YouTube Shorts. That's low-hanging fruit for us, so we're going to get movement on that very soon, so look out for that. And I think probably the most exciting thing, at least for me the most exciting thing, is we're working on a few things in the merchandise realm. And if I go back to the very foundation of this company, the guys who developed this IP, their instinct from day one was, "These are going to be toys. These need to be toys." That's how they developed the IP, and that's what we've been working on for literally since day one, for over a year now, a year and a half.

(24:18):

So we are now in talks with a number of different partners to help us develop collectibles, so think high-value collectibles that we will also integrate with a digital NFT angle. We are also working on toys, generally speaking, and then a whole merchandise store as well. So there's a whole bunch of physical additions coming to the Claynosaurz world.

Brian Friel (24:42):

That's awesome. Keeping with the theme of pushing the boundaries both on the digital and in the in-person and the physical. I love it. Well, Andrew, this has been an awesome discussion, really exciting to talk to you and to hear your vision for how internet native IP is going to play out and everything that Claynosaurz is up to. One closing question that we ask all our guests, and I'd love to hear this from you, is who is a builder that you admire in the Solana ecosystem?

Andrew Pelekis (25:04):

When I first got on, and this is going to sound perhaps odd, but I really admired what the guys are doing at Backpack. I think that they're solving for a lot of friction that currently exists between Web3 and everyone else. I think if that product develops in a way that they envision, it'll be a really big step forward for the entire Web3 community. So I admire them very much. And then I also have to give a big shout-out to Aurory because these guys are... They're Montreal native like we are. They're developing what I think to be a very high quality game on the Solana ecosystem, and I believe that it's a really good showcase of what's possible on Solana that may not necessarily be possible on other L1 chains.

Brian Friel (25:51):

I love it. Two great answers. I agree. Great builders in the space, and I think you're not the first to shout out some of those people as well, so you're in good company there.

(25:59):

Well, Andrew, this has been really awesome. Thanks so much for your time, for sharing your vision of Claynosaurz. Where can people go to learn more about Claynosaurz?

Andrew Pelekis (26:06):

I would say right now you can go to @Claynosaurz on Twitter, you can go from there into our Discord where a lot of the particular information is, and we've got great mods who will help you out. And lastly, I would continue to go look at www.claynosaurz.com, where we will soon have a great website up and running, with all the information at your fingertips.

Brian Friel (26:28):

Love it. Andrew Pelekis, the CEO of Claynosaurz. Thanks so much for your time.

Andrew Pelekis (26:32):

Thank you, Brian. Thanks for having me.

Our guest this week is Austin Federa. Austin is head of strategy and communications at Solana Foundation, responsible for setting the direction of the Solana Foundation and working with projects and developers building in the Solana ecosystem. 

Austin discusses Solana's pragmatic engineering culture and the need for developers to focus on building things that are truly only possible on Solana. He also highlights the Foundation's role in supporting infrastructure-level initiatives and turning R&D into stable, standardized solutions. Finally, he stresses the importance for founders to focus on revenue and business models during the bear market and to build outside of the United States. 

Show Notes:

0:55 - Starting with Solana

6:42 - Pragmatism at Solana

11:15 - Labs vs. Foundation

17:36 - Exciting new things at Solana

21:52 - Things Austin is personally excited about          

26:19 - Contributing to Solana

31:47 - Who is a builder you admire in the Solana ecosystem?

Full Transcript:

Brian Friel (00:00):

Hey everyone, and welcome to the Zeitgeist, the show. We highlight the founders, developers, and designers who are pushing the Web3 space forward. I'm Brian Friel, developer relations at Phantom, and I'm super excited to introduce our guest, Austin Federa, the head of strategy and communications at the Solana Foundation. Austin, welcome to the show.

Austin Federa (00:25):

Hey, thanks for having me.

Brian Friel (00:26):

I'm super excited to talk to you today. As I was saying just before recording, I think this is the first time I'm recording someone who's actually a podcast pro, so I have a lot to learn from you. Thank you for making time. Austin, before we get into everything about Solana today, I'd love to just learn a little bit about you, how you got started at Solana. And I remember when I first joined Solana, you were the head of communications, and I think at the time there wasn't a clear split between labs and foundation. Since then, a lot has changed and maybe you could go in a little bit of that of how your role has evolved as well.

Austin Federa (00:56):

Yeah, definitely. So I originally joined in January of '21 out of Bison Trails. So Bison Trails was getting acquired by Coinbase to become Coinbase Cloud. I'd worked there for a little over a year running a bunch of the product marketing there and those sorts of things. And just with the transition over to Coinbase, it was like, oh, you don't want to go work for Coinbase, do you? And I was like, no, probably not. And so it was one of those things where it was somewhere in between one of the people who didn't make the cut and one of the people who they were like, you're just not going to be successful here. And I was like, that's a fairly accurate read. I got tons of great friends who are still working at Coinbase, but for me it just wasn't really the right spot. So I was talking to a bunch of L1s and L2s about coming over.

(01:41):

And so, one of the big things we'd done at Bison Trails is we had built out almost all of the world's Eth2 staking infrastructure. And I mean almost all the world's Bison Trails infrastructure ran solidly over 50% of the Eth2 network when the Beacon Chain launched, and still at that point in January of '21. Now this didn't matter from a decentralization standpoint because the Beacon Chain wasn't actually a thing. It was just a place you could stake. There wasn't actually user transactions or anything of value on it besides some Eth. But I was pretty heavily in the EVM world at that point. And so I was going around and talking to a bunch of different protocols. I was talking to a bunch of L2s and scaling solutions and these sorts of things, and I was talking to Polkadot as well and some of those type of other L1s.

(02:25):

And a friend of mine who I worked with back at Republic years ago, Ben Sparango was like, "Hey, what are you up to?" And I was like, "Ah, I'm kind of between stuff right now. I'm interviewing a bunch of places. I don't really feel super passionate about it. I was like, maybe I should leave crypto. I kind of like this industry a lot, but I don't know. We'll see." And he is like, "You should talk to Raj and Toly." I was like, "Of Solana?" He goes, "Yeah, yeah, I joined Solana a few months ago. It's great. You should come talk to us." And I was like, "I don't know, man. I worked with 20 different protocols when I was at Bison Trails and none of them were Solana. Solana was the weird thing that was hard to run and no one understood how to build software for it, but we supported it at Bison Trails because there was people who were trying to run infrastructure for it.

(03:04):

And he is like, "No, just come and talk to them." And we just finished up this big project with Masari, which was the state of Eth2 was basically the report that we just helped them write and put out. And I had a lot of questions and I thought the questions were just things that I was getting wrong. I thought it was me who was not understanding the model under which Eth2 was going to work. This is back at the time when you're going to have Parallax, execution shards on the network and all this sorts of thing. And I was like, I don't understand how DeFi is going to work here. The minute you break what now we call the global state, but the minute you start moving data into segregated places, that means the data has to be moved before it can interact.

(03:45):

And if there's one thing we all know about computer science, it's that copying is expensive and takes a lot of time. And so I got on the call with Anatoly, and I was just talking about Eth2 stuff and asking him some questions about what he thought about this stuff. And he's like, "Oh yeah, there's no composability in charting." And I was like, "You're the first person who's told me this. Tell me more." 'Cause I've been talking to a bunch of people who were talking about like, oh, well, it's just harder and it's like... He runs me through the whole thing about like Solana's, a single global state machine, really fast blockchain, what all these advantages were here. And all this stuff, for me, I was like, oh, this makes perfect sense. All of the things that I have been thinking and feeling about the undefined world of what the new state... Now I would sort of call it the cosmofication of Ethereum, what that process was like.

(04:32):

I wasn't an idiot and I wasn't just not smart enough to understand what folks were talking about. Folks just were talking ahead of the problems they'd solved. And this is not to say that we're never going to have composability uncharted ecosystems, but it took video game designers almost a decade to figure out how to program for multi-core processors. And that took a long time to figure. Out for me, this sort of decision to come and join the Solana Labs at that point was really practical. It was like, I don't know if this weird wacky idea is going to work, but I know I'm going to learn a hell of a lot here from these folks who are doing something very different than the rest of the industry. And the very different than the rest of the industry is usually where the cool stuff's happening.

Brian Friel (05:15):

I think that is the most perfect intro for this because it hits on so many themes. I want to dive in with you.

Austin Federa (05:21):

Great.

Brian Friel (05:21):

One theme that you kind of hit on right there, and this is before we even get into what you currently do as your role and everything, which we should definitely hit on, but I think that resonates pretty well with what Phantom saw originally. Because Phantom also coming from EVM background and the founders were all Zero X folks, seeing that, hey, there is this thing, it's maybe the redheaded stepchild of crypto right now, but these people who are marching into their own beat. This is like 2021, very early 2020 at this point. But basically what I would say it was a very non-consensus bet to do things differently and built out its own genuine kernel of developer ecosystem, which has just evolved into all this craziness today we can talk about.

(06:00):

But I think one of the key principles of that that I've noticed in my time in Solana is just the level of pragmatism and the reality of, Hey, these are problems today. We have users today, and how do we ship and iterate on these things and not talk about a problem that might be 10 years from now, which may or may not be solved, but actually addresses the problem today. And I think there's a lot that is going on in Solana about this across just all sorts of stuff. We should dive into all of that.

Austin Federa (06:27):

Oh yeah.

Brian Friel (06:28):

But I love that framing, and I'm curious, is that level of pragmatism... Who do you think that's set by? I feel like that's almost something an Anatoly thing, but is that an explicit choice that Solana Foundation or Solana Labs is choosing to bring into the ecosystem?

Austin Federa (06:42):

So one of the things I think is really important when you're looking at any software system is to look at philosophies that the people building it have. And a lot of the places you see that philosophy is in their background. And so if you look at Anatoly and Stephen Akridge and a bunch of the other early founders of the Solana project, their expertise was all in embedded systems. A bunch of these folks came from Qualcomm or very similar companies to Qualcomm, and they were trying to figure out how you could cram the best user experience possible on a flip phone or a proto smartphone onto a chip. And they had to do all these crazy low level optimizations to get this stuff to work. And Solana's not super, super low level, but one of the major things there was saying, we're going to combine the consensus layer with the virtual machine.

(07:38):

And that's not for some elegant principle of software architecture. That's because it's faster and yes, it's harder. And yes, there's a lot of other problems that come with that, but at the end of the day, the pragmatism comes from the background of folks who actually had to ship chips that companies were going to build software on that would interact in the real world and be the basis of all of this mobile revolution. And so there's other approaches that are very sort of come from the academic computing world where it's as long as we can define the perfect software system, in theory, the problem is just finding the execution place to do it on. And there are some chains that have been more successful than others with that. But I think at the end of the day, the thing Solana has going for it is this sort of ruthless pragmatism. It's a desire to build software in a way that doesn't let perfect [inaudible 00:08:33] of the good, but also keeps its values front and center.

(08:36):

And one of those major values is if you know you have to do the hard thing, do the hard thing first. And that is the thing I will routinely tell people internally is the only way you eat an elephant is one bite at a time. And that is kind of the way we go through all of this stuff. It's so easy to talk yourself into waterfall releases. It's so easy to talk yourself into, well, when this thing comes out, then this and this and this, and this can all come out and then we'll have this end state of this. And it's like you're making assumptions about what the blockchain industry's going to look like 18 months from now. I don't think any human is ever successfully predicted what the blockchain industry would look like six months from now, let alone three times that. So there's all this stuff about not working with entrenched assumptions, picking software architecture systems that feel like they're persistent. I would say that the software philosophy that Solana core engineering builds on is closer to brand philosophy than it is like technical philosophy. It's very interesting.

Brian Friel (09:36):

Yeah, I couldn't agree more. I mean, being [inaudible 00:09:39], I think we have a front seat to that too, as the ecosystem changes as the leadership basically, like you said, just takes the hard challenge first and says, this is something that we have to face. Let's tackle it now. Here's an open proposal, here's how we can do it. I'm looking back at what Solana was even just a year ago, one of the dev advocates on our team on it put out this tweet that said, "Things we didn't have a year ago on Solana Wallet's standard."

Austin Federa (10:02):

Oh, I love it.

Brian Friel (10:03):

Which is like looking at the state of other blockchains trying to be an ejected wallet there, it's a mess. Solana takes that hand on, makes a chain agnostic wallet standard for that version transactions, which like high level, massively refactoring how transactions can be done such that you can just access way more accounts on Solana DeFi doing multi hops exchange. Jupiter, the perfect example of that. Priority fees on the network, I mean elegant state level hotspot fee markets that don't impact the rest. Anyone else on Solana. Programmable NFTs, state compression, quick, stake weighted QoS.

(10:37):

I mean, not to mention Saga, new token programs. There's just so much going on right now. From where you sit, and maybe this can get into a little bit of the labs versus foundation discussion that we want to get into too, is how do all these ideas come to life mean? Some of these are community driven, like Metaplex having their own programmable NFTs. But a lot of these also are Solana engineers who are just on the front lines with their own proposals. Jordan Sexton has an idea he's doing it. How much of that is top down driven? How much of that is bottom up? And how much of this is a labs versus foundation? How do you see all this kind of how it plays out?

Austin Federa (11:16):

So before we even get to that, one of, I think the most interesting examples of pragmatism is how little work wallets have to do on Solana. This is super different. On Ethereum, the wallet has to build the transaction, that is a part of the thing. And on Solana, the DAPs have to build the transactions. Because the DAPs know more about what they're building than the wallet does. So why would the wallet build a transaction? The wallet's role is to verify that the transaction is what the DAP says it is, right? But it's those little tiny things where it's like how do we make it easier for people to build something like Phantom in six months as opposed to nine months?

(11:55):

And that's kind of one component that falls into that. But you were saying these sort of ideas about where do these things come from. A lot of it comes from best practices in other ecosystems about things people are talking about. I think one of the things that Ethereum is far ahead of Solana on is formal verification. And formal verification is not something that we came up with or claimed to have come up with.

(12:20):

It's like, oh, this is a really strong thing in another ecosystem that we should take and bring into this. Proof of history is just time division multiple access. It's TDMA, it's literally what 2G cell phone technology run on. But you've applied that to a blockchain with a leader schedule now and suddenly you have an incredibly fast blockchain. I think one of the best things to think about is Solana is full of out-of-the-box solutions to very conventional problems. And those out-of-the-box solutions will often come from engineers who are working on this stuff. They'll often come from engineers who are not working on this stuff. The number of suggestions that have come from someone's like, oh, I'm trying to build this thing, and someone like over lunch or over a Zoom on something else is like, what if you just do it this way instead? And they're like, okay.

(13:08):

And then they go down that... It's sort of this idea that there's not an intellectual purity test. You don't have to subscribe to a philosophy of how something should be built in order to have an idea here. P NFTs came entirely from community demand for them. That was a direct response to sort of a problem. The wallet standard is again, it's like it's really annoying that developers have to integrate calls for every wallet into their DAP. Wouldn't it be so much easier if there could just be one thing they could call and all the wallets in your Chrome Exchange could be like, hello, here I am. And that was an incredible easy turnkey thing that didn't require creating a whole separate product, a whole separate company to just connect wallets or adapt wallets if we should say it that way. And that's where these kind of things come from.

(13:58):

Now sometimes this leads to suboptimal user experiences too. I would say that we have three excellent explorers on Solana for what you want to do with that explorer. And you don't go to Solscan for the same things you go to Solana FM for and you don't go to the explorer.solana.com for the same things you go to those other ones for. And so there is sometimes this sort of fracturing that occurs because everyone has great ideas and they feel very comfortable building them before we've had a committee meeting or faculty meeting or something to decide what the right path forward is. As much as possible, the goal is to move fast and see what's adopted and the stuff that's adopted then gets tons of resources thrown behind it from the community.

Brian Friel (14:48):

Yeah, I do think that's incredibly refreshing though for crypto. I mean, especially an industry that's still... I think as a whole macro level iterating a lot. The meta is constantly changing. Some pattern that I've noticed is with P NFTs is a lot of times Solana will hit a new meta or figure out a new problem well before other ecosystems because of this rapid iteration and experimentation. And it's almost like, hey, Solana's figured it out. Let's take the learnings from there and tell everyone else and get up to speed on that.

Austin Federa (15:16):

Oh yeah. And tell everyone else we thought of it ourselves. That's also the other thing. And we see this all the time, not in a way that people are like, but all of the tricks that Monad is doing to try and speed up EVM, they're all the things that Solana did. Except they're trying to do it with an underlying architecture that it's a lot harder on because transactions on Solana have to specify their accounts, their instructions, their memory, their compute, before they get accepted and executed. So the work of transaction simulation on Solana is a lot more about just reading what the data says and being like, yes, these things say what they actually say they say, and then you can simulate balance changes and all that sort of stuff. But that is a very different problem than trying to stochastically model what an EVM transaction is going to do.

(16:05):

And if you're trying to do out of order processing of EVM transactions, I'm not going to say it can't work because a lot of people thought Token Ring was the only protocol that could possibly make the internet work. And the idea of just throwing packets randomly at a router and being good luck, well, that sounded insane, and that is exactly how the internet works. You just randomly throw packets at routers and most of them get there somehow. It's pretty astonishing. Like packet collision's super rare nowadays, even though everyone's just screaming at the top of their lungs constantly for bandwidth, and that's wild.

(16:37):

So who knows if the stuff will actually work on that side. But the cool thing I think that's going on in Solana is this lack of ideological purity around how something has to be done, and it's more of a purity around what the outcome has to be. There's so many analogies here, but the United States, we talk about equality of opportunity all the time, and that is actually a much harder thing to do than equality of outcome. And so I think with Solana, it's like if you focus on the outcome that you want and not the process by which you get there, you will find a better way to get there.

Brian Friel (17:12):

I love that. So from where you sit on the foundation side now head of strategy at Foundation, you mentioned that there's all these engineers, some at Solana, some not at Solana, who basically have these problems. They come up with pragmatic solutions. What's the role of the Solana Foundation on all of this? And is there any big bets in particular that you're excited about or you guys are making for this year on Solana?

Austin Federa (17:36):

Yeah, So the Foundation is a Swiss nonprofit foundation that exists to further the adoption and advancement of the Solana blockchain. And so this is the entity that gives grants. This is the entity that if you've ever sort of interacted with a granting apparatus, breakpoint, hacker houses, developer boot camps, those are all run out of the Solana Foundation. That's its role for being in the world. And so the initiatives that we are working on are really infrastructure level. They always have been, and I think they will continue to be throughout this year. So a great example of this are fee markets, like you mentioned, right? Local fee markets. That was technically shipped in September, but I would argue it practically wasn't shipped until December. And that was because there wasn't a method at that point for an RPC, for a wallet, a DAP, anything to hit up an RPC and say, how much do you think I should prioritize a fee if I really want to make sure this transaction gets through?

(18:34):

And without the ability to guesstimate, you don't have anything, right? That is not a functional, usable, shipped thing without developers actually being able to implement it. And that's kind of the difference I would describe between the work that gets done through let's just say Solana Labs and core engineering there and the work the Foundation's supporting. A lot of the work that core engineering does and a bunch of, obviously not all, there's core engineers all over the place, but a number of the core engineers are on Solana Labs' payroll. And those individuals, they're focused on the core engineering, right?

(19:09):

They're like, we shipped fee markets. We're good. At the Foundation, we're like, wait a minute, wait a minute. There's so much work to actually be done to turn this into a standard that every DAP and wallet can use without spending days writing custom code. And so I would say that's kind of the place that the Foundation comes in is it's not directing what work gets done, but it's sort of the process of taking stuff that feels like it's either R&D or it's super hot production engineering. And turning it into something that's more stable, that's more standardized, that's more universally understood, and doing that in a way that there's feedback collected from many people in the ecosystem, in addition to the whole granting apparatus.

Brian Friel (19:47):

So the developer relations team sits at the foundation level no longer at the labs level?

Austin Federa (19:52):

Yes, very much. You were saying earlier like, oh, these things maybe weren't as separate before they actually were just as separate. They were just very few people worked for Foundation. So because most of the work at that point was just sort of kick out as much as you can get out the door. There were folks at Foundation giving grants and stuff like that, but a lot of that sort of work that we do today, it wasn't necessary to do it yet because the thing didn't exist yet, at that stage. When I joined, there were 36 programs on the network that had daily transactions through them.

Brian Friel (20:25):

Wow.

Austin Federa (20:26):

Absolutely nothing. And now we're over like 1200 easily. And I just think that's such an interesting change to see over such a quick period of time.

Brian Friel (20:35):

Oh, for sure. It stood out to me too, that... I think I mentioned the earlier conversation too. It's like this kernel of genuine developer interest that basically no other blockchain ecosystem I think has outside of Ethereum where it's people who are very much specialized, Solana centric as Chase loves to say too in Glass, but really just thinking about what's only possible in Solana? How can I iterate on this and expand on this? That's super invigorating to be a part of, and that's my favorite part of the ecosystem, essentially. Yeah,

Austin Federa (21:04):

We love it.

Brian Friel (21:05):

On that note, there is this meme now, is recording this in April 2023 of only possible on Solana and these things that everything we talked about, this pragmatic engineering culture of basically what's the outcome, what's the end user experience that we really want, and finding ways to ship that. There's a lot going on right now. I mean, I think Saga is an awesome example of this. It's like, how could we take a phone that just is the most kick ass crypto experience you could possibly have on mobile, but there's all sorts of stuff. There's compressed NFTs and state compression, what that means, DPIN is this new thing. There's all existing, DeFi, just normal FTs payments infrastructure. What are you personally most excited about and are any key themes in the year ahead that you think people should look into now that really highlights the strengths of Solana?

Austin Federa (21:52):

So the decentralized physical infrastructure layer is a really interesting story for me personally. And I think there's so much that goes on with that that goes into that, whatever kind of language you want to use to describe that. I am just super excited about what that looks like. And for me personally, the stuff I'm most excited about on Solana is you really don't have a choice to build it anywhere else that you need a fast composable ecosystem that has the capacity to go up to tens of thousands of transactions per second for a base fee of $.000025 and that's rare. You really can't find that in a lot of other places or a lot of other applications. And so for me, that's like some of the coolest stuff on Solana. Now, in terms of what's coming this year, I think we're going to see Fire Dancer rolling out on testnet probably in Q4.

(22:40):

That's going to be really interesting to see how that performs when it's intermingled with the other clients on the network. So that's going to be very interesting. There's a ton of work being done to make custom contracts easier to deploy on Solana. This is a project called Interfaces. This is out of necessity. The Token 22, which is code name, it definitely won't be called that once it's released. Token 22 is this new token program coming to the network. And it brings all sorts of things like interest baresing tokens. You can charge fees to use contracts directly in the contract.

(23:11):

There's a lot of really interesting stuff that comes to it, but it adds a second token program to the network. And that second token program means you need to suddenly have a way that a wallet can instantly say, Hey, which program should I look at for this arbitrary piece of data on chain? And because of that, it means if you've built support for two, you can build support for 20,000. So there's little pieces like that that are coming, but I really think this is going to be another infrastructure year, but instead of it being base level infrastructure, it's going to be something closer to developer tooling. I'm not sure I would call Interface is developer tooling, but it's definitely usability tooling. That means it's easier to develop novel things for the Solana ecosystem.

Brian Friel (23:55):

Yeah, I see that as well. The conversation shift towards interfaces is really exciting too, because Solana's account model and program model has some implicit instruction in that where, okay, this is the canonical token program.

Austin Federa (24:08):

It's perfect. What are you talking about?

Brian Friel (24:09):

Yeah, it's perfect. What are you talking about? And I think that just leans even more into those pragmatic values kind of shipping. And that's like, Hey, if we do have these interfaces where all of a sudden any wallet can take any of these token programs, any NFT exchange you can list on, you can list your NFTs through them. Opening up that design space, a deeper infrastructure level, I think would be really exciting.

Austin Federa (24:31):

Yeah. This will support everything from if you are a... No offense, but if you're a super corporate NFT project and you want to make sure that you have certain protections or certain things or whatever, you might want to deploy your own version of an NFT contract. And right now it's really hard to do that. It's not hard to deploy the contract, it's hard to get the ecosystem on board with the contract you've deployed.

Brian Friel (24:55):

You have to knock on every door to get a custom integration.

Austin Federa (24:59):

And we're seeing this with compression, right? Compression is awesome. It's been picked up by a ton of wallets. There's not an NFT marketplace that supports it yet.

Brian Friel (25:08):

Not yet, but I have heard soon. So maybe, and by the time that this podcast is released.

Austin Federa (25:13):

Who's adding it?

Brian Friel (25:14):

I have heard Tensor.

Austin Federa (25:15):

Interesting.

Brian Friel (25:16):

As an alpha drop.

Austin Federa (25:17):

They've been making moves.

Brian Friel (25:18):

They're making moves, but I would not be surprised if Magic Eden and others would be following suit at some point. But if we can open up an interface, some sort of interface standard where we can get buy-in, do the hard work up front to get all these different companies to buy into some sort of interface together, it's going to unlock a lot of really cool potential on Solana.

Austin Federa (25:38):

Absolutely.

Brian Friel (25:39):

One other thing I want to ask too is, you mentioned a few things kind of implicitly there. One of my questions was going to be like there's all these exciting things happening where we should we be investing now to unlock all this. But I guess there's also... I've noticed on Solana, and particularly Solana Twitter, there's this part of what this pragmatic culture has attracted is a culture of doers and people who show up and they want to contribute and they want to lend their time. And a lot of developers who maybe not even be working in the Solana ecosystem who are just excited and passionate about it. If you could speak to those people, where do you think they should be focusing their time and energy? What is Solana most in need from external contributors at this time?

Austin Federa (26:19):

It's a really good question. I mean, the problem there is I don't think the advice that I would give external contributors is good advice for their project at this point. It's great advice for Solana. The advice for Solana, I'd say is keep building strong open source tooling and foundations so we can make it easier for new developers to get involved. Anything you build that fits into the Lego thesis super strong, please keep doing it. What I would actually give as advice for founders in this space right now is that we're probably in a bear for at least another 12 months, and it's going to be a climb out of this thing. And you should be spending time thinking about revenue. You should be spending time thinking about business models. Not a lot, not enough to go raise a massive series beyond, but enough that you're extending your runway by a few months that if you have to raise a bridge round, you can show, hey, actually we do have revenue.

(27:23):

Here's our revenue numbers. Give us a little bit of money. Because I think this is a really hard time in the capital markets. It's really easy to be like the bear is a great time for building. That's true. The bear is a great time for building. It's a terrible time for payroll though. And that's kind of something they just remember as you kind of go through the process. Now, what does Solana need? I mean, I'm going to tell you my vision of how Solana could not win. And the way Solana doesn't win is if these incremental small scaling solutions for EVM, that 400 transactions per second, you can do an EVM right now if you really try. Maybe we just don't come up with transaction heavy use cases that anyone truly wants for a while. And that's a situation where all this horsepower that's been brought to bear on something like Solana isn't actually needed for what things people want to build on blockchains.

(28:20):

Now, I don't think that's true, but that's the thing to think about. What Solana needs is for people to embrace only possible on Solana and to build more things that are truly only possible to be built on Solana. Because as much as I love NFT projects, very few of them are only possible on Solana. This is the great thing about XNFTs. Those are truly only possible in Solana right now. But let's see teams going out there and saying, okay, a 10,000 drop is cool. What if we do a million, 10 million, a hundred million? Yeah, they're going to be cheaper. Yeah, the dynamics are going to change. Something's going to change, right? But this is the thing that I think is so interesting about this space is everyone has internalized this financialization, Bitcoinification view of all crypto. Like, Bitcoin's value is scarcity, period, end of day.

(29:20):

That's great. Props to Bitcoin, nothing since Bitcoin is Bitcoin. Like Magic The Gathering is not worth less money every time they print a new trading card pack. The Pokemon company is not worth less money every time they sell a new Pikachu plush. There are models here that people just seem emotionally afraid to try. I think Clano is getting pretty close to this and they're doing some very cool stuff with how they're doing some collection expanding. On the NFT side though, I think people need to get away from the idea that their value proposition is scarcity and figure out ways to do like LVMH and Louis Vuitton have done where they have something that is still high end, that is still hard to get but is not fixed cap. And sort of see where that maybe heads from there. On the DeFi side, start building outside of the United States, translate your projects, websites into Vietnamese and Turkish.

(30:18):

Don't think your growth is going to come from the United States in the next year or two because the regulations here are really uncertain right now. And it's a bit of a tricky time for folks to be in the United States. But I went to Turkey and I went to Vietnam, and folks are using crypto, and they're using crypto because in Turkey it's significantly more stable than their actual native currency. And that's a crazy thing to be thinking about, but that's true. So let's embrace that. Let's actually think of this stuff and make sure that the work that's being done truly actually supports this kind of stuff. And I think that's kind of one of the most important things to think about from the perspective of a founder at this point.

Brian Friel (30:57):

Yeah, I think there's been a key theme here throughout this whole conversation of basically going back to first principles and thinking, what's the outcomes that we want? Originally, I think Solana's tagline, even blockchain at Nasdaq speed, we were promised flying cars. We got Twitter, we got the greatest JPEG trading engine in the world on Solana, but how can we continue to iterate on this and what are things we can only do on Solana? All those examples you brought up I think are awesome examples. I really appreciate that you guys are continuing to challenge the ecosystem and to push and to not be afraid to try new things, and that's where the unlocks happen.

Austin Federa (31:30):

Yeah, of course. I think that's incredibly important and powerful here.

Brian Friel (31:34):

Well, Austin, this has been an awesome conversation. Thank you so much. One closing question we ask all our guests. Keeping line with the last question of the things you're excited about is who is a builder that you admire in the Solana ecosystem?

Austin Federa (31:48):

I mean, there's so many, it's hard to pick one. There's the easy answers of Armani and those folks and Mango Max. And I think the truth is that the folks who are doing some of the most interesting work are the ones who are bug fixing, who are going in and saying, ah, I ran into this problem with this tool set that I've seen someone else build. Let me go spend a little time trying to fix this thing up. And I don't have anyone particular to name in that, but it's very easy to be like, holy shit, Armani and X NFTs. Wow. And it's like, that is incredibly important. You know what else is really important? The dude that went in and made RPCs 20% more efficient for certain types of calls. And I think those are equally important things, and I wish we did a little bit more celebrating of the maintenance work in addition to all of our celebrating of the true innovations only possible on Solana.

Brian Friel (32:40):

Mert is going to love that, that you said their call that out, so.

Austin Federa (32:44):

There we go.

Brian Friel (32:44):

Maybe we can put Mert, Triton, all those folks, everyone, all the infrastructure that does the unsexy blocking and tackling that maybe really is the true glass eating on Solana, all of those guys.

Austin Federa (32:56):

Totally. I mean, there's a bunch of devs that work in Mango that are actually part of core engineering now, and they just fix a bunch of stuff because they're just like, we were trying to build our next version of Mango and we kept running into these problems, so we just started fixing stuff.

Brian Friel (33:10):

No one knows it better than them. Yeah.

Austin Federa (33:12):

Exactly. So it's good.

Brian Friel (33:13):

That's amazing. Well, Austin, I'm really excited for the next year Solana, thank you so much for coming on the podcast.

Austin Federa (33:20):

Definitely. Thank you. This is fun.

This week's guest is Domingo Valadez, Co-founder & CEO of Homebase, a platform that lets people invest in tokenized residential real estate for as little as $100. As real estate prices continue to get more and more unaffordable for people, Homebase aims to be the destination for US renters to invest in the US residential real estate market via fractionalizing NFTs.

Show Notes:

0:50 - What is Homebase?

2:05 - Why Solana?

4:06 - How does it work?

7:09  - Benefits using web3 and Solana

9:17 - Us vs International

11:11 - How things can evolve for Homebase?  

14:18 - Regulatory landscape in the US / next US markets to expand to

17:04 - User journey from first wallet to being a homeowner

20:04 - Voting  

21:14 -  Retaining people in Crypto    

22:57 -  Exciting things in on-chain residential real estate.

24:38 -  A builder Domingo admires in the Solana ecosystem

Full Transcript:

Brian Friel (00:05):

Hey, everyone, and welcome to The Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the Web3 space forward. I'm Brian Friel, developer relations at Phantom, and I'm super excited to introduce my guest, Domingo Valadez, the co-founder of Homebase, a digital platform for fractionalizing residential real estate via NFTs. Domingo, welcome to the show.

Domingo Valadez (00:28):

Thanks so much for having me, Brian. Super excited to be here.

Brian Friel (00:30):

Yeah, super excited to have you on as well. You guys are a hotly anticipated recent launch. I've seen you guys on Twitter. It's one of the most, I'd say, unique and more pragmatic applications I've seen most recently launch on Solana. Can you give us a quick overview of what is Homebase and how can users start using it today?

Domingo Valadez (00:51):

Yeah. Homebase is a platform that lets people invest in tokenized residential real estate for as little as $100. The main value property right people is just getting exposure to an actual physical rental property and starting to get some of that passive income, starting to get that appreciation over time in terms of how you can participate and invest, you can just go to our website, make an account, we do force you to put a KYC and that's just to follow us regulations. So right now we're limited to just US investors unfortunately, but have plans to make it international as we continue to grow. But right now it's a matter of KYCing. You also have to set up a 15-minute call with one of my co-founders, Alex, and that's just to make sure that you're a sophisticated investor so you get to know us a little bit. So we're very transparent with our team and what we're doing, but we had 38 people participate in our very first home and now have 1500 that want to participate in our next one.

Brian Friel (01:41):

That's awesome. So residential real estate investing, that's something that I'd say a lot of the demographic with Solana maybe skews potentially on the younger side. This is something that people think is interesting but have historically been left out of this world of investing. What made you guys decide to do something in a purely digital way that's different than traditional residential real estate investing and what made you guys choose to launch this on Solana?

Domingo Valadez (02:05):

I grew up in a family that has always seen real estate as a great way building wealth over time and just growing up I've very quickly seen it become unaffordable for most people in my generation. So I was working at Google for five years, still couldn't afford anything in the Bay Area and I was like, "This is absurd." And so it was like how can we make this affordable for people where they can actually get some skin in the game with the properties they're living in? And so that was really a big culmination for why Homebase and so then I've invested in my own residential property, myself and my hometown of McAllen just going into that flow, so many third parties, how to work with a bank, took literally three months to buy the property and that was just awful as well. So it's kind of like what can we do that's completely digital that just makes the experience really, really easy for people?

(02:49):

And so that's where the idea around Homebase came from. We're making it where people can invest in properties for as little as a hundred dollars. And so real estate's also a industry that loves silo data. You have big players that really hold their data near and dear to their heart and don't want to share it, and that's the complete opposite of public blockchains, right? It's like, "Let's just get data. Everyone should have a fair shot at understanding what's going on and if you know how to utilize that data, you can make some great decisions with it." A big piece of it came from the mission as well of I've been following Bitcoin since 2017, love the decentralization aspect of it and so wanted to see how we could get real estate in a very transparent open source way. That was a big culmination about why even build in a digital space using blockchain to do this.

Brian Friel (03:33):

Love it. I think that story resonates with a lot of listeners potentially I myself in Bay Area. Similar story there, so it's similar frustrations. I guess I'm a little curious how does this at a high level work under the hood? Kind of back to my earlier question, a lot of folks maybe don't know much about real estate investing. There's a lot of paperwork involved. What role is Homebase playing? What parts of this are done on chain? How do I go from, "I'm just a normal crypto user with NFTs." To now, I can say, "I'm a part of this homeownership project." How does that all work under the hood?

Domingo Valadez (04:07):

I'll share the Homebase side, then I'll share the user experience side. So it's actually quite complex to make it work. It took us seven months to build out the legal frameworks to how to do this and then building out the software for tokenization took about two months for us to do. But just to walk you through this first home, how we did it effectively, we found a property that was suitable. We put it under an exclusive buyer seller agreement, so Homebase had full rights to sell the house on behalf of the owner. We then spun up a special purpose vehicle that was sole intent was to purchase that property, and so then we created NFTs that represent ownership in that special purpose vehicle and we had a mint date on that mint date. It was basically like the day we started selling the property.

(04:45):

And so people could literally go to our website, these are people that have already KYC accredited, non-accredited, could then buy tokens with USDC and they would mint them directly on our platform. And so they would get those tokens immediately to their account and then in tandem they would get DocuSign documentation sent to them. So they have to sign a legal LLC operating agreement, they need to sign a security token purchase agreement, all this legal documentation that basically says like I am buying tokens using USDC and I'm now a member of this LLC that was created. So once we acquired all the money that was necessary, we then closed up the SPV and then actually completed the transaction. And so the owner received the amount of money that they were trying to sell on his first property, and then once that was closed, we then filed with the local title companies to basically transition the title from the owner into this new SPV we created.

(05:40):

So the piece that's truly on chain are the NFTs we created to represent ownership, but we're pretty much a Web 2.5 company where we do need to know who exactly owns what tokens, and we only whitelisted wallets can effectively trade them between themselves. So we file these as Reg D 506, security, private placement offerings, and in that regulation you have to hold the investment for at least a year. You can't trade it for that initial year, and then after that you can sell it through our platform either back to us or eventually want to allow for peer-to-peer trading, but we need an alternative trading system license for that, which we don't have yet. So the majority of it's going to be people selling it back to us and then us reselling it to the next person.

Brian Friel (06:23):

That makes a lot of sense. That was going to be one of my follow-up questions because given the permissionless nature of most tokens by default on chains, I was wondering how that works within a legal framework. You mentioned this first home that you guys tokenized from what I saw, it sold out within the first two weeks. It was a great success, but you guys basically just proved a use case that, "Hey, within the legal framework of how this exists today, this actually works." I think we could get into in this podcast talking a lot about where you guys see this going in the future and how this whole process is going to evolve. But can you talk a little bit about even just this first home that you guys tokenized and sold, what were some of the immediate benefits that you saw using Solana or blockchains in particular that might be different than the normal process?

Domingo Valadez (07:09):

I think a lot of the benefits are for users, not for us as the company doing it. So there was still a lot of complexity when it came to structuring all this and every single home we tokenize and sell on the platform has a lot of complexity behind the scenes, but for the end user, people could literally invest in this first home within five minutes. That's how long it took some of our users to purchase these tokens. And then they're just relying on us to do all the paperwork on the backend. Moving forward, we're going to be distributing out all funds using USDC, we're actually partnering with Circle. They're our money transmitter. They're the ones basically sending out all the funds to every single holder and we're going to be doing that monthly.

(07:46):

So as an end user, you just became a fractional owner in this property. You don't need to deal with any sort of property management headaches. You get your passive income and when you're ready to sell, you can just sell it back to us. We're going to be partnering with blockchain home registry to showcase the value of the properties monthly, and so you'll be able to sell it at true fair market value as dictated by five different data points of trusted institutions saying, "This is what the value of that property should be."

Brian Friel (08:11):

That's pretty awesome. One thing I want to hit on too is you mentioned that there's accredited investor checks, but is this also open to non-accredited investors as well?

Domingo Valadez (08:19):

We can have up to 35 non-accredited investors participate per home offering. It's limited to that just by the Reg D 506 B offering that we do, but we can have unlimited accredited. So moving forward, we think the 35 non-accredited spots will be taken pretty quickly because of course that's the main use case for people where they see the main value in what we're doing. But yeah, we plan to switch to Reg A offerings in the future and that'll allow anyone to participate. No limitations whether accredited or non-accredited.

Brian Friel (08:47):

These terms, accredited investor, unaccredited, Reg A, they're very, I would say US-centric. There's a lot of particular nuances to US investing laws that maybe contribute to why folks like us are interested in these kind of products. We can't always afford residential real estate in areas that we live and work. Is Homebase exclusively focused on the US Do you guys also see this problem internationally and can you talk a little bit about maybe how the US differs from some other major markets internationally?

Domingo Valadez (09:17):

The US probably has the toughest regulation when it comes to this. So for us, we very much wanted to tackle one of the hardest markets and also two of the three co-founders are US based, are three co-founders in Canada and both markets so similar, very, very expensive real estate in any sort of big city all feel priced out. So we really all align in the mission behind this. Our initial launch market was in McAllen, Texas, so that's where I'm originally from. So it was very near and dear to my heart to launch there and see properties that I grew up with actually get access to the internet and get tokenized in that capacity. But we'll stay likely in the US for the near medium term, but we do want to allow international investors to participate as well. So we've already been reached out to by a few big players internationally that want to be LPs in our future properties and then they can sell it to some of their customers as well, and that's how we'll open it up and expand the pie to international investors as well.

Brian Friel (10:12):

I love that. So you mentioned when you did the high level overview of how this process works, essentially onboarding people one by one, taking video calls with them, making sure they understand the process, having to give them tokens that there's restrictions on how they can actually be sent to different people if they want to resell. It oftentimes having to go through you guys that whole process and then I'm sure even just the whole process of you setting up these legal entities as Homebase and your Web 2.5 company right now, there's a lot of legwork that you guys are doing on the back end, abstracting this out.

(10:45):

I think listeners of this could imagine a world where one day this is all pushed more to the edges, to the actual token holders and owners themselves. How do you guys think about how this is going to evolve over time? Which pieces of this do you think potentially in the next couple years could be more evolve, looking in areas where you guys maybe at Homebase aren't doing as much legwork and which areas do you think are going to be a little bit slower to evolve over time?

Domingo Valadez (11:12):

US real estate's very locally driven. Not only do you have to follow federal regulation, you also have to follow state regulation. You also have to follow local regulation all the way down to the county level. And so understanding each of those three layers of regulation is really important. And so that drove a lot of where we first launched. So Texas is very pro landlord, they're pro tendency in common, so it was very easy to fractionize the property there and they don't have any sort of transfer taxes. So if I sold my tokens to you, other states or other cities would charge a tax on that, Texas doesn't. So that was a big piece that kind of decided where we even launched on the piece about where we're going and what do I think is going to get better over time. One of the big reasons we even did this on chains, we've had a lot of people say, "Why don't you just fractionize this without blockchain that's so complex, you're making your process harder."

(12:00):

It's really about the secondary financial implications of what it means to have things decentralized and on an open platform. So for example, we're already in discussions with an on chain lender to allow people to collateralize their tokens to actually take on chain debt. No bank, no credit score required, literally just you collateralizing your tokens to take on debt and that to me is a beautiful thing. You cannot own any piece of a home without a mortgage under your name or a bank, someone getting involved and checking out your credit score. So that to me is really, really exciting and something we can already do with the first home moving forward. Another piece would be as regulation gets looser, having more clarity around allowing peer-to-peer trading. So alternative training license is what we're going to be going for relatively soon, and that's going to allow for people to trade within themselves so they don't have to sell it back to Homebase, but actually allow for peer-to-peer trading.

(12:55):

To me, it's really just like all of the applications that then could get built on top of having real estate completely tokenized on chain is what gets me excited about the Web3 space. I think the pieces on the regulation that's going to push back is making sure everyone's KYC, making sure you know who your users are, making sure they didn't launder any of their money. But yeah, I think that's one of the biggest benefits of Web3 and creating liquidity in a market that's historically been pretty illiquid and at a very, very high prices.

Brian Friel (13:23):

Yeah, I think you're right. There's this element of composability that comes with this when this is native to the internet, it's online and there's a token, anyone can [inaudible 00:13:34]. Then like you said, build a lending market around that. And there's a world where one day you guys aren't even involved with that decision, it's just someone can just sole end or another project can say, "Hey, we already have this lending market and we accept these tokens now as collateral." My gut tells me that you guys are doing this by the book. That regulation is going to be the rate limiting step in all of this as it starts to go. How do you guys see the current regulatory landscape in the US and you mentioned that there's some differences not just federally, but on state levels and on county levels. Can you talk a little bit about that and why maybe you guys are choosing to start in Texas and where you guys, I mean maybe foresee the next markets that you guys are expanding to as well?

Domingo Valadez (14:18):

You're absolutely right. Regulation's going to be the inhibitor on doing a lot of Web3 related transactions for properties. I think Coinbase getting sued by the FCC is going to provide a ton of clarity around... Or that's my hope at least a lot of clarity around how Web3 companies should be operating. I think there's been a lot of confusion around what's legal, what's not legal. So just to keep our users safe, we chose the web2 legal approach where we tried being as closely to the book as we can in case things go wrong or awry. Our users are completely fine and we feel very confident with that. But of course as we continue scaling the company and getting bigger, we love for these secondary applications like a Solend. To just say, "Hey, we just created this lending platform, we actually don't need your permission to do it. We can just trade."

(15:05):

That to me would be amazing because that means we're succeeding in actually bringing homes on chain and tokenizing them and letting people do what they want with their assets. But the regulation's really going to kick in until then. Texas was great because it was very landlord friendly, very easy to fractionize the property and no taxes associated with that. We’ll likely continue to stay in Texas for the near to medium term, we're in McAllen now, plan to go to Austin later this year.

(15:31):

Other markets we'd likely open it in would be Colorado is also pretty open to this. So is Florida, specifically Miami is pretty pro Web3 and pro tokenization. It would be very, very city state dependent on what laws they have in place and how we can make this work. For example, even us opening it up to international investors, that requires us to redo some of the legal structures we have to allow for international investors to even invest. So we're going to very much rely on partners that say... There's a lot of demand in Latin America, for example, specifically from this country, "Okay, that's going to be the first country we allow to invest internationally just because of the regulatory piece of that." And we don't want any of our users to worry about that. So we're trying to remove all that complexity for end users while Homebase deals are all the complexities around that.

Brian Friel (16:19):

That makes a lot of sense. Miami, Florida doesn't sound like the worst place to be a homeowner as well, so that aligns pretty nicely. Taking a step back as an end user who's thinking about this, let's say that somebody has a Phantom wallet, they've experimented with sending some crypto to their friends, they maybe have a few NFTs. What would they need to know to feel confident in taking this next step and being an owner of residential real estate? Is it as simple as just showing up to your guys' website, hitting connect wallet, filling out a couple forms in a Zoom call? Is there anything that they need to do after they've already completed the purchase or other things that they should be aware of? Essentially, could you walk us through the user journey from getting their first wallet to actually being a homeowner?

Domingo Valadez (17:05):

Yeah, absolutely. So funny enough, for our very first property, we actually had a lot of new to Web3 users participate. So plug for you guys, we had Phantom as the preferred wallet for people to create and effectively onboard into the Solana ecosystem. And I think something that was very beautiful about this was people could upload their money into Coinbase, send Solana or USDC and Solana to their Phantom wallet and see it happen in two seconds within the call that we were helping them do it. So I don't think it's the same thing for other chains, but that's something that Solana does really, really well. So once you have a loaded wallet, you as you mentioned, have to make an account on our website, you do need a KYC, you set up a quick call with us, just it's your way of understanding who we are as founders and you can ask us questions directly.

(17:50):

It's really just to build trust with people. But once we have a home that's live, you literally just go to the property page, you connect your wallet that we've already whitelisted preemptively, and then you can just buy however many tokens you like. So every single token is denominated in a hundred dollars, so everything's transacted in USDC and you can just buy however many tokens you like, they immediately get minted to your wallet and then you get sent DocuSign links to sign that'll make you truly a fractional owner of the legal entity we spun up to acquire that property. So once you purchase it and everything closes, you don't need to worry about anything. We know exactly whose wallets hold what tokens, and we just start sending you your proportional amount of net rent every month and then you can decide to sell whenever you'd like.

Brian Friel (18:35):

So there's no upkeep. Part of the joys of being a landlord is things break in houses, there's taxes, property taxes to pay, all this kind of stuff. All of that is abstracted away from an end user.

Domingo Valadez (18:47):

So any home we list on our platform, we charge an extra 5% fee and that's really just to have a capital reserve pool. So if anything breaks, like we as Homebase have a property manager, they'll go out and fix it and then we refill that reserve pool with rent. So the goal is to never ask people that purchased it for money, we can refill it ourselves with the rent we collect, which is what's beautiful about real estate, it's cash generating and in terms of property taxes, we handle everything from that end. We do distribute K1s to everyone at the end of the year because everyone has their own personal income taxes they need to pay. So we can't force you to pay them, but we can give you all the information you need to pay them on your behalf.

Brian Friel (19:25):

That makes a lot of sense. I was also thinking when we talked earlier about the layers of this that could be abstracted away and evolved over time, that's potentially one of them, but I'm not sure if people actually at the end of the day want that. Is there a world where there's Homebase down people are voting on how do we pay for fixing the plumbing leak? I have a feeling that that's a service that all owners here are pretty glad that you guys are handling on behalf of them.

Domingo Valadez (19:50):

Yeah, one thing that is true though is people can vote us out. So we're the default manager of the property, but if you're not happy with the job we're doing, you can absolutely vote us out.

Brian Friel (19:58):

Oh, that's interesting. How does that vote happen? Is that an on chain vote with tokens or how did you guys set that up?

Domingo Valadez (20:05):

Yeah, so not on chain right now, but theoretically you're truly an owner of the LLC and you have voting rights in that LLC. So if people just came together and said like, "Hey, we want to vote them out." There's a meeting set up, people say like, "Yay, we want to remove Homebase." We won't be the manager anymore. It'll be up to the owners to pick a new manager and then that's how they can start facilitating the management of that property.

Brian Friel (20:28):

Wow, that's fascinating.

Domingo Valadez (20:30):

Yeah, we truly want people to be owners.

Brian Friel (20:32):

Oh, that's really cool. So I guess I have a couple questions here to kind of wrap up, but you mentioned that you guys are onboarding a lot of net new users to Web3, essentially people getting their wallet for the first time, maybe they don't fully understand how to use these wallets or the gravity of sending things on chain and the irreversibility of a lot of this. Do you guys have any particular insights from getting on calls with these people and walking them through this process? Do these users stay in crypto in your view? Do they stay engaged with it? Is it a steep learning curve for them? Basically, how as an industry are we doing at onboarding these people who maybe find crypto not because of crypto but because of a use case Homebase where they're just, it's a solution to their problem.

Domingo Valadez (21:15):

So very transparently, I'd say some people do have difficulty and it's a 30-minute call, and other people it's very easy. So I think something a lot of users asked for was like, "How can we abstract the complexities of wallets even further?" We're thinking about potentially having noncustodial wallets on our website where we partner with someone that basically just showcases the wallets directly there and then for an end user, it doesn't matter if it's crypto, you just know you own tokens in a property, you didn't have to create any wallet, it was automatically created for you. But for the people that do know Web3 and have their own Phantom wallets, have their own personal wallet, they can do what they like with those tokens and use on chain, that sort of piece. So I think for the industry to continue to expand, we need to continue to make it easier for people to onboard, abstracting away a lot of the complexity is something that'll continue to be key to keep widening the pie for everyone.

Brian Friel (22:09):

Totally. I can't imagine the call where someone buys a bunch of shares in a residential property and then forgets their seed phrase so, these are things that we're thinking about as well. I mean, I liked that framing of essentially giving users the easy option to start and the optionality to eject from that and really take control if you really know what you're doing. I think that's awesome.

Domingo Valadez (22:31):

Absolutely.

Brian Friel (22:32):

Well, this has been an awesome discussion, Domingo. Before we wrap up with one closing question, I always ask everyone I want to know for you too, what excites you the most right now from where you guys sit in this new field of on chain residential real estate, where are you guys heading next and what do you think is the most exciting next frontier? Is it new markets? Is it improvements in the way this is happening on chain? Is it in regulation? Or maybe it's something completely different that you guys are seeing?

Domingo Valadez (22:57):

I'd say one of the biggest drivers for me for building Homebase, we want to redefine home ownership and what that even means, I think we'll continue to see real estate prices keep getting more and more unaffordable for folks. And I think being a homeowner's going to start being a privilege, which is a really sad reality. Unless we have true government intervention come in and add more housing supply, I think it's going to get worse. And so with that reality, it's like it's up to private markets to figure out how do we actually make more people homeowners? So something we care a lot about at Homebase and something we're very mission driven about is making the tenants that live in these properties, also fractional owners of them. And so getting people comfortable with the idea of only owning 10, 20, 30% of their property, but still feeling like an owner of that property.

(23:42):

And so for this very first home, for example, Homebase bought an extra piece of it so that we can offer it to the tenant to actually buy it from us so that they can also be a fractional owner of the apartment they're living in. And so in 10 years we want Homebase to be the destination for renters. When you're moving to a new city, you use a Homebase platform, you find an apartment, you move in, you buy 30% of the value, and now you're a fractional owner of that property. So that's why Web3 excites me. You can completely do this in an open liquid market and we're trying to facilitate that through Homebase.

Brian Friel (24:14):

Yeah, that's putting skin in the game too, right there, you're a renter and you actually have upside if you treat the place well. That's pretty cool, and I think that's kind of spinning the model on its head in a really crypto native and interesting way. And I love that framing. Well, Domingo, this has been an awesome discussion. One question we ask all of our guests, and I want to know this for you as well, is who is a builder that you admire in the [inaudible 00:24:38]. Ecosystem?

Domingo Valadez (24:38):

Okay, this is going to be a total cop out, so I'll give you two. My first one's [inaudible 00:24:44]. I love that man's Twitter content. I feel like the way he speaks, he's clearly very, very technical, but also very good at bringing things to a high level and explaining things. And it's no secret that Solano ecosystems gotten a lot of heat from a lot of third parties where the day FTX went down, someone from the Binance blockchain basically told me I was dumb to continue building on Solana and was really trying to pull us to build on their chain.

(25:09):

And I was like, "I think the leaders of Solana are taking this very well and are being very, very thoughtful about how they're moving things forward." So that's the first piece really, really like [inaudible 00:25:19]. The second one's [inaudible 00:25:21]. I love his content. He's been a champion for Solana and you can always rely on that guy to call out people that are spewing fake news about the chain and really showcase his technical know-how of how things truly work behind the scenes. So I think those are probably my two biggest, I fanboy over both of them a good amount.

Brian Friel (25:43):

I think those are both great choices. And a sneak peak, you mentioned that the [inaudible 00:25:47]. Recording was just before this, but [inaudible 00:25:49]. Also mentioned [inaudible 00:25:50]. As his choice. So you're in good company there. Part of what [inaudible 00:25:55]. Was saying too is he loves people that are building pragmatic applications that can "Only be done on Solana TM." And I think Homebase is a really awesome shiny example of that. So thank you so much for taking the time to walk us through it. I'm super excited. I'm going to have to check it out, bring my Panama to it. I know nothing about residential real estate, but I think you've given me the confidence to give it a try today. For folks who want to check it out, where can they go to learn more about Homebase?

Domingo Valadez (26:22):

Yeah, you can go directly to our website, which is Homebasedao.io.

Brian Friel (26:26):

I love it.

Domingo Valadez (26:27):

Everything's completely transparent on our website, we even have a white paper that goes into all the technical pieces, whether it's the legal side, whether it's all the technical side on the blockchain component piece. So we're very, very transparent and we also have a discord where we answer questions as people have them.

Brian Friel (26:42):

That sounds great. Domingo the co-founder of Homebase, thank you so much for coming on.

Domingo Valadez (26:48):

Absolutely. Thanks so much, Brian, for having me.

Our guest this week is Mert Mumtaz, Co-founder & CEO of Helius, a vertically integrated developer platform offering a suite of tools to help easily build products on Solana. Mert joins Brian Friel to clear up common misconceptions about Solana, shares the latest opportunities for developers, and dives deep into state compression, which reduces the amount of on-chain storage required to store NFTs, resulting in lower costs for creators and buyers by up to 100 times. State compression on Solana is already being leveraged by projects like Dialect, Drip.haus, and Helium to help scale their projects.

Show Notes:

01:10 - Origin Story and background

05:08 - How he started on Solana

07:45 - How Helius began

11:27 - Misconceptions about Solana      

18:01 - What is he most excited about on Solana

23:03 - How is Helius working with DePin

25:34 - Opportunities for Developers on Solana

32:15 - A builder he admires         

Full Transcript:

Brian (00:06):

Hey everyone and welcome to the Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the Web3 space forward. I'm Brian Friel, developer relations at Phantom, and I'm super excited to introduce my guest, the man who in Solana needs no introduction. Mert Montaz, the founder and CEO of Helius. Mert, welcome to the show.

Mert (00:25):

Thank you for having me, Brian.

Brian (00:26):

I've been looking forward to having a conversation with you here for a while. I don't know if you remember this, but way back in the day, I was getting my start on Solana by writing articles on Twitter, dev related articles, and you were one of the first people that took my article and said, hey, I'm an engineer at Coinbase. I can actually vouch that this is legitimate. And that actually got me in front of Chase Barker and everything. I don't know if you remember that interaction, but it's been a long time that I've seen you on Twitter.

Mert (00:54):

I do remember it.

Brian (00:55):

Thank you for that because that got me my stardom of three. Maybe that'd be an interesting place to start is I'd love to learn a little bit more about you. I know you were, previously before getting involved with Solana, you were at Coinbase. Can you share a little bit about your journey, what your background is and what led you to Solana?

Mert (01:10):

Yeah, absolutely. First of all, I do remember that interaction. I think it was a medium article about it was either voting or incremental counter, maybe a peanut butter sandwich or something.

Brian (01:21):

Yeah. It was like a simple app.

Mert (01:22):

Yeah, it was actually quite good. I was super impressed with it. I wish people kept producing those. I think we need more brine blog posts. Yeah. I guess maybe a brief intro of how I got started. I majored in math and communications engineering, communications engineering being satellites and signals and stuff like that. And I actually got to work at Blackberry as an intern. And so I got to see some pretty interesting engineering challenges at my earlier years about cloud infrastructure. I was on the team that ran the cloud for BBM, for example, which handled a lot of volume until it died, of course. Yeah, I mean after that I worked at the big banks in Canada, Canada's run by five big banks and I worked at three of those in some weird order where I did cybersecurity, I did payment systems, ATM withdrawals and stuff like that.

(02:11):

And I then joined a startup that got acquired, Shutterstock. It was about digital advertising and stuff like that. I'm sure some people are familiar with Shutterstock. And then I worked at Clear Bank on the treasury team where we were in charge of payment rails and stuff for funding entrepreneurs. And then we had this situation where we needed to send money to Australia and I needed to write the code that would handle doing that. And we met with a bunch of these vendors and stuff and it was all super complex for some reason that I didn't understand, you had to do these hops through various jurisdictions and stuff like that. And I was like, I mean you could probably just use USDC or something. And people just thought that was a scam. And at that point I was like, I wonder what the actual truth is here.

(02:55):

I did some digging and I was like, this is obviously not a scam, not even close. And in fact, it seems super interesting. I did a brief look into crypto in university where I thought I was maybe too academic and you need a PhD or something to do anything meaningful. Obviously quite wrong, but that was my first intro. And then a few weeks after that I was working at Coinbase. Actually it was interesting because I joined them slightly before they went public. And so they still kind of had the startup ethos and it was super fun working there and got to learn and build and talk with a bunch of really bright people. And that's obviously doing research on different blockchains. Obviously Coinbase is very EVM centric. Some times were good, some times we're bad. And somewhere in that line I found Solana and I just started digging around posting stuff, publishing stuff. And I really liked the approach that Solana had taken to be the pragmatic approach. I'm sure you hear this word a lot, but the practicality of the ecosystem as well as the ethos really resonated with me.

(03:52):

And the community was also pretty cool. You actually just mentioned Chase talking to you about something you posted. That was also my experience. Whenever I would posted something, Armani or Chase would hype me up and I was like, okay, that's pretty cool. And yeah, I mean it kind of just took off from there.

Brian (04:07):

Yeah. I love that framing of the pragmatic chain and you actually having that experience at a big bank just saying, why don't we just use USDC? It's settled in 400 milliseconds or whatever. And Solana really, I think, is the best example of that. That's pretty poetic that you found your way there.

Mert (04:23):

Mm-hmm.

Brian (04:23):

I remember a time though when you first were posting on Twitter, it was mostly around trying to help others understand what was happening on chain. And you mentioned Coinbase, very EVM centric. I think a lot of us who worked in crypto at the time, it was just EVMs the only game in town. And if you thought differently, that was just weird or a lot of people it didn't make sense. And I think my experience, one of the biggest barriers to getting people familiar with Solana was just wrapping their head around the mental model of just how stuff works on chain. It's just inherently different. Can you talk a little bit about that, how you got your start? What were you doing when you were writing these articles and helping others understand what was going on on chain? What did you have to build, what were you teaching yourself at that time?

Mert (05:07):

Yeah, that's a good point. Most people actually don't really know that unless they were early like you. At first what I would do, this was kind of during the peak kind of start of NFT season on Solana and basically a lot of influencer types or people who I don't think were very intellectually honest would post some sort of claim about, oh, the price of the NFT is going down because the price of Solana is going up. This is obvious and stuff like that. And I thought to myself, there's no way the markets are that efficient for JPEGs, right. There's other stuff there. If people were botting these NFTs and getting a high concentration on maybe dumping on retail and doing other sketchy stuff. And so I would just write scripts, goal length scripts or JavaScript scripts, whatever, and analyze the data. This is before any data analytics existed, really like Solana FM or I mean, Solana FM was there, but they did regular indexing, Solana floor and stuff.

(06:09):

Flip side, Nance, none of these actually covered Solana. I would just do it and then I would just write my findings in a Twitter thread with some charts and stuff. And I did that pretty regularly. I did it for a bunch of different stuff, including some upcoming projects in terms of gaming and where the potential is. And somewhere along the line after being armed with that knowledge of just doing it for a consistent amount of time, I came across a lot of people on crypto Twitter just really making unsubstantiated claims about Solana and its architecture and its scaling plan and all this stuff. And I guess I was in somewhat of a unique position where I was actually still at Coinbase at the time and somebody would post something and I had relatively okay knowledge of EVM, but also pretty good knowledge of Solana.

(06:56):

And so I'd usually be able to tell, okay, this is just not true what this person posted. Why is nobody correcting them? And it's because nobody actually just really knew both ecosystems that well. And sometimes in internal Coinbase chats, this would come up and people would be like, that is wrong. And I'd be like, yeah, that is wrong. Why aren't we doing something about this? And I kind of just started yelling at the people who were just lying or maybe spreading knowledge that was not grounded in truth, let's say. And I just never stopped doing that. And turns out crypto Twitter is full of these people, and so I never-

Brian (07:29):

Yeah. Your job's never done.

Mert (07:30):

Exactly.

Brian (07:32):

Is it fair to say that you arming yourself with this knowledge, you had to actually build the tools you needed just to understand what's going on-chain. Was this the start of Helius and essentially what you guys now offer? And maybe you can talk a little bit about that, how Helius began.

Mert (07:45):

Yeah, 100%. That's exactly right. The most common problem I ran across was when you're looking at on-chain data, the data is super cryptic, right. The instruction data is bortion coded or something. And unless you knew the schema of how it was encoded or maybe the idea which, especially in NFTs, in DeFi, it's not too bad, but especially in NFTs and other non-DeFi use cases, nobody has any idea what the on chain data looks like. And so I would have to hard code some weird methods, maybe parse logs, but also reverse engineer based on discriminators. Or I would even try to brute force it sometimes, which actually kind of worked. I would go on Magic Eden, and you would know this is before Magic Eden's programs were more readable. This is the first version. I would check the app layer. I would go to magiceden.io and I would see, okay, this NFT is listed for 20 SOL or something.

(08:38):

And then I would try a bunch of different decodings until I got that answer. And then I would do that with a bunch of different ones and I'd be like, okay, this is clearly the discriminator that I need to use. And so I would do that. I also did a bunch, go to the network tab, inspect source, and then dig through the entire minify JavaScript, unminify it, see the schema and try to use that schema when trying to decode the data and stuff. And I was like, this is bananas. This should not be done. And basically that's kind of where Helius came from and the first iteration of Helius was like, okay, we need to make on chain data read about Solana because it's particularly impossible. And then along the way, once we started doing that and talking to customers, it seemed like quite a few people were having other problems, especially around RPCs, which was surprising 'cause I thought RPCs were kind of okay, but after digging into it, it turns out that wasn't really the case.

(09:28):

And then you run into all sorts of other issues like streaming data on chain, at least in an inexpensive and reliable way. Solana has this problem with web sockets where you might lose data. Yeah, I mean just talking to customers just found a bunch of problems. And Helius is essentially now there to be this vertically integrated developer platform on Solana to essentially just help developers succeed on Solana. And we're not necessarily bound to Solana, but basically my philosophy on this is that I want crypto to succeed. I mean obviously we're all here because we're interested in crypto and believe in crypto’s future. If you start from first principles there, I think given the options out there today, Solana's our essentially best shot at executing that vision. Obviously a lot of people disagree with that, but it's something I believe in. And so then my thought process, okay, how do we get more people to build on Solana so that we can have a better crypto future?

Brian (10:19):

No, I totally agree with that. I think that's been our ticket on Phantom as well, where it's like most of Phantom came from EVM folks and I think a lot of us independently kind of had this realization of we want crypto to succeed. Pragmatically thinking, what am I going to get my parents or my friend to use today? How are we realistically going to scale this thing in the next couple years? Solana also right now is the most pragmatic approach to doing that. I think before we jump in a little bit more to Helius in particular, what you guys offer and what you guys are up to, I kind want to take a moment just to talk maybe broadly about Solana because I think you are one of the most well known vocal defenders of Solana where there is a lot out there that's just blatantly wrong and you not only technically know how to rebut it, but you take the time and the energy to be out there and educating people. I want to know a little bit for where you sit at Helius, what you see right now, what would you say are some of the biggest misconceptions today about Solana that folks who maybe already know about crypto, maybe are already well versed in EVM, but maybe they just haven't gotten through to actually hear from somebody's boots on the ground. What would you tell them that they're misunderstanding about Solana?

Mert (11:27):

Maybe I'll take a more broad approach to answering this because it's kind of different segments, but in terms of maybe people from EVM, if you're already familiar with EVM and maybe you want to build on Solana and what are your kind of reservations, right. Some of the ones I've come across are, well, one, Rust is just hard to write. Solana has a diehard kind of fan base of Rust developers, but Rust is not easy. That is just a fact. Solidity, is somebody in high school could learn it easily, but Rust, I mean they'd be able to learn it, but I don't think it'd be easy. The concepts like lifetimes and for example, that stuff is not easy for somebody who wants to just prototype and maybe ship something. And so then you'll say, well, there's Anchor and stuff and Anchor is super helpful and probably my favorite tool on Solana, unless you know Rust, you're still going to be kind of flying blind and you know might need that to build your applications.

(12:17):

And if you're a determined developer, you'll get over that and then learn Rust anyways. But that friction alone is enough to deter a good amount of people is what I found. That's just one thing, and I know Foundation folks and Dev are working on this and there's some other teams, there's the Python seahorse stuff, there's a new type of Script One coming out. I think maybe there's even a Goaline One. It's also just a result of being early. Solana has really been around for two years, whereas EVM almost nine years now. It's hard to compare these things. That's one. And then two, and this is an interesting one, is developer optionality. As a developer, let's say at an entering focus from Coinbase, let's say you want to build a new product and  you're deciding between EVM and Solana. Well, the obvious kind of elephant in the room is, okay, if Solana has a problem, you are kind of done, right?

(13:12):

You don't have any other options. You can't port your code base over anywhere else. Whereas if you are the EVM developer and you build on Polygon, you can just use main net Eth, maybe you can, with some effort, use any of the other L2's or maybe another EVM for it, something like that. It's a much easier transition. It's less risky such that on a design doc that you want reviewed by product managers, most engineers are going to take the safe route there.

Brian (13:37):

It reminds me of that “no one gets fired for hiring IBM” phrase that they used to have back in the day, the safe route to get it approved by somebody. Yeah.

Mert (13:45):

100%. And it doesn't help that the Solana PR is so bad that everybody's even mistakenly saying, oh, Solana always goes down or Solana's all these different things. You add these up and then as an engineer, if you're at a big firm and you pick Solana, you have to religiously fight or justify your position. And most people just aren't going to do that even if they believe it. That's a big problem. One of the reasons why I think more SVM roll-ups that sell on other chains might be interesting here to give developers more optionality such that if you build on Solana, but Solana has something bad happen, but it's still settling on these other L1's or other data availabilities or whatever it might be. And then three, is of course, there are actual misconceptions about the reliability of the chain.

(14:33):

People think the chain has gone down 12 times or something, or multiple digits. It's actually gone down four times. People conflate performance degradation with outage. Performance degradation is just when you maybe have, you guys obviously notice at Phantom when you maybe aren't landing transactions on chain or maybe there's latency or something like that, that's the functional equivalent of fees getting higher on EVM. That's performance degradation. But an actual outage is actually relatively rare. In fact, the numbers, I think the last time I looked at them were 99.7% uptime, which isn't perfect, but it's also not bad. It's certainly not as bad as something that would go down every day or regularly. I mean there's a misconception there.

Brian (15:15):

Or reorgs in that matter too.

Mert (15:16):

Yeah, exactly. I mean we can kind of talk about that in maybe another part of this, but people don't realize that especially for an indexed company, maybe Coinbase where you're selling funds, those reorgs actually affect your architecture an insane amount because you need to add new systems to communicate, oh actually this block was not correct or something. Whereas on Solana, you don't really need to do that. I mean no block to my knowledge went back after being confirmed.

Brian (15:40):

Yeah. I was going to say I don't think there ever has been a... It's even, yeah, the optimistic confirmed, not even finalized as there's never been a reorg once it's been that. Yeah.

Mert (15:49):

Exactly. Some people think you need ridiculous hardware requirements to run these nodes and that's actually not true. You can run a node, depending on if you want an RPC node or a validator node for really anything from $200 to $800 a month. People think you need actual data centers to run it, which I don't know where people get that from. And then there's also light clients coming out now, right. I can talk all day about the misconceptions, but I think the first two are probably the most justified reasons from actual engineers that I've heard.

Brian (16:20):

Yeah. No, that's a really good take, I think, because one, there's the FUD, which I think is the back half of what you kind of just talked about, which I think that just comes with time and getting people to experiment with Solana and trying it firsthand and understanding there's no better teacher than that, otherwise you're fighting essentially Twitter algorithms. But I think that's a really nuanced take what you had to start, where you're saying the de-risking almost to get this buy-in because you know what it's like to work at these large companies and kind of proliferating Solana there. I also think what Jump is doing with Fired Answer is also just another benefit to that as well. Essentially just reducing the service area potential bugs that occur. Essentially if you have a bug in just one client implementation, adding a second one greatly reduces the chance it'll happen again.

(17:09):

Maybe one way we can take this is instead of fighting the FUD, because that could take all day, is from where you sit right now in Helius, say that you guys have a really interesting position in the space because one, you're super close to what's actually happening as Solana's roadmap evolves. I'd say part of being the pragmatic change is Solana's not afraid to push the boundaries, take risks, add new token programs, NFT compression, just constantly evolving at a fast pace. You guys are close to that and then you're also close to the developers who are coming into this space for the first time, like you said, the hobby weekend developer who's interested and they don't want to learn Rust and so they need some sort of abstraction layer to this coming in some sort of dead platform that's helping them in some way. What are you personally most excited about right now that's happening on Solana?

Mert (18:02):

Well, I mean Compression, I think, maybe is one that's gaining some steam in and an obvious one that I think most people are aware of at this point. But back when I was trying to show it, most people weren't aware. I think our job here is maybe done so now it can kind of take off, but Compression is super exciting because most people don't realize that Compression, actually, let me just explain what it is first. Data storage or state storage on Solana is quite costly. I don't know the exact cost, I guess I would need to look at that chart, but there's some articles on this and you can look at the Helius blog "shill" for seeing the comparisons for the numbers, but basically state storage on Solana is expensive and with Compression, essentially what you can do is instead of storing the data in state, you can store it on ledger. And that might sound a little abstract, but basically instead of needing it for consensus, you securely log it in transaction logs.

(19:00):

Basically it's what an engineer would call a stateless accumulator. I call them L2 because I like doing random marketing stuff, but Toly really doesn't like it. Do not call it an L2. Call it a stateless accumulator, which isn't very beginning friendly, but that is actually what it is. You just store a reference, it's a pointer by reference kind of thing. You store a reference to the data that's on the ledger on the state now instead of storing all the data on the state. And we do that via Merkel Trees, which I'm not going to go into here, but essentially you're able to get a few orders of magnitude and cost reductions. Now that's useful for digital assets and that's the first use case, NFT compression where you can mince thousands, millions, billions of NFTs. People will say like, oh, why do you need to mint a million NFTs, billion NFTs?

(19:45):

And it's like, that's not the point. The point is that we're not limited by technology anymore, whereas before we were, and we can maximize the design space and explore some things, right. You have Dialect doing sticker packs, Cross Mint using their APIs for all sorts of different cases, including loyalty programs, Helium migrating over to Solana for their hotspots using Compression, driphouse doing airdrops, Render potentially using it for their scene graphs, which is a super cool concepts, high map results even using them. And so it clearly has some use, but the cool thing about it is it's not actually limited to NFTs. Actually you can apply to any account, you can extend it to be fungible tokens and also just general account compression, which I think the guys at Gum are doing for some social graph formatives. It actually has quite a bit of potential there.

(20:28):

That's one of the big ones I'm excited about since my name is Compression Mert on Twitter right now. And then the Solana mobile, the Saga phone is awesome. I had a test unit and I've been an Android user my whole life after Blackberry Force and it's the best Android phone I've used and it's super snappy, very good build quality and it actually has changed my consumer behavior somewhat where actually, before I would explicitly shy away from mobile first or mobile crypto apps, I wouldn't use crypto at mobile at all. But now I'm like, okay, this is actually pretty cool. I can use leverage my secure seed vaults. We do need to work on that naming, but I can use that and have that confidence and that seamless integration. You have apps like Otter, Finance, Tip Link, Get Code or I guess just Code Wallet, which enables super fast kind of P2P payments, something like Venmo. And actually, I have used all of these to make payments to my family members and friends, so I'm super excited about that.

(21:27):

The thing I'm most excited about on Solana is this narrative of decentralized physical infrastructure or deepen taking off with not only do you have Helium now and High Mapper, you also have Render Now, Pollen Network, Genesis Go, Teleport and let's see who else we can get over. But I think this kind of intersection of P2P networks and using crypto to actually enable change in the physical world is super interesting and something that wasn't really possible before.

Brian (21:56):

That's super cool. I should say just for the listeners that we are recording this on April 13th, 2023, which is the official Saga launch day, so it's topical to bring that up. We're super excited about that too. I just think it's awesome that they're not afraid to push the boundaries on that. I mean for us at Phantom to not even have the ability to see a user seed phrase and it's just completely abstracted away at the hardware level, I think is awesome and a glimpse of where this is all heading. Let's talk a little bit about DePin too because I'm not as up to speed on that. I don't know if most of our users are. I think Helius migration is happening soon, TM, like this month in April. What are you guys seeing there? Is there any major changes to what you're doing on the infrastructure layer that's going to have to adapt for this? Do you foresee any major changes to end user behavior?

(22:46):

Part of what's interesting about Solana is the fee markets can adjust on a per piece of state level as opposed to if it was on Eth, you could see all of a sudden all your gas fees are increasing just like it would on a crazy NFT mint day. Can you talk a little bit about how you guys are working with this new DePin movement and what you guys are seeing?

Mert (23:05):

Helium particularly is interested in using Compression, or I mean they are using Compression to represent their hotspots and it would cost them just too much money to work with that kind of stuff on any other chain. And so Solana is what makes the most sense. And like you said, the independence of state, which causes individual account based fees as opposed to chain level fees, which doesn't make the UX horrible for one person here either. It's just you might have to pay extra. And so compression is something that they use the most, both High Mapper and Helium and also Render is, I believe, going to use it. They mentioned this in their GitHub migration paper. And so that's kind of the main driver, but also these teams generally have to subscribe to on chain events. And as a larger engineering firm or maybe independent of size, most people prefer getting data pushed to them instead of setting up some polling system to listen for events because there might be issues there.

(24:02):

They actually use our web hooks and then they kind of configure what events they want to listen to and then they kind of have this ease of mind where, okay, Helius will just stream me these events as they happen and I can just kind of plug, play and then forget. If anything happens, Helius will kind of let me know or maybe I'll get a page or something. The web hooks have actually been, it's interesting. When we first came to Solana, there was no web hook products on Solana and I'm not even sure if there was anything like that on Eth. It was just such an obvious thing and we built it and we shipped it and for example, Discord uses that for their integration into Solana. Their first actually Web3 integration, or actually I don't like the term Web3, their first crypto integration was with Solana and that was enabled with the Web hooks and we have some other big names using them now as well.

(24:47):

I don't think those are announced yet, but it's such a simple primitive, but just web hooks and listening to on chain data really helps some of these bigger firms who don't want to spend the time writing all this complex infrastructure code and they can just plug and play into some existing solution.

Brian (25:02):

Yeah. It's future-proofed, essentially. They can build once and they don't have to constantly be readjusting their implementation.

Mert (25:08):

Exactly.

Brian (25:08):

That's awesome. Turning this back to a developer who is maybe listening to this, familiar with EVM, looking at Solana, you guys do a lot, not just on the infrastructure side, but also on developer education, getting developers involved. We can talk about some of the specific initiatives there, but at a high level, what would you say are some of the biggest opportunities for a developer today who's looking at Solana? Where would you guide them to get started?

Mert (25:35):

Well, one thing I'll say is that Solana has maybe two main things that I would mention that might be interesting for folks coming over. One is that it's much earlier than the other ecosystems. And so there's a lot of low hanging fruit and underdeveloped tooling infrastructure, application layer stuff that exists in other chains in some form, but not on Solana. And so as a developer, let's just try to build something and you'll notice what's missing. You'll notice that the deployment workflows aren't great. You'll notice that maybe the monitoring isn't that great either, or maybe it's easy to shoot yourself in the foot with certain types of smart contractors and stuff. You'll notice a ton of problems and that's just your opportunity to make something cool and fix those maybe as open source, maybe as a public good, maybe as a company. And so there's a lot of potential there.

(26:22):

Another thing is that Solana's architecture is, and so this almost kind of contradicts the first point, but not really if you think about it. The architecture of Solana is so different, right. It's functional based where you have actually a lot of modularity within the layer. You have independent state and logic, you have different accounts, localized fee markets, and so it's much more modular than something like ETH where state and logic are coupled. And also obviously the scalability features of Solana are quite different than anything else. And what that means is there's a lot of things that you can actually build that's only possible on Solana.

Brian (26:57):

I love that catchphrase by the way, only possible on Solana TM.

Mert (27:01):

Yeah. I've been a big fan of that one, let's just say. And it's totally true, right. Order books, for example, you saw it with Serum, you're seeing it now with Phoenix. This is before Fire Dancer and before 200ms block times, which will happen. This is the slowest it will be, it's only going to get faster from here. And so there's a bunch of things that are only possible on Solana. And I would strongly encourage people to think from first principles as a developer, look around, see what problems there are. They don't have to be Solana specific, they can just be problems, right. I don't know, maybe it's too slow to send your dad money or maybe it's too hard to offramp crypto, I don't know, something like that. And then usually if you are trying to look for a solution there for that problem, Solana will be able to handle it much more comfortably than others.

(27:47):

And the other important thing is it'll actually scale, right. You want kind of elasticity as a developer such that if your app takes off, you don't want to have to now migrate to another stack or something. With Solana, it's honestly just plug into a cloud provider, just kind of scales with you. But also a third thing I'll actually mention, which this really should have been number one, but I would encourage you very, very strongly to produce content, especially developer related content. Build something, learn from it and then write about it, make a podcast, produce a video, produce a tutorial, just write content. And not only will that obviously help you connect with other people who are in the ecosystem and like-minded and building other cool stuff, but also when you write stuff and produce content, you have to know what you're talking about, otherwise you won't be able to write it, right. It'll make you connect the dots and it'll point out flaws in your thinking.

Brian (28:44):

Yeah. It's the fastest way to get the right answer on the internet is to publish something that's wrong.

Mert (28:49):

Exactly. And so I guess maybe to go along with that is just have a high tolerance for looking, I don't want to say stupid, but just have a high tolerance for being wrong. You're going to be wrong a lot, but that's not a bad thing unless you're building the infrastructure for handling, I don't know, some critical payments or something. But you're probably not going to be doing that.

Brian (29:10):

Yeah. It's like the pursuit of truth. If you're open to that and you're excited to get told what's right, I couldn't agree more that's 100% the best way to build.

Mert (29:19):

Yeah. Sometimes I'll post something that I think is correct, but it's not apparently actually correct because Toly will comment and he'll gently say something that's slightly unrelated, but it's like, oh, okay, I'm wrong, I guess. I will retract this. And so honestly, it's just a fun way to learn and you do enough cycles of that and you are going to be doing that to other people and that's how we grow.

Brian (29:46):

Yeah, I totally agree. I think this ties in with what you were saying earlier of Solana being the pragmatic chain. I think part of the benefit, there's a knock, we talked about it, about, hey, Solana's new, it's different and you're essentially fighting network effects at that point. But part of the benefit is you get to build your own genuine kernel of a developer ecosystem and start from first principles and start from new and not be afraid to change things new. And I think that's been pretty eye-opening, even just to me personally. As Phantom enters EVM, we're looking at everything that EVM has inherited over the years. Most obvious one being even just how injected wallets play with each other on EVM is so different than Solana because Solana took a very first principles approach and said, we're going to do this in a way that you have a wallet, you can use it anywhere, it's going to scale forever kind of thing. And it's been pretty eye-opening to see the differences there.

(30:36):

That would be my only other thing I'd add to you is if you are a dev and you want to make it high impact on, it's probably the best place for it because you can post publicly about why you're doing what you're doing and you'll get people who are interested in listening and will back you on the basis and the merits of your ideas is what I'd say.

Mert (30:52):

Yeah, absolutely. Me, Chase and other parts of the developer system will help you the best we can. Basically the Helius tagline is actually “Where Solana teams succeed” because our entire goal is to help you succeed. That's essentially why I wake up and that's what I spend my entire day doing. And the Phantom founders, for example, are great example of this, right. They came from EVM and they saw what was possible on Solana and they built the number one wallet in crypto and it had such good UX and such good design and stuff, and you guys absolutely dominated. And then now you're actually transcending the change, right. It's actually becoming a product, it's not just a chain’s product, it's just a product that you can use to onboard people onto crypto. I really like that approach from starting from first principles like you guys. You saw Meta Mask and you're like, okay, well we're going to do it differently. And you did it much better in my view. And so I think that's just an example of what’s possible.

Brian (31:50):

Thanks. Yeah, I mean we love hearing that, but obviously love everything that Solana's doing and Solana's always going to be home. There's a lot to do on Solana. I'm excited to roll up the sleeves this year and get started. I guess, Mert, and as we start to wrap this up, one question we always ask all our guests, I'd love to hear this from you. You mentioned a lot of people on this podcast, a lot of teams, but I'd love to know, is there a particular builder that you admire in the Solana ecosystem?

Mert (32:17):

Oh man. I mean, I do admire my co-founders, to be honest. I don't think they got that much credit because I'm kind of the loud one, but Nick and Liam are super, they're actually the driving force behind Helius and they do all of the engineering, and I do essentially nothing other than just larp on Twitter. Them for sure, but also, I'll give you my general approach on this, actually, maybe this is useful for someone, but my general approach to Twitter is whenever I see a founder on somebody's bio or something like that, or maybe a co-founder or something, I'll immediately follow them because those people are super inspiring to me. I pretty much follow all the founders on Solana at this point, I think. For example, the founder of Squat, Stephan Wright. I saw him, I was like, I'm going to follow this guy.

(33:01):

Turns out amazing dude, we're friends now. That's my general approach. I just respect all the founders in the ecosystem because they're taking big risks and they're trying to build cool stuff, and they're all trying to help the ecosystem. And so I have just huge respect for everyone there. Someones, I would probably point out specifically, would be obviously Armani and Tristan, huge respect for them. The founders of Gito, right, Sec, Fault and Buffaloo, I'll just say their pseudonym names. Co-founders of Squads, right, Margin, Drift, Zeta, for example. All the DeFi protocols. I'm probably just going to end up listing literally every single one. I would say if there's one particular one, it would be, I guess honestly just Toly, right. That's probably a cliche answer, but Toly just always keeps his composure under people just relentlessly slinging mud at his life's work essentially, and in a super unfair way. And he still gets up. And I mean, not only does he engage with the community, but he still builds cool stuff and there's so many different things. I have no idea how he does it, and I have a ton of respect for that.

Brian (34:08):

Well, I think that's the perfect answer. Having listed all the major founders in Solana, and then you go back to the guy who started it all, he sets the tone for the space and I think he makes it that drama free, practical, pragmatic, how do we build practical that's useful today. That's been my answer secretly too, that no one's asked me, but... Well, Mert, this has been awesome. Thanks so much for coming on. We'll have to do this again later once we've shipped all these crazy upgrades to Solana and check in again. But where can folks go to learn more about Helius?

Mert (34:42):

Yeah. Just helius.xyz. You can just go there or you can just @ me on Twitter. That's honestly how most people get in contact with me. Just tag me on Twitter on something and I'll respond.

Brian (34:50):

Awesome. Love it. Mert, the founder and CEO of Helius. Thanks so much for coming on.

Mert (34:54):

Thank you for having me.

Often referred to as "the AWS of crypto" Alchemy provides the infrastructure that helps developers build cutting edge web3 applications. Product manager, Rob Boyle shares the latest tools Alchemy is building, the web2 companies that are starting to build in web3, and what it's like building for Multichain in episode 24 of The Zeitgeist.

Show Notes:                          

00:38 - Origin Story / Starting at Alchemy

03:15 - What is Alchemy? 
06:45 - What would Alchemy be analogous to in web2   
07:36 -  What kind of devs is Alchemy building for?
10:21 -  Patterns of Web2 companies coming to Web3 

16:42 - Teaching new incoming devs 
19:07 - Keeping up with a Multichain World

23:12 - A builder he admires in the Web3 ecosystem

Full Transcript:

Brian Friel (00:06):

Hey everyone and welcome to The Zeitgeist, the show where we highlight the founders, developers, and designers who are pushing the web 3.0 space forward. I'm Brian Friel, Developer of Relations at Phantom, and I'm super excited to introduce our guest, Rob Boyle, Product Lead at Alchemy. Rob, welcome to the show.

Rob Boyle (00:22):

Hey, Brian, great to be here. Thanks for having me on.

Brian Friel (00:24):

It's awesome to talk to you today. Phantom and Alchemy are doing a lot of great work together as it relates to our new multichain project. We got a lot to talk about today, but before we dive into all that I want to learn a little bit about you. Who are you and how did you start working at Alchemy?

Rob Boyle (00:39):

I've pretty much been in tech my whole life. I grew up in the Bay Area, went to school in the Bay Area, and then I graduated about 2006, degree in computer science, was fired up to work in Silicon Valley. A bunch of my friends went and worked for this startup called thefacebook.com, you might've heard of it, it's a bit of a thing now. I did not think that was going to be the most fun startup so I went and worked for another startup in Palo Alto. Turned out in retrospect to be perhaps not the best decision, a lot of those friends who went to Facebook are retired now quite comfortably, but I had a lot of fun, worked for a startup. I met my co-founder with whom I started two startups back to back both of which were a blast.

(01:10):

As with most startups, didn't really have rocketship success but we both did find our way over to Facebook a little bit later in life. But went over there and then had a blast at Facebook. Facebook is cool and that it's big enough that you can work on a ton of different problems and problem spaces within the company so I worked on integrity, finding and fighting badness, I worked on consumer products, and I also worked on Facebook developer platform. About two years ago at this point, I was looking to move on. I really liked working on developer platforms, I was looking for developer platforms in new and exciting spaces that were really innovative.

(01:43):

And I got a cold reach out from Alchemy and they had the fact that Jay-Z was an investor in the subject line. I was like "That's cool enough to respond." Started talking with them. It's so funny I'm like this is maybe bad for branding for myself but I'm the opposite of a lot of crypto folks where I loved Alchemy. I thought Joe and Nikil were brilliant, I thought the team was amazing, I loved the stage that they were at company-wise. And I was like "Guys, convince me that crypto is not a scam." That was the thing I wasn't on board with. I was new to it. And it took me a few months where I just went down the rabbit hole. I started talking to all my advisors and mentors, realized that a lot of them were already in crypto and web 3.0 and I was late to the game. And then over the course, I got completely convinced that this was the most interesting space to work in. And then two years ago I joined Alchemy and the rest is history.

Brian Friel (02:29):

That's awesome. You might be the first guest on this podcast that came into crypto because they thought the company was cool-

Rob Boyle (02:34):

I know.

Brian Friel (02:35):

And not that they got obsessed with the space and then found a company based on that interest. Hey, congratulations, you're the first so that's an award right there.

Rob Boyle (02:43):

I feel very lucky.

Brian Friel (02:44):

That's awesome. So you mentioned that you were working on developer platforms at Facebook, and then that transitions really well to what Alchemy has positioned themselves to be in the crypto space. I'd say for most developers who have been developing crypto some while, the term developer platform might mean something different or might not make total sense in the crypto space. Usually, people think, "I'm building my own DAP and I have this RPC provider, and all I really do is put the URL into my DAP and I go from there." What is Alchemy doing? What makes you guys say that you're a developer platform in web 3.0?

Rob Boyle (03:16):

I think there's three pieces to that. I think we have a very technical audience so they know what an RPC provider is. I'll give the overview just for anyone else who happens to be in the audience. The quick 30 seconds is, modern crypto apps have two components. They have the on-chain component, the smart contracts that run on-chain, which is the really new exciting thing about crypto, and then they have what is more traditional like a user interface like opensea.com where someone goes and interacts with the dapp. What you really need is a bridge between those. The opensea.com needs a way to read data off the chain, what NFTs are for sale, what NFTs do people own, interact with their smart contacts, and right to the chain, actually push transactions through the chain. Same thing is true for Phantom, to use you as an example. The wallet, it needs to understand people's activity, it needs to read and write from the chain. And we are the conduit that allows that.

(04:01):

What we do is provide that platform in which developers can read and write to the blockchain, we're your conduit there. For the more technical folks, that's traditionally you run your own node or you have access to a node, which is a JSON on our RPC provider which allows you to access that interface that you would to read and write from the chain. What I think makes us a developer platform and not just like a node is a couple things. The first one is scale. The way that these things evolved is you run a node and you're like "Oh, that's fine," and then you get more traffic and you're like "Oh, this node is hard it's not handling all traffic let me just spin up a second node and a third and a fourth, and then you're like "Now I need a load balancer, and now the nodes don't totally agree." As soon as you get past one node with a capacity a bunch of really hard problems emerge in managing that scale.

(04:45):

And so the first thing that we do is eliminate all those problems. We've spent a bunch of time on a bunch of proprietary infrastructure. We call this product super node where it gives you the interface that looks like a node interface but there's a bunch of complexity underneath the hood to account for inconsistency across nodes, and reorgs, and node upgrades, and all these different factors. We actually have an architecture diagram and the nodes are this tiny little box at the bottom, and the majority of it is all this infra that we've done to give you the feeling of a node. We've had customers who 10 or 100X their traffic overnight when they get super popular or explode or go viral, and our system just magically scales to handle that. So that's the first one is the scalability, reliability function.

(05:23):

The next one that I'd say is you can do a lot more if you're not just using the node interface. An analogy we like to use is building on the node interface is if all you have is a shovel, and a hand saw, and nails, you don't have a lot of leverage there versus we have a whole suite of enhanced APIs that are using power tools, and bulldozers, and modern construction equipment like our NFT API, or balanced API, transaction API. And all those things provide functionality that you would have to spend a lot of time, which we have spent, getting that functionality out of the node interface but we do it for you by building these APIs. So it really gives you a much more effective set of tools.

(06:00):

And then the third piece is our dashboard and our monitoring tools. In the new web 3.0 world, a lot of apps don't have the tools. The Web 2.0 world has 20, 30 years of services to help you understand the performance of your application, and how it's running, and which users are interacting with you. There's whole companies built around that. There's some startups doing this in the web 3.0 world but we provide a lot of value here where you can understand all the transactions flowing through your application, wh ich users are using it, where they are in the world if errors crop up what's causing those blah, blah. So that's really why we call ourselves a full-stack developer platform.

Brian Friel (06:33):

If we're translating this to the Web 2.0 world, what would you say are some similar analogies? Some company names that come to mind are maybe AWS, Datadog, Event Monitoring. How would you guys pitch that to a Web 2.0 company that's looking at web 3.0?

Rob Boyle (06:46):

AWS is the analogy that we draw the most to. AWS is, obviously, a massive company. You're like "Oh wow, your AWS is crypto." I almost think that undersells it a little bit because we do have aspects of Snowflake, we have aspects of Stripe even and how they help with transaction processing., We have a transaction product that helps you better to the chain. We have aspects of Datadog as you said, and Google Analytics to do some of that. The nice thing about web 3.0 is since it's a brand new industry we can take all those concepts that are really powerful in Web 2.0 and just go build them all for the web 3.0 world. AWS is the closest analogy but we wrap in parts of the other ones as well.

Brian Friel (07:20):

A one stop shop for everything you need too as well.

Rob Boyle (07:23):

Thank you, that's our pitch.

Brian Friel (07:24):

That's awesome. I want to talk a little bit about the devs that you guys are building for, right? So you painted this picture of you guys are everywhere across the developer stack. Who are these developers that you're seeing who are entering the crypto space?

Rob Boyle (07:38):

Every developer's our customer. And our ultimate goal is to have 1000X developers in the space. We think of this flywheel where when you have a new technology like blockchain, as soon as developers start building something in the space that attracts users. The more users are in the space the more developers turn their attention to it and they build more stuff which gets more users, which gets more developers, and you get this flywheel going. Where crypto sands is, development in crypto is really hard compared to Web 2.0. So the flywheel is running in sand or glue right now where it can't get spinning. And we identify it because the development is so hard it's hard to get this thing going, and some other difficulties as well. So we really just want to make development easier for literally anybody.

(08:21):

I'll talk about historic, our current customers. We have big enterprises so OpenSea runs on us, Phantom, to use you guys as an example as a luminary in the space, run on our platform. So we pride ourselves on having the scale and reliability to support the biggest names in the space. A lot of these companies were two people working on it on their own not that long ago so we really want to support new developers of the space. We see a lot of developers coming in who are new to crypto. They're coming from Web 2.0, they're coming from other spaces, and now they get excited about crypto. You can develop a really powerful app on our platform with a bunch of usage and not pay a cent because we have very generous free tier. And we also have education resources. We have Alchemy Ventures, a venture arm for some reason. I'll stop sharing all the stuff we do. I see a bunch of new people, I see traditional enterprises.

(09:02):

What I think is really interesting is increasingly we're seeing Web 2.0 enterprise companies enter the space. This is what excites me. With the most recent bear market, there's a lot of news around oh, a bunch of companies shutting down their web 3.0 efforts, and you saw potentially a pullback, but we're not really seeing that from our perspective as Alchemy. I see a lot of big traditional Web 2.0 enterprises who are still super bullish on experimenting in web 3.0. And have web 3.0 units they're building them out. We work with a ton of them. And they're way more crypto-native than you would think. I won't name the company but I talked to a very big old-school Web 2.0 company and they were complete Degen's who were very excited about a bunch of cool new blockchain technology and were very fluent and very excited about building it. So I think that's really excites me is seeing the Web 2.0 giants really continue to turn attention to the space.

Brian Friel (09:51):

That's super cool. And that's a bit of a narrative violation like you said. I noticed you guys just put out through Developer Report, you guys do this every year. Flipping through some of that, you guys have some pretty awesome numbers in there to show. I'm curious what you guys are seeing, especially as it relates to these Web 2.0 companies coming in? Are there any patterns that are emerging about why they're interested or what they potentially want to be building in the space? Or maybe even what chains they're going to first? Any patterns that you guys are seeing that maybe other people aren't aware of?

Rob Boyle (10:21):

That is a great question. The biggest pattern is that a lot of them are finding ways in which their existing business models and the value that they add to people can be augmented by web 3.0. I think that's the exciting part. If you look at Shopify, has rolled out some stuff around token-gated commerce. And that's an example where Shopify does, they build stores, and they realize oh, loyalty programs, some of these other solutions like exclusive access to key fans is a really exciting prospect, and this gets really empowered through web 3.0. So they're taking existing stuff they want to do, which is exclusive experiences for top customers or the ability for brands to give interesting experiences to people, and then using web 3.0 to go power that. So that's the pattern I see.

(11:07):

It's not like I see all these Web 2.0 companies being fired up about NFTs or DeFi or something, it's more them saying, "Oh, what's the core thing, the value I deliver as a business to people?" And then "Oh, there's all these ways that I can use web 3.0 to deliver more value or make that more exciting." And I think that's what actually makes crypto win. I don't know, some of these guys are like "Oh, I'll do yet another DeFi protocol." There's a lot of those. But it's when they start using web 3.0 to power the existing value chains that they already have.

Brian Friel (11:35):

It reminds me of what Reddit did with their ... They even called it digital collectibles instead of NFTs, but that was one of the most successful by the numbers successful version of that.

Rob Boyle (11:44):

They're a perfect example of this where they take something that they already do and they're like "Oh, this gets way better with crypto."

Brian Friel (11:49):

That's pretty cool. I think that's a world that I get excited about as well where it's a bit more getting mainstream people into it almost by accident or by chance. They see the value and they're like "Why wouldn't it be this way?" And it's a lot easier. Like you did, they can then go down the rabbit hole and learn everything else that's behind the curtain about crypto as well which is pretty cool.

Rob Boyle (12:10):

Our CEO Nikil has a great quote he likes to use that I love which is, "No one ever talks about using an internet application, that would be super awkward. They just talk about apps that add value." It's a little cliche at this point but the same is true of crypto. My mom is never going to talk about this cool blockchain app she used, she's going to talk about this app that allowed her to send money internationally with no fees or something. And then I can be like "Oh, that's built on crypto" and she'd be like "Oh, no way." I'm like that's how we're going to get a billion people under crypto. So the more that those types of apps start to develop the more exciting it is.

Brian Friel (12:38):

That's really cool. We also were chatting just before we hit record on this about another trend that you're seeing which is this migration off of the RPC interface. Back in the day, you're having to deal with these RPC providers directly and there's a lot of problems with scale that comes with that. I know you guys are doing a lot with abstracting stuff away. I also saw very recently you know guys put out Create Web3 dApp and just constantly making it easier and easier for them to build with. But can you talk a little bit about that trend that you guys are seeing as well?

Rob Boyle (13:07):

Completely. To another slightly labored analogy. I think working straight off JSON-RPC is like coding and assembly, or coding a web app without reactor any frameworks at all. It's pretty painful. The original people who came to crypto were super deep into crypto and that felt fine to them. They're like "Oh yeah I code an assembly all day, that's awesome. Just give me a JSON-RPC endpoint I'll go build something." But increasingly as new developers come to the space, especially Web 2.0 ones, they're like "Oh, show me the abstraction layers." Awesome. I understand that this exists, but in the Web 2.0 world I have all these frameworks and services that let me not have to think about a lot of the nuts and bolts and I can work at a higher level of abstraction. If you hit someone who's like "I have a great idea about how to use NFTs to do gated fan experiences." And we're like "That's great, but first spend two days learning how Eth Call works. It's really hard.

(13:54):

A bunch of what we try to do is meet developers where they are. Where they come in and they have cool ideas around NFTs and how to use them, and we're like "Awesome." We have a minting process, we have an allow list product called Spearmint, we have NFT APIs for getting data. And you can just think at the level of NFTs and not at the level of chain primitives, and that really accelerates how fast people can both learn and get up to speed and start building apps that deliver value. And I see a bunch of startups in this space too. There are a ton of startups. I'm not sure an advantage, but something that's really powerful that Alchemy has is our ventures arm Alchemy Ventures that's been super successful. People would be shocked at the number of people who run it, it's very small but they have investments in some of the most exciting companies in the space.

(14:33):

And through Alchemy Ventures we see a bunch of these new startups. And we've seen an explosion of startups building abstractions both in frameworks as well as services that allow people to think at these higher levels. And they're doing that on the read side, how people pull data off-chain, there's a bunch of really interesting data platform startups. As well as the right side. There's a bunch of really interesting startups helping people get data under the chain in a more abstract manner. Right now the majority of development is against the JSON-RPC interface which is more historical. In the future, I see the vast majority of development actually pointing at these higher level of abstractions. I think that's where most developers will be used to working in the future.

Brian Friel (15:07):

That's pretty cool. That's something that I think all devs here would be plenty happy to switch to. There's this meme on solana of chewing glass where the developers are all having to worry about not just finding product market fit with their own app but serializing and deserializing accounts. That context-switching is pretty brutal but it's a rite of passage. And then those devs who go through that process of chewing glass all feel very connected to one another and trial by fire experience.

Rob Boyle (15:33):

I think it's great for a sense of community for sure.

Brian Friel (15:37):

It really is. It's also helpful that you guys are turning glass into bubblegum here a little bit it makes it a lot easier.

Rob Boyle (15:42):

That's a great analogy. I'm going to give that to our solana marketing team they should use that. Glass into bubblegum.

Brian Friel (15:49):

There you go. TM, just add the credit to Zeitgeist podcast for that one.

Rob Boyle (15:54):

No worries. Hat tip all the way.

Brian Friel (15:56):

You mentioned that you guys have a couple different insights here. One, you're working with Web 2.0 companies directly. You have this ventures arm that you're making these investments in on these upcoming developer tools. You guys also have this Alchemy learn and Alchemy University platform as well though I think which captures the more long tail end of the developer. Do you think that the way we're going to be teaching developers, like these long tail devs, coming into web 3.0, do you think that's changing already? Are you guys incorporating that in your curriculum? Or is this still something that this abstraction layer is going to take some time and people still really need to learn Eth Call now or solana account to serialization? How do you guys think about that, trying to teach new incoming devs but also not abstracting too much of what makes crypto crypto?

Rob Boyle (16:43):

That is a great question. I think right now, as much as I get excited about these abstraction layers, none of them are seamless and you still need the fundamentals. If you take a modern CS class these days it's not like they start you with react to these frameworks, they start you with bare code, you're probably learning C or something. I think the same is true in web 3.0. I think our developer courses reflect this. We still teach people the basics. You really have to understand the basics. And I think the best combination is you get really fluent with the core fundamentals, the building blocks, the most basic layers. You really understand how the protocol works, you really understand how the accounts and onboarding works and signing, and then you get access to the more powerful tools. And then you're like "Oh cool, this saves me a bunch of time but I know how to use them effectively because I understand what they're doing under the hood." Our education classes reflect that. We still teach a bunch of basics, we introduce some of our abstractions.

(17:37):

I do think it would be a mistake if we had our education portal just telling you how to use Alchemy NFT API to build something or something. We launched a new project called Create Web3 DApp that gives you a bunch of template code. It basically helps you generate all the code depending on the app you're trying to create. The purpose of that is not necessarily so people can ignore that, it's so you can take all that code, digest it, understand what it's doing but not have to write it yourself and be like "Okay, cool." So you can get up and running fast but you still should definitely understand what it's doing. That's still important. I think it will be for the foreseeable future.

Brian Friel (18:07):

I tend to agree with that as well. That was my experience just learning the code as well. You're always looking for the equivalent of a crate react app but that's just because you want to get your ideas out in the world, but then pretty quickly you're going to need to actually learn what's going on here. I think that's the right approach for sure. So I want to switch gears a little bit and talk about how you guys are operating in a multichain world. Phantom and Alchemy came together because Phantom's expanding. In addition to solana are adding support for VM chains starting with Polygon and with Ethereum layer one. You guys, obviously, have your hands in a number of layer ones. Also, the world's moving to layer twos.

(18:43):

There's all this complexity that's happening in crypto and it feels like there's 1000 flowers blooming and everyone's trying to find what the right way to scale this is. I want to hear from you guys. How do you guys think about all these different L1 ecosystems? Do you believe in this multichain world? Do you focus most of your efforts in certain areas? How do you guys keep up with all these protocol changes? What's that from your guys' perspective?

Rob Boyle (19:07):

Totally. It's complex now. It's going to get worse or better depending on your perspective but I think it's going to get more complex from here. The most precious resource or scarcest resource in the world right now is block space. That is what it all comes down to. And especially if you look at onboarding billions of people onto blockchain, you're going to need so much more block space than we have right now. We don't see a clear path to that that doesn't involve a massively multichain world right now. There's some interesting scaling solutions, there's some L2s that are doing this, but if you just do the math on block space none of them are going to really meet the demand that we foresee for crypto without multichain.

(19:46):

And similarly, I think there's just a lot of different use cases where you can build a chain that's made for that. There are chains that are really good for gaming, there's ones that are really good for DeFi because of how the primitives are put together. So I absolutely think we're going to be in a multichain world. I saw an interesting quote from Optimism that I love. They're leaning into this really heavily. And they said, "Chains are the new smart contracts" where they want spinning up a chain to be as easy as deploying a smart contract is today. And they really think app chains, the first of which is base which, obviously, has gotten some good traction is the first of those.

(20:17):

We think about multichain as the defacto future. The question then is which chains do we support and how do we understand where we put that? A lot of that on our side is bandwidth constrained honestly. There's a bunch of chains I think are super exciting and we just have to be really disciplined around what chains does it make the most sense to support based on what we can provide the best support to. So that's one reason L2s have been straightforward for us but we've had to be more picky around L1s. We really pride ourselves in providing a really top-notch, incredibly reliable, incredibly scalable solution. And it is hard to do that if we're juggling multiple chains at once.

(20:54):

As you talked about, there are protocol releases all the time for these chains, a lot of them are moving targets. One of our requirements to work with a chain is a very, very deep relationship. So we have all of the protocol teams for all of these chains on Slack we talk to them constantly. We are pushing hundreds of fixes. I think at last count to a lot of these client teams we work really hand in hand with them. And it's hard to do that if we had 30, 40, 50 chains. So we form really deep relationships. So we have to be picky from a just how many chains we can support at the level of quality we want. But I absolutely think that we're going to have a ... Be in a multichain world.

(21:29):

In terms of looking into the crystal ball a little bit, I'm really bullish on the Eth ecosystem. I think using Eth as an L1 and then having a bunch of L2s and potentially thousands of app chains is a clear future. I think that's really interesting who's going to be a big player. But there's a lot of super interesting L1s. Like you said we support solana. I think they're doing really interesting stuff and have a very vibrant community. They have a future ahead of them.

(21:51):

And then the last piece that we're trying to think about is interoperability. There's people doing really cool projects in this space. That's going to have to be a core technology is actually being able to interact across chains. Because it's cool to say there's a bunch of chains, but if it's incredibly hard to move liquidity between them it's going to be very hard to use. People shouldn't actually even be thinking about chain necessarily if you're an end user, we have a long way to go for that to be seamless.

Brian Friel (22:15):

I would agree. We're noticing that already with Phantom's multichain betas. We're getting Eth people saying, "Hey, there's Clang source or a big mint happening on salona and I need to swap in but how do I do that? They want that simple one-click button interface. Like you guys are doing, there's a lot of lot of complexity to abstract the way behind the scenes there but it'll be a fun challenge in the year ahead.

Rob Boyle (22:35):

You guys are doing great work on this. That's what people expect, right? If you weren't so desensitized by being in crypto that you're used to all of this hoops you have to jump through you'd be like "Oh, I'm looking at my Phantom wallet, I have Eth, SOL's right there, I need more SOL. I should be able to move it over done and dusted. And instead it's a whole rigamarole. That's just not going to work.

Brian Friel (22:55):

We'll definitely get there. And we've already come a long way from the days of running the coin core full node on your desktop computer. Rob, this has been an awesome conversation. One question we ask all of our guests, and I want to hear this from you as well is, who is a builder that you admire in the web 3.0 ecosystem?

Rob Boyle (23:13):

At the risk of this sounding paid, I actually really love Phantom. I'll bring up someone else to just not to be totally a complete shill. Phantom is just upgrading the level of user experience to Web 2.0 standard. Phantom is obsessive about how good the UI is, the onboarding experience. And when I first used the Phantom wallet I was like "Oh, this feels like a Web 2.0 app, it doesn't feel like a web 3.0 app."

(23:39):

Web 3.0 apps, in general, is rough. It felt like a breath of fresh air. So I think you're doing a fantastic, fantastic job. I also also see it on the back end. As you know we work together on the RPC side. And if our latencies slip by a percent I get a message from a Phantom engineer right away being like "What's going on guys?" You guys are obsessive on the UI side and on the performance side. Anyway, so I really admire that. As much as it sometimes keeps me up at night because I know as soon as we have an issue I'm going to get a message the next day from you, I think you're really good.

(24:08):

I'll name a couple other ones. I think OpenSea is doing a really good job about also doing this multichain thing. I think they do a decent job about abstracting away chains. When you're browsing on there you can sometimes forget what chain something is on and they're trying to make that less of an issue at the front of people's minds. I think that's really the right direction to go. I really admire that. And then on the core tech. I know that's been a little controversial recently but LayerZero I think. We're going to need tech like that to be able to move across chains seamlessly so someone's got to be doing that type of stuff.

Brian Friel (24:36):

Those are all great suggestions. Appreciate the Phantom shout-out. That's definitely not required to be on this show.

Rob Boyle (24:41):

Of course. I'm an avid user so I can't not.

Brian Friel (24:44):

The feedback goes both ways so we obsess about our user's feedback too. If you have anything just let us know as well, we'll constantly try to improve on that. OpenSea and LayerZero too are great ones as well, I'll have to have those guys on the show. Rob, it's been awesome, thanks so much for coming on. Where can people go to learn more about Alchemy?

Rob Boyle (25:01):

Alchemy.com is pretty much your gateway to everything. It's your gateway to our university, learn more about education. That's your gateway to our products to get up and running and building. If you're sitting in a Web 2.0 company getting excited about building something, if your brand new to web 3.0, no matter what alchemy.com you can be directed. You'll find the resources you are looking for to learn more.

Brian Friel (25:21):

Love it. Rob Boyle, Product Lead at Alchemy, thanks so much for coming on.

Rob Boyle (25:24):

Brian, thank you so much this was super fun.