199 - Are Crypto Games Making a Comeback?

Are crypto games making a comeback? Vance Spencer and his Co-Founder Michael Anderson join us today to answer that question. We did a bunch of episode on crypto gaming last hype cycle – retrospectively, it was too early. But now we have cheap blockspace, better wallets, and games that are fun to play. ------ ✨ DEBRIEF | Ryan & David unpacking the episode: https://www.bankless.com/debrief-crypto-gaming-2 ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum ⁠ 👾GMX | V2 IS NOW LIVE https://bankless.cc/GMX 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap ------ TIMESTAMPS 00:00:00 Intro 00:07:19 Intro To Crypto Gaming 00:14:00 How Has Crypto Gaming Evolved? 00:17:39 Casual Vs AAA Games 00:21:10 The Current Gaming Experience 00:26:00 What Benefits Come From Blockchain? 00:32:47 Best Argument Against Crypto Gaming? 00:45:29 How Far Can This Go? 00:50:47 IOS and Taxes 00:55:11 Dealing With Regulators 00:59:01 Choosing a Chain 01:04:50 Are Traditional Studios Coming? 01:07:27 What's An On Chain Game? 01:12:20 Blockspace 01:18:58 Can This Pump Our Assets? 01:21:44 Closings and Disclaimers ------ RESOURCES Vance: https://twitter.com/pythianism Michael: https://twitter.com/im_manderson ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

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

• 0:00Speaker 00

  You're going to see it start out international. You're going to see most of the users in Asia. You can see most of the users in Eastern Europe. And then as you kind of build that side of the game, the labor side, you're going to see the capital side flow in and kind of build the sustainable game economy. And I don't think the question is like whether you can build a crypto game that works. Like there's no rules that say you can't. And what we're doing on DeFi is kind of like an early iteration of a crypto game anyways. I think the question is, can you build a sustainable economy?

• 0:28Ryan 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. The question today, are crypto games making a comeback? So we did a bunch of episodes on crypto. Yeah, I don't know. We're going to find out. We did a bunch of episodes on crypto gaming last hype cycle. And retrospectively, it was a little bit early, David, but now this time.

• 0:55David Hoffman?

  That's what we say, front running the opportunity, right?

• 0:57Ryan Sean Adams?

  Yeah, I think so. And this time, things are a little bit different. We got cheap block space. We got better wallets. We've got games that are maybe actually fun to play. We've got Vance Spencer and Michael Anderson on the podcast from Framework. They are investors in crypto gaming. They're on the frontier here and they're here to make the case for why the time for crypto gaming is now. Crypto games are making a comeback. A few things we talk about, what's the state of crypto gaming as we head into 2022? Number two, why are guests think now is the time for crypto games to take off? Number three, which chain is going to win all of this crypto gaming activity? Is it Solana? Is it Avalanche? Is it an Ethereum layer two? There's actually a pretty compelling answer here.

• 1:38Ryan Sean Adams?

  Number four, we talk about this one simple trick to route around iOS store and Google Play store, our current gatekeepers on the crypto gaming market. And number five, if everything they say comes to pass, the big question is, what does this mean for our assets? What does this mean for Ether, for DeFi tokens, for layer two block space? David, you're sticking your finger in the air, pointing to the sign up. Why is this episode significant to you?

• 2:03David Hoffman?

  I think just adjacently, the story of Framework, Vance Spencer is like bull case for DeFi. Episode 10, I think with us really early. Was one of the strongest articulations for DeFi and that's where Framework as a VC firm like cut their teeth and also made a killing, right? Investing in things that you will be familiar with back when it was super contrarian post 2017 ICO mania, things like Ave, Synthetix, Chainlink that just rocketed out of the bear market of 2018, 2019. And so this is where Framework got their start and now is a very large VC firm, like a large assets under management, large like hundreds of millions of dollars.

• 2:44David Hoffman?

  And I think the story of like how Vance and Michael like went from DeFi and the last bull market into gaming was because that they, they had such a strong performance that they were like, well, now we have so much capital and we need to deploy into a sector. And right now, the rest of crypto is not large enough for us to deploy our sector. So we need something larger to deploy it to. And they came to the conclusion of gaming, not exclusively, but gaming is something that they have been investing in for their, their thesis for a number of years now because gaming is like a way bigger industry than crypto. And so that could actually absorb some of the investments that they need to make in this space. And now two years later, some of these investments are starting to bear fruit.

• 3:29David Hoffman?

  This is my quick like TLDR history of Framework from my perspective. And I think it makes sense if when we get to the part of like why gamers and crypto people are like really similar. If you believe that thesis, it makes sense that gaming is the next big frontier for crypto. If that story tracks with reality, then Framework will have themselves set up because gamers, like Vance said, they're always online. They're familiar with digital, digitally native things. They've got technical chops, they've got computers. And so all of these ingredients are coming together. If you believe the thesis that Vance Brenser and Michael Anderson are about to make you very bullish on.

• 4:09Ryan Sean Adams?

  And most importantly, maybe there's 3 billion of them out there, gamers out there that could become crypto users. Guys, we're getting right to the episode, but first, we disclose both David and I own some IMX tokens. And of course, you gotta know, Michael and Vance, they are venture capitalists, so they have a fund that invests in crypto gaming. So of course, they're going to be bullish on crypto gaming, a particular set of assets. Guys, let's get right to the conversation. But before we do, we want to thank the sponsors that made this episode possible, including our number one recommended crypto exchange, the way you get into crypto, that is, opening an account on Kraken. Go check them out.

• 4:45David Hoffman?

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• 5:27David Hoffman?

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• 7:07David Hoffman?

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• 7:19Ryan Sean Adams?

  Bankless Nation, I couldn't be more excited to introduce you once again to Vance Spencer and also Michael Anderson for the first time, who lead Framework Ventures. Longtime Bankless listeners should be familiar with Vance. We've had him on the show a couple of times. This is Michael's first time on the podcast, but they're both at Framework. Michael, welcome. Vance, welcome back. It's good to have you guys. Thanks for having us. Hey, we want to dive into a topic we haven't talked about in a while, but I think it's going to be an important topic. It's gone dormant for a while, and this is the topic of crypto gaming. I can tell you, we've explored this thoroughly, though, okay? And it was probably most like two years ago. Let me read you some episode titles to get us kicked off here. "The Crypto Gaming Revolution." This is with Arianna Simpson. "The Emerging

• 8:03Ryan Sean Adams?

  Metaverse." This is with the folks at Galaxy Ventures. "Web3 Gaming 101." Amy Wu. "The Dawn of Crypto Gaming." We had Robbie on. "What's Real About Crypto Gaming?" This was all like two years ago, when it felt like the crypto gaming narrative was like really taking off. And you know, if you remember that time, Axie was hitting like all-time highs and it had grown from like, I don't know, $10 million in market cap to multiple billions. Since that time, things have really quieted down. And I want to find out from you guys, do games still need crypto? Like, why? Like, what's the story with games and crypto? Has it died? Is it set for a resurgence? Give us the tag. We'll start with you, Michael.

• 8:43Speaker 03

  I mean, I think the thesis here is really simple. If you have two games and they're the exact same game, the same gameplay, the same game mechanics. One of them is in a digital ecosystem like a PlayStation or an Xbox or a computer that we're used to playing and have been for the last, you know, couple of decades. The other is the exact same game played on the exact same venue, but you actually own parts of the game, whether it be your characters or resources or attributes within the game. And you put that up against anyone who's, you know, an avid gamer and you say, do you want to play this game or the other game? The one with ownership or the one without? I think just about everybody would say, okay, if it's the exact same game and I'm going to enjoy it the exact same way, I want ownership. And I think we haven't, what we've been waiting for and taking it back to what you're talking

• 9:28Speaker 03

  about, Ryan, is, you know, two years ago, we didn't really have any fun to play games. There were, there were sort of like random number generator based games with two dimensional artwork. And what's happened since is there's been multiple years, hundreds of millions of dollars invested into games and game ecosystems that have been developing and gestating and are now kind of set to launch. You know, and games are, you know, really, really, you know, massive markets, but they're also really hard to build. And so I'm excited just because, you know, we've been waiting and investing and building and it's kind of time for that to come to the forefront.

