What's Hot in Arbitrum? | Arbitrum Ecosystem Guide

In today's episode, we're talking about what’s hot on Arbitrum. Three Arbitrum experts are here to help guide us through what's new in the Arbitrum ecosystem. The Arbitrum metrics are HOT. 2022 was not the best year for crypto, but they were for L2s, and especially for Arbitrum! Tune in to learn why and how Arbitrum is shaping the future of L2s, gaming, and NFTs as we know it. ------ 📣 Crypto Tax Calculator | Free Crypto Tax Calculator https://bankless.cc/CTCpodcast https://bankless.cc/cryptotaxcalculator ------ JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe ------ BANKLESS SPONSOR TOOLS: KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi ----- Timestamps: 0:00 Intro 8:11 What is Arbitrum Doing Right? 15:20 GMX 17:03 Arbitrum Culture 24:30 Treasure's Expansion 29:30 Culture vs. Technology of Chains 31:42 The Bankless Thesis 36:00 GMX's Hooks 38:20 DeFi Activity 43:37 Community Engagement 48:00 The Nintendo of Web3 51:50 Building Along Treasure & Arbitrum 57:53 What's Holding the Ecosystem Back? 1:03:55 What is Beacon? 1:07:00 PFPs in Arbitrum 1:12:00 Token Alpha 1:13:50 Closing & Disclaimers ----- Resources: Karel Vuong - Co-Founder & COO, Treasure https://twitter.com/karelvuong Diego Vidaurre - Co-Founder & CEO of The Beacon https://www.linkedin.com/in/diego-vidaurre-schaffer-6989a1120 Coinflipcanada - Core contributor to GMX https://mobile.twitter.com/coinflipcanada Massive Arbitrum Acquisition!! with Steven Goldfeder & Preston Van Loon https://youtu.be/PmWeXVRPeic How to Gain Exposure to Arbitrum https://newsletter.banklesshq.com/p/how-to-gain-exposure-to-arbitrum ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Ryan Sean Adams?

  Bankless Nation, we've got an excellent episode prepared for you today. What's hot on Arbitrum? That's the question. David, it feels like it's Layer 2 season. I know we've said that a few times in the past, but this time it feels like a real bright spot in the crypto community. Layer 2s are up. And among all of the Layer 2s that are doing things in terms of getting more transaction volume, getting more users, deploying more applications, Arbitrum is kind of in the lead. And so we are doing a deep dive exploration on the Arbitrum community. Why don't you tee up what's in store for us in this episode?

• 0:36David Hoffman?

  Yeah, so we got three community leaders who are also the experts, the co-founders, the core contributors of whatever particular app on Arbitrum that they contribute to. But they're also just DeFi NFT power users across the broad Arbitrum landscape. And so we're going to have a panel today of three Arbitrum power users that are building on Arbitrum, that are just community members of Arbitrum, community leaders of Arbitrum. Because of all things that happened in 2022, all of the down, bad things that happened in 2022, Arbitrum was not one of them. They were one of the few ecosystems that was growing throughout 2022. And you can really feel it in the energy of the community. So I want to know, why is Arbitrum so hot right now?

• 1:21David Hoffman?

  What is Arbitrum specifically as the team? What are they doing right? And what is on Arbitrum that these NFT organizations, these DeFi apps are really, really leveraging? There's a bunch of energy going on, and I want to know why that energy is so high.

• 1:36Ryan Sean Adams?

  Guys, we're going to get to the episode. Before we do, a few things to talk about. Number one is a crypto tax calculator. Here is Ryan Sean Adams, the tax optimizer himself, telling you, have you done your taxes yet? Have you taken a look at them at least? I know last year was kind of a mess. You might be thinking about ignoring it. Don't make the mistake I have made a long time ago. That's why, David, it always gets on me for like, Ryan, why are you always talking about taxes? It's because I felt the pain before in not having a tax strategy ready and getting totally burnt. There's this new tool called Crypto tax calculator that actually the COO of Bankless, Rachel Cusack, let me know about, and I wish I had had this in previous years, David, because

• 2:21Ryan Sean Adams?

  there are lots of different ways to do your taxes in crypto. But what I found is no tool covers like all of the different hard, complicated transactions, right? Like layer twos and DeFi, does it support this application? That application, what about its NFT support? Crypto tax calculator is actually the most user-friendly, comprehensive way of getting all of these integrations in there. Like they do the hard DeFi DGEN transactions.

• 2:49David Hoffman?

  Do you guys hear the excitement in Ryan's voice right now?

• 2:52Ryan Sean Adams?

  I'm seriously excited about this tool. And here, here's why I'm excited is because it's literally going to save me hundreds of hours. Right? Like you just plug in your address and boom, you get the results, you deliver that to your CPA or whatever, do it yourself. Anyway, taxes don't actually excite me, but getting taxes done quickly excites me.

• 3:10David Hoffman?

  Fair.

• 3:10Ryan Sean Adams?

  And that's what you can find at Crypto Tax Calculator. David, I think there's a discount.

• 3:15David Hoffman?

  There's a big discount.

• 3:16Ryan Sean Adams?

  It's like a 30% discount. How do folks activate that?

• 3:19David Hoffman?

  Yeah, there is a link in the show notes to activate a 30% discount for Bankless listeners. But if you're a Bankless premium subscriber, there's a 40% discount in the Discord. So go find that code there. But otherwise, for you non-premium subscribers, you can go ahead and click a still healthy 30% discount in the link in the show notes.

• 3:37Ryan Sean Adams?

  And I think that the code is bank. Am I right? Bank 30 to get that discount.

• 3:41David Hoffman?

  I, I hope that's right. I will.

• 3:43Ryan Sean Adams?

  Go check it out. Go check it out. All right. So Arbitrum, David, you've teed up the episode. What should listeners really be paying attention to from these three panelists?

• 3:52David Hoffman?

  Yeah, like I frequently say on Bankless, there's always a bull market somewhere. And the energy across the layer two ecosystem is probably at all time highs. And that is especially true about the Arbitrum ecosystem. Ryan, did you know that the Arbitrum Bridge contract is the seventh largest holder of ETH? Number seven, number seven. Yeah. Uh huh. It's also one of the largest burners of ETH. And so the energy of the Arbitrum smart contract burning all that ether is coming right out of the Arbitrum community. You can see them in the chat right now. Yes, I am looking at them. Uh, and there's, and so like I said in the intro, there is, there's, I want to explore. How did, how did Arbitrum do this? What about the builders on Arbitrum? Uh, why do they choose Arbitrum?

• 4:35David Hoffman?

  Uh, Arbitrum doesn't even have a token. Uh, things like Avalanche, Solana, like all these other all layer ones have had tokens. Yeah. Arbitrum is lapping them in TVL and transactional volume. What is going on over in Arbitrum? Uh, so these are, this is going to be the meta of the show. These are going to be the questions that we were asking the three contributors, uh, in the Arbitrum app layer. We got a representative from the treasure DAO. We got a representative from the GMX, uh, lever, um, what do you call these things? Margin trading apps, uh, which fun fact, Ryan, was the best token to hold throughout 2022 where everything was down like 90%.

• 5:09Ryan Sean Adams?

  That is the stablecoins?

• 5:11David Hoffman?

  Up 20%. It was up 20% in 2022. Yeah. Uh, uncategorically winning 2022. Uh, and then also we got a game, the beacon. Uh, and so we're going to explore DeFi. We're going to explore NFTs. We're going to explore gaming because apparently you can do it all on Arbitrum. Uh, and I should say that there are disclosures that we usually, we don't have too many disclosures to disclose, but on this episode we do. Uh, I own a material amount of magic tokens and also small brains, which are the unofficial PFP of the treasure ecosystem. And the bankless fund also owns some small brains as well. Oh, and Arbitrum is also a currently a bankless sponsor. So there are plenty of conflicts of interest in this episode, but we've been promoting layer twos for a while now. So this should really come as no surprise.

• 5:55Ryan Sean Adams?

  David also owns some ETH too. We may talk about ETH here or there.

• 5:58David Hoffman?

  Certainly.

• 5:59Ryan Sean Adams?

  I'm excited about this episode because I, I feel like I'm going to learn a bit more about the Arbitrum ecosystem. So guys, if you want to join us in that, then stay tuned. We'll be right back with our episode with folks, uh, at Arbitrum exploring this ecosystem. But before we do, we want to tell you the sponsors that made this episode possible, starting with our favorite number one recommended crypto exchange, and that is Kraken. Stay tuned.

• 6:22David Hoffman?

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• 7:06David Hoffman?

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• 7:49David Hoffman?

  to make sure that you never lose an airdrop ever again. You can also upgrade to Earnify Premium to unlock access to airdrops that are beyond the basics and are able to set reminders for more wallets. And for just under $21 a month, it probably pays for itself with just one airdrop. So plug in your wallets at Earnify and see what you get. That's E-A-R-N-I dot F-I. And make sure you never lose another airdrop. All you, David. Ladies and gentlemen, welcome to the State of the Nation, where the State of the Nation is hot because that is exactly what Harbithrum is. In the top right corner, we got Corel. Corel is the COO and co-founder of Treasure Dall. Corel, welcome to the show.

