102 - The Emerging Metaverse | Sam Englebardt & Richard Kim

Sam Englebardt is a co-founder and partner at Galaxy Digital, and is the founding general partner of Galaxy Interactive, which invests in next-generation interactive entertainment. He is also a content producer of film and television, working in a broad range of traditional & digital businesses. Richard Kim is a general partner at Galaxy Interactive, after a stint as COO at Galaxy Digital. These two guests are getting their hands dirty as the gaming, cultural, and technological worlds converge into the Metaverse. Trying to predict, invest, and help build this emerging phenomenon is a massive endeavor, but it’s one that we need to get right. Exploring what the Metaverse actually is, how today’s internet compares to the digital worlds of the future, and optimizing the user experience comprise the core of this discussion—but we open it to understanding the skeptics in the space, as well game economies and tokenomics. Sam and Richard expect to see a mass exodus into the Metaverse over the next couple decades… how are you going to play the Metaverse game? ------ 📣 ALTO IRA | THE CRYPTO RETIREMENT ACCOUNT https://bankless.cc/AltoIRA ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 👀 POLYGON | LAYER 2 DEFI https://bankless.cc/Polygon ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🦊 METAMASK | THE CRYPTO WALLET https://bankless.cc/metamask 💳 LEDGER | THE CRYPTO LIFE CARD https://bankless.cc/Ledger 🧙‍♂️ ALCHEMIX | SELF REPAYING LOANS https://bankless.cc/Alchemix 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants ------ Topics Covered: 0:00 Intro 5:00 Sam & Richard of Galaxy 8:23 The Year of the Metaverse 13:33 The Gaming Gateway 17:09 Skeptical Pioneers 26:21 Value vs Price 29:30 Enabling, not Escape 36:27 Building Stakes that Matter 43:51 Steak and the Sizzle 47:45 Creating Meaning in the Metaverse 55:21 Social Sandboxes & Other Theses 1:02:55 Viewer Participation 1:07:54 The Power of Emergence 1:13:48 How the Thesis Changes 1:18:40 Overhyped? Top Signals? 1:27:08 Microsoft & Decentralization 1:34:02 Closing & Disclaimers ------ Resources: Richard on Twitter https://twitter.com/galaxyRTK?s=20 Sam on Twitter https://twitter.com/samenglebardt?s=20 Galaxy Interactive’s Thesis https://www.galaxyinteractive.io/thesis Asmongold’s Rant https://youtu.be/rgg768z2GRA Metaverse Episodes Defining the Metaverse https://youtu.be/EqQiPseP_P8 Web3 Gaming 101 with Amy Wu https://youtu.be/x-3wNEahNl4 The Crypto Gaming Revolution with Arianna Simpson https://youtu.be/A_xsjqMcnCQ ----- 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://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:07Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Guys, we have a fantastic episode for you coming up on the metaverse. We cover a number of things that I think you're going to want to take away from this episode. Number one, what is the metaverse, an actual definition? Second, why today's metaverse is nothing like the metaverse in its final form? Third, why the play to earn skeptics, soft currency versus hard currency in gaming economies? Number four, how the metaverse isn't predetermined, it's emergent. The metaverse actually builds itself. Number

• 0:49Ryan Sean Adams?

  five, what's wrong today with crypto gaming and how it can be fixed? Number six, this big idea, I think the central idea of the podcast is we are embarking, humanity's embarking on a multi-decade exodus to the real world. We unpack all of this in the episode today. David, what were some of your thoughts?

• 1:07David Hoffman?

  I think my biggest enjoyment in this podcast is the fact that Richard and Sam seem to have a conclusion for what the metaverse is, and it's hard to argue with that conclusion. It's very, very easy to hop on board with it, and some of their very easy to define versions of the metaverse are some things you'll hear in this podcast, such as when you're talking about some version of the metaverse and whoever you're talking to is like, wait, wait, which reality are you talking about? Are you talking about the digital one or the real one? Like, that's how we know when the metaverse comes. And then working backwards from there, what does that mean? Because if you're going to mix up the digital world and the physical world, a lot of things need to happen where, for example, meaning

• 1:47David Hoffman?

  and purpose and some sort of emergence needs to be in the metaverse on the digital side of things. And so what does that mean? And what does that create? And what teams and what games create meaning and purpose in the metaverse in a way that's emblematic of the world that we currently live in? And the other big takeaway I had is that there's a stark difference between some of these play to earn games These early metaverse startups that we are seeing today in 2021 and 2022 versus what logically needs to happen in order to have this more holistic version of the metaverse built out. So my takeaways, Ryan, are what we're building today in crypto is probably going to be very, very different than what we're going to be building in five to 10 years. And it's really the five to 10

• 2:30David Hoffman?

  year plan that really, I think, excites me and what excites people about whatever the hell this metaverse thing is.

• 2:36Ryan Sean Adams?

  Yeah, same here. And what I like about Sam and Richard is they were here before all of the metaverse mania that we've seen, right? And so like, they were here in 2018, investing in the space, trying to figure out their thesis, you know, laying it down. There are so many projects that have spun up in the last six months that are just like jumping on the narrative without a lot of like long-term substance. And I think both Richard and Sam sort of bring this long-term perspective to the space that's needed. Once you get past all of the mania of like, you know, digital real estate and $2 billion funds pouring money into the space, what are we actually left with? And the thing to me that we're left with is if you're in the space, if you're listening to this episode, if you're exploring the metaverse today, you are so early and you also can't go

• 3:19Ryan Sean Adams?

  wrong, because this is all about humanity's exodus, its migration from the analog world into this digital world. And so no one can predict it. And if they could predict it, it wouldn't be the metaverse, right? Because the metaverse is fundamentally emergent. So, you know, that's the fun part of this is this is another episode where we're all trying to figure it out together. We get to pick the brains of Sam and Richard, who are experienced venture capitalists in the space, investors in the space, and are gamers themselves, very plugged into the media side of things, the content creation side of things. And so it's overall a really fun conversation that I know you guys will enjoy. As always, make sure you like this podcast if you're listening to it on

• 4:02Ryan Sean Adams?

  YouTube, subscribe in your local podcast feed, and also review it on Apple iTunes. Need those iTunes reviews to boost us to the top of the charts. And we will get started with the episode in just a minute. But without further ado, we want to thank the sponsors who made this episode

• 4:18David Hoffman?

  Bankless is proud to be sponsored by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum that lets you trade any token at the current market price. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. The Uniswap Grants Program is accepting applications for grants. Do you have something of value that you think you want to contribute to the Uniswap ecosystem? No matter how big or small your idea is, you can apply for a unique grant at uniswapgrant.org and help steer Uniswap in the direction that you think it should go. Thank you, Uniswap, for sponsoring Bankless.

• 5:01David Hoffman?

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• 5:45David Hoffman?

  Check out the power of Alchemix at alchemix.fi and make sure to join their extremely vibrant Discord if you want to participate in governance or have any questions about the project. Living a Bankless life requires taking control of your own private keys. Not your keys, not your crypto. That's why so many in the Bankless Nation already have their Ledger hardware wallet. But the Ledger ecosystem is much more than just a secure hardware wallet. Ledger is the combination of the Ledger hardware wallet, the Ledger Live app, and soon, the CL CryptoLife card powered by Ledger. The CL card powered by Ledger is a crypto debit card with powerful features like an instant exchange to fiat, where crypto assets are only sold at the moment that you swipe your card, and also credit from crypto collateral, where you can collateralize your crypto assets in order to get a higher credit limit. You'll be able to manage your CL card powered by Ledger

• 6:30David Hoffman?

  inside the Ledger Live app, right next to all the DeFi apps and services that you're already used to using, making the Ledger Live app your one-stop shop for all of your financial needs. Go to ledger.com, grab a Ledger, and download Ledger Live to get all of your DeFi applications all in one place.

• 6:46Ryan Sean Adams?

  Bankless Nation, we are super excited about our next guest. We're here with Sam Engelbart at Richard Kim of Galaxy Interactive. We're talking about their thesis for the metaverse. Big topic today to unwind. Sam is the co-founder and partner at Galaxy Digital. He's also the founding general partner at Galaxy Interactive, where he now works. He's a media and tech investor and content producer, who's helped create a broad range of traditional and digital businesses, and a ton of different films and television shows over the past decade. Definitely a lot of experience in the interactive space. And Richard is a general partner at Galaxy Interactive, as well, and a managing director at Galaxy Digital. He joined Galaxy Digital as their

• 7:26Ryan Sean Adams?

  chief operating officer in May 2018, before going full-time into Galaxy Interactive in December. Guys, welcome to the show. You ready to talk?

• 7:36Speaker 02

  We are ready. Glad to be here. Thanks for having us.

• 7:39Ryan Sean Adams?

  All right. You know, we're super excited to dig into this. We've touched on a few different, I guess, topics related to the metaverse, but I feel like this is sort of a metaverse episode. And actually, before we call this a metaverse episode, let me ask you guys about this term "metaverse," whether you like it or not, because I know we're going to talk a lot about like, just gaming in general, and how that's going to evolve. Maybe that's the terminology you prefer. But what do you think of this term "metaverse"? Is 2022 going to be the year of the metaverse? Thoughts on this?

• 8:12Speaker 02

  I mean, I guess I would start by saying, whether we like it or not, and regardless of what we think of it, it's here to stay.

• 8:18Ryan Sean Adams?