• 10:01Ryan Sean Adams?

  So Michael, let me, let me take the skeptic take for, for just a minute because we started this podcast on maybe a skeptical kind of lens and I don't think we'll, we'll conclude there, but we got to start there because there's a lot of questions. You said that if you give any two games, one game, you can sell your assets, you have ownership of your assets, gamers will prefer that rather than the other, right? That was my thinking too. I legitimately thought this. I think I still think this and yet we haven't seen that played out because if you call that thing an NFT, right now, we've, we've seen the gaming community kind of rebel against this. I must've watched like an hour and a half long video about how NFTs and games are just like, it's the end of gaming, gamers like consistently, it's all sorts of threats. I know gamers like to complain, but. There's a consistent chant of "we hate NFTs."

• 10:46Ryan Sean Adams?

  So it seems like if you call them NFTs, you might be in trouble. Maybe there's a branding problem. And then there's also this other accompanying thing, which is like, some gamers will tell you, "No, if you start monetizing it, it becomes too real for me." And it becomes more like a job and you actually take the fun. I go to games to escape. These have been two of the persistent, I think, themes from gamers. One is this anti-NFT thing. They see it as exploitative, maybe. And another is like, if you inject economics into it, then it becomes like a job. And I start to lose the virtual escapism element of my games. What's your take on that?

• 11:24Speaker 00

  I've got a take on it. So like, asking the people who play, or who like, go to Kotaku, which is like a game rating website, who play like, super intense games like Dark Souls or Final Fantasy, asking them if crypto gaming is real or the right thing to do is like asking traditional finance if DeFi is in trouble. It's just like, not the right segment. It's not the right job to be done. The real answer of, you know, like, who's... It's not about like, if crypto needs gaming or if gaming needs crypto. It's what users want. And I tweeted this out a few days ago, but, you know, when I was early in the NBA Top Shot Discord, it was filled with people trying to turn $5 into $10, or people trying to turn their time into any amount of money.

• 12:07Speaker 00

  And if you think about like, the crypto use cases that we have today, like, DeFi is like a power user segment. NFTs are kind of this whole other thing. Games are really the only thing that can fulfill this need of like, you know, "I've got some money, I've got some time, I'm trying to play a game, I want to have some ownership." And sure, like, the people who play like Gears of War or Final Fantasy, like, they're not going to want the NFTs. But the people who are playing Candy Crush, which is frankly, most of the gaming market, the people who are overseas, who don't have the same access to, you know, economic opportunity, like, those are going to be at least the first cohort of people that try and use these games. And you're going to see it start out international. You're going to see most of the users in Asia, you can see most of the users in Eastern Europe. And then as you kind of build that side of the game, the labor side,

• 12:52Speaker 00

  you're going to see the capital side flow in and kind of build the sustainable game economy. And I don't think the question is like, whether you can build a crypto game that works. Like, there's no rules that say you can't. And what we're doing on DeFi is kind of like an early iteration of a crypto game anyways. I think the question is, can you build a sustainable economy?

• 13:09Speaker 03

  And that's kind of like where the discussion gets more nuanced and more interesting. Like, I don't think anybody wants to recreate Axie. It's just like financial napalm for retail. It just doesn't work. What you do want, though, is something that looks and feels like a game that you might play, where you earn some money, but you also really like playing it. And that goes on in perpetuity. And that means probably less reflexive token economics, but it doesn't mean taking them out as a whole.

• 13:35David Hoffman?

  I think that that's a lot of just what resonated with me in the early days of gaming. Like, every single game establishes its own economy, right? And there's like the idealized, like, you get ownership, you get sovereignty as a player, you have your own assets. And this is one of the reasons why the idea around crypto gaming kind of took off way, way back when. But I'm wondering if you, I'm hoping you guys can kind of just like download us on the undercurrents that have been flowing in the crypto gaming space over the last two years. Because most people, including myself, have been largely tapped out of it. And, Michael, I think a bit of your answer was like, yo, building a game is, is long and hard. So it's going to be a while until the games come to market. But I think we're starting to see some games come to market.

• 14:18David Hoffman?

  So if I had been tapped in for the last two years, and I would imagine this space has been dominated by devs, game devs, building dev stuff, doing game, game dev stuff. How have they been interfacing with crypto? What does it mean to be a crypto game versus our expectations that we were left with post-Axie Infinity? Like, what are the undercurrents that are being established by some of the game devs right now?

• 14:43Speaker 03

  Yeah, yeah, I mean, so I think there's kind of two ways of looking at this. There's sort of the, the financial capital and the amount of money that it takes to actually build a game. And then there's the technology. And maybe I'll start with the tech and we could talk about the financial side. But the tech side, you know, within any ecosystem, right now, within crypto, within Web 3, it's exceedingly hard. It's much harder than what your average application is, whether it's, you know, you're using it for payments, you're using it for DeFi, you're using it for any of, you know, the different ecosystems. You have to be pretty knowledgeable about MetaMask or whatever wallet solution you're, you're using. You have to be knowledgeable about what network you're on, you have to bridge assets over. It's an exceedingly difficult process, even today, and, you know, at the end of 2023. Gamers are not going to be able to put up with this.

• 15:27Speaker 03

  Gamers are also not going to be able to put up with any sort of system where every single time they need to do a transaction on-chain, they have to pay a little bit of gas, even if that gas is one cent or one tenth of one penny. That's just not going to be something that's feasible. So the two major improvements, I would say, on the technology side are account abstraction, where you don't actually have to pay the gas yourself as a user. And then having the ecosystems where you're abstracting away the blockchain elements via a unified wallet experience. And historically, when we talk to game developers, the biggest impediment to growth for them or their forecasted growth is what they call the wallet wall, where you get hit with this MetaMask or Wallet Connect type ecosystem when you just go to sign up for the game.

• 16:12Speaker 03

  It has to be as simple as username, password, email, password, just like every other application. And so we have solved, over the last few years, there are a number of solutions that have gone out and solved this problem, whether it be infrastructure providers or wallet solutions themselves, or games who have taken it upon themselves to build these solutions into their ecosystems. But I'd say that is sort of the clearing of the path of opportunity for these games to actually get real usage, actually get real gamers. And then to take it to the financial side, you have to have tens of millions of dollars just to be able to build these games. And we can talk about it further, but we're recording this on the eve of when Alluvium is going to announce or going to launch their open beta via the Epic Games Store.

• 16:56Speaker 03

  I mean, they've spent tens of millions of dollars and they have hundreds of people building this game over the last three years. There's sort of an opportunity that if you want to have a game, you had to go back two years with all that capital, with all that time and all those people, and build it. And I think that's just one thing that is a blocker for anybody who hasn't been able to do that.

• 17:18David Hoffman?

  When it comes to games, there's just like a massive spectrum, right? There's like the AAA games that require a pretty fancy GPU built by some of the studios that we all know and love. And I think this is kind of where Illuvium is or in the sphere of like, you know, very elegant graphics with a lot of development time. And then there's on the other end of the spectrum, the mobile player Candy Crush. Where is Web3 crypto gaming assets interfacing on this spectrum more or less? Is it like lumpy? Is Illuvium kind of a special case? Is it more to what Vance was talking about where it's further down on the cheaper game end of the spectrum? If I'm allowed to call mobile games kind of the cheaper end? Like where, where's the distribution here?

• 18:01Speaker 00

  So Illuvium has a mobile app game that is kind of like a version of like SimCity slash like Clash of Clans. And that's for kind of the casual enjoyer of the game. Then they have the Overworld, which is kind of like GTA on an alien planet. But you're mining resources and you're mining characters that you can then play in the arena, which is kind of like the classic Pokemon arena battle.

• 18:25Speaker 00

  Games are going to start at kind of every end of the spectrum generally. Like we've seen people who are just building the, the mobile fast casual side. We've seen people who are just building the super intense, you know, like crazy, like Dark Souls, Final Fantasy, like GTA, like Overworld. We've seen people start with just like a TFT battler. I think the, you know, eventually you're going to need all three as a game to address these different audiences and to make your economic loops make sense. But I think the key thing is just like the IP needs to be compelling. Like if you're playing, you know, Clash of Clan or like, you know, let's say Candy Crush with a token. There's not really a lot of expansiveness to that. The game kind of ends and starts like right, kind of in your, in your pocket.