• 8:28Speaker 02

  So happy to be here. Thanks for having us.

• 8:30David Hoffman?

  In the bottom left corner of your screen, we got Diego. Diego is over at the Beacon, which is a game, I believe, inside of the treasury ecosystem. We're going to ask about how that works. Diego, welcome to the show.

• 8:44Speaker 03

  Hey, guys. Happy to be here. I'm the CEO and co-founder of the Beacon.

• 8:47David Hoffman?

  And then also in the bottom right corner, we got CoinFlip Canada, the only Anon on the stream. This is why we've got his little profile picture over the Zoom chat. CoinFlip, welcome to the show.

• 8:58Speaker 04

  Thanks for having me here, David. Longtime fan of the show.

• 9:01David Hoffman?

  Cheers. Well, it's been a while since we've had a panel up on Banklist, which is why I'm juggling both the stream and also the questions. But I think this is going to go, this is going to be pretty fun, guys, because this is exactly what the systems, these protocol systems are supposed to do, bring people together in the app layer to allow for some interoperability and also some lively, healthy growth. That's what we're looking to talk about here. And so I want to start with this question. What exactly is Arbitrum doing right? Because the Arbitrum ecosystem is one of the hottest things in Ethereum, but not just in Ethereum, in all of crypto. Like I said in the intro, in 2022, crypto deflated in 2022, except for Arbitrum. And so I want to know why that is true.

• 9:47David Hoffman?

  So, Corel, I'll throw this first question to you. And from your perspective, what's going right in the world of Arbitrum?

• 9:54Speaker 02

  I'd say a ton of things. I mean, you know, we're coming into this from the vantage point of, you know, gaming and NFTs, of course, but, you know, I think for us, like, we came into Arbitrum, you know, late kind of 2021, you know, kind of shortly after they launched. So we were fairly early into everything. And, you know, I think the major theme in just kind of working, not only with Arbitrum, but also everyone else here, is that like, this is a super collaborative and like, you know, largely kind of community-driven sort of effort. And so working shoulder to shoulder with everyone here, I mean, they're focusing on the right things, growing organically. I mean, you kind of mentioned it and, you know, looking at, you know, one token, which I think is a common theme across the board. But yeah, I mean, I think there are so many

• 10:38Speaker 02

  Many different sort of game changers that have come out of this, you know, I think from a technology perspective as builders and users, I mean, that that's been, you know, a huge thing for for us at at Treasure and all the games that we're supporting as well. Um, so I mean, definitely, I think, you know, there's there's that that that's been a huge kind of part and and, you know, I think why they're, you know, kind of playing uh the the the right cards. And, um, you know, I think the other part of that is everyone who's come here to build on top of the Arbitrum, um, you know, uh, network. And so, you know, for us, all the games, um, you know, a a network is is kind of dead without, you know, DApps and protocols and things that are coming here. And and so I think, you know, there is that sort of flywheel network effect, um, that is coming out from just having a thriving sort of ecosystem that is, uh, growing and and building together.

• 11:25David Hoffman?

  Uh, Diego, I want to throw kind of the same question. I think we're gonna just take this one by one by one. Uh, Diego, from your perspective over at the Beacon, uh, and perhaps you could kind of illustrate how the Beacon works on Arbitrum. Because if I understand it correctly, the Beacon, the game, is built on top of Treasure DAO, which is built on top of Arbitrum. Is that how this works? And and overall, like, can you talk about just the network effects that you've been able to experience over there?

• 11:46Speaker 03

  Yeah, yeah. So to some degree, so in, yes, the the Beacon interacts with Treasure, but it's not precisely built on top of on top of Treasure. It's built, in fact, in top of Arbitrum, like all our contracts or smart contracts are deployed in Arbitrum, right? But Treasure is like this sort of ecosystem that powers games for the most part. And the Beacon as a game pretty much just stepped into Treasure's infrastructure in order to not only will help it grow, but also us benefiting from the thriving ecosystem that they have. But technology wise, yeah, it's an Arbitrum project in that sense, like it's everything is, everything is just on the Arbitrum, on on the, it's an Arbitrum on the, um, on the technical side of the equation.

• 12:25Speaker 03

  What I do think that they've been doing well is a few things. I mean, Corel actually summarized it pretty well, but it's a set, it's a, it's a fact that there's like this set of interesting initiatives that are being, that have been growing in Arbitrum lately. Uh, very cool projects and most of them are very community driven and very open towards collaboration. And I'd say that that's one of the key aspects to it, but it's also the fact that for developers, and I would say that for users alike, Arbitrum is a fantastic experience. Like for us, when we deployed our contracts and and and everything did on the Arbitrum layer, um, the experience was fantastic. It was really smooth and from the side of our users, transaction speed is fantastic and it's also on a very low cost basis. So I'd say that if you add like all these factors together, they really grant the

• 13:08Speaker 03

  An experience that makes people well delighted of the experience. I'd say that that's one of the main things. Yeah, that's from my side of the list.

• 13:16David Hoffman?

  And of course, Corral and Diego are part of the NFT gaming ecosystem side of Arbitrum. But the DeFi part of Arbitrum is just as hot. And so I'm going to turn now to CoinFlip Canada out of the GMX ecosystem. So CoinFlip, talk to us about DeFi on Arbitrum. Well, I think that's kind of where Arbitrum really started is starting with DeFi apps. NFTs and Treasure Dow came not too shortly afterwards, but Arbitrum really got started with its roots in DeFi. Talk to us about the health of the DeFi ecosystem on Arbitrum. What about it is so special to you?

• 13:48Speaker 04

  Well, in many ways, I mean, and without making it sound too grand for me at this point, Arbitrum DeFi is Ethereum DeFi. It's just it's just become the natural home where the applications, the dApps, the collaborations that you want to do are possible in the environment that Arbitrum has built. Safe, secure, secured by Ethereum, which I think has been such a fundamental part of its success. The fact that so many people have, you know, been willing to come over, bring their assets over to Arbitrum. You said the number seven wallet in all Ethereum is the Arbitrum Bridge. It just shows that the comfort level with remaining, you know, closely aligned within the Ethereum ecosystem has been just such a boon.

• 14:32Speaker 04

  But it's also been that, you know, and again, I was probably involved in DeFi in the early days, but I wasn't involved, let's say, in Ethereum in the early days. And you talk to a lot of people and they say that we have that sense that it's a small community still. It's not a community that what it's really a community where people are building. The conversation is around product. People are looking at how innovation actually applies, how it works together, how there is product market fit. I mean, I think it's just, it's, it's really interesting that it sort of runs at a pace that is very, you know, sorry, way to put it. In crypto, nothing is human, but in a very human pace where people are actually trying to figure out how they do sequential pieces that are not rushing to deploy things that don't work and see what happens.

• 15:15Speaker 04

  It's, I don't know, there's just a real sense of sensibility over there.

• 15:20David Hoffman?

  In a coin flip, like I said in the in the intro, GMX is one of the few applications that ended up green on the year in terms of the token price, but also trading volumes. And I also butchered the the description, I believe, the perhaps the correct description of what GMX is, is a derivatives exchange. But for people that never have interacted with GMX before, or maybe derivatives exchanges in the right name, and can you just explain a little bit more about the DeFi app, what it is and what does it do and what you can do on it?

• 15:45Speaker 04

  Yeah, so GMX is a oracle-based perpetuals and spot exchange on Arbitrum and Avalanche. It basically works by aggregating the best off-chain data from large centralized exchanges and in time decentralized exchanges as their volumes grow to help create, you know, a deep liquid on-chain market. And we've really been able to try to create an environment where people have confidence that they're getting transparent pricing, everything that happens is still executed on-chain, you're able to verify what the market price was, what you were executed at,

• 16:29Speaker 04

  what you were liquidated at using chain link oracles. It's really just helped to try to bring, I think, a sex-like experience over into the on-chain experience, but most interestingly doing so without external market makers or other participants, but instead relying on one of the great DeFi innovations, which is a liquidity pool.

• 16:49Ryan Sean Adams?

  A sex-like experience, and of course, you mean centralized exchange-like experience, of course.

• 16:54David Hoffman?

  YouTube comments have already caught up on that.

• 16:55Ryan Sean Adams?

  Maybe not that good, but it is pretty good.

• 16:58Speaker 04

  Tried GMX out and then told me.

• 17:01Ryan Sean Adams?

  Coin Flip, you mentioned that Arbitrum DeFi is Ethereum DeFi, which is kind of interesting take on things. I'm curious from all of our panelists, maybe starting with you again, Coin Flip, and we'll work the other direction. How would you describe Arbitrum culture? How is it the same? How is it different than Ethereum culture? And then GMX is also deployed on Avalanche. How is Arbitrum similar or different from an alt-layer-one-like Avalanche?