  Is that Zuckerberg's fault?

• 8:20Speaker 02

  It's not his fault. Things were trending in that direction, but he's certainly solidified it for us. We were just talking earlier today, and the reality is, whatever happens, metaverse, the idea of the metaverse, Meta, the company, and all the buzz around this concept, we can be certain that, at a minimum, at earnings time every quarter, we're going to be hearing, most of the big companies, certainly One and Normus Company, and a lot of others following their lead, talking about metaverse. So, it's here. I think ultimately, that's a good thing. But in terms of the word, and what we think about it, and to what extent our strategy is a metaverse strategy, you know, we end up in this conversation a lot, as you can imagine, over the last couple of years. And I feel like, and including,

• 9:05Speaker 02

  I've heard you guys on your show as well. You know, there's this need, I think, initially to define metaverse and figure out first and foremost, are we even talking about the same thing? And I think when you dig into it at all, what you realize is very few people are talking about the same thing. And it's the, you know, the ability for one person to hear the word metaverse and imagine Ready Player One and the Oasis and the things that have been made popular in the literature over the last couple of decades, most recently, but, you know, even going back historically to ancient Greece, if you think about some of the ideas philosophically, that concepts of immersive worlds have been explored. There's that version of it. And then there's, on the other end, everything that might mean to some people

• 9:48Speaker 02

  nothing more complicated than, you know, a mobile game and buying digital objects in a game. So we need to define the term and that's the first task. And then we figure out whether we're in it or soon to be.

• 10:00Speaker 03

  It's one reason we generally don't like to use the term metaverse because we don't want to spend 15 minutes talking about definitions when we could be talking about what actually matters, which is that, you know, this is a world where our digital identities have become just as real as our physical ones. And so if you think about the practical ramifications of that, they're quite wide ranging, right? And really challenge a lot of the foundations of value that traditional kind of markets people have understood, right? And started with Fortnite cosmetics and now with crypto, it's about earning a livelihood for, you know, doing the things you otherwise would have just consumed as entertainment. It's now a whole investable asset class, right? So that's what's interesting to us.

• 10:41Speaker 02

  Yeah, if you're, if what we're talking about is where do you spend your time, your money, meet your friends, build your, your life, have your status, create your identity, you know, I think we realized even a few years ago, it was true, and it's even more true today, that people are already spending the majority of their conscious time inside of digital spaces through their devices. And if you include ideas around the second and third screen and the way that we're all looking at, you know, our phones and our consoles and our PCs and everything else, we're spending more, considerably more than 100% of our conscious time at this point in digital worlds. And so if that's what we mean, maybe we're already there.

• 11:19David Hoffman?

  So if we were to play a game where we weren't allowed to use the term metaverse, but we still needed a word to or a phrase to talk about what we're going to talk about, what would be second best? What would, what else? What other word is relevant to this conversation?

• 11:30Speaker 03

  I think the concept of digital identity and value is, is really what it boils down to. I mean, Ben Thompson had what I think is the best take. I mean, he's in this bucket of, we're already in the metaverse. It's a world where particularly in a post-COVID world, a lot of the most important relationships and time and energy we spend are in interactions with people we've actually never even met physically. Right? And I think it's useful to think not just how digital worlds are the equivalent of physical ones, but the types of interactions that are only possible in purely digital realms, you know, especially in this world where you can zoom in with hyper specificity to people who share the

• 12:12Speaker 03

  same interests and values that you do, form a community around that, just like you guys have done with thankless Dow, right? And really have that be a long-term, sustainable meta game. I think that's the most fascinating part. And then when you unpack the implications of, of a lot of that, it's about this intersection of markets, content, tech, that all come together in really interesting ways to enable things that weren't possible before.

• 12:36Ryan Sean Adams?

  I think a lot of this podcast is going to be about games, but high level, do you see games as kind of the gateway to the metaverse? Is this how we're going to experience the metaverse primarily? Cause I know there's a big emphasis in your investment, your fund, your thesis on gaming. Is that, is that going to be the metaverse for people?

• 12:53Speaker 02

  I mean, I think gaming is an enormously important part of this conversation and it is, you know, the tip of the spear for where so many of the behaviors that are going to matter in the metaverse conversation and just in people's lives generally going forward. The generations younger than, than me, and I think forever going forward are learning their behavior and are building their lives inside of games primarily. And so, you know, if what we think the metaverse is, or a big part of what the metaverse is, is immersive digital worlds, then what better place than the, than the game worlds that are are already built and that are being built where people are spending their time. And you know, I think the thing Richard and I realized is the for us, and we do have such a heavy focus on gaming in our business,

• 13:38Speaker 02

  but not because we just want to be or believe the opportunity is in games. But what we've recognized is two massive growth trends that are converging, right? And so it's immersive digital worlds led by games with a real sea change in finance and fintech and trading technologies and markets and all of the ways that people are monetizing their experiences and their time. And so for us, games matter, but it's also really the intersection of games and markets with all this new technology. And yeah, I think if you start talking about things like digital objects and the other stuff that we explore, especially as you unpack the web three piece of all this, it's really like no better place than games where people have been comfortable for a very long time with the idea that digital objects have value.

• 14:23Speaker 02

  And they've already been making markets inside of those worlds and building economies, many of which have grown to be enormous, you know, in size at this point. And for a lot of people, they've been spending a lot of time in those worlds.

• 14:34Speaker 03

  I think the types of games that are going to do well in this kind of metaverse world, and by that I mean, you know, fully open economy. Cause you know, they just look on the app store, look at the top charts today. Take random mobile game X and put a token on it. Is that going to work? I think in 99.99% of cases, the answer is no, right? So it's not as simple as taking an existing popular game and slapping a token on it. I think the things that are going to do really well are those that are specifically designed to work well from a long-term, sustainable economic standpoint with fully open economies, right? And so I think the most lasting part of gaming and game design is going to be

• 15:16Speaker 03

  in a lot of the early experimentation we saw around open world economies. It's quite interesting to me, you know, when I talk to a lot of the pioneers in that space, they're the ones who are actually the most skeptical blockchain and play to earn, not because they don't believe in the potential of earning value for your time, but they just know how complicated it is, you know, short-term speculative fervor aside, to build a lasting and sustainable kind of token economy that's fully open. So I think learning a lot of the learnings from the last two decades and applying that to play to earn game design is going to be a really interesting space.

• 15:51Ryan Sean Adams?

  Wait, can we dig into that for one second? Because you hit on something that I think is interesting. So you're saying like the early pioneers of digital worlds who created digital economies before there was a thing called Web 3 and before there was a blockchain that had been invented. They are the most skeptical of the sustainability of this Web 3 thing. Can you talk about some of their concerns? Like, why are they, why are they so skeptical?

• 16:18Speaker 03

  Yeah, I think a few points come up pretty regularly. One is this general theme that what we should be optimizing for with this new primitive is not scarcity, but abundance. You know, so many of the initial play to earn kind of game loops are some form of buy an NFT, use that as access and then build, breed, all these things that kind of flow from this exclusive club to start off with, right? When there's a whole sample space of design out there of you should really be using tokens as an incentive to encourage user generated content and work not to exclude your community

• 16:58Speaker 03

  in the form of like 1,000 or 10,000 avatar project, but actually give people tokens for their time, right? And then over that course of earning, you produce such a sustainable volume of user generated content that that's like the insular economic loop that keeps the thing going. I think there's a lot of things that flow from that. Like, we could have a whole discussion about land, right? Like, in things like Ultima Online, if you talk to, you know, one of our portfolio companies, Ralph Koster, about the learnings of land and Ultima, you know, I think they're almost universally skeptical that land is a good idea. And you see so many of these early play to earn projects focusing on land as a heuristic.

• 17:40Speaker 03

  So I think we're going to go through this process where a lot of the lessons over the last 20 years get re-learned in the crypto space. It's hard to tell to date because so much of the beta in the space has been so strong. You say Metaverse or play to earn on anything and you see companies raising $50 million When, you know, literally six to 12 months ago, the same company was on our list of potential write offs. Right. Couple of cases like that. And so I think over time, it's going to take a few years to play out. We're going to start to see some of these things reveal themselves.

• 18:16Ryan Sean Adams?

  That's so fascinating to me. I think we could do a future bankless podcast just on that subject of what like, you know, the OG game designers who created some of these economies, like the Yvonne lines of the world and World of Warcrafts. And you have Diablo's and all of these, what they think of this whole crypto economy. And you're saying that they're like actually anti land, which is just blowing my mind and fascinating to me because like my model for the metaverse is kind of like, it's just like real life, only digital. And we have this scarce thing called land in real life. And so why not make that digital? But it strikes me that that might be skeumorphic, right? That might be sort of like, oh, you're just importing the old world into this,

• 18:56Ryan Sean Adams?

  into this new paradigm, rather than seeing what the, what the, the new technology can actually bring about. But just, can you help me there, Richard? Why, why anti digital like land?