• 19:09Speaker 00

  Like there's not anything that would compel you to use or transact with that asset. And in many ways, it kind of mirrors like the birth of Ethereum. Like what, what is Ethereum? It's a community of developers who built really strong IP around the core values, around the functioning of the system, around the mini games that exist on chain. And that's kind of what I think the best games are going to do as well, like. I think, you know, ILUVIUM started from a perspective of like, what would Pokemon look like if it was Web 3? And you have, you know, the characters, you have the mining, you have the SimCity builder, you can loop it all together with the economics. The token is the thing that unifies everything, just like ETH, the asset, does to the Ethereum network and the developer community. That's what's going to make these games stand out. I don't think it's necessarily the best game wins. I think there's a certain quality threshold that you need to get to, but the thing that's

• 19:54Speaker 00

  going to make these things like massive, interesting economy is the IP. And to Michael's point, like, let's think about, you know, whose opportunity this is? You needed to have start building, you know, a few years ago, if you're going to launch in the next year. There's probably 10 teams that have done that. You need to have a couple hundred million, you know, of those 10 teams, there's probably five who've done that. And then you need to actually have really compelling IP and a strong token economic flywheel. Of those five teams, there's maybe a couple. And so I think a lot of our thesis with, you know, how at least Web 3 Gaming plays out initially, is that there's going to be a huge first mover advantage, just like there was with DeFi. And, you know, some of that is because you're going to have the ability to bootstrap the

• 20:35Speaker 00

  economy, but another part of that, which is different than DeFi, is like, the next wave of people who are going to chase you are probably going to launch in like, two to three years. So there's going to be like lumpy success in Web 3 Gaming, but it's going to spur, you know, this like multi-year process of games getting funded, getting built, and then launching. So that's kind of how we think it'll play out.

• 20:57Ryan Sean Adams?

  All right. Can we talk about like the impediments or the blockers so far? And like, just update us on kind of the, again, the last that David and I probably left this was more in the Axie era, right? And you're still kind of playing with your MetaMask browser and it was kind of clunky and all these things. Tell me about a modern experience, like something, something like ILUVIUM. So first of all, it's in the Epic Store, right? So it's in the Epic Games Store. So that is like much more native than something like Axie ever was from a distribution perspective. And then tell me about like the wallet experience. If I'm just a casual gamer, I just don't know anything about holding my private keys or like MetaMask. What's my experience? And then if you if you could tell us about kind of the front facing experience.

• 21:39Ryan Sean Adams?

  And then also, like for the crypto native who's listening to this, what parts are actually crypto? So when you said alluvium has its own kind of asset that's like ETH for its own economy, what is that? NERC 20? Is that on some layer two somewhere? Is that on its own side chain? And we're talking about like these NFT assets, like where are they stored? Could you just walk through what a modern game like alluvium actually looks like right now?

• 22:03Speaker 03

  Yep. So first off, alluvium is built on immutable X, which is a which is a application-specific blockchain built by Starkware. And I think this is kind of the the example of the abstraction becoming, you know, the real important component of the tech stack. Most people who play alluvium should never even know, you know, what immutable X is, or that it's built on Starkware. The way that you enter into the ecosystem is another product called Passport that is built by the immutable team. And think of Passport as truly your passport across all the different games that are built on the immutable platform. And the immutable platform has the Stark, uh, Starkware instances of the games that are built on top of

• 22:45Speaker 03

  them, alluvium being one of them. They also have a ZK EVM instance that they're starting, uh, that they're launching in January. That's where most of the other games will be built. And then they'll have the opportunity for games that get big enough to actually have their own app chains. But, you know, once again, this is like, what type of database is your favorite social media application using? Nobody should actually ever know that. They just care about the product and the experience itself. The passport is the unifying layer of value that connects across all of these different game ecosystems. And once again, it's sign up, email, password, username, password, and you put money or value into that passport experience, where you can then use that to go off and buy or or, you know, transact. But in

• 23:29Speaker 03

  the alluvium case, you're not actually ever Doing anything if you don't have to, if you don't want to. And so I personally play the city builder. I can start playing the city builder without ever having to buy anything or spend any money. I can just start farming resources and then build up over time. If I want to expedite the process, I would be able to buy something, speed up the building, speed up the process, earn more resources in that process. But that's, you know, kind of the, the normal experience that you would expect with any digital game. If I was to go on to the Epic Games Store right now and download any game, it'd be user email, username, email, password to sign up. It would be, you know, me putting in my credit card, just in the same way that you have with passport. Or I could fund it from another source and then, you know, start playing and start buying things.

• 24:15Ryan Sean Adams?

  So the passport is kind of like a wallet for.

• 24:17Speaker 03

  The passport is exactly, it's a wallet that connects across all the different games within the immutable ecosystem. And we're talking about immutable right now, just because Olivium is, is topic du jour, but you know, there are other ecosystems that are building, you know, games and, and, you know, other platforms, other blockchains that have similar type products.

• 24:36Ryan Sean Adams?

  Okay. So, so the experience for the, the typical gamer is going to actually feel very similar to like traditional games then, right? There's not going to be this, this wallet wall, this crypto learning curve that we've, we've seen in the past with this generation of games. Is that what you're saying?

• 24:51Speaker 03

  No, no high gas fees either. Like actually was, actually was on L1, you know?

• 24:56Ryan Sean Adams?

  For a while, right? And then they, they did their side chain. There was a hack, all sorts of things, right?

• 25:01Speaker 03

  And, and you know, they built the L2 and then they built the bridge. And then the bridge got like, you know, we're like so far away from that point. Like it was just a complete long show for a long time. And so to kind of like the opener that you put to us, you know, you've done all these podcasts about crypto gaming and you know, they were early and we're, we're definitely guilty of that. We were excited about it. But like, you can't really judge it yet. Like we haven't seen any games launch. And so like, you know, you have to defer your judgment. I don't think you can be bearers on Web3 gaming. I think you can just say.

• 25:33Speaker 03

  It hasn't happened yet, but we haven't had any games launched and we have all these things, the UI, the low-cost blockchains, the ability to distract them away. Like, the proof points get stronger as we go on.

• 25:44Ryan Sean Adams?

  Okay, now link this. So now the crypto native kind of understands this, right? So I understand the backing of how this works. It's on immutable, so it's a layer two. You've got this passport thing that's basically like a wallet and you own all of your own assets, whether that's all of the tokens in these ecosystems or the NFTs, like skins and items, all of these things, right? So I get that. Now, for the gaming, you know, individual who is just like new to crypto. Okay, tell me, guys, how is this? Why? What benefits am I getting from a blockchain underneath all of this? All right, so like, I can kind of get that same experience with with other games. Like, it feels, I mean, how do I feel the ownership of my own assets? Can I go take these assets and like bring them into another world?

• 26:29Ryan Sean Adams?

  Can I like go onto like Ethereum layer one and like, I don't know, sell them in a Uniswap market like if I want? So now talk to the gamer and what are the the benefits of being on a blockchain rather than a central database?

• 26:45Speaker 03

  Frankly, just the marketplace capabilities of being able to sell these different assets. And it could be, you know, OpenSea, where you're selling these and sort of like that style of marketplace. It could be, you know, a mechanism that's built specific for the games that we're talking about. But or maybe there's a Uniswap pool where you have, you know, a fungible asset or a fungible type of asset, like resources in a game that you're able to go off and make markets for. But really, the it's the same way that we look at any, you know, digital asset that is in your meta mass right now or an NFT that's in your meta mass right now. It's you have ownership because you have the agency and you have the ability to sell it. It's not, and I think one of the biggest misnomers and points of confusion is the ability to say, I'm going to take this asset from one game

• 27:28Speaker 03

  and bring it into the digital ecosystem of another game. There that is such high complexity.

• 27:35Ryan Sean Adams?

  That's never gonna happen.

• 27:36Speaker 03

  That's never gonna be a value proposition. I think that, you know, being able to, you know, use an NFL character in, you know, Illuvium, maybe that's like kind of interesting, but like, nobody really cares about that.