• 17:35Speaker 04

  Well, I think the starting point between Ethereum and Arbitrum and obviously I think being spending so much time in Arbitrum, maybe for me, the line has become very fuzzy. Because I, you know, and maybe I've had the opportunity, sort of GMX has been very privileged. We've been sort of, you know, the biggest player on Arbitrum and it's given us a chance to probably talk to so many protocols and those conversations are always about how they can come in, how we can integrate. Sort of if I, if I take the, you know, the great idea of being able to be composable, have permissionless contracts. I mean, those discussions have been very central. So I think a lot of things that people were hoping to do on Ethereum.

• 18:15Speaker 04

  Which just, I think, just from a gas standpoint, even now with lower gases, we're not practical settlement times. You know, I think, you know, people have sort of said, well, great, we've been able to solve that by coming over to Arbitrum and now actually sort of conceive a lot of the ideas people had a few years ago. So I think now it's really a conversation about, so how do we do it? I think my conversations, to be fair, you know, in the Avalanche ecosystem have probably been very similar. I think it's, you know, I think when you actually get down to conversations with builders, it, there is, I think, a lot more sensibility. The markets, obviously, and the wider ecosystem gets, you know, it's noisy. But most builders have been, you know, really focusing on, you know, what piece of the puzzle they can work on and how we can work together.

• 18:58Speaker 04

  And I think Arbitrum, I've really been, I've really appreciated working with, you know, other, other collaborator, collaborating with other protocols to have also said, look, we've got one piece of the puzzle and hopefully all of these pieces put together start to create a tapestry, they start to create that experience in DeFi that, you know, doesn't require you to now need to, you know, move off-chain for anything.

• 19:22Ryan Sean Adams?

  Diego, how would you describe a kind of crypto gaming culture and Arbitrum? And what does that look like? I mean, I, I remember there was a period of time where Ethereum mainnet had more crypto games. They were very sort of, you know, primitive, but most of those have, have kind of now migrated. Is Arbitrum sort of an epicenter for crypto gaming right now? How would you describe that? And is Arbitrum going to be the long-term home, like Arbitrum One? Or are there talks, is there talk about like Arbitrum Nova or some of these other, you know, game-centric layer twos as well?

• 19:57Speaker 03

  So it seems to be that Arbitrum is like the epicenter of L2 gaming at least. But I would say that that's not in no... It's not a coincidence, the fact that we have Treasure DAO into Arbitrum is actually one of the main, I would say, one of the core drivers of that adoption. But not only Treasure, of course, the Arbitrum team is also putting serious effort and making this environment more friendly towards developers. Like, for instance, NOVA is actually quite the promising approach to build games upon and for users to use it. To me, it's the fact that it would seem to be, and this is just my personal opinion, that currently the community in Arbitrum, at least in relation to games and perhaps like other projects as well, is more cohesive, it's like more united than what you would find, let's say, on the other chains, maybe.

• 20:41Speaker 03

  Maybe on, for instance, if you compare the Arbitrum community with the AVEX community, it would seem to be, to me at least, and maybe I could be biased because I'm building here, right, that it's more cohesive, more driven, more welcoming. At the same time, it's like maybe because it's also the fact that Arbitrum is, let's say, I wouldn't say the new kid on the block, but it's like fairly newer to some degree than maybe like all these cool initiatives have been being built upon it, that it also brings the hype in, you know? Like, people are actually quite enthusiastic about the future of Arbitrum. And the fact that it's also tied to Ethereum makes it, let's say, makes it to be perceived as a more secure bet, right? It's like you're building games, we're having games, everything, but it's also tied to Ethereum. So that sort of thing set up.

• 21:23Speaker 03

  To me, the main feeling I derived from this is that the community is more united. But, and I will give the ball to Corel in this one, is that it seems to me that a good portion of that is also due to the fact that Treasure DAO has been pushing this sort of ethos forward as well. So it's like it's hard to distinguish one from the other to some degree, it's very tied together. But yeah, Corel, if you want to add to that.

• 21:46Ryan Sean Adams?

  Yeah, Corel, it sounds like...

• 21:47Speaker 03

  I want to put you in trouble, by the way.

• 21:47Ryan Sean Adams?

  It sounds like Treasure is a main reason for the gaming ecosystem really taking off on Arbitrum in the way it has. So can you describe kind of the gaming culture? And yeah, why do you think Treasure and Arbitrum are becoming the nexus for L2 gaming, as Diego says?

• 22:07Speaker 02

  Yeah, absolutely. Thanks. Thanks for the alley-oop, Diego. So I mean, I think the Arbitrum gaming and NFT culture, I mean, it's largely treasure culture as well. And, you know, I think because of that, and I'll give some background maybe on treasure really quickly. I'll kind of speed run through it, but I mean, we're effectively building, you know, what we like to call the decentralized Nintendo. So a crypto-native game publisher that is leveraging Web3 to its fullest extent. So breaking down Walled Gardens, transforming how game publishing is done in a bottom-up and community-driven manner. And all of this is tied together through interoperability, shared resources, magic as our token.

• 22:49Speaker 02

  And so as we think about this kind of context, and you know, I think why we sort of view this as the culture of treasure as well is, you know, I think a lot of the gaming and NFT activity, certainly from a transaction perspective. I mean, we really dominate the scene right now. And I think we account for across all of our different games, like over 95% of, you know, related transactions on Arbitrum. So, you know, kind of looking at it from that lens, you know, I think a lot of it is because of how we're approaching things. And, you know, in the same way that, you know, you have a Nintendo, you have different cartridges, different games that you can slot in and out. You know, there's this cohesiveness that spans really the entire ecosystem.

• 23:33Speaker 02

  So between the games, between the, you know, different types of kind of infra and tooling that we're building out, everything is connected and, you know, you're kind of looking at this in the, you know, sort of viewpoint of, you know, this sort of broader degree of network effects that really kind of drive both players and builders, you know, into this epicenter that is kind of forming. It's a very, I think, deep contrast to, you know, some of the other sort of L2s networks out there, where in a lot of, you know, ways, any games that are kind of building there, for the most part, anyway, we haven't necessarily seen a kind of treasure-like community form quite yet, is that they're kind of building in isolation.

• 24:16Speaker 02

  And so really this like rising tide lifts all boats ethos is, you know, is something that we live and breathe by. And, you know, it is, you know, kind of shared across, you know, all the games that we have and who, you know, we have the pleasure of working with.

• 24:30Ryan Sean Adams?

  And so is that is that basically Arbitrum one, is that going to remain home for treasure? I mean, I mentioned Arbitrum Nova earlier, and then we've also talked about Avalanche. But what about Arbitrum one feels like home? And how would you kind of expand into other chains if you do?

• 24:48Speaker 02

  Yeah, absolutely. I mean, Arbitrum one is, you know, in a lot of ways a relic of which has served, you know, I think treasure quite well. But just in terms of how we migrated and moved everything over from Ethel one, you know, on to Arbitrum, right? And so Arbitrum Nova wasn't there at the time, you know, it's a good bet on us to kind of transition there. Whereas I guess if we think about the future of treasure and where we're going to go from here. I mean, certainly, I think there are no, you know, plans to move away from Arbitrum kind of period, you know, at this point in time. But, you know, I think with the Nova question, you know, I think just thinking about from a even technology perspective and speed and transaction costs.

• 25:32Speaker 02

  I mean, it makes a ton of sense as, you know, they are really kind of, and by they, I mean Arbitrum, you know, they're positioning this as the gaming and social kind of chain for for different sort of applications like that. So I think, you know, we did launch support via our marketplace for Arbitrum Nova, I think in the fall. So, you know, could there be really a question, you know, a subset of games that also emerged there? I think it's very realistic. And, you know, I think it's, there's a bigger question on a liquidity kind of front as well as we think about this token that unifies everyone. Having that fragmented is also a big question. So it's not something we're looking at lightly, but definitely considering for sure.

• 26:16David Hoffman?

  Diego, my hearing members of thoughts from you?

• 26:20Speaker 03

  Yeah, I mean, I was just wanting to add something that Correll said to before. I mean, I don't want to throw us lower in any other chain or anything like that. I've actually haven't been able to explore, I haven't been exploring the other chains for a while because as we said on Arbitrum and Treasure, we just like stopped looking. But I could add that at some point when we were like deciding which chain to launch on. One of the key challenges that we sort of find out, what found out was that even though there was, there were initiatives for these chains to build games upon, it sort of felt like every game you had on this different chains was like a siloed operation. It sounds like there was no communication between the community of one game with the community of another game, even though they were in the same chain, let's say, as Aivex. Whilst, on the other hand, with Treasure or Arbitrum, for that matter, you sort of found that there

• 27:02Speaker 03

  was like this deep connection of community. And I'd say that that was like the deal breaker for us to, to jump in. It wasn't that those other chains didn't give you support or any of those things, but it seemed to me that the community aspect was like stronger on the Arbitrum side. And for that, for us, that meant that was like a deal breaker, like community is king if you want to build a blockchain game.