• 19:08Speaker 03

  I'd really encourage people to look at Asmongold's recent rant post Square Enix launching their NFT strategy. Because I think, and try to watch that, not with a, you're wrong about this or that, but just listen. Like refrain from trying to explain why he's misguided or whatever. Just listen. And I think what you hear when you listen to that, Asmongold, for those who don't know, is a pretty, pretty well-known Twitch streamer who's played, is probably the number one World of Warcraft Twitch streamer. Right? So he was talking about, you know, how a lot of NFT and blockchain gaming is, it's essentially microtransaction squared, right? There's a lot of PTSD from decades long excessive monetization

• 19:54Speaker 03

  that really takes the gamer out of the heart of the immersive experience they wanted. Right? I'm personally obsessed playing Breath of the Wild right now, which is not a new game. The reason I love it is there's no microtransactions and it's completely transporting. And yet it hits all of the themes that are in vogue. Again, multiplayer social gaming today, like open world crafting, you know, all these things in the context of a narrative structure that's quite inspiring and like mythologically grounded, right? And so, you know, when I see kind of videos like that, my mind immediately goes to that the next wave of play to earn gaming that's going to be really successful are the games that give players value for their time without ever asking them to buy anything, right?

• 20:38Speaker 03

  They're going to be airdropped value for playing the game.

• 20:41Speaker 02

  Well, and it feels like playing a game. I mean, without over complicating it, I think it's like, it doesn't take a deep study to figure out very quickly that if you go on and play a blockchain game, a lot of the skills and a lot of the experience and the things that you're being asked to do and that things that will determine your success. You may, if you're a gamer that's been playing World of Warcraft or other games or First Person Shooter, or any of the things that like have defined you as a gamer and the areas in which you've built your skills, you're being asked to do and to learn entirely new things and to understand things that may not be in your vocabulary or in your skill set at all. Like, how many of these traditional gamers that have been playing games for decades now come to a blockchain game, understanding yield curves and understanding how to be a trader

• 21:26Speaker 02

  and understanding all of those things that really determine success in a lot of blockchain games? And so, like, I think it's not surprising at all that people come to those games and actually want to play a great game and want to continue to do the things that they have learned how to do in their experiences gamers.

• 21:41Speaker 03

  Yeah, I mean, I'll tell you my mental model for how I think the next wave of real games is going to work is, you know, you have this concept in gaming today of like soft currencies and hard currencies, right? Soft currencies are the things that you earn playing the game that allow you to do various things in game, right? It's like a earn, it's the equivalent of SLP in Axialand, right? And then you have a hard currency, which today is like the equivalent of gems that allow you things like super cosmetics and other things, but you have to pay money for, you can't earn, right? So what is the equivalent of that in play to earn space? Well, Soft currencies are interesting because they're these things that help game designers balance supply and demand. And the objective of a soft currency should not be to have this

• 22:26Speaker 03

  thing go up. Like you sometimes see Axie analyses where it's like, oh, SLP is inflating like crazy and the price is going down and it's a disaster. I personally don't view it that way. Like I don't think SLP was ever meant to go up. It was meant to be this plug to like bridge supply and demand. And if you think about like an RPG or any kind of game mechanic, it's a very useful thing for a game designer to have a fungible soft currency now, where if I want to shortcut playing 1,000 hours in the game, I can do that by buying the equivalent of SLP in this game. And it's fine, right? That market exists. Like there's many progression based in-app purchases and mobile is a very big thing. And it'll be great. I think the really exciting thing is you airdrop

• 23:09Speaker 03

  soft currency to players for their time, but then have this opt-in hard currency, the equivalent of AXS to go back to Axie, that can redistribute the economic rewards through kind of shares of transaction fees or otherwise back to players. And that, if I'm a gamer and I don't ever want to do another microtransaction again, like a truly free-to-play system where I'm earning value for my time and don't have to opt into that hard currency, but I can, true believer, and I want equity-like upside in the growth of the ecosystem. I think that's really interesting, right? So I looked at the top 50 blockchain gaming projects recently, I forgot who published it. And like, frankly, it was a chore even looking through that because I just knew what

• 23:52Speaker 03

  the core loop of all these things is going to be. It's either like some clone of Axie, it's like some buy my avatar and I'll promise to create some game that may or may not be delivered. It's like all these things, they're like three blockchain games today, right? And we're much more excited about the opposite, which is like real game designers who are thinking about how can we incorporate fungibility into our token and economic model in ways that give players value for their time.

• 24:18Speaker 02

  And game designers that are going to build a game or have a shot that people are going to be playing 10 and 20 years into the future.

• 24:24Ryan Sean Adams?

  This is so interesting. Like, the idea that you were saying, Richard, is kind of like this idea of like, there are some people who have more money than time and some people have more time than money, right? And there's this separation between a hard currency and a soft currency between almost like labor and capital that you're getting in. But like, you have to have the balance, right? It's like the Thanos thing, all things in perfect balance. Like, you can't have too much capital invading. You can't have, you know, too much labor without capital. But I also wonder if there's some sort of a, you know, crypto loves its trilemmas, some sort of, you know, trilemma here that might prevent this world from coming true. Because once we have that thing that you said was important earlier called an open economy, then everything just suddenly gets priced, right? Like, everything has a market.

• 25:08Ryan Sean Adams?

  Like, do you think there are ways around that? You know, people are going to speculate on SLP. And that, like, that's why SLP in the Axie game, it was supposed to be soft currency, but that's why it's gone up. And if you want to have an open economy, then it has to plug into DeFi and has to be part of this whole speculative game. And then, like, you kind of get what we have right now. What are your thoughts on that? Is there some sort of impossibility, trilemma that we're hitting up against?

• 25:33Speaker 03

  I think there is. Like, you know, I think there's a fundamental tension between reputation-based currencies that you can only earn by doing things, and they can earn real status because of the proof of work that goes into earning them, versus something you can just buy and say, I have the same status. Now, I've said that in the past, and I've had mobile game designers come up to me and be like, you're wrong. You know, here's why you're wrong. Because like, you know, we sell this thing as IAP, and it costs just as much status as someone who's earned it. But, you know, I think particularly in a crypto world where you can really tell who's put in the proof of work versus just bought something, I think it's going to really detract from the long-term value accretion that goes into virtual goods that you can only earn, right? Or find randomly. So, yeah, I do think there is that

• 26:17Speaker 03

  tension. And there's a lot of tensions in any kind of currency whose value is driven by engagement, right? Like, I think we can even talk about social tokens as an example, right? Like, you often hear- The social token paradox of there's a tension between the need to expand your your token community versus exclusivity, right? And how do you balance those two things? I think it's the same for any kind of virtual good or token that plays on in the status realm. And I don't know how that tension kind of sustains itself in the long term.

• 26:52David Hoffman?

  One of the things I really enjoyed about learning about Galaxy Interactive is you guys call yourself a thesis driven investors. And you know, Bankless, we like to call ourselves a thesis driven media company. So we have some alignment there. And I think another thing that we align on is just overall long term thinking, rather than just, you know, cloning Axie and, you know, reskinning it with some new loop. You guys are really thinking deeply about what it means to actually have a successful metaverse, successful virtual worlds. And there's some things on in your guys' literature that really stood out to me that I want to unpack with you guys. The first one is on your website, you guys say that you believe in the power of digital playgrounds to foster a healthy sense of community, place and purpose, a means of

• 27:34David Hoffman?

  enablement, not merely escape. And I really like that last line, enablement, not merely escape. How will, in your guys' minds, how will the metaverse enable people? And is it a good thing that we are also depriving people's way to escape, when so many sectors of the gaming industry is like, kind of optimizing for escapism?

• 27:55Speaker 02

  Yeah. I mean, I think we should both comment on it because I think we have different ideas and angles. But I mean, I think of when I think about enablement, so much of this is first imagining and understanding these worlds as being proactive places that people are building, right? And so if you're building your identity and you're building the content that you find inside of it, and you're able to design a life for yourself, I mean, obviously, to the extent you're earning, you're living inside of these worlds, that's one very important part of this conversation. But likewise, just the ability to really, this way predates metaverse, right? I mean, just user generated content in the first place. And when you imagine persistent virtual worlds that people are building, whether they go all the way to the extreme version of metaverse that some people are imagining.

• 28:38Speaker 02

  We've already gone in the direction of people being able to realize the vision for themselves in their lives inside of these worlds. And that's very, very different if you think about the history of gaming, right? And, and I mean, gaming in the evolution of media, obviously, we, you know, even 20, 30, 40 years ago, gaming was already far more lean forward than, you know, television before it and movies before it. But even in the last few years, the progression we've made towards gaming, not just being leaning forward and interactive, but actually a place where you impose your will and your creativity into a world for others on a permanent basis. That we think is an enormously empowering, enabling idea.

• 29:18Speaker 02

  And then as this space grows, the other thing we're starting to see are just the best practices from these game worlds that are being built, carry out into other aspects of people's lives. And again, I think we talk in other places about just the gamification of the world more broadly. And that is, we hope, and to the extent we have an opportunity to influence the direction these things go in, we think it's really an opportunity to take those best practices from games and help people apply them to their lives more broadly.

• 29:49Speaker 03

  Yeah, I think my perspective on this is it's really colored by my own experiences with my son. I tell this story all the time of, you know, we're investors in the sandbox. And I, a couple of months ago, he plays Minecraft for three hours a day. So I was like, Charlie, why are you wasting your time in Minecraft? You could be earning sand tokens as a creator.

• 30:13Speaker 03

  Like, I literally forced him to do it.

• 30:15Ryan Sean Adams?

  You're trying to crypto pill your son here?