• 27:50Speaker 00

  And so for us, ownership really just means the ability to sell these assets or make a market for them. And that's how you kind of imbue in the sense of ownership. And it's, and it's exactly the same way as you would have with DeFi tokens or any other asset.

• 28:06Ryan Sean Adams?

  Just, there's an interesting implication here that I want to get to. And then, you know, I bet David has a bunch of questions here, but it's like, one is, what does that turn a gamer into? Does that turn a gamer into like, I don't know, somebody who's working? Like, like, could gamers think of this as a job? I mean, you, you mentioned developing economies and developing countries. And that was certainly something that was incredibly popular during the kind of the Axie blow up days. There were stories of, you know, people in the Philippines who basically made their income from playing Axie all day. But it started to like, turn into like a job for many people rather than, rather than kind of a game. How do you guys see this, this fusion?

• 28:47Ryan Sean Adams?

  Do you think that that plays a role in things when you introduce economics and the ability to kind of sell things? I mean, that starts to sound a little bit like the, the real world. And like, like after all, if we said before, I mean, I feel like maybe life is a game. Everything's a game. I mean, like, what, what are we doing? I'm going and I'm collecting like, you know, your tokens and, you know, currencies and DeFi, is that a game? Like, I don't know, this, this gets, this gets complex pretty quickly. But what's your take on that? Does this shift the type of, of game player and the experience at all? When you introduce like real world economics here?

• 29:20Speaker 00

  It's a similar form factor to Ethereum. Like from a highly speculative economy, we've built something that's sustainable. We've built kind of these mini games on chain, like whatever you want to call DeFi, whatever you want to call NFTs. Like we've built the sustainable economy and I'm sure some people do it for fun. Some people do it for work, but it doesn't kind of work without both of those character types. Like you need people who enjoy it, then you need people who are trying to, you know, get value or get work out of it. And again, it comes down to can you build a sustainable economy? And, you know, one way of doing that is building something around financial services. Another way of doing it is building it around entertainment and consumption of digital assets in a non-financialized way.

• 30:04Speaker 00

  And so for the gamer, It's basically the exact same premise as traditional gaming. You're gonna play a game that you like and maybe after everything, you know, it's not just you giving the game developers thousands of dollars. Maybe you get something in return and you can make money on a micro level off of the assets that you've generated. And at a macro level, if you want to buy the token of the game, it's akin to owning a share of a of a stock. Like you get a direct upside participation in the game. That's pretty interesting. For developers, it's a different proposition. IDFA, which is the Apple retargeting of ads, which drove most of the business models of free to play game developers. That's been killed as of last year. Most gaming studios saw their revenue trend down 30 to 40%.

• 30:48Speaker 00

  And there's more competition than ever because these games are easier and easier to build. So you need some sort of new monetization, even if you can kind of stick with your existing IP, which is what you're seeing a lot of game developers in Asia do. Crypto is just the best monetization known to man. If you can earn, you know, 2% on every fungible token transaction, on every NFT transaction, like immutable or like a Luvium does, like that gives you a whole different vector for not only monetization, but redistribution via token to the community. And, you know, like when you get to the point of like finger pointing saying, you know, those aren't real gamers. Those are just people that are like working. That to me is like an immediate indication of like, okay, we're doing something right. And the initial player base is gonna be people from India, people from Asia, people from Africa, Eastern Europe.

• 31:33Speaker 00

  Like you go in these discords, those are the people. And that's fine. And that'll be kind of the initial, like if you think of it as like labor, if they're like working or if they're enjoying it, those are gonna be the first people to play it. But they're gonna be the earliest participants as well. And I think that's kind of beautiful that in no other gaming function, like are you able to partake in the actual game success? And this is hopefully something that's a bit more egalitarian.

• 31:58Speaker 03

  The only thing I'd add is that I think in the 2021 era of Web3 gaming, the original sin was that speculation was basically the only thing that you had. And I think that speculation is a necessary component, but it needs to be balanced with a fun-to-play ecosystem, high-quality games, whether that's an alluvium-type AAA quality, or just something that's really engaging and addicting in the way that most digital games are. But the other element, which I think we haven't really touched on, is is it really hard to win? And if you have the ability to have it be really high, really deep in terms of how far you could take it and how far you can go, that's going to make it a game of skill, or at least closer to skill. And that's where you start to see

• 32:42Speaker 03

  all of these variables start to coincide in a way that we just haven't seen yet. And so we've only seen one aspect, which is speculation, and I'm excited for the others.

• 32:50Speaker 00

  Let me ask you guys a question, David and Ryan. What's the best argument against crypto gaming?

• 32:56David Hoffman?

  Oh, God, you're asking crypto bulls to argue against crypto stuff? The best argument against crypto gaming is, well, I could give you an answer in a variety of different respects. Like, A, we haven't even figured out wallets yet, like smart contract wallets, account abstraction wallets. But I guess you could route around that. It's like, okay, you just have a centralized wallet do all that stuff for you, and then you can take assets later. The best argument, I would say, is going to be something along the lines of crypto gaming is not, is all going to be zero-sum, because somebody, if somebody's making money, right, which means somebody else is losing money, which means,

• 33:41David Hoffman?

  like, how do you really incentivize that? Or there's no really flywheel there if it's a zero-sum game? That'll be, that's my argument.

• 33:50Speaker 00

  Wait, wait, wait. Let me address that one. So Ethereum has gone from, you know, what, 50 cents to whatever it is today, $2,000. Is that zero-sum or not?

• 34:01David Hoffman?

  Sure. Okay, so let's go back to Illuvium. So how do I play Illuvium? And do I need to deposit money first?

• 34:08Speaker 00

  Nope, you can just mine. Not even like ETH where you had to buy it.

• 34:13David Hoffman?

  Okay, so I can enter the game and it's like some sort of like I get some sort of like tutorial, like wooden shield and wooden sword and then I can start. And then, but then how do I get money?

• 34:25Speaker 00

  You can craft things together and you can create new assets. You can sell them. You can partake in in-game actions that earn you the native currency of the game. Like, there's a variety of ways to bootstrap your account without actually putting money in.

• 34:36Speaker 03

  Okay, in particular, what that means is you run around in the overworld, the ecosystem, and you could collect or catch Illuvials. The Illuvials are the characters, kind of like Pokemon, if you think of it that way. The other entry point is if you play Arena, or if you play X, which is their city builder game, you can actually just start a city, start farming resources and just sell those resources in the ecosystem to earn enough capital to be able to go off and buy an Illuvial. So there's multiple ways.

• 35:04David Hoffman?

  Okay, so I can just sell this stuff, but someone's buying them. Why are people buying them? So they can just get ahead?

• 35:10Speaker 03

  Because you need those resources to be able to play the overworld game at a higher level.

• 35:14David Hoffman?

  Okay, so like, okay, so if there's going to be an economy, and like, this is also true for games, but before there's financial assets in the games, everyone is just like, I play Overwatch so I can win and feel momentarily good about that with the dopamine. When there's financial assets, like that, it really ups the ante of why people are playing the game. And like, some people are going to win and it's going to be the same, like, well-capitalized entities, well-capitalized players are going to win more than less well-capitalized players because they have the advantage of capital. And so doesn't like capital just centralize over time? And winners, like, it's like poker, right?

• 35:54David Hoffman?

  Like, all of the small fry come to the table and the big sharks, like, eat up all the small fry.

• 36:01Ryan Sean Adams?

  What are you saying? It's like you could buy your way in, right?

• 36:04David Hoffman?

  Well, you buy your way in, but like the skilled people end up taking all the money all the time. And then it's not fun because all the small fries keep having to shovel out money over and over and over again to play the game.

• 36:13Speaker 03

  I would argue that what you're describing is precisely the issue of a speculation-only game. You have to have a good economy design that doesn't allow people to pay to win.

• 36:26Speaker 03

  It maybe means that you're able to pay to, for instance, in Olivium, if you want to pay for something, the the main use of paying for things is to travel faster through the world. And and it's like taking the train versus walking there. And and that that's kind of one of their core economic principles that I think is unique. And we just haven't seen those examples yet. But yes, I agree. If you're in the way that you're describing it, if you can just buy your way in and buy your way to the to the victory podium, then it doesn't matter. It's not a game. It's not fun.