• 27:20Ryan Sean Adams?

  Coinflip, you have any thoughts?

• 27:22Speaker 04

  Yeah, I, I, I'd echo, echo what Diego said. The community aspect, I think, really should not be underestimated. The fact is that if I, if I go through sort of, you know, our side chats within GMX, the dialogue actually isn't just about DeFi. There is a lot of conversation about Treasure, other people building game environments. There's a lot of interesting sort of gamified vaults and, and gamefied that that's also developing out. I mean, I know Treasure is also looking at a few things within the ecosystem that are, that we've been collaborating on. So, I mean, I think that's, that's the interesting thing, that people are sort of trying out and testing out those different models because, because there's been such an interesting, you know, intersection between those two sort

• 28:03Speaker 04

  of areas. It'll be interesting to see how things keep developing. But the fact that people in these communities are overlapping, it's not like we have a NFT community and a DeFi community. There's really an Arbitrum community that sort of overarcs and people are dabbling across that whole ecosystem.

• 28:18Ryan Sean Adams?

  And there's a lot of crossover between DeFi and, and gaming. You, you mentioned gamefied, but that's really, I mean, that's been talked about a lot, but is that really happening on Arbitrum Coinflip?

• 28:28Speaker 04

  Yeah, so there, there are, there are platforms that are looking at, well, you know, Copy trading in a sort of a social aspect, you're looking at people doing gamified vaults. There's a project protocol called, I think, DSQ, who's working with us. I think they're doing something with Magic as well. I know even Magic's been talking about looking at LP positions and other things to sort of back the game, their ecosystem. So, you know, I think there's a lot of things there where we're trying to see how do you, how do you optimize, you know, for idle capital, because there is a lot of inefficiency that sort of lies in the system. So there's, you know, obviously, well, we're all a little careful because, you know, we don't want to go too quickly, but I think those conversations have happened and we see a lot of potential for overlap.

• 29:11Speaker 04

  And I think, I think that if I were using the example that GMX has done very well with, you know, attracting a good amount of capital and trading activities. So off of that, you're getting a lot of people looking at, you know, well, gaming, which crosses over into gambling and a lot of other things that are sort of happening. So that, you know, I think you're going to see a lot of happening in that space.

• 29:29David Hoffman?

  I'm actually reminded of what you were saying, CoinFlip, from all the way back in DeFi summer, where we had this concept called Composable Communities, where I think this really came out after like YAMs came out, where you could deposit your Synthetix tokens, your Maker tokens, your AVE tokens, your, like your DeFi project tokens. And it was all these communities coming together to farm YAMs. And it was like this great like composability of all these ecosystems come together under this one DeFi app. And so this one brand new DeFi app, YAMs, was collectively owned by all these other communities. It seems to be there's a little bit of that playing through in the Arbitrum app layer. But it's, it's interesting to me that this is not really something that is technical.

• 30:12David Hoffman?

  This is not a protocol competing against another protocol, right? This isn't like Arbitrum going over and competing with Avalanche on their protocol, even though I'm sure they could. But it's really something much more in the social layer that is really allowing Arbitrum to, to rise to what, to what we see today. Do you, do you think that's a fair take of it's actually the culture that has been created more than the protocol?

• 30:35Speaker 04

  Yeah, I mean, I think I'm not going to get into a technology conversation because I think every every system has its own merits, but I think that what, you know, in some ways, as you said, 2022 was a very interesting experience. If I think about when Arbitrum mainnet went live, if I recall, it was basically November 1st, which of 2021, it almost kicks to like the peak of the market, the bull run. And that's when Arbitrum went live and it and, you know, there's no, there's no Arbitrum token. There's nothing on that front. So what happened was it did become, it did become a community that got to focus on the protocols and everything that was being built. I think, I mean, I'll say that, you know, listen, I could take Avalanche, I can take Phantom,

• 31:20Speaker 04

  I can take all these other ecosystems. In some ways, as token went down, communities got, you know, you know, their emotions got tied with the token price as opposed to what was being built. Race was being built in other spaces, but in Arbitrum, everybody got to only focus on what was being built. And I think that was, it, it, it just really helped to, you know, snowball and keep growing in the right direction for us.

• 31:42David Hoffman?

  I got, I got one more question for you that, since you, when you hopped into the Zoom, you said that you're familiar with bankless content and that means that you're generally familiar with a bankless thesis, which means you're generally familiar that bankless has kind of been promoting the alt or the layer two thesis much more than it has the alt layer one thesis. And since GMX has straddled both Avalanche and Arbitrum, I think you're actually in a pretty well-equipped position to give an audit as to the bankless thesis. In what ways were, do you think we were right? In what ways do you think we were wrong?

• 32:18Speaker 04

  Well, okay, so I, I will say, I'm, I'm a great believer that the Ethereum network from a, from a security standpoint is the most valuable system of security. And I think that that's been a real big aspect of where, you know, from a DeFi standpoint, I think there's a lot of potential. So I think that thesis is extremely strong. When it comes to L2s and, you know, as you said, we're, we're deploying on Avalanche as well. And there's even governance proposals for us to go to other, to go to other L1s. I think it really comes down to what is getting built on on each protocol. I mean, for something like GMX, we were a base layer and we want to work with other people who can build on top of us, who can build liquidity under us.

• 32:59Speaker 04

  And it largely comes down to each ecosystem if there's if there's an active number of builders. So I don't know. I mean, I'm not sure there's anything. I think that thesis is sound. I mean, I think that, you know, Ethereum will continue to snowball and grow. And for any alt L one to to stand up, they will have to differentiate themselves. They will. I'm not sure if that's in DeFi, if that's in gaming or whatever area, but there's a, I mean, I don't, I'm a black holes up. I think that there's a, there's a center of gravity around Ethereum and then the L twos that is, that's very strong.

• 33:33Ryan Sean Adams?

  You know, what's so exciting to me about this whole conversation is how much, David, this feels like we are exploring new lands, you know, and kind of like settling. We've called layer two, the kind of the new frontier. It's moved from Ethereum mainnet into the new frontier. And what we're seeing in Arbitrum is entirely different kind of ecosystem of of players and important applications in the stack. So like treasure being incredibly important, GMX being incredibly important. This whole gaming ecosystem, that is so much different than kind of the cast of applications and important ecosystem participants on mainnet. And you you you might have assumed like a sterile world of, yeah, all of the big DeFi apps

• 34:16Ryan Sean Adams?

  and all of the big kind of apps on mainnet will just replicate across all of the layer twos. We're not seeing that at all. It's almost like, you know, our analogy of Ethereum is kind of like a a nation of states. You know, every state being kind of a different blockchain. It's like, some of these things are almost like like cities. So when we look at Arbitrum and compare that to optimism, it's it's almost like looking at the difference between like New York and San Francisco. These are entirely different cities with different networks and different ecosystem participants. And sure, there's some crossover, but they're all united under this one kind of, you know, I guess, settlement assurance of of a nation state. Anyway, that that's very striking to me. And it's also

• 34:58Ryan Sean Adams?

  Very, very exciting because what it means is there is a whole new world of opportunity for builders to make their mark in new chains. And in addition to like kind of lower gas fees being a, you know, a place for innovation to sort of thrive. We have these new ecosystem participants that can try something different and I think we'll get a lot of variety that way. Is that what you're seeing or like, am I, am I off here or, you know, cause I know you've explored L2s a little bit more deeply than I have.

• 35:29Ryan Sean Adams?

  And this is a question for you, actually, David.

• 35:31David Hoffman?

  Oh, this is for me. Oh, yeah. Yeah, this is absolutely what I'm seeing. And, and so like, yeah, there's the different cultures in different cities, but also free transportation, free access across each one, right? So like you can walk, I mean, you can't really, but in theory you could walk from San Francisco to New York, right? There's nothing stopping you from doing that. And that's what it feels like Layer 2 bridges. But what you do find in these different Layer 2s is different cultures. And it's easier to compose inside of cities than it does across cities. So that's kind of what I'm seeing there. Coinflip, I got one last question for you about specifically GMX before we turn the conversation into the more NFT and gaming ecosystems. How are other DeFi protocols on Arbitrum hooked into GMX?

• 36:15David Hoffman?

  Cause we all know that DeFi is what it is because of composability. What's the current state of composability on the Arbitrum Layer 2?

• 36:24Speaker 04

  It exists and it's growing. And so I would say that, you know, I'll just use an example that if, if we're doing any sort of update to our protocol at this point, I'm sending, you know, we're probably sending out updates to 50 different, you know, protocols, builders, groups who are already sort of, you know, tied into GMX in one way or the other, and roughly an equal amount who we know are already in the process. And that's across both, you know, our existing deployment and our upcoming GMX synthetic markets, which is kind of a bit of a successor to what we've done with, with GMX and GLP. You have countless people building Delta Neutral Vaults, you have people building compounding vaults, you have people building trading strategy vaults now that will, that are utilizing

• 37:08Speaker 04

  GMX. You have options, protocols already deployed and more who are deploying, who are able to use GMX to provide capital efficient hedging strategies for being able to, you know, expand their marketplaces. So, you know, I think everybody has really looked and found value in bringing that capital efficient structure on chain and being able to ensure that you have, you know, you have transparent settlement. You're not, you're not needing to move beyond the chain to be able to, you know, effectively add risk or offload risk. That's, that's a nice way to say it for other protocols. For traders, it's typically, you know, doing the same thing, but for protocols, I think it functions very differently and that's continued to be, you know, a build out.