• 30:18Speaker 03

  Yeah, and he built some pretty cool stuff in there. And then after a while, he just, he wasn't using it anymore. And I said, Charlie, why, why aren't you using the sandbox anymore? He's like, it's really, really simple. The sandbox doesn't have a concept of redstone yet. Redstone is the block that is essentially electricity in Minecraft. Like you can read books about redstone. I was just mind blown when I actually looked into this. And I think one of the things that makes Minecraft so popular, it's like digital Lego blocks, right? I have this imagination of the world. It's like, kind of like, what's in my mind? I want to just like, play without even having a plan. That's the other thing that was just mind blowing to me. One time, I went with him to his friend's house, and so you have four 11 year olds. They're like, hey, let's go play Minecraft together.

• 31:02Speaker 03

  You actually watched them play. I was just entranced watching this for an hour. No plan whatsoever, and somehow, the most beautiful order emerged from total chaos. Like, from, literally, like, killing, like, the sheep and, like, cutting down trees to, like, one of those beautiful worlds with, like, no coordination. It's just kids expressing themselves, right? And I think somewhere along the way, we get jaded in life, and especially, like, the crypto audience. Everything becomes about money, and it's like, why would you not earn value for your time? And to him, it was like the exact opposite. It's like, why, why would I want to work if I just want to play? Like, and that's not play, right? So, how do we get to this point of play in virtual world, which it's as seamless as,

• 31:44Speaker 03

  you know, Alex Danko has this great line, like, "Build a jungle gym, not a tightrope." I think so many, like, play to earn economies, they feel like work to earn, or like, walking on a tightrope. It's like, why am I doing this? And it's just this visceral, like, oh, feeling, right? And I think the moment we get emotionally closer to, like, that jungle gym, where, where, like, we just hang out with our friends, and that kind of social space is just as real as, like, the things we were doing if we were all hanging out and having beers right now. Like, I believe in that world because I think it can teach us something about ourselves, that we don't get to capture every day, given our physical limitations. And that's the type of stuff that gets me excited.

• 32:24Speaker 02

  I mean, by the way, I'm listening to Richard say all this, and I've heard it, obviously, it's a topic we discuss a lot, but, he hasn't been to Burning Man yet, right? And what I love about this conversation is, like, if you, and I don't know if you guys have, but, you can talk about playing games and game worlds for kids and all the rest of it, but, it just doesn't have to be only an immersive digital world. It can also be in physical worlds and in real life, and you go to a place like that and you realize that, like, a small number of people in events like Burning Man and the related events thrown around the world. And that whole trend, again, I think, is growing as a result of so many people coming out of Games or feeling empowered by the gaming experiences they had when they were younger, or just wanting to relive them or reinvent them. And when you go to a place like that, that is, for all intents and purposes,

• 33:09Speaker 02

  a fantasy land for a week each year, where the only thing for you to do there is play and create and share these experiences and like visceral joy. The benefits that come from allowing yourself as an adult, the opportunities to do that are so tremendous in terms of how we engage with other people in our lives and what we end up building and bringing back to the world. And so like that, I think if we are creating as a result of the gamification of everything in the world and the way that things are going, I think it bodes very well for what we're capable of as a, you know, as a species going forward.

• 33:44David Hoffman?

  There's a number of topics that we're dancing around and I want to circle in on one here. I was actually talking to Jiho from Axie just yesterday about a lot of the mistakes that many play to earn metaverse games make. And he talked about how one of the mistakes that they make is they just try to just make the fun, most fun game possible and slap some tokens on it. We've talked a little bit about this, but what really gets really interesting is not just games that serve you dopamine on a platter, but serve you also what we've been talking about, like, you know, meaning and purpose. And he thinks that the future of many of these metaverse games is not to just be super fun, but to actually emulate the real world so that you can actually find meaning and purpose. And one of the, I think, reasons why Eve Online was such a successful game

• 34:28David Hoffman?

  is because there's such a strong component of loss in Eve Online. You can put a ton of energy, a ton of, you know, blood, sweat and tears into building out your resources and collecting your instruments, just to have it just be like, you know, looted by a bunch of pirates and then all of your labor just goes out the door. And so one of the lines that you guys have on your website is that you believe that the virtual communities, marketplaces and experiences will cause people us to revisit long-held assumptions around the meaning of real. So when you guys are looking at the games being played and things that you are investing in, how are you thinking about what is real? And then how will the metaverse come to redefine what we think is real?

• 35:07Speaker 03

  My colleague, Michael Fan, actually had the best definition of the metaverse I've come across,

• 35:13Speaker 03

  which is, you know, you've hit the metaverse when you have to ask the question, wait, which reality?

• 35:21Speaker 03

  Yeah, and I think I think that's very relevant to the question you just asked, because one of the things we haven't seen yet is a play to earn or a virtual experience that, you know, has real world societal impact. And through our actions in those purely digital realms, they have real world consequences. And so, you know, where where does one end and the other begin? I think there's much more room for that type of experience. You know, we were just this past weekend, I don't know if you can say the name, but you know, we were brainstorming with, you know, very large organization with a ton of societal impact and thinking about how token economies could potentially instigate a wider community dedicated towards these things that actually matter. And I think there's tremendous opportunity

• 36:04Speaker 03

  for that, because it goes back to like, the whole saying, you know, like, I think it's Munger saying, you know, play stupid games, win stupid prizes. And I feel like there's a lot of stupid games and stupid prizes right now. And they get obfuscated in, you know, like staking token economics and like the third omphork type of discussions. But all these things ultimately are like short term distractions, in my opinion, to like making a real impact, whether emotional relatedness, or some charitable or social impact cause, right? And I think a lot of these primitives that we're now experimenting with through DAOs, through NFTs, through play to earn, they're eventually going to find their analog and things that actually matter. And I think people are going to be tremendously proud of what they do in these digital realms and the impact it has, right?

• 36:49Speaker 03

  Like Constitution DAO is like a foreshadowing of like, the many, many things to come in the space.

• 36:54Speaker 02

  I mean, this in some ways wraps us back around to your first question and how we started this conversation, because like, when you ask about is Metaverse here to stay? Or what's the importance of this? You know, to put a cap on what Richard just said, it's it's when the world decides, as they have now, that games matter. I mean, we have an amazing day today in the game space with the, you know, the acquisition of Activision by Microsoft, largest gaming M and A deal ever by lot. You know, when the world has decided that games matter, then the things that games can do start to matter too. And people put a much finer eye towards what's possible with these games. And they don't matter. And very rarely do we ultimately decide that things matter just purely as entertainment when they get to the size that the gaming economies have become.

• 37:38Speaker 03

  Yeah, and I think one of the things when people look at this space with a primarily financial lens and they look at, you know, these NFT projects and other things trading at crazy values, they really struggle to understand it. And the thing I always explain is what Web 3 is enabled is it's allowed the things that previously could only be consumed as entertainment, i.e. were ephemeral, to be captured in persistent form. So like the, you know, consumption is now an investment. And the implications of that from a consumer TAM standpoint are just massive, right? Because think about whether it's World of Warcraft. So it started in games, but it's not limited to games. There's all sorts of things that consumers have affinity for, that they could only, you know, go to a concert or buy a

• 38:20Speaker 03

  virtual good, like these things that were consumption before, they're now potentially investable because of the fungibility, tradability, et cetera, that Web 3 brings. And what's interesting about that is that it allows communities to form with an incentive structure built in, right? Like if you imagine a chart of like the market cap of a token on the Y axis and the engagement value on the X axis. Like in the old world, like I get asked this question, like, well, why can't you just use dollars? Why do you need a token? Right? So if you use dollars in, say, a game, that chart, if you would applaud it, would be something like a straight line that starts from the origin and extends out diagonally. So if you've built up a lot of actual engagement in your game, your kind of currency or your

• 39:04Speaker 03

  GMV should be quite high. Like the Fortnite skins is a good example of this, right? But in the early part of that curve, there's like no engagement, right? There's potential engagement, but if there's no actual engagement. The interesting thing about tokens is that that line is no longer a kind of diagonal line. It's like a horizontal line, where irrespective of actual engagement, the market has assigned some price to this token, right? And what's interesting is if you think about the area under the curve, that horizontal line, and split it into potential engagement value versus actual engagement value, it, you know, potential engagement value is the vast majority of what's under the curve today for play to earn gaming, but also all sorts of causes. But that's not a bad thing. Why?

• 39:47Speaker 03

  Because you've essentially allowed people to stake the things they think they care about, and then over time, turn that perception into reality, right? So I think that as a mechanic is something that has massive TAM potential across all sorts of causes that matter. And I'm really excited to see those causes materialize.

• 40:06Ryan Sean Adams?

  Yeah, this mechanic that you mentioned, this is really what we've seen in crypto since the beginning, right? It's like, do you remember the days where they used to call Bitcoin magic internet money? We don't see that, we don't see that meme very often anymore. And that's because like at the stage in the, it became like institutions are buying. And if Paul Tudor Jones is buying like Bitcoin, is it really magic internet money? Or is it just money? Right? And so like, part of this crypto journey, at least for me personally, has been somewhat surreal. And I think many, many people will cross the chasm from like, what you think is just a game to suddenly something becoming real. Like David and I, and you guys probably too, every day, we log into the crypto game.

• 40:49Ryan Sean Adams?

  And like, we're just playing, but it's, but it's also real life. Like this weird internet money thing. Go like, talk to your parents about it, right? They think what you're doing is strange and bizarre, but like, it's now work and it's play and it's a video game, maybe, but it's also real life. I think that this thing will happen to an entire generation until like, all of humanity, like the metaverse becomes the thing that is real. That's like, that's what we do.