• 36:54David Hoffman?

  OK, so there's there's like the PVE element, like the player versus environment element. And then there's PvP, player versus player. And if we keep the monetization to increase your odds of winning versus the environment, we're OK with that?

• 37:09Speaker 00

  Your ability to win?

• 37:12David Hoffman?

  And just in in the player versus environment domain.

• 37:17Speaker 00

  I mean, I think that's OK. Like, you have to have some function for paying for things at some point. And travel is, not even in Web 3 games, it's the most common thing that you're you're paying for.

• 37:31Speaker 03

  But also look at like Boom Beach, for instance. OK, you could either spend time and you could wait for things to to reset for you to get more ammunition or, you know, more lives, whatever it may be. Or you could just pay, you know, $4.99 to Apple to be able to upgrade immediately and not have to wait 24 hours for that to reset.

• 37:48Speaker 00

  Like, that is zero sum.

• 37:51Speaker 03

  Totally, but but those are the types of monetization elements that exist in mobile mobile gaming. And I think, you know, we will start to see and test what these different monetization elements are, such that you have a sustainable game game economy that we haven't seen yet in a game.

• 38:06Ryan Sean Adams?

  Can I throw out some other to your questions, Vance? So what about this? The the idea that crypto can often collapse, and I worry about this about DeFi, quite frankly, at some level, to Ponzi and, you know, speculation. Or so you have these big boom busts. Or you have somebody who is willing to create a game that that plays the short term kind of like games, essentially. And you have these like Axie style, it runs up into the billions and then it just like collapses. And just like, there's something about human nature and speculation and tokens and prices that just like ruins things.

• 38:50Ryan Sean Adams?

  And the whiplash is like. Too harsh, right? Because humans, you know, we go, there's massive run up, we're all feeling great. And so many people buy the top and they're, you know, their, their experience, their net promoter score is really low because they purchased an asset that they thought was going to do well and it lost like 99%. They're very dissatisfied with this. What about this? The temptation of speculation, maybe let's say, the temptation of Ponzification, of pyramid schemization, like maybe that's a thing that could hold this whole crypto gaming thing back. What do you think about this?

• 39:26Speaker 00

  I mean, people will do that. People will start outright gaming Ponzi's. I think they might do well for a time, but they won't last, you know, for much longer than that. You'll also have people who build really good games and have really good economic flywheels. And maybe there's a couple of issues along the way, but it's not zero sum. You're growing the pie and you're distributing it to people who are playing your game. And so there will be both. I also think, like, if you, if you look at the traditional gaming industry, especially like mobile games, there's people who spend hundreds of thousands of dollars on Candy Crush and, you know, things like that in the traditional free to play space. It's pretty sad, honestly. It's just kind of like

• 40:07Speaker 00

  they're pay pigging for like these gigantic mobile gaming companies. And so, you know, when you're starting from that position, almost anything is better than it. And sure, there might be some creative destruction as we go from good games to bad games or vice versa. But like, I guess my point with this question was like, there's no universal rule that says that we can't do this. And I think you just kind of need to bet on like entrepreneurs and innovators who really believe. And like, we don't need to kind of just like, just believe for much longer. Like, we're gonna have proof points in the next couple of months. So I think we'll hopefully have better arguments in a, in a couple of months. But right now, I don't think there's like anything that's super convincing to me about like, why isn't this possible? Like, there's no rule of like physics that says it's not.

• 40:53Speaker 03

  So one additional variable here, I think what's implied with all of these different questions is that you're assuming that people are having to like pay a substantial amount of money just to enter into these game ecosystems. And I think most of the smart game developers recognize that that's just never going to happen. Maybe you buy a subscription or a license in the same way that you would a digital game today. Maybe it costs 20 bucks for the for a season type thing, but it's not, it's not going to be a situation where you're paying $10,000 for an Axie and then it goes down to $5 and everybody feels terrible and MPS is negative. The sentiment here is games are now coming to the realization that you it has to be free to start. You have to be able to have monetization elements

• 41:36Speaker 03

  that you be able to earn your way to, but you could also pay for to expedite. And those are kind of the new norms that people are kind of circling around, game developers are circling around, which I think is fundamentally different from anything that existed in 2021, where speculation, once again, was the overriding variable. So to Vance's point, I think this stuff is happening, like literally tomorrow and for the next few months. So I think we're just going to see a ton more shots on goal.

• 42:08David Hoffman?

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• 42:52David Hoffman?

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• 43:36David Hoffman?

  Experience Web3 development the way it was always meant to be: secure, fast, cheap, and friction-free. Visit arbitrum.io and get your journey started in one of the largest Ethereum communities. Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world. And now, something big is happening. Introducing the Cello Layer 2. It's a game-changing proposal that's going to bring Cello's rapidly-growing ecosystem home to Ethereum. Vitalik has shared his excitement for the Cello Layer 2 on the Cello forum, so has Ben Jones from Optimism. But why? The Cello Layer 2 will bring huge advantages, like a decentralized sequencer, off-chain data availability, and one-block finality. What does all that mean? Rock-solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. And real-world adoption is happening.

• 44:21David Hoffman?

  Active addresses on Cello have grown over 500% in the last six months. With the Cello Layer 2, gas fees will stay low, and you can even pay for gas using ERC20 tokens. But Cello is a community-governed protocol. This means that Cello needs you to weigh in and make your voice heard. Join the conversation in the Cello forum. Follow @celloorg on Twitter and visit cello.org to shape the future of Ethereum. I think my, the big questions I have about crypto gaming is more about just like the scope of the success, not whether or not it's real or not. It's more like, how, how far does that realness take it? Cause you could, you could have like the very, very bullish scenario versus the very, very bearish scenario. For example, like maybe the most bearish scenario

• 45:02David Hoffman?

  is something like, well, we have online like casinos, right? Like little casinos, like Texas Hold'em Blackjack. And then they also take like Bitcoin or maybe stable coins too. And those are like, those are games and they take crypto payments. And so like, we're starting to enter, we're starting to combine these primitives. And then there's on the complete opposite end of the spectrum, which is like something like Ready Player One, which is like a straight metaverse and there's digital currencies and there's digital artifacts and there's digital assets. And everything is an NFT, everything is on-chain. And then there's like different stops along these visions, right? You have like, okay, maybe you have a Fortnite, except the skins are NFTs,

• 45:42David Hoffman?

  which is still like asset light, I would say. Or there's like, we revitalize the Diablo 3 Auction House and you discover in-house items, except those are NFTs and you can sell those now for, you know, a currency on Ethereum that can go to Uniswap. And we're now, we're starting to get pretty heavy. So I guess like the real vision is, or the real question is like, where along this spectrum do we really end up? And can we really get all the way to the full like Ready Player One, fully like simulated economy, except it's not simulated because it's real and it's in the metaverse? Like where, where do we end up here?

• 46:20Speaker 03

  Let me say this. With every new technology platform for games, you've had a new dominant game model that takes over. And, you know, when it was, you know, console-based, you had, you know, the depth of Diablo and first-person shooters and things that required real high, you know, technical requirements to be able to play those games. You know, when you had mobile, it became fast casual. And, you know, that was sort of the dominant game mode. We don't yet know What the dominant game mode will be and you know something we talked about with you know the game developers we talked to on the regular is like what's going to be that candy crush moment where it's like boom okay we now see it everybody now has the playbook that's how it's gonna work one of the theses that at least I have is and something that

• 47:05Speaker 03

  we haven't talked about yet is UGC being a major component of web three gaming where it's not you going in and saying I've earned this resource or I've you know got this I now have ownership over it I can sell it what if you're in there in the digital ecosystem creating something creating a template that other people may want to use in that same game and then you are able to monetize that yourself you know you own the template people can buy it you know those are great ways that I think you just haven't seen in a as a dominant game model yet but we're starting to see a ton of those types of games employ UGC elements and monetization through UGC elements that that would be unique and and so that is one possible path for web three gaming that we haven't seen yet.