• 37:53Speaker 04

  So I, I really do feel like 2023, you're definitely going to see, you're going to see, you know, that notion of the Lego really, you know, the tower being built up with multiple protocols, you know, feeding liquidity into GMX and multiple protocols building and utilizing that liquidity.

• 38:10David Hoffman?

  Krel and Diego, the way that I kind of think of you guys are founders of your respective projects, but power users of the rest of Arbitrum. So that means DeFi too, I'm assuming. Do you guys use Arbitrum for all of your DeFi activities? Is it like 50 50 between Arbitrum and the rest of the Ethereum ecosystem? Like, I know we've said that Arbitrum is DeFi at this point, but to what degree like is your activity, your DeFi activity, whatever that may be, contained inside of the Arbitrum ecosystem? Krel, let's start with you and we'll go to Diego afterwards.

• 38:42Speaker 02

  Yeah, I'd say if, you know, it's fairly limited, you know, speaking from a kind of treasure lens, but you know, aside from sort of from a liquidity standpoint, you know, we had recently kind of made a swap from, you know, kind of gamified like protocol on liquidity that was previously just, you know, kind of through sushi, Magic Eth kind of pools and moving that to GMX. I mean, we have initially, we haven't put that in place yet, but at least we got the governance proposals through. So there is that kind of, you know, crossover that is beginning to kind of take shape. But beyond that, I mean, everything is, you know, that we sort of do and interact with is, is all on, all on Arbitrum.

• 39:22David Hoffman?

  And Diego, what about you? What about your?

• 39:24Speaker 03

  Yeah, I guess I can add to that. So I guess it's important to disclose that our project does not have a token per se, like our own token, we don't have one. And that's we may, we may have one in the future, but we don't have one because we pretty much rely on our treasures, infrastructure, economic infrastructure to be the unit of account of our game to some degree. And so most of the DeFi part are actually sort of outsourced towards treasure, towards, towards Corel in that sense. But I do ambition that if at some point, let's say we have a token, we will for sure like use Arbitrum's infrastructure on the DeFi side to, to fuel it, right? But there's no need to do that now. On the personal side, I do use Arbitrum DeFi quite a bit. The speed and the transaction costs, it's quite delightful. But yeah, in the case of our project, it's mostly because we outsource the problem towards Corel in that sense.

• 40:10Speaker 02

  Yeah, and if I can, if I can add there, I mean, I think there, there are homebrew or homegrown kind of, you know, I'd say products that like we're, we're in development for, you know, to kind of bring this to life as we think about just the cross game economy. So we have something called Magic Swap, which right now, you know, is essentially just using magic as the base pair. I mean, that's similar to a lot of the other kind of protocols out there. There is an evolution of that, that's kind of coming, that is, you know, more focused around, you know, how we can do this, but from an NFT perspective and, you know, as we think about, and, you know, I think there's, there's a big debate right now across gaming, you know, in Web three on kind of the financialized sort of aspects of it.

• 40:50Speaker 02

  And the other side, which is more of the intrinsic sort of value that you can kind of derive from, from, you know, essentially kind of building here. And so there's, there's a lot of that, that, you know, we're kind of building up towards as well. And, you know, certainly that will sit on Arbitrum.

• 41:06David Hoffman?

  Well, I, Corel, I really want to dive down into the, the economics of the treasure ecosystem and the, the whole idea of treasure as a, like a Nintendo for Web three with different cartridges to slot in and out. There's always been this idea in the world of crypto of composable games and composable gaming. And up until this point, I've been kind of a skeptic, like, all right, that's a cool meme, that's a cool narrative. But it's hard to say that what Treasure DAO is doing isn't actually executing on that narrative. And so this has gone from a narrative to an actual real story. So I want to dive down into that specific part of this conversation. But first I want to talk about a moment to talk about some of these fantastic sponsors that make this episode possible. Uniswap is the largest on-chain marketplace for self-custody digital assets.

• 41:51David Hoffman?

  Uniswap is, of course, a decentralized exchange, but you know this because you've been listening to bankless. But did you know that the Uniswap web app has a shiny new fiat on-ramp? Now you could go directly from fiat in your bank to tokens in DeFi inside of Uniswap. Not only that, but Polygon, Arbitrum, and Optimism Layer 2s are supported right out of the gate. But that's just DeFi. Uniswap is also an NFT aggregator, letting you find more listings for the best prices across the NFT world. With Uniswap, you can sweep floors on multiple NFTs and Uniswap's universal router will optimize your gas fees for you. Uniswap is making it as easy as possible to go from bank account to bankless assets across Ethereum, and we couldn't be more thankful for having them as a sponsor.

• 42:35David Hoffman?

  So go to app.uniswap.org today to buy, sell, or swap tokens and NFTs.

• 42:44David Hoffman?

  Arbitrum One is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web 3 landscape. Hundreds of projects have already deployed on Arbitrum One, producing flourishing DeFi and NFT ecosystems. With the recent addition of Arbitrum Nova, gaming and social dApps like Reddit are also now calling Arbitrum home. Both Arbitrum One and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM-compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io, where you can join the community, dive into the developer docs,

• 43:28David Hoffman?

  bridge your assets, and start building your first app. With Arbitrum, experience Web 3 development the way it was meant to be: secure, fast, cheap, and friction-free.

• 43:38David Hoffman?

  And ladies and gentlemen, we are back in the second half of the show. We're gonna dive down into the NFTs, the PFPs, the Web3 gaming side of Arbitrum in this conversation. And so, Corel, I'm gonna, I'm gonna start with you. I interviewed the Treasure team back in last April. I was still living in San Diego at the time, and the community that showed up in the chat was absolutely insane. They were the craziest, but also extremely friendly, the most friendly community that I've ever engaged with, which was really refreshing at the time, because in April of 2022, I had gotten in like three fights in a row with various different Frog armies, first DoKwans, and before that, Daniel Sestas. So it was really refreshing to have all of these like small-brained people coming into

• 44:21David Hoffman?

  the chat, even though I didn't really know what the hell the E thing was. But it was just, and so like fast forward to where we are now, I poked in my head into the, into the Treasure ecosystem to see what's up with that community. Did they make it through 2022, or are they doing all right? And I mean, they were just as crazy and energetic as ever. So dude, how the hell did you do that in 2022? How did you keep your community so engaged throughout one of the worst years crypto's ever happened? Like, how did you got, how did Treasure inject so much energy into its ecosystem?

• 44:55Speaker 02

  Yeah, no, it's, well, Juan, thanks for stopping in there. We will definitely have Ryan, I think, do a big E at the end of this, is my first mission.

• 45:05David Hoffman?

  I've already asked.

• 45:06Speaker 02

  What is this? But, yeah, I mean, and definitely it's a team effort. I mean, I think part, part of it is, we've just gone, you know, I think, looking back to April 2022, and I'll bring up like one of the things that we, you kind of talked about to cap off the last kind of call we had, which, you know, the, the kind of framing of, you know, we have the centralized Nintendo, but then there's also Treasure as like the Web3 nation, and it's the ecosystem made up of many network states, of which, you know, those are Games, or the Metaverses. And so as we think about this like GDP of the network, right, it's like the economic activity, it's all the builders, developers, contributors of all. All the, you know, many games and metaverses and then, you know, of course the players.

• 45:51Speaker 02

  I think that has, you know, there's just something special about gaming, which in a lot of ways is anti fragile to, you know, everything we're sort of doing. Um, and, and certainly I think with, with the pace of the, you know, just macro and, and market overall where, you know, uh, people are kind of, you know, sticky because they're here for the content and the games. And, you know, of course, like there's been a, a big change in the way from, you know, kind of early twenty twenty two P to E, you know, that sort of era has, you know, I think very much sort of changed the landscape of gaming and how we kind of approach things. Um, and so I think there's that sort of natural just path as the treasure ecosystem at large, you know, matures.

• 46:34Speaker 02

  We brought more games, a lot of them also matured as well. And, you know, they went from what was much more kind of simple sort of game mechanics and game loops into something that's a lot more immersive. That's fun, you know, and it is really kind of going through that, that, that evolution. Um, you know, you have, uh, games like the beacon, uh, come, kind of coming out. And, you know, I think a lot of these, you know, I think changes and, you know, just us maturing as an ecosystem. You know, the player is kind of sticking around because they're just having fun and being part of the community. Um, you know, I think there is a, also just a provenance of, you know, I think being kind of early and being, you know, part of this and, and kind of contributing in meaningful ways.