• 41:19Speaker 02

  I mean, it sure makes it harder to refute the idea that we're living inside of a simulation, right?

• 41:23Ryan Sean Adams?

  Yeah, well, don't, don't get me started.

• 41:25Speaker 02

  The more of these things happening, the little, the little, you know, blips in the matrix that we're starting to see. But I mean, for sure. And I think of so many things as I hear both of you guys talk about this stuff. And it's, you know, we've been saying for a very long time, there's been this idea of selling the sizzle and not the steak, right? And I mean, I think to some extent, what crypto has done is enable you to sell the sizzle at scale, you know, throughout the entire cooking process. And that's important. And much more importantly, I think you nailed it though. I think we're getting a little taste of this game that is our lives for sure. And I think the more that you drill into that, you realize that we're all playing a game and we're sort of, you know, betting

• 42:07Speaker 02

  our lives every day on the decisions that we make and the things that we do that we're playing the game correctly.

• 42:12Ryan Sean Adams?

  Yeah.

• 42:13Speaker 02

  And now we've been able to put markets around it.

• 42:15Speaker 03

  One of the most challenging things is balancing the tension between like trading and short-term speculative motivations versus being more of a builder and participant. Like, I've been thinking a lot about wanting to spend my time in the causes with large areas under the curve. Like, it's okay for a lot of the value today to be potential engagement, but in a world where... the answer to that has to be a world where that value under the curve is real and meaningful, right? And I think my issue with, just to use one example, a lot of, say, profile pick project communities, is you hear this word "community" a lot. You talk about shared interests and values, but as I apply my, like, mental framing of, okay,

• 43:00Speaker 03

  what's the area under the curve of, you know, these profile pick communities, you know, in a success scenario? I just, I struggle to get excited about why that's big. And I think a lot of it is justification for short-term speculative behavior on, of obviously, like, talking your own book a bit. And I think if there were less talk about trading and more talk about, you know, spending value and spending time and energy in the projects that actually make a difference, and just forgetting about selling entirely. You know, I just turned 36. I wrote an article on my blog about how I wish I could go back and tell my 18-year-old self, "Forget about selling. Forget about the zero-sum mentality, you know,

• 43:41Speaker 03

  for your mental health if nothing else, and just focus on what projects do you want to devote your time to." I think that's ultimately a much more healthy way of approaching the space, and a long-term, sustainable way of approaching the space, than getting caught up in the high buy-in, "Come join our cult" type of trading that you see today.

• 43:59Ryan Sean Adams?

  Well said, and I too have bull market fatigue, especially nowadays.

• 44:05David Hoffman?

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• 44:48David Hoffman?

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• 45:33David Hoffman?

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• 46:17David Hoffman?

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• 46:36David Hoffman?

  The last of the overarching theses that I've been able to pull out from what you guys think is this concept of meaning, which we've definitely been talking about, but I want to go straight for it right now. Say there's a team trying to build some sort of game, some sort of component of the metaverse, and they are looking to raise funds from Galaxy Interactive. You guys say that you guys are looking to back teams creating meaning in the metaverse. How does one create meaning in the metaverse?

• 47:01Speaker 02

  I mean, like, I think it's a difficult thing to answer, and the truth is, that's what we aspire to do, and we also end up backing a lot of companies that are just building great games. And I think we have to do that right now at this stage in the development of this industry. But we aspire to find the ones that are going to build something that people care about. And I think a lot of it has to do with what are the skills that people are learning in these worlds, and what are they going to carry through into the things that they build. I don't want to sound like a broken record, but it comes back a lot to user-generated content and a lot to self-expression. I think that's ultimately, at this moment in time, the best opportunity for people to make something that matters. If they don't have the tools to put their mark on a world, then it's going

• 47:44Speaker 02

  to be very hard for them to have an impact at all. And so that's where a lot of the sandbox games that we back come in. And again, I think we are, hopefully by inspiring people to build games and enabling them to do it with the tools that a lot of our companies are creating, their own search for meaning, and I do believe it's universal amongst human beings ultimately to search out meaning and to put their mark on things. And so at this stage, we're really largely building the infrastructure to enable them to do that, as opposed to, I'd be kidding you if I said, look at our portfolio companies, and they're, you know, they're spilling out with deep philosophical meaning and answers to the questions of life and the world, like, we're not there yet. But, but the tools that are going to

• 48:25Speaker 02

  enable people to express themselves, just like the printing press enabled people to write, and computers and the web enabled people like Richard to build a blog and share his thoughts and ideas, I think that's what the games that are being made today are going to allow people to do.

• 48:39Speaker 03

  I think a lot about, like, what loops are internally consistent and stable. So, like, I go back to, you know, A social token community called RNG, like before FWB and all these things. And I learned a lot from the experience. You know, I had this idea of, well, if you got a Discord together and you put a token on it, like, can't you like boost engagement, retention, like 100 acts and don't all the rules go out the door? And I quickly discovered that the answer to that was no, because you still need a community of shared interests and values. And like, one of my favorite things as part of that was some of the self sustaining internal loops we created there, where we had this token, for example, and we'd host these creative challenges. I think you guys sort of do this too in Bankless now, where like we would ask artists to create NFTs on a theme.

• 49:24Speaker 03

  And then the community, so the community would create the NFTs, the community would curate the NFTs in terms of like the top three, and then the top three would get minted and then sold back to the community in the native token, right? Like, I think that's a really cool thing. I think there's a tremendous amount of meaning and value you get from building these self sustaining loops. I think a lot of the fatigue in the space you see comes from feeling like you're participating in Ponzi's, because for anything to be sustainable, you need like the the next sucker to come in and buy it, right? So, you know, in terms of, again, where I want to spend my time, it's less on the stuff that, you know, requires new fiat inflows to work and more on the, how do we get a bunch of people who care about some cause to create these internally self sustaining loops?

• 50:07Speaker 03

  Where in success, this thing gets massive and it's long term sustainable, right?

• 50:14Ryan Sean Adams?

  I do think this is a good point that we're, you know, brushing upon. And again, we're not turning this into a philosophy podcast. I'm sure there's a philosopher out there that has commented on it, but it strikes me that in all of my metaverse or interactive experiences, the times and the places where I found the most meaning have been with other people. It's been a part of engaging in some sort of community, like the social element and aligned people playing long term games together is where at least I found a ton of the meaning in this space, right? And that's why it's like, I would encourage those that are listening to go and seek out those types of communities, right? I mean, you guys were talking about, there's so many different get rich quick, you know, speculation type communities out there.

• 50:55Ryan Sean Adams?

  But there are some incredible projects that are building these insanely incredible aligned communities that are here for the long run, right? Not the tourists, these are the settlers. And I would encourage anyone listening to this to go seek out those communities. And when you find one, plug in deeply because magic things will happen and like play the long game there too, right? It's like, it's not going to happen in a week, you know, token price isn't going to 10x in the next two months, but like magic things will happen. And I found purpose there too.

• 51:28Speaker 02

  I mean, Ryan, that's such an important point because if you've spent any time in these worlds, and whether they're 2D worlds or 3D or VR, it's, I mean, Mark Zuckerberg's getting so much shit for, you know, putting on the headset and his talk and the idea of saying, I'm going to build these worlds and, you know, and looking like he's doing something, you know, inactivity that's ultimately so isolating. But people forget that on the inside of that headset and inside the screen, for everything else you want to say, like, he's having, and everybody that has had a really immersive digital experience like that, a digital social experience like that, understands that there really is a feeling when you get that immersion right and you're in a

• 52:10Speaker 02

  shared social, like, deep immersive experience, that you are bridging enormous physical gaps to connect with people that you might otherwise never meet and never see. And likewise, for a lot of people who can be somebody that they've never been comfortable being in physical space, right? There isn't like such an important unlock that happens for so many people that where they have courage that they didn't think that they could have, where they have an opportunity, a sense of humor that they never had before. Like, all of these things are tools to self-actualize and realize things that you may just not be equipped to experience if you're just meant to walk up to random people on a street or at a bar or these things. And so it's all really empowering

• 52:55Speaker 02

  stuff. It comes with its dark side. And I think you can't be in this space and building these things without being conscious of the challenges that come when you create worlds like this for people or participate in it. But ultimately, the opportunity to empower people in a way that they might not otherwise have in the physical world is really important.

• 53:15Ryan Sean Adams?

  Absolutely. All right, guys, let's zone in on a few things now because we're all looking at how to evaluate communities and opportunities in this space. And you guys have a thesis that you put out, I believe, like 18 months ago or so, maybe a little bit longer. And I'm curious to dig into some of the themes of that thesis, both in what they originally were when you started on this journey and how they've evolved, how they've changed. A few of them, I'll list, there were seven or eight different pieces of this. Social sandboxes, like the ability to design your own experience. Viewer participation, so users creating the games, the interactions themselves. Interactive tech, felt like kind of a VR type play. Mobile gaming, you still thought mobile gaming at the time would be huge.

• 53:58Ryan Sean Adams?

  The creator economy, so this is the idea of creators kind of remixing and building things. Gaming becoming a cultural movement, right? Like gaming as like the new Hollywood is maybe how I think about it. Synthetic media, so these new forms of media with like AI. And then, of course, Web three and open finance, this concept of squad wealth, which is maybe a foundation layer to all of these things. But so let's touch on a few of those. And one that you mentioned a few times throughout the course of this episode is this idea of sandboxes and maybe social sandboxes. Could you touch on that thesis? And then some of the other macro trends where you've been right, where you've been wrong, you can just pick a few of these out for us.