• 47:50Speaker 00

  The other thing I'll say is like the you know to your point of like if it works how big does it get I think that's when you need to kind of rely on the data that we have and there's not a ton of it but Axie had more daily fees than Ethereum in the last bull run for a period of months it had the most users of any chain you know it's still Ronan at least still has you know almost as many as like the lower L2 blockchains so like these things are considerable size and the token itself you know obviously didn't stay there for a long time but it was a $40 billion FTV outcome like these things are huge.

• 48:24Ryan Sean Adams?

  Forty billion dollars.

• 48:25Speaker 00

  Yeah, these things are.

• 48:25Speaker 03

  Yeah, but hang on I want to I want to throw a flag there because like why were the fees paid well because the token pumped and people could afford the fees because the token was very very highly priced because it is a speculative speculative mania so in the final equilibrium of crypto gaming we can't expect high fees to be paid just because like these assets have these speculative premiums.

• 48:45Speaker 00

  I mean, like, look, this is the data that we have. You know, it's not the data that we would want. And it, what it tells you is that these things get quite large when they get going. And there's reflexive aspect to them. And so that's kind of like the backwards looking data. And then the data that we have right now is all the playtest data that's coming in on these games. And like, almost unanimously, the retention is like 40, 50% higher than traditional games. Like, people come back because they know that they own something. It's like not, you know, the most like big brain explanation, but the aspects of ownership are compelling to people in a way that represents in the data. And so, you know, I feel more not less confident as the, as the playtest data comes in,

• 49:28Speaker 00

  whether or not the game of the future manifests in a similar way to Axie. To your point, I don't think they're going to be paying like crazy ETH gas fees. But like, the monetization schemes that these things have is considerable. You know, Olivium is taking 2% of all fungible and non-fungible transactions. Think about if this gets to be the size of OpenSea in terms of just like transactions. And I think that's like, kind of where we think things are going to go. I think the NFT PFP market, other than like punks and fidensas and things like that, I think that's pretty much done. What I, what I do think, what I do think is coming, you know, and going to be a lot bigger are in-game asset NFTs. And if you think about like the theses that were thrown around back in the day of like the unbundling of these NFT marketplaces,

• 50:13Speaker 00

  it hasn't really happened because there's been nothing to unbundle. Other than maybe like the derivative side with Blur and, you know, the spot side with OpenSea. We're now going to see just like gaming NFTs be their own thing. And it's not going to be monetized by some third-party NFT marketplace. It's going to be monetized by the game itself. And so like, you've got the game, but you've also got like this 2% thing that's attached to it. That, imagine if that starts getting going and you start redistributing to token holders and it feeds on itself. You can see how it would become quite big.

• 50:45David Hoffman?

  Yes, I can see how it can become quite big. And if that 2% is real and all of these things do become as as large as we hope that they are going to become, you are going to then be faced with some extra obstacles. The smaller of the two is going to be like the distribution platforms, the Steam, Epic Games Store, iOS Store, which they're going to want their fee, they're going to want their tax. You know, you know, who else is going to want their tax? The taxman, the the actual taxman. And so we're going to start to get into like regulatory conversations as well. How do you guys navigate these conversations?

• 51:22Speaker 03

  Not tax advice, but

• 51:27Speaker 03

  that anytime you earn income, you owe the taxes on that.

• 51:31David Hoffman?

  Yeah, but what about little Jimmy, who's eight years old, who just downloaded a game, who doesn't know a damn thing about taxes?

• 51:36Ryan Sean Adams?

  He's got it. He's got an item drop, and it's a taxable event that he's got to file, right? It's like, I could see how this is weird.

• 51:43Speaker 03

  Jimmy can fend for himself, but

• 51:47David Hoffman?

  but like, I'm trying to so like the iOS, the iOS point is a good one. So a lot of the games that we see start off as, you know, no crypto in the iOS App Store. And then if you own assets and you want to sell them, then you transfer them to a blockchain. And that's a way to, one, play nice with Apple. But two, you know, you can have like this graduating onboarding funnel where you say like, cool, you now own the asset in the game, you want to sell, you want to do different things, we're going to take you on chain, a place that is devoid of the iOS taxman.

• 52:21Speaker 03

  Well, and just to to clarify, if you are onboarding via a mobile device and you're buying something, and Apple has already come out and suggested that this is the path that they're going to to do with their guidelines for iOS App Store transactions. You're going to pay 30%. The developer is going to pay 30% to Apple. Apple's exceedingly happy about this. They'll start promoting NFT-based games. If you're going to be buying a $10 NFT in-game, you're going to have, you know, the developer's going to get $7, basically, but you're still paying $10. And what happens afterwards is you move outside, there's no second, there probably won't be secondary marketplaces within, you know, iOS App Store ecosystems,

• 53:01Speaker 03

  but you're still going to have that same, once again, passport and/or connective wallet that connects your mobile device and your web device. And the web will be where you have that secondary market transaction and everything will live on-chain.

• 53:15Ryan Sean Adams?

  Wait, so are you guys saying we just, we just have a backdoor here? We just have a loophole here, which is like-

• 53:19Speaker 03

  We just go on-chain.

• 53:21Ryan Sean Adams?

  Okay, so, so basically the game is in Steam or it's in Epic or it's in iOS, right? So like, so like it's deployed there, but we're not exposing any of the kind of the, like, DeFi-type economics inside of that wrapper. You just hit a button and you like export off-chain when you want to sell all your assets. And that's just our simple loophole, like, checkmate? It's that, it's like, you don't-

• 53:46Speaker 03

  Apple, Apple hasn't come out and said whether or not they will allow any of the DeFi elements. Can you sell it via Uniswap, you know, contract or pool? Assume that they won't allow that type of stuff, but yes, this is the way that most games are thinking about integrating both mobile and web experiences.

• 54:03Ryan Sean Adams?

  I mean, that seems like it could be defensible here, right? Because like, how, how would Apple argue that you can't export your own, like, metadata off, like, you know, off, off their platform? It seems that, that would be a pretty-

• 54:17Speaker 03

  Well, because Ryan, their metadata has never been worth money before.

• 54:22Speaker 03

  I think you can come up with like creative reasons as to why it won't work, but right now it works. Like, there are games that do this. There's also people who are expander-benting with PWAs and things of that nature.

• 54:33Ryan Sean Adams?

  Yeah.

• 54:34Speaker 03

  Like, there's, there's a few different ways you can skin this cat, but-

• 54:37Ryan Sean Adams?

  So you guys aren't very worried about the gatekeeping of kind of the, you know, the gaming platforms at all, at all?

• 54:42Speaker 03

  Across the ages, and this, this data was in, in France specific, which is where they started, was a top-five game for the last two months, and it's an NFT-based game.

• 54:53Ryan Sean Adams?

  Okay, so to go back to David's question, there's another class of gatekeeper. We touched upon it with the taxman and whatever. Little Jimmy's gonna have to download some software to help him figure out his taxes.

• 55:03Speaker 00

  He'll be 1099.

• 55:07Ryan Sean Adams?

  Little Jimmy's gonna have quite the education. But there's another class of regulators out there. And this is kind of the SEC Gary Gensler class. And right now, at least in the US, Gary can't tell us whether a Pokemon card, if it's tokenized, is a security or not. Does this put a foil, throw a wrench into the works here? We're gonna have a problem with regulators on the crypto gaming side.

• 55:33Speaker 00

  Pack it up. It's over. No, I mean, like,

• 55:39Speaker 00

  you know, they're gonna, how it's manifested in practice has been that the US game developers have gotten really gun shy. Like, they don't want to launch tokens. They don't want to launch NFTs unless it's like 100% chance of them being compliant. But that's just left this door open for all the international developers who have, frankly, better regulation countries. And I hope our country gets there in time as well. I think it will. But people aren't stopping. You know, they're not like, ooh, sounds like Gary Gensler doesn't like this.

• 56:14Speaker 03

  And we live in Australia.

• 56:15Speaker 00

  We don't even have an answer. We don't even know, right? Like, there's a certain subset of people that will stop. And there's people probably should not be entrepreneurs, but like, nobody really cares.

• 56:28Ryan Sean Adams?