• 47:15Speaker 02

  And, you know, I think there's a cultural sort of aspect to it as well. The, the social kind of moat that, you know, I think can sort of emerge from that. And, you know, you spending time in, uh, the small brains community and, you know, we in a lot of ways view them as kind of the blue chips and, uh, you know, and, and kind of the, the punks plus bake plus whatever you want to kind of, you know, compare them to. But in, in its kind of unique way, and, you know, we like to call them the, the Mario of, of treasure. Uh, and so I think there's a lot of that, that, you know, uh, has this emotional kind of connection. Um, but really, I mean, at the end of the day, it's, you know, I think, you know, there are just things to do here and, you know, it, it leads to, I think, people kind of sticking around and contributing or playing. And, you know, we're, we're hoping to have a lot more of that.

• 48:00David Hoffman?

  Yeah, it was definitely something I learned throughout this last bull market is that like the attention game is really where it's at in crypto. And gaming has this edge over most other things in that like there are things to do. So there's always a reason to deposit your attention into a game. We've talked about the narrative of like treasure as like the Nintendo of Web 3. And what that means, I did not understand that meme when I first heard it. So I think we need to take some time to explain it. Corel, can you kind of explain this vision? What does this mean to be the Nintendo of Web 3? And how do game cartridges fit into this whole thing?

• 48:39Speaker 02

  Yeah, absolutely. So, you know, when we think about, you know, just game publishing and, you know, kind of the Nintendo, I mean, that's one really good analogy. There's also the Valve and the Steam and the Half-Life, which is also another one that you could probably use as well. But really thinking about this from like, you know, breaking down these old gardens, which, you know, I think is kind of looking at this in a brand new way that, you know, previously probably wouldn't have been possible in Web 2 or was not, you know, feasible from a business perspective. But now, you know, enter kind of Web 3, you know, and really coming at this from how kind of treasure started. I mean, it was, you know, a derivative of loot. I won't go through all the history because we have another, you know, a pod on this already.

• 49:22Speaker 02

  But, you know, and kind of approaching this from just like a bottom up manner. You know, it's a fair launch, free mints, you know, we distributed magic. We distributed, you know, the kind of initial NFTs that led to free mints, that led to small brains, that led to kind of Bridge World and Legions. And so that was our approach of, one, taking this thesis of how can we kind of create and bridge and connect games that could share common resources. So this interoperability thesis, but kind of do this in a way that helps to kind of showcase what a proof of concept could look like. So, you know, like a Nintendo, you know, there are first party bets and IPs that, you know,

• 50:02Speaker 02

  need to kind of form and that, you know, ultimately our hope is that we can kind of create some hits from them. But at the same time, because of the nature of the space and what you know, I think, you know, magic sort of unlocked for a lot of people was the ability for other builders and other games to come into treasure and you know, again, it's permissionless. Anyone can pick it up and do whatever they want with it. And but that said, it needs to kind of be done in a way that the Dow can formally kind of accept and bring in, you know, one folks who are kind of well aligned with treasure and magic and really what we're trying to accomplish. And, you know, kind of build together. And so this, you know, enabled this sort of like bottom up,

• 50:46Speaker 02

  you know, manner of building that, you know, maybe the Nintendo of, you know, kind of web two probably wouldn't be able to kind of tackle it. And so we're doing this as and, and, you know, my, my aspiration is that we no longer have to refer to this moniker of the decentralized Nintendo in a few years and we just call it treasure.

• 51:04David Hoffman?

  Certainly. And I'll say my, my first initial reaction to that was that's a great, that's a great narrative. All like web three gaming platforms want to have this interoperability, this, you know, just come build your game on treasure. But then my, my initial like skeptical, I was optimistic that we could do this. Somebody could hopefully do this. But my initial reaction was like, well, why would you just build your game on treasure when you could just build your game independently and not be subjected to the economics of treasure? And so this is what I was really waiting for when, after doing the interview back in April, and then I come back in June, I was like, oh, that that's actually playing out for some, somehow they've, they've managed their coordination incentives to actually encourage people to build on treasure rather than defect and go out and build on their own.

• 51:48David Hoffman?

  And one of those games, I think, is, is the beacon. So Diego, Diego, I want to turn to you is like, why, what resources did treasure, the treasure ecosystem have to offer you and what you're building? And why did you decide to build alongside treasure instead of just forking off and building your own ecosystem?

• 52:05Speaker 03

  Sure. I mean, there's quite a few. I'd say that one of the things that I wanted to mention that I don't really know precisely how how treasure achieved is this culture that they have, like this E kind of thing. I really don't know how you recreate that. I think that's impossible. And when we actually found out about this community, we were like, what is up with these guys? Like, who are these people? Like, what, why, how, how are they all like so well coordinated and so sharing like the same? I don't know, like ethos to some degree.

• 52:29David Hoffman?

  Ethos.

• 52:30Speaker 03

  Yeah, we quickly, sorry.

• 52:33Speaker 03

  That was quick. Well, so we quickly realized that we found this community that had the interest that we were looking for, which is people that are interested in the crypto space, but also highly interested and invested in the gaming side of things. Much like we were, you know, like we are, we're all gamers. We love the crypto space, but we found out that this community had like that those two interests, interests like buried at heart and they, they have built a community that was not only fun, but very contagious, right? So we quickly realized like, hey, whatever is in the disguise built is actually quite unique, quite hard to replicate and we don't really want to replicate it. I think that this was like the audience that we were to some degree like looking for, right? But besides like the community side, which is actually quite the big one. If you're building a game, I'd say that's, that's the hardest part.

• 53:16Speaker 03

  It's the fact that treasure also offers a set of, let's say, an infrastructure that is very hard to build on your own, let's say. One of the main reasons why most projects in gamify fail is because they develop, they develop um tokenomics that don't really make economic sense, or they sort of orient the game design towards a token and usually they fail on that, right? But what treasure sort of grants you is a, it's a token that has utility outside of your game, while also providing you with a community that wants this token and this infrastructure to thr- and this, let's say, this whole ecosystem to thrive. And also providing you infrastructure to build upon, like a marketplace and, and, and other stuff like that, right? So they sort of help you in different ways that is very hard to come by if you're building on your own.

• 53:59Speaker 03

  To me, one of the core aspects where games fail is because they focus on building a token first, rather than just fo- focus on building a game first. Um, so with treasure, we sort of realized that we could focus on creating what's actually engaging for players, which is the game, right? We also sort of leveraged the fact that treasure impulses interoperability, right? The fact that an asset on my game can be used in another game and so on, so on and so forth, right? Which actually adds more value to whatever exists to this ecosystem, in, inside the ecosystem. So this, I'd say the treasure has like this property that the more it grows, the more it's enticing for games to hop into and the more games that hop into, the more it keeps on growing because sort of everyone benefits from it. And you can certainly see that the community has that, that in mind to some degree.

• 54:44Speaker 03

  That's what they've created that I say it's very hard to replicate. It's very, very hard. So yeah, that's my answer, I guess.

• 54:52David Hoffman?

  Yeah, it really seems to be the treasure's moat is distribution where games could be independent if they wanted to, they could attempt to bootstrap if they wanted to. But maybe they just want to take the easy route and plug right into treasure and have just like these crazy e fanatics and immediately start playing their game. Uh, and that seems to be like kind of the bull case for for treasure. Is that is that how you you guys see it?

• 55:18Speaker 02

  It's I'd say it's one part, uh, and I'll start, Diego. I mean, I'll clip that for for later and show the team because I think that was a great testimony. Um, but yeah, I mean, I think when we think about certainly like from the the gaming and sort of builders perspective, like we we we like to talk about our flywheels a lot. But there is a bit of this like builder flywheel where, you know, we have this like vibrant and kind of intimate ecosystem. There's the community sides, you know, it's bootstrapping player adoption, tap into that, you know, it's the the ease in the crowd and, you know, uh, also the beacon community. I mean, you know, there there, you know, I think this player base, um, and especially as this grows, like it, you know, there is that kind of cross pollination that's kind of happening.

• 55:57Speaker 02

  There's this other side of it, which I think is maybe more builder centric and in a lot of ways, it's almost like a a founder's group. You know, if you kind of put your your VC hat on, you know, it's a group of just like it's other entrepreneurs, other builders. And, you know, I think for us to be be able to kind of curate and bring, you know, really talented folks together who can spend time talking about very openly, you know, struggles and challenges that they have, you know, with regards to game design, tokenomics, go to market, um, operations. I mean, there's a chat going on right now on like generative AI and, you know, the use of that in like art production. And it's a very just like collaborative kind of effort versus it being, you know, really kind of competitive in that sort of nature.

• 56:40Speaker 02

  So there's a big kind of bucket around that that ecosystem. Um, so distribution, I think, is is really key to that, but also, um, kind of this this kind of building side of things. Um, you know, I think we're moving to this, um, you know, maturity of the the network where you can have and kind of bring out just these like more immersive kind of gaming experiences. So interop is like a really big sort of theme there. I think there's also this meta game that is emerging because everything is tied together in so many different ways. So you have this meta game that we're trying to foster that is like intergame, intra game. And then just, you know, add a kind of layer of identity as, you know, kind of social, the play, you know, the social graph that players can kind of,

• 57:24Speaker 02

  you know, tap into and then coordinate, you know, we're talking a lot about guilds that could form, that could span different games and, you know, the way that, you know, what might have emerged in World of Warcraft, but you know, think of having something that could have, you know, kind of, um, you know, take shape in, in multiple games. Um, uh, XP, uh, identity, et cetera, et cetera. So I think there's, there's so many different parts there. Um, that we can kind of play a, a role to, to help kind of cultivate and, and, you know, really kind of bring this to life.

• 57:53Ryan Sean Adams?

  Joel, I'm curious, what's holding you guys back right now? So there, there was a time where I, I might've said, yeah, game five is being held back by really high transaction fees. Uh, in kind of scalability constraints of, of, uh, decentralized blockchains. I don't know if that's still the case. Uh, maybe another, uh, aspect is user experience. I mean, wallets are still kind of hard, onboarding and decrypters still kind of hard. But what would you point to? Like, what's holding treasure, that entire ecosystem and game five in general back? I, I get the impression that this is maybe a, in, in terms of number of gamers, we're in the, you know, the tens of thousands or so, maybe close to hundreds of thousands, maybe. Uh, what's it going to take to get to the millions? What's it going to take to get to kind of the, the big boy numbers?

• 58:39Ryan Sean Adams?

  That the Nintendos of the world are, are pulling in.

• 58:42Speaker 02

  Yeah, absolutely. I think, uh, I mean, my, my perspective is a lot of it is from that user experience. I mean, I think there's definitely a, a scaling and, um, kind of cost and, and speed question. Um, I mean, I, I think in a lot of ways though, you know, and you're, you're seeing more of the kind of hybrid, like on off chain sort of models emerge. And, you know, I think there's a, there's room and a place for like fully on chain games. Um, but I, I do think that there was a period of time where like, that was the end goal for a lot of folks, but I think we're maybe still a bit far off from that.

• 59:16Speaker 02

  That said though, I, I think there's, um, you know, that wallet experience, the, you know, uh, like, I think, and, and this may be a hot take, you know, I think at the end of the day, you know, a, a user and a player shouldn't even know what network they're on. They shouldn't have to worry about kind of the tokens, you know, and so this is where, uh, you know, whether it's on Arbitrum and hopefully it's on Arbitrum, but it could be anywhere else that like it's abstracted away, you know, you don't have to manage your wallet. And so, we're making. Quite a number of strides. There are a ton of partners out there. A lot of people just working on the really the picks and shovels uh to you know take make that experience like you know much better for the end user.

• 59:55Speaker 02

  Um. So so I think that is is maybe the the biggest kind of uh blocker right now for us to kind of get there. I think the other side of it is just, you know, the the types of games that, you know, could appeal to um, you know, that kind of mainstream audience or mass market. I think we're still a bit far off from that. Um. But you know, I think, you know, like, there's a a number of them that are, you know, which I would point to with with the beacon being like one that I think has like, you know, the ability to really kind of capture that, you know, uh that sort of audience. Um. And, you know, I think we had like, you know, come from a a stage where like there is a ton of games that weren't free to play. You know, you had to buy and mint an N F T

• 1:00:39Speaker 02

  in order to participate and or and it costs, you know, quite a bit to for you to kind of enter and and, you know, play. So I think, you know, there's just a a bit of a shift in in terms of how games and and how builders are approaching it. Uh. But I I'd love to hear Diego's uh perspective.

• 1:00:54Speaker 03

  Yeah, yeah, absolutely. I mean, there's plenty to touch in there. Uh. To me, I agree with Carol for the most part. I think that on ramps are quite the important part. Just make this frictionless for regular players. To me, one of gamify's ma- most like biggest problems is gamify itself, right? The fact that you create uh a game that spins around a certain token and that you need to to use DeFi to participate into it. I think that that that's not necessary. Uh. The approach that we took in our end was to, why don't we create a game that sort of leverages the well, the benefits of blockchain without necessarily requiring it for you to play the game. So do it well. Well, by doing that, we achieved to some degree to create a fun and engaging experience

• 1:01:36Speaker 03

  that also has the benefits of blockchain. And that, at least as for now, has been has worked well because people are really threat uh really people really want to play games on the blockchain. The only issue that you have is that you don't have that many. And the the way to play them is to, well, to purchase tokens and participate on this strange economic loops. There's also, to me, like a change in some tendencies, like game five, let's say, a year ago was way different in the sense that there was like this notion that every aspect of the game had to be in a blockchain. Everything had to be centralized. I mean, decentralized, which I think that is not the case anymore. I think that. To achieve mass adoption, we need a game that is like a hybrid that has the aspect, even the benefits of blockchain, but that has the technology that allows it to be a fun game. Like you need to have a game that's to some degree centralized in order to create an engaging

• 1:02:21Speaker 03

  experience, because if everything is on the blockchain, there's just no way to do that and create a fun game by having like everything decentralized. You need like this sort of hybrid approach. And I think that we're seeing a tendency now where games are actually focusing on the fun aspect first and blockchain sort of second to some degree. And yeah, I think that that's one of the things that's going to drive adoption is if you want to appeal to the web two crowd, give them what they want, which is to have fun, right? And if you show them the benefits of web three, which are quite, quite substantial to begin with, they will immediately inevitably keep on using the technology. The way I sort of ambitionate to some degree is that people will be using blockchain in games without realizing that they're using blockchain in games, the same way that we don't realize many of the technologies that we use nowadays.

• 1:03:06Speaker 03

  I think that that's sort of the way to go and I certainly see that happening to some degree, although we're still have the old gamify approach, let's say, that's token based. So that's just my take, by the way, I might be wrong on this one, of course.

• 1:03:19Ryan Sean Adams?

  You're saying we don't, we don't make kind of finance the focus or the end all be all, right? It's got to be more than that.

• 1:03:26Speaker 03

  Yeah, I'd say.

• 1:03:27Ryan Sean Adams?

  I would just say we're depending on you guys to build some really cool stuff because I don't know if you noticed, but the gaming community kind of hates us right now.

• 1:03:34Speaker 03

  Absolutely.

• 1:03:35Ryan Sean Adams?

  Hates crypto, hates NFTs, thinks it's all a Ponzi scam. And it's up to you guys, the builders, to prove that we have something really fun and engaging. And I think we're seeing that in kind of the, the community, the treasure communities that's sort of stuck around and is exploring this ecosystem right now. They seem very engaged and excited, but it's up to you guys.

• 1:03:54David Hoffman?

  Diego, on that note, I think when people hear the words like web three gaming, they think Axie Infinity and they really understand it to be like, there's a you, there's a skin on top of this economic game. Actually, what is, what's the beacon game? What are you doing in the game? What are the objectives? Can you like pitch the game for us? Like, how do you play the game?

• 1:04:14Speaker 03

  So the beacon is a rogue-like RPG game that leverages the social aspect of MMOs together with NFTs, right? So the game basically spins around two core concepts. The first concept would be a solo dungeon crawler rogue-like game that's pretty much based or inspired on games like Hades or The Binding of Isaac, if you've experienced those games, like fast-paced, action-heavy, skill-required games, that use procedural generations, so that every time you enter, it's gonna be a different experience. But the idea is that players, as they play, the farther they get into these dungeons, the better or the more loot they can take home. And this loot could be sometimes NFTs, sometimes it's just cosmetic items, right? That's one of the dimensions of the game. And the second dimension of the game will be a highly social gameplay,

• 1:04:59Speaker 03

  where every player, just for the sake of existing, owns a house, a house, right? And they can decorate this house with the items that they find during their dungeon runs, right? So you have like a character, you have your house, most of the items inside the house are NFTs, and the idea is that you can invite people over and visit other players' houses, and it's pretty much having this sort of social experience, right? But besides that, we have the fact that characters are highly customizable as well, by NFTs and by different items, so players can have like their own unique looks, right? And besides the housing system and the social experience, we are planning to have like this sort of open-world kind of city that mimics the experience that most MMOs have. Like, most MMOs that you ever played had a town or a city that you needed to go to in order to interact with the core aspects of the game, such as questing and crafting and stuff like that.

• 1:05:44Speaker 03

  And it's usually that place where people hang around and just talk with each other. And we were planning to recreate this experience in our game. So we're basically just a mix between Hades and Stardew Valley that also sort of includes the social aspect of MMOs, right? And we're using NFTs to power most of this, like in the sense that you have limited items that you can share towards others and a highly competitive gameplay that we can leverage to, well, to have people competing against each other and stuff like that, right? So it's basically a game that is a game-first approach that uses the blockchain to its benefit rather than relying on the blockchain as its main source of existence, let's say as its main motive of existence. And that's what we think that will be one of the ways to go in blockchain gaming.

• 1:06:29Speaker 03

  It's just using the power of the blockchain to leverage the assets inside of a game instead of just pursuing financialization. Although you can actually add some financialization approach into it if you want to, but it comes with its risks, of course. That's like a broad uh uh explanation of the game, but I can dive deeper if you want.

• 1:06:47David Hoffman?

  No, I love that. I'm already getting excited because Rogue Likes are my like bread and butter. That's my favorite kind of like casual game to hop into. Guys, this has been just a great like overall landscape overview of the Arbitrum app layer. But I want to talk about this this last conversation before we wrap things up here, which is the PFP landscape of Arbitrum, because that's actually how I really just got like zoomed into the Arbitrum ecosystem as of recently. It's like trying to ask myself, what are the PFPs worth collecting in the Arbitrum ecosystem? And so like, Carl, I'll throw this one to you, like, what are the PFPs in the Arbitrum ecosystem? Because people definitely rock them. Can you like, kind of run us through the landscape of Arbitrum PFPs?

• 1:07:28Speaker 02

  Yeah, I mean, you already have one. One is definitely the small brain side of things. I mean, for a backdrop, you know, the kind of genesis for it, I mean, obviously, super cute monkey, very zany, just amazing, kind of pixel art. But the concept of that was, you know, it had, you know, ever kind of increasing heads, you know, as you kind of staked it. By the way, you should be tossing up Trove on here, not OpenSea.

• 1:07:55David Hoffman?

  You're showing your

• 1:07:56Speaker 02

  Saboom shake.

• 1:07:57David Hoffman?

  Your Layer 1 maxi right here.

• 1:07:59Speaker 02

  Trove, huh? Okay, I'll be right back.

• 1:08:04Speaker 02

  But, you know, you would have this kind of, you know, small brain that would, you know, grow over time. And, you know, the longer you stake it, the more IQ it would gain. And, you know, with that, though, the kind of collective world would also advance at the same time. So, I mean, it was definitely one of the first and, you know, few that kind of came to Arbitrum. And certainly, there were many that, you know, were kind of there before as well. But, you know, this is really that kind of blue chip, you know, it's the cultural icon of treasure.

• 1:08:36David Hoffman?

  Is it a blue chip? How do we know that that's a fair statement to make? Is it the blue trip of Arbitrum?

• 1:08:41Speaker 02

  Uh, I mean, I, I guess so. Look at it from maybe like a, a kind of, there's the price angle, but I think from a cultural relevance as well. Um, just in terms of, you know, kind of where it's, it's stood, uh, overall sort of volume. I don't know what that translates to in terms of hard numbers, but it's on quite a bit. Um, but certainly I think, um, you know, but, but the hope is that there are going to be many more. Um, so, you know, we, we just announced, um, another kind of, uh, and I mean, there's certainly the beacon. You know, I, I see a lot of people representing, uh, their beacon characters, uh, on, on Twitter and, and Discord and all that as well. Um, we just announced a partnership with a game called, uh, Carrero before the holidays, uh, which is effectively, uh, a Pokemon, uh, of, uh, kind of web three.

• 1:09:24Speaker 02

  And so they're building an ecosystem and, you know, they'll have, uh, you know, a, a PFP collection as well, which, um, you know, super excited for. Um, maybe I'll, I'll, I'll bump it to coin flip because I, I know that, uh, they also have one in the GMX, uh, community as well.

• 1:09:40Speaker 04

  Thank you. Daryl, thanks for that shout out. Yeah, no, um, G, GBCs are the GMX Blueberry Club, which I guess depending on if I'm talking or not, you might see on the screen.

• 1:09:50David Hoffman?

  Yeah.

• 1:09:52Speaker 04

  Was a real fun part of our community. It's actually, it, well, again, we are, we are very much, you know, a, a DeFi protocol, but, uh, you know, early in 20, earl, earl, early last year as, you know, the bear was setting in and people wanted to really focus on, you know, how they were appreciating and enjoying the community. Actually, a few can, community members came together and created, uh, GBC, which is, you know, has also grown and, you know, you'll, you'll find it all over Twitter and it's a great way for people to show their support for the protocol, but it's created this interesting community because we, we kind of in a very different way, I, I remember a part of the dialogue, it was that

• 1:10:30Speaker 04

  we just wanted to show a happy, friendly place. And that was kind of a hard thing of Arbitrum and GMX and everybody coming into our community. So, you know, GBCs are happy. They're, they sort of, you know, they, it, it just, it, it, again, I think it became a very nice way for people to just show their, their loyalty, respect, however you want to term it for this community that was being built out. And I think everybody's very proud of that. And I, I think that's one of the good things with PFPs. It doesn't need to be, you know, it, it doesn't always need to be about signaling, um, you know, status and anything else. It's just about being part of a community.

• 1:11:03David Hoffman?

  I'm loving the synergies here between DeFi, which is of course what GMX is and NFT PFPs, which is just kind of showing the case that like, it doesn't matter if you're a DeFi app, you can also have a PFP NFT as well. And I do appreciate the happy-go-lucky vibes of this of this collection. And also, if you had told me in 2017 that I would be having a podcast where we talk about blueberry profile pictures, I would have thought that crypto went off into niche territory, but turns out this is actually how we scale this out to the masses.

• 1:11:41Speaker 03

  It's interestingly enough, like one of the most uniting aspects of the whole technology. People really just say, put the PFPs of the projects that they like and they sort of identify with them. That's, yeah, I mean, it's big.

• 1:11:54Speaker 02

  Yep, we're all looking for our tribe.

• 1:11:58Speaker 03

  Absolutely.

• 1:11:59David Hoffman?

  Well, guys, this has been a fantastic exploration. And I know none of you guys are the actual Arbitrum team, but I have to raise the topic of the question of the token. You guys know anything about the token? Because they are not telling me anything. You guys got any alpha?

• 1:12:16Speaker 04

  What token?

• 1:12:17David Hoffman?

  The Arbitrum token.

• 1:12:21Speaker 03

  I wish I did. I wish I did.

• 1:12:24Speaker 04

  I'm sure it's like the first, second, third, and 100th question they get. And I don't, but you know what? I mean, jokes aside, I actually appreciate the fact that that's not their focus. It's, it really has ended up being one of the big uniting factors for building out this community. People, as you said, instead, what have people done? They've come across to Arbitrum because everybody has heard of it. And they've gone and looked into the magic community. They've looked within GMX and our extended ecosystem. They've gone into DopeX's ecosystem. You know, there's, there's all these decks that are coming across now and opening, you know, like, like Trader Joe's come across, Camelot, Swapface. I mean, it's just like, you know, and everybody's instead focusing on projects and protocols, not a token.

• 1:13:10Speaker 04

  But yes, one token.

• 1:13:11David Hoffman?

  Sounds like y'all all share that sentiment. Yeah, nevertheless, I think we are all very, very excited for what we hope to be is an eventual token drop some way, somehow, in some mechanism. I'm sure the Arbitrum team is listening right now, chuckling a little bit. So I got one last question. This one's actually for Ryan. Ryan, what is the letter that comes after D in the alphabet?

• 1:13:35Ryan Sean Adams?

  Are you talking about E, David?

• 1:13:37David Hoffman?

  Yeah, can you say it a little louder?

• 1:13:38Ryan Sean Adams?

  I'm just talking about E as a letter. Nothing to do with any PFP ecosystem. It's just the letter E. A, B, C, D, E.

• 1:13:48David Hoffman?

  Well, they're gonna love that one. Ryan, you want to close this out here?

• 1:13:50Ryan Sean Adams?

  Yeah, guys, it's been a lot of fun. Look, thanks for making crypto fun again and weird again. I feel like we got sidetracked in 2022, but the Arbitrum community is really, really delivering some cool stuff. So I want to thank all of our panelists for this. Appreciate you. And message to the Bankless Nation. It's a bear market, but it's time to explore. This is kind of the most fulfilling time. I think you can be on your crypto journey because there's a lot less noise. There's a lot more builders. The communities are much cooler. There's much more signal and less noise. So go check out the treasury ecosystem today. Well, the link in the show notes, you can just Google it. You could figure this out. Also, go play Beacon, the game.

• 1:14:30Ryan Sean Adams?

  It sounds really cool. Dungeon crawler mixed with crypto economics. Very cool. Go check out GMX as well. We'll also include in the show notes a link to some of our Arbitrum guides that we published on the Bankless newsletter. So you can get started with this, but most of the tools you're familiar with on Ethereum and other place in the ecosystem will work here. So.

• 1:14:50David Hoffman?

  But I think that the first point of Alpha I say is on treasure, use trove, not open C. That is one of the first things that I learned.

• 1:14:58Ryan Sean Adams?

  There you go. I just learned that now. So guys, we're all leveling up together. And disclaimers, of course, got to let you know that Arbitrum is risky. So is all of crypto. DeFi is as well. You could definitely lose what you put in, but we are headed west towards the frontier. It's not for everyone. We're glad you're with us on the Bankless journey. Thanks a lot.

• 1:15:20Speaker 04

  嗯 哦