• 54:37Speaker 03

  Yeah. I think one of the interesting things is to, so we put this document out in the third quarter of 2020, which isn't that long ago, but these were written with a decidedly, you know, Web two hat on. Crypto and blockchain didn't dominate every one of these things. And what's been interesting is to think about, particularly over the last six months, how Web three really accelerates adoption of these things in meaningful ways. So let's just start with the sandbox side, right? So we've seen this kind of decade-long trend towards, you know, game design evolving from a work of intentional creation to one that, you know, is more individual to, you know, how users want to play, like my Minecraft is the example here, but you know, you can also point to Fortnite Creative like GTA Online.

• 55:22Speaker 03

  There's many examples of this and you know, some of the biggest titles today started out as like mods of, you know, Starcraft and other games. And so, you know, when I look at things like loot, for example, take, take something that's like a pure UGC, user generated content thing, or a CCO project like Toads, for example. I'm generally pretty skeptical that any of these things are going to produce like the equivalent of the next Picasso, because you need this good balance between kind of top-down narrative and a framing, really like a sandbox for people to go play, like the equivalent of all those blocks in Minecraft. And if it's a, hey, guys, go build something interesting. Here's 10 words. Like, I don't think you get there, right?

• 56:05Speaker 03

  So I think it's a space where traditional game developers who are thinking about the promise of token economies can potentially do some really massive things. Like, we have a few in our portfolio that, you know, we highlighted in that deck as being exciting, like build a rocket boy. So here you have, you know, like Leslie Benzi who created Grand Theft Auto, which is now this like, it's produced over like nearly $20 billion in lifetime revenues, right? And he's building this world that combines the kind of seven-part epic narrative, really fantastic AAA gameplay, you know, with this world where there is this sandbox environment, right? For people to take a lot of the lore and the assets in that title and express themselves by creating their own games with that, right?

• 56:49Speaker 03

  You know, I think those types of UGC environments are going to do better than kind of pure play. Go build something interesting. And the potential for tokens then to capitalize on that as like a monetization mechanic to incentivize creators to do interesting things. I think that is one of the kind of core sustaining primitives behind token economies, right? In contrast to, uh, let, let me turn my virtual economy into a fun thing, like, because that, that doesn't work 99.9% of the time, as I've said, because of inflation issues, right? Everyone wants to sell their famous, like, to use Vitalik's word, sword in World of Warcraft. But if you've suddenly made all swords tradable, like, the price is going to tend towards zero and no one's going to be happy in that world.

• 57:30Speaker 03

  So like, what is the buy-side demand for this fungible token? A very good answer is user-generated content.

• 57:38David Hoffman?

  And I think we've seen a little bit about this before. And another one of your guys' theses that you have is viewer participation. And I think maybe the first instance of this that I think is relevant to bring up that listeners might be familiar with is Twitch Plays Pokémon. That was like a very early preliminary. It's like, oh, everyone just log into Twitch and watch this Ash character that's being controlled by the collective brains of 10,000 people. It was entertaining, but then it was also just so easy to also partake in. Can you guys talk about just the future of this kind of engagement and its role to play in these digital worlds that we're all apparently going towards? Yeah, sure.

• 58:15Speaker 02

  I think this has been an observation that we made, obviously, back when we started Galaxy Interactive. I think it's increasingly becoming the expectation that people will be able to access these worlds from everywhere and engage with them to the extent that they want. And again, we were talking earlier about sort of leaning back versus even in the gaming world, how passive is the gaming experience versus being able to assert yourself and impose your will on the environment. I mean, we made an investment in our first fund in a company called Genvid, which is, in our opinion, really leading the charge in terms of enabling real two-way interactivity in game engine rendered worlds at scale. They've built technology, it's middleware

• 58:56Speaker 02

  technology that allows you to access a game or an experience that they've created from a web browser from any device with zero latency and actually participate as a viewer in the activities of that world. And so you're impacting and affecting the game that you're watching. But, you know, in the case of the first experience that they launched at scale was a game, really what they call a MILE, a massively interactive live event, to capture this idea that they're building things that aren't, aren't quite games, aren't quite broadcast television, and are opportunities for everybody to interact in an enormous scale. So they made this game called Rival Peak, which they launched in partnership with Facebook, and it became, you know, very

• 59:39Speaker 02

  quickly the highest engagement experience that Facebook has ever launched. This was- Part game, I mean, it was really, I guess, if you were to check it out, it would look like a game engine rendered version of Survivor, where 12 contestants are on an island. These are all AI-controlled characters. They're on an island. This thing is running live for months. You can log in and watch from a browser, any place where you can access Facebook. You can experience Rival Peak and watch the characters on this island engage in their lives, the AI characters on this island engage in their lives. They've got cameras on all of them, which you, as the viewer, can choose, you know, who you want to watch.

• 1:00:21Speaker 02

  And then you, as a viewer, can also engage in the content experience that they're having. And, you know, if a character you like is attempting to make a fire and you want to make it a little easier for him to get some wood, or if you want to create a problem for somebody, you know, else to find food, or whatever it is, right? So you're really like in, from a spectator's perspective, you are able to impose your will on the space. And it's experiences like that where you recognize that everybody's got a device on them at all times. Again, probably multiple devices, but at least one at this point. And they want to choose whether they're going to just watch and be entertained. And I mean, what Rival Peak did that was so brilliant, once a week, they would cut

• 1:01:03Speaker 02

  together the best events from the, you know, from the footage of the week and actually hosted, Will Wheaton would host a live show that was very much like a recap show like you would watch in the old, you know, produced version of Survivor, where, where they're cutting through the content from the week and you're able to come in and watch. And that's where you see what happened and how everybody participated. And then back to the next seven days where you're letting people log in and direct the action to some extent. And so it's the blurring of these lines that we're really excited about in terms of expanding the total TAM for gaming and the idea of what gaming is. And this is, you know, in some ways, it's just, you don't, do you define this as a game? Do you define it as a show? Do you define it, like, what is this thing?

• 1:01:48Speaker 02

  And that, to us, is sort of a sign of what people are starting to demand from their content experiences.

• 1:01:55David Hoffman?

  There's a theme that's going on here, I think, that I want to pull out, and that theme is emergence. And we've talked about this a number of times where, Richard, you talked about it when you watched your son and his friends play Minecraft, where they didn't have a goal, they just went into Minecraft and things happened. And we are seeing the same thing with that same sort of like viewer participation, at least with, I remember Twitch plays Pokémon, the names of these Pokémon were just gibberish because no one could really control the keyboard. And so these gibberish names got named for these Pokémon. And then the viewers started to actually create like songs and raps and like content around these like weird meme-y names about these Pokémon and turned into like this cult following around what was going on in this very small digital world,

• 1:02:40David Hoffman?

  which is this one instance of Pokémon being played. And this is why this is both a crypto and not a crypto conversation, because we've also seen this in the world of crypto. Not even Vitalik realized that it was the composability of DeFi that would really unlock DeFi. Vitalik just thought that contracts would be written and then we would use them. But he didn't really think that contracts would interoperate with other contracts to create money Legos. That was something emergent. And I think a lot of your guys' themes, your seven to eight theses, are all about trying to foster some sort of emergence. Like, we don't know what's going to happen, but it's going to be cool. And that's the same kind of thing with the internet. No one knew what the internet would turn into. But, you know, in hindsight, now we do. And I feel like now we're on the cusp of the metaverse,

• 1:03:23David Hoffman?

  and no one knows what's really going to happen. And that's kind of the point. Is emergence something that you guys are trying to optimize for with your investments?

• 1:03:32Speaker 02

  I mean, optimize for it, at least acknowledge it and not get in its way. I mean, I think the, if there's one thing that's been true about the evolution of just, say, content, for example, alone, without addressing all the other things we're talking about and finance and the rest of it. But if you think about the evolution of content mediums, for certain, the only thing you know is that with technology, you really can't predict and shouldn't try to put like the format of the content experience that was into the new medium that is today. I mean, you need to recognize, I think back to like, I mean, I always joke, I spent the first half of my career entirely in old media and traditional, you know, media and everything that's, you know, was then and continues to be in secular decline. And it's, it's like,

• 1:04:18Speaker 02

  Back in 2007, 2008, like that was the era of everybody thinking that, you know, the webisode days, right? If you guys remember that, you were pretty young, but it was, you know, the internet was happening and streaming was possible. And everybody just assumed that you should take a television show and cut it up into three, you know, a 30-minute television show and cut it up into the three-minute bites. And that was going to be what people were going to watch on the web. And obviously, it turned out to be something very different than that. And it's the same thing with games. And again, that's why enabling people to do their thing with the tools that are being built now, either at the end user side or on the infrastructure side and the game engines themselves and the middleware that's being built on them. This is all about ultimately empowering people to build. And by the way, going back to the metaverse

• 1:05:03Speaker 02

  conversation, this is super important, right? Because again, whether we're in the metaverse today or not, one thing that's certain is that for any version of the metaverse, at least the really interesting versions we want to talk about, they are going to require an enormous amount of content, way more content. And for any game developer, their single biggest line item is your two biggest line items, like as user acquisition and content creation. And the amount of content that we're talking about, if you want to build a persistent virtual world that people are going to be in all the time, and that it's going to feel in any way, shape or form like their real life, it is way more content than any one company or any one 1,000 companies are going to be able to build themselves. So the only way this is going to happen is via

• 1:05:47Speaker 02

  user-generated content and the tools that enable people to make the content and the incentives that enable them or encourage them to want to make it.

• 1:05:55Speaker 03

  Yeah, I mean, I think you hit the nail on the head with emergence because, you know, I wrote a long thread on what I think is going to drive long-term sustainability of play-to-earn economies. And I think it boiled down to a virtual world that mirrors the real world, right? Like, that's the ultimate upside case for any virtual currency. And part of the reason why is the shift, as you were describing of live content design, evolving away from these works of predetermined creation, you know, where all of the rules and the kind of script is fixed upfront to this paradigm where like users are Feeding on each other to create their own kind of personalized experiences and also encounter the unexpected. It's one reason why I, as I mentioned at the outset, I'm relatively bearish.

• 1:06:38Speaker 03

  A lot of traditional mobile game designers in particular, and then their transition to crypto. You know, when I went to Slush in Helsinki in 2019, if you use the word blockchain, you would be ostracized, right? Like, you know, it's just giant no-no. And this year, when I visited Slush a few months ago, there's a lot of people who are quite interested in it, but they're thinking about it the wrong way. They're still thinking about it with this lens of, okay, I have a fully designed game. I'm like, God is central bank. I can design all these things. Let's just give players value for their time by making these things fungible. And what you'll inevitably find is the economy doesn't work. And I think so that unexpected emergence and user generated content is the lifeblood long term of these economies.

• 1:07:22Ryan Sean Adams?

  So when you guys put together these theses, like when you started in 2020, how has the theses changed, right? Of course, we've seen Web three, open finance, you know, DeFi, the metaverse kind of coming into vogue. Has that been the only change? Or like, what have you been right about? And what have you had to pivot and adjust?

• 1:07:43Speaker 02

  Yeah. I mean, to be honest, the overarching thesis and the sort of top down, what drove our whole ethos in Galaxy Interactive and what still drives our big macro investment perspective is this idea that we are in the early days, but in the middle of an exodus in many respects from the physical world to these immersive digital worlds. And what are the opportunities that are created as that happens? And if we just assume that's going to continue to happen? So that was the, that was the big idea that drove all these sub theses. And we just feel like, if anything, that's just been further validated as opposed to changing. We were wrong for sure about the timing and order of some of this stuff. I think if you had asked us a couple of years ago, even a year and a half ago, prior to 2021 being the year of the NFT, right?

• 1:08:28Speaker 02

  I think we thought in a big thing that was driving our portfolio and our investments was the idea that if the ownership of digital objects or the ownership of blockchain Objects, right, was going to happen anywhere. It was going to happen inside of a game world, mainly because like that's where people already were and where they were comfortable with the idea of ownership of digital objects. There were markets in the games. They would, we thought they would open up earlier. That's where we expected to see scale first around this idea. And obviously, it didn't happen that way, and it happened more in the art NFT and the collectible NFT that was completely detached from any top-down created immersive game. Now, it's coming back around, and I think, you know, we were making a bet broadly across the

• 1:09:12Speaker 02

  space and so, and obviously, NFTs and both individual projects as well as the infrastructure that was powering all of this were a big part of our investment portfolios from the beginning. But we had the year of all of these NFTs happening away from games, and now I think we're going to start to see the launch of some of the games that have been created by really great developers and the emergence of NFTs and the importance of them and open economies inside those games.

• 1:09:40Speaker 03

  Yeah, I think one thing that's interesting to me is like we, as Sam was saying, we invested in blockchain gaming, us and Anamoka were like the two earliest investors back in 2018 and, but even us, like we viewed blockchain gaming as a thing and then gaming as a thing, right? Mainstream gaming and then all the other theses like that had nothing to do with blockchain. And what's been so interesting to me is web three now, I could take any one of those seven or eight theses and describe to you why web three is accelerating those trends. And so I think that's going to be the most interesting part. Like, I mean, just take culture, for example, gaming culture. We invested in Artifact. We were the first check-in to Artifact

• 1:10:21Speaker 03

  when they weren't an NFT company. You know, they had this idea around digital sneakers. And if you look at their actual first drop, it was hoodies and physical sneakers, right? Which a lot of people don't realize because they just assume Artifact was always like the supreme of the NFT space, right? And so like somewhere along the way.

• 1:10:39Ryan Sean Adams?

  This is the group, by the way, Richard, that just did a deal with Nike?

• 1:10:42Speaker 03

  Correct.

• 1:10:42Speaker 02

  They were just bought by Nike.

• 1:10:44Ryan Sean Adams?

  They're bought by Nike, that's right.

• 1:10:46Speaker 03

  Yeah, so going through that idea. Process with Benoit and Zapto and all these guys as we were thinking about, hey, web three is really interesting. Can we use NFTs to accelerate a lot of these themes that we know people care about like that? That's what's interesting to me. The things that start off as web three things, pure crypto things and say, I'll later add on gaming as a supplement. Those aren't likely to work. So I think the core of our strategy to try to identify independently of crypto, what are the societal trends around meaning and purpose in digital realms that matter? And then thinking about how web three might accelerate that was really the right strategy. And one reason why, despite the fact that you do see a lot of speculative hype, particularly around, say, Playa Urin and the whole metaverse sector in crypto as it exists today, I think

• 1:11:30Speaker 03

  the game hasn't even started. Like, I don't even know if we're inning one yet. Like, it feels like the warm-up batting practice part of the evolution here.

• 1:11:39Ryan Sean Adams?

  Can we talk about that for just a minute as we close the thesis part up? And then we have a few other wrapping up questions, I guess, for you. But like, it does feel like the crypto gaming sector is suddenly hot. It's like Axie Infinitys blew the doors open on the thing. There's all of this capital, all of this money flowing into the space. You guys were here back in 2018 doing this before it was sexy, before it was cool, before people, like, they would look at you like you had three heads if you said the term blockchain. But now, FTX just launched a $2 billion fund, okay? All crypto gaming, $2 billion. Okay? That's a lot of money. Mechanism Capital just this week, another 100 million. The player to earn category, there's so many other things. There's game studios that are talking about it.

• 1:12:21Ryan Sean Adams?

  Are we like overhyped in the cycle? Because I'm catching some vibes from both you, Richard, and you, Sam, that like, you are super bullish on this thing long-term, but you're seeing some things in like the short term that are not exactly healthy or not exactly sustainable. You tell me if I'm reading into that, but but tell me if you think it's overhyped in the short run right now and where we go from here.

• 1:12:47Speaker 03

  I mean, I think you are, I think you're you're spot on.

• 1:12:52Speaker 02

  Are there projects today and are certain themes overhyped perhaps? And obviously, we've seen there are a lot of projects out there that into Richard's point that if they don't have the fundamental team in place that really understand, for example, how to make a great game or understand game mechanics and engagement loops and how to build a virtual world that people are going to want to stay in and live in and build in. These actually are not things that have emerged in the last year with the rise of blockchain gaming. They're things that people have been building and learning and thinking about for decades now. And in some ways, they ultimately come down to how well do the people making this world understand storytelling and some of the fundamentals about content that also

• 1:13:34Speaker 02

  haven't changed for thousands of years. So for us, the thing that hasn't changed in our approach from the first game studio that we invested in, the first fund, our first investment in a studio was Mythical Games. And underwriting a studio like Mythical was all about the fact that there was a team that had proven themselves over decades to understand how to build and ship and operate a great game. And so we skipped a number of, you know, as the blockchain wave happened, we skipped a number of projects that would have been short-term, great financial investments, but that we just didn't believe we're being built by a team that we're going to be able to operate something and create something that was going to last. And so, nothing about our thesis has changed in that respect.

• 1:14:19Speaker 02

  And in fact, I think what's so exciting, a lot of what Richard's talking about is we're independent of the short-term hype around this. This is an opportunity now where there are teams creating some really, really great things. And the like web three tools that are available to them now and at their disposal to expand their ability to tell a story and pull people into a world where they're going to stay. I think that is the most exciting thing about this. But as you guys know, if you want to jump on a new short-term crypto bandwagon, like every day it's available, at least in the bull market cycles. And then for some period of time, it may not be. But what is exciting to us, like, I'm very certain that-

• 1:15:01Speaker 02

  We are at the beginning, as Richard said, of decades of tailwind behind this idea of building immersive worlds for people to live in and play in and build their identity inside of it. So that's the stuff that we want to back.

• 1:15:14Speaker 03

  Yeah, it's critical to not get high on your own supply in this space. And you know, that's obviously in the form of massive, fully diluted valuations to tokens, right? There are deals we passed on because, you know, like a $30 million seed round in a game studio context is rich. And there are token projects, we talked to last year, that started off at this level with with a deck and barely a team, and now traded 10 billion FTVs. You know, is that sustainable? Well, Bethesda sold to Microsoft for 8. something billion. So I'd say probably not. I think too much is being read into top of book FTV

• 1:15:55Speaker 03

  as if that reflected one liquidity depth and two, what's going to actually happen once tokens unlock. So, you know, with that caveat in mind, I think there's too much capital in crypto chasing the same themes. Like, I would point to the guild theme as a great example of this. Like, there's a lot of money flowing into guilds, and no one has ever been able to explain to me what the exit strategy of these things is, because it's great to go and buy a bunch of long tail virtual goods. But what happens when you want to exit and monetize that? Well, I'm pretty sure if you're a guild that matters and you start selling some of these virtual goods, it's going to trigger a collapse in the price of these things as soon as you want to get out, right? So I think there's

• 1:16:35Speaker 03

  a lot of mechanics people need to be careful of when indexing to nominal mark to market that can lead you to the the wrong decisions. And so like, the question I ask myself is, can I convince myself that this this game, this network, this experience is going to be stronger five years from now than it is today? And if the answer is yes, and I see a credible path there, those are the things we want to spend our time on.

• 1:16:57Ryan Sean Adams?

  Do you also get worried, Richard, when you see the crowd like piling into something? Is that like a signal to you to like, run the other way? Right? It's like, I was on YouTube watching a crypto video or something the other day, and I saw this this advertisement for like, digital real estate as like, the next new thing. And like, I'm in crypto, okay? Like, I'm aware of generally what's going on, like, in like, that's not.

• 1:17:22Ryan Sean Adams?

  I don't know the economics behind that, right? Like worries me that that message is going out to sort of normies and they're purchasing all of this land in these virtual worlds. It just feels very toppy and worrisome to me. But is that in general a principle we should take away? It's like when you see everyone piling into something like turn and go the other direction in the crypto gaming metaverse industry?

• 1:17:43Speaker 03

  Yeah, I mean, I think the problem is the cost of admission to all sorts of projects these days is extremely high, right? Like if your plot of land in your metaverse costs $15,000 to get in, like you've by definition excluded 99.9% of users that will actually drive value into your economy.

• 1:18:02Ryan Sean Adams?

  Plus, all the 12-year-olds that are going to make it way better, right? They have the time.

• 1:18:05Speaker 03

  100%. Like, like the risk, if that's your model, is you end up with large corporations who create like the equivalent of the empty shopping malls of Second Life, because no one else has the capital. And your lifeblood of 12-year-olds, as you say, is not in this economy, right? And so the same comment applies to profile pick communities, to anything with a high cost of, like even Axie, right? Like, it's not free to play. Yes, you have scholarships and all these things, but how painful can you make an onboarding process, right? So I think retaining some form of value accretion and form of digitally scarce goods, but having in-sourced mechanics. So another reason why, by the way, I'm skeptical of the guild thesis.

• 1:18:47Speaker 03

  I think the next wave of play to earn games is going to have a lot of the borrowing scholarships stuff that you see, you know, the big guilds in Axie right now being outsourced. Like, I think that's going to be in-sourced into internal marketplaces in games. And you have the potential for like global arbitrage and labor directly in these games, right? So this space is moving so quickly that if you're deploying 100 million of capital into the existing suite of play to earn opportunities, again, that's like investing all your capital before the game's even started, right?

• 1:19:21Ryan Sean Adams?

  Absolutely. Also, as we kind of draw to a close, I have a couple more questions, but got to ask you this because this was a big news this morning. So Microsoft just bought Activision Blizzard. Of course, we were talking about Vitalik's World of Warcraft sword, and now Microsoft owns his World of Warcraft character, right? That got nerfed as a classic story. What do you think this means? Is this just another run-of-the-mill acquisition? Is this Microsoft somehow chasing the metaverse, or is this just kind of a regular course of business gaming acquisition that they've done in the past?

• 1:19:52Speaker 02

  I mean, I think it's hard to look at Microsoft paying, what was it, 45% premium to the share price to buy a company that has quite an active labor lawsuit in the state of California and all sorts of problems with a toxic work culture. Like, Microsoft doesn't do that if they're not making an enormous statement and bet on the metaverse theme, sure, but more specifically, the value that is in the Activision IP franchises that can be unlocked as they bring those worlds together. And I mean, the closest comp would be the Marvel

• 1:20:31Speaker 02

  Cinematic Universe, the idea that you have this IP that is intergenerational now and undeniable in its importance to culture. And I think they see this as an opportunity to come in. I think it's also a statement to Facebook directly that like they're coming and it's not going to be just meta in the building of the metaverse. But no, it's an enormously, enormously important acquisition in our space, but also just in the world. And again, going back to that first question you asked, I think it virtually guarantees that continued focus on immersive digital metaverse, if that's what we want to call it.

• 1:21:08Ryan Sean Adams?

  Last question for you guys. So we managed to get this far through the podcast, and we haven't mentioned the D-word, okay? We haven't once said decentralization. And I'm curious if you think that's important for the metaverse or for your investment thesis, right? We maybe danced around it. We talked about the concept of openness being very important, open economies. But is decentralization important for the metaverse? Or is that not really a concept, do you think, that investors will care about, users will care about into the future? Thoughts on that?

• 1:21:41Speaker 03

  I think it matters primarily in terms of composability, right? If composability accrues to ecosystems that people ex ante feel are going to be decentralized and not get captured by centralized actors, you can build a wide range of marketplaces, galleries, like other ways to display your kind of digital identity in ways that really scale. I think it's much less about, you know, my sword is going to get stolen because like the game's going to turn off the economy. Like it's, it's not that. But it's a relatively, I think, weaker use case in gaming relative to something like DeFi, for example, which has, you know, very good reasons why it needs to maintain decentralization,

• 1:22:24Speaker 03

  particularly if we see a regulatory crackdown. You know, while just while we're on the, the R word there, like, you know, I think that's going to be one of the biggest challenges to the space is how you can engender like real economic value in tokens in the hard currency equivalent without having your thing be a security. And I think like the way the industry is dealing with it right now practically is there's the US and there's the non-US and just exclude US people. But I, I don't think the world's that simple. It's not like the US is the only country with securities laws. And the more these things look like tokens that accrue real value as a result of the product of centralized actors and game designers, I think the more challenging it gets. Right?

• 1:23:07Speaker 03

  So that's another one of your, go back to your trilemma conversation. That's another one of these tensions between like exit to community slash decentralization versus the need to build the great content experience while also giving users value for their time. And it's, it's unclear how that all shakes out.

• 1:23:23Speaker 02

  I mean, I do think if you imagine the metaverse version where you're really moving, like if you think of, of the metaverse being the ability to move seamlessly like across various content verticals that like right now, we sort of go down a content rabbit hole that's generally a centrally owned or controlled experience, right? And then we come back up and we move over into the next one and down we go. And like in each one of those places, we're usually opting into a system. Where, you know, whoever dug that hole is controlling the monetization of what I do in that place. And I think like if we're going to talk about a really expansive immersive digital experience like people have in mind when we think about the metaverse, or at least

• 1:24:04Speaker 02

  a strong version of the metaverse, it's hard to understand how that can exist in any form other than decentralized, because presumably, you know, you're going to need your identity and the monetization of your actions and the ability to reap the rewards of going across these different places. It's easier, actually, for me to imagine some version of a decentralized system where I control ultimately the monetization of what I do in these worlds, than to imagine the alternative, which is like massive coordination across all of these different verticals in some way where everybody's agreeing and like, it's actually simpler for me to imagine that, you know, given we're building the tools for something like a decentralized version of that to exist, it's easier for me to imagine it's just decentralized and and

• 1:24:46Speaker 02

  there's participation with the different top down centralized content experiences along the way, but some control that stays ultimate at the end user.

• 1:24:54Speaker 03

  I also think it's a phasing thing, right? Like, I think five years from now, decentralization in play to earn game economies can be a really real topic that's super interesting, right? Like, which of these ecosystems have a sufficient velocity and quality of UGC that you could arguably exit to community? Right now, there's no point in even having that conversation, because, you know, as we were saying earlier, you need some, it's almost like raising a baby, right? And like, the baby needs to grow up first to have, you know, the wherewithal to stand, you know, by himself, right? And so because the game hasn't started yet, we're not having the decentralization discussion. But I think at a certain point, if our thesis on the space plays out, we will.

• 1:25:36Ryan Sean Adams?

  Guys, well said. We are in the crawl phase of crawl, walk, run still. It's so very early with the metaverse. It's been a pleasure to have you, Richard and Sam, to guide us through this. And we're really excited about what's going to happen in 2022. I think we're going to follow it in Bankless very closely. So thanks for walking us through that.

• 1:25:53Speaker 02

  Thanks for having us on, guys. This was great.

• 1:25:55Ryan Sean Adams?

  Bankless Nation, hope you enjoyed this episode on the metaverse. A few actions.

• 1:26:01Ryan Sean Adams?

  Items for you. We'll include a link to Galaxy Interactive's thesis and their investments in the space. I think it's a fantastic deck. You can get some good ideas there. There's also been a few other episodes that we've done on the metaverse, on crypto gaming specifically, one from Amy Wu, Web3 Gaming. It's called Arianna Simpson as well. The Crypto Gaming Revolution will include those as links in the show notes. Finally, we'll include a link to the rant by Asmin Gold on NFTs that Richard was mentioning earlier. I think it's very important to check your priors on this stuff. And like, sometimes we have our crypto bubble hat on. Everything Web3 and NFTs are good. Look at it from the existing traditional gaming perspective as well, an actual player. And that'll help inform your ideas in the space too.

• 1:26:44Ryan Sean Adams?

  Of course, risks and disclaimers. All this stuff in the metaverse is risky. Crypto is risky. Eth is risky. DeFi, crypto gaming items, virtual real estate. You could definitely lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.