  Sorry, Gary. Does this get, so this gets solved through jurisdictional arbitrage, right? Like, if for a period of time, the US is just very harsh, there's not clarity, then maybe less game development happens in the US and just escapes outside of the US. And then the US realizes, you know, our population wants access to these games and they have to update. Is that how this plays out in your mind?

• 56:51Speaker 03

  I'll tell you this. 75% of the games that we talk to, the number one jurisdiction or the number one region that they're targeting from a gameplay standpoint is Asia or Southeast Asia.

• 57:02Ryan Sean Adams?

  Really? Not even in Europe, not, not the US?

• 57:06Speaker 00

  Europe more so, the US is like kind of an afterthought.

• 57:10David Hoffman?

  Is this reflected because of regulation specifically because of US?

• 57:14Speaker 00

  No, no, it's because, I mean, look, the biggest, biggest games in Asia are pay to win games. You pay $5 more, you win the game, congratulations. Asia has no problem with this, conceptually. America has a huge problem with this, conceptually. And so it's like, you know.

• 57:32David Hoffman?

  Wait, what's a pay to win game? That's just like gambling, right? That's like casino is a pay to win game, right?

• 57:40Speaker 00

  But it's not like you're gambling against anyone else. So like a good example of how this does not fly in the US is the latest NBA 2K update, where you, you can pay to enhance your player. People threw a hissy fit over this on the internet forums and just like, you know.

• 57:54David Hoffman?

  It's not fair.

• 57:54Speaker 00

  Cause it's not fair. Yeah, people stamping their feet, it's not fair. People in Asia don't care about this. And so, look, it may sound strange, it may sound like a different mental model, but it's like, that to me is like a very good sign of, there's a market that's largely unseen for what we're trying to build, that isn't really comparable to what exists today, but that could be massive. And like, if Axie Infinity can be a 40 billion FTV outcome with only Southeast Asian players, guess where everyone's gonna go? Like, it's like, you know, it's sad that people are not gonna target the US. I do think that is changing as the quality of game increases. Like, most of the Olivia and play testers are Western oriented, just from like perusing the Discord.

• 58:39Speaker 00

  But that's certainly not who they're targeting.

• 58:42Speaker 03

  The other, the other thing I'd add to is, just in terms of technology, obviously Android heavy in all of those regions. And Android just has a much more open ecosystem for games and gameplay.

• 58:55David Hoffman?

  Okay. I want to turn the conversation to chains, games and chains. So like the Ethereum, I think stance towards games is that, oh, every single game is gonna want their own chain. Like, give game developers the sovereignty and the control that they have over the game, over the chain that their assets run on. The Solana narrative is probably something along the lines of games need maximum amount of scale. The Avalanche narrative, of which I know games and Avalanche for some reason go together, is probably something similar to the Solana narrative. I don't really know, hopefully you can tell me. But just like, what, what do game devs, crypto game devs think about the chains that they're building on? Like, how do you rethink about these things?

• 59:35Speaker 03

  There's a really interesting stat, which is of the games that are still in development that we've talked to, or some of our investor investments are partnered with, something along the lines of like 40 to 50% of the games that are building games currently have not even chosen a blockchain yet.

• 59:55Speaker 00

  Doesn't matter really?

• 59:57Speaker 03

  And it doesn't really matter to them. What really matters to them is throughput, therefore cost, and where assets are, or users are.

• 1:00:08Speaker 03

  And so where, you know, that starts to aggregate is whoever has the lowest cost per transaction is going to be something that's really viable for games. But you also have to be able to have people, one thing we haven't talked about yet is there's this massive industry in the traditional games industry, or in traditional games for user acquisition. You know, it costs tens of millions of dollars to develop these games. Well, it also costs tens of millions of dollars to market these games, to have them break through, have them actually get attention from, from the game players that they want. And that is something that just hasn't even been around yet. I mean, historically within DeFi, this has been like, you know, farming, or, you know, if, if you're in discords, you kind of have to be in the know. But what we're talking about attracting here is people who are not in these, you know,

• 1:00:53Speaker 03

  web three native discords, not people who are web three native per se. You know, these are people who want to play the game because it looks interesting. And then, you know, you, you kind of come for the game and then you stay for the, for the ownership. And that is a totally different model that we just haven't really seen yet. And so, you know, does it really matter where these net new users are going to be from a blockchain perspective? Not as much as it does, you know, from a DeFi perspective, where, where really security and, and like TVL are, are kind of the core metrics.

• 1:01:24Speaker 00

  I, I think there still is like the EVM versus everyone else dynamic. And I would still say that 90% of games we see are building on some form of the EVM.

• 1:01:35Speaker 00

  Most of them frankly, on IMX, just because they're like oriented and focused towards that. And like, just to give you an example of like where the ecosystem stands today. So Polygon signed a partnership with IMX. That basically makes IMX like the default gaming superchain of their network.

• 1:01:53Ryan Sean Adams?

  But by the way, IMX is immutable. We talked about.

• 1:01:56Speaker 00

  Yeah, it's immutable.

• 1:01:57Ryan Sean Adams?

  Yeah, same thing.

• 1:01:59Speaker 00

  And IMX has like, you know, they're extraordinarily well resourced. They've got like 250 million of cash. They've got like, you know, more than 600 or 700 million dollars of their own tokens on their balance sheet. And it's structured as an equity company. So they have like a large degree of discretion over like how and when grants are given out. And they're able to win a lot of game developers just because like capital for games is so thin right now. That being able to offer like an integrated blockchain, a passport solution. That's the UI layer and some grants and some capital to build a game. It's like pretty compelling. Solana, we've seen less games go to recently. Just since like the foundation is kind of like geared down a little bit on that, just like from resourcing. It's also just like you're on your own island.

• 1:02:43Speaker 00

  There's no base chain that's adjacent to you with a shit ton of users or like Ethel one that you can do interesting like, you know, pack drops or things like parallel has been doing. So that's definitely happening. And then you have kind of like a string of like also rans that are giving out small chunkier grants. But like, instead of having like 200 games like IMX has, they've got like three. And gaming like, as we all know, is like a shots on goal business because you never know what's going to hit. And it's a power law distribution when it does. So it's still the EVMs game. 90% of games are building on the EVM. I would say like immutable is probably the one that's been the most focused and concentrated and has won the most. And if you, you know, flash forward a year, like, does this look different?

• 1:03:26Speaker 00

  It does, because once you start to have, you know, say immutable gets like a ton of users on their chain. Like, that's just another value prop. Like you want to launch on a chain with a shitload of gaming users that are willing to try your product. Try IMAX. And so like, once the flywheel starts spinning, the moats are gonna build. And I think that is kind of the next phase of like, say, say, ILUVIUM works and there's like, you know, 50 million players. Guess where everyone's gonna want to launch on immutable, where they are?

• 1:03:55David Hoffman?

  Mm hmm. Okay, so the immutable is like kind of one piece of real estate for everyone to share. What I didn't hear is any sort of conversation about one chain per game. Or at least when that chain, that game hits scale, that they might be interested in having their own domicile, having their own sovereign network. Maybe it's just too early for these conversations. We'll see when that game gets that large. Maybe that's that your response?

• 1:04:24Speaker 00

  They will, you know, but that's probably like three or four years down the line. And it may even be still within the same like IMAX or Polygon or whatever ecosystem. But I think like the job to be done right now is like build successful games. Once, you know, we've already seen that like on a long enough time horizon, everyone wants to launch their own L2. I'm sure that will happen here too. But like, we're just not in that phase of the game quite yet.

• 1:04:49David Hoffman?

  Okay.

• 1:04:50Ryan Sean Adams?

  Okay, can you guys, this was another narrative that started to kick off in the gaming, like crypto gaming world in 2021, which is like the traditional gaming studios are coming, right? Is this kind of like the herd is coming type of riff, I think?

• 1:05:02Speaker 00

  I don't think they're coming.

• 1:05:04Ryan Sean Adams?

  Okay, tell me about that.

• 1:05:05Speaker 00

  I mean, there's some, there's some.

• 1:05:06Ryan Sean Adams?

  I heard there was like maybe two weeks ago, Lance, maybe the Roblox CEO. And he said something to the effect of, hey, you know, it might make sense to do something on Roblox, like an NFT. He actually used the NFT word. So like, I is, but you don't think they're coming at all? Is that not going to be a tailwind for crypto gaming that traditional studios start to play around with immutable and deploying assets and Fortnite skins? You know, like that was the thing in 2021.

• 1:05:35David Hoffman?

  It's kind of like.

• 1:05:38Speaker 03

  Like when Netflix was first coming up, like it was like this streaming enabled player. They were faster, they were smarter, they had more data, they used all the new technology to their advantage and they leapfrogged everyone else. And then you had HBO Max that was trying to launch their own streaming service for like 10 years. And they like launched it once, half ass, they like pulled it back. At one point they had HBO Go and HBO Max. They like pulled that back, they rebranded as Max, like they're trying to like, you know, compete with all the major streaming players, but they're not even like a 10th of the scale. The people who actually use this technology from first principles versus like, we're thinking about an NFT, you know? What do you think? It's just like, you know, it's like worlds of difference. So I think it's, um, it's an innovator's dilemma always.

• 1:06:25Speaker 03

  And the entrepreneurs who they're competing against are just like not sleeping. You know, it's like.

• 1:06:30Ryan Sean Adams?

  We don't need trad gaming then. We just don't even need them.

• 1:06:33Speaker 03

  I mean, look at, look at the, the past platform shift of, you know, desktop or console to mobile. You know, the biggest mobile based game developers are not the biggest developers of games from previous platforms either. You know, it's not the Ubisofts, it's not, you know, the Epic. Sure, they have mobile games, but it took them so long because for them it was, how are we going to be able to fit this Call of Duty game, this first person shooter onto a mobile device? Like it's just, we're going to have to degrade the service so much. And to Vance's point, that's a classic innovator's dilemma problem. You have to start from the ground up with the new platform and that's what blockchains represent. It may be eventually the Ubisofts or the kings of the world, or you know, even the Zynga's, the Tate 2s, they're going to be able to build something that's on chain or integrate to NFTs.

• 1:07:16Speaker 03

  But I think they're going to have to be shown what that playbook is and it's going to have to be not just one instance of it, it's going to have to be like, we hit them over the head 20 times before they start to get the picture. And, and we haven't even started yet, you know, we haven't hit that candy crush moment.

• 1:07:30Ryan Sean Adams?

  So far we've been talking about games that are sort of using the blockchain for sort of the property rights type use case. And if that sounds so, you know, to you, Pyne the Sky, just basically saying the assets, whether it's a token, a coin of some sort, or it's a, an NFT, an item, a skin or something like this, they're all registered on chain. But the rest of the game is just on like traditional, you're gaming servers and an AWS server somewhere or something like this. There has been another, I guess, theme that is sort of very indie right now. And actually, David's been on the frontier of exploring this a bit more, which is like fully on-chain games. I don't know if, David, maybe, maybe you should give like an explainer of this, not for, for Michael and Vance, but for Bankless listeners to pose the question of like, what

• 1:08:15Ryan Sean Adams?

  do you guys think about this? But what's a fully on-chain game, David?

• 1:08:19David Hoffman?

  The way I would define it is just like this state of the game is derived from data that's held on-chain. So like, when you are looking at your computer screen and you're looking at some sort of visual image of that, it's not coming from a server that is being served to you by like Activision Blizzard. That data of how it's being displayed to you is coming from reading a blockchain. And so fully on-chain game, like the physics are on-chain, the assets are on-chain, the moves are on-chain, like everything is on-chain. So it's actually just like the entire game logic. We talk about DeFi is putting like business logic on-chain. Fully on-chains are like all gaming logic exists on-chain, which is a completely different endeavor than just like building a game with some assets in it.

• 1:09:02Ryan Sean Adams?

  Yeah, what do you guys think of this? Is this sci-fi? Is this near terminal? Are you guys looking at this at all?

• 1:09:07Speaker 03

  We've looked at a couple of different, I mean, Dark Forest is kind of like the, the start of this concept. You know, Dark Forest took down X-Die because of the amount of throughput.

• 1:09:17Ryan Sean Adams?

  That's it? Oh, wow.

• 1:09:20Speaker 03

  This, this, you're always going to be battling with a throughput problem. And I think it could be interesting to have things that, you know, game types or game models that don't necessarily need synchronous throughput as, you know, a core component to make it a fun to play game. Maybe this is like a turn-based game or something that, you know, you kind of, you make your play and then you wait for other people to make theirs. Like, there's, there are game models that I think could work. I also think with infrastructure getting faster and cheaper and better, you know, the cost of using, you know, putting something fully on-chain is, is going to go down as well. And yeah, I mean, there could be other things that come up, but frankly, this is, it's

• 1:10:02Speaker 03

  not sci-fi, but I think this is probably like way further out than, you know, the traditional game types that are going to be launching soon.

• 1:10:09David Hoffman?

  Strikes me as like a little bit like Urbit-esque. Like, we all need self-sovereign servers because reasons.

• 1:10:17Speaker 00

  Like, you know, you never like fully get to like the why. Um, and I think why we're bullish on gaming is like a different reason than, you know, most people are bullish on on-chain games. We're bullish gaming because there's billions of people who play it and they look, feel and act very much like crypto people. And we're not that far. Like putting it even further away from them doesn't feel like, at least for us, like the best path.

• 1:10:41David Hoffman?

  Go into that a little bit more, Vance. Why are, why are gamers like crypto people? Or how cut from the same cloth are we?

• 1:10:48Speaker 00

  I mean, have you ever hung out in a, like a gaming discord and they're all screeching at each other for, you know, you really can't even interpret and they're, they're on their computer, you know, they're internet people. Um, they're obsessive. They own digital items. They participate in digital economies, like a lot of

• 1:11:02Ryan Sean Adams?

  Freaking nerds, David.

• 1:11:05Speaker 00

  They are literally like, you know, somewhere in the genealogical tree, like they're our cousins. And so it just doesn't feel like a large lift, um, to get them in here. It's a lot different than like, I don't know, say like music people, like music people are cool. They go out, you know, they do different things. They're not, they don't own digital assets other than something on like iTunes.

• 1:11:27David Hoffman?

  Right.

• 1:11:27Speaker 00

  You know, it's just different.

• 1:11:31Ryan Sean Adams?

  I mean, one other thing I'd say to that is like, almost everyone I've met in crypto has like been a gamer, like previously or is a gamer now still.

• 1:11:39Speaker 00

  You played RuneScape, you played WoW, you played like so many origin stories are from that stuff, including Metallica's.

• 1:11:45Ryan Sean Adams?

  Yeah, exactly.

• 1:11:47David Hoffman?

  Yeah, including Metallica's. Yeah. Our Diablo two, I think is the game that Ryan and I share the most, just with nostalgia and also with crypto memes.

• 1:11:54Ryan Sean Adams?

  A hundred percent.

• 1:11:55Speaker 00

  Like the, the cat CL 120 or whatever, like he's always streaming League, you know, like pop in and watch that. He's playing that with like Ansem and like a few other crypto people. Like they are us, you know?

• 1:12:09Speaker 00

  Like, it's the same thing.

• 1:12:10Ryan Sean Adams?

  So let's talk about the, um, let's talk about our bags for a minute. Okay. So like, by our, I mean, uh, crypto natives. So I, I feel like one of the themes lately has been we've created all of this cheap block space. Now who's gonna buy it? Right? Like, and I, I'm wanting you to say that's going to be the crypto gamers in the crypto games. All of these layer twos pumping up, you know, block space, mostly it's empty block space. And in order for the economics of this entire crypto system to work and the, the promise of crypto to work, somebody actually has to want that block space, actually has to demand it. And, you know, of course we're, we're ultra bullish on DeFi, all sorts of other use cases. But could crypto gaming be the big demand catalyst for our block space?

• 1:12:53Ryan Sean Adams?

  What if the 2023, 2024 version of crypto gaming is maximally successful? What does that do to layer twos and block space? What does that do even to DeFi? What are the kind of the, the riplon effects in the crypto native economy, do you think?

• 1:13:11Speaker 00

  So, I mean, the biggest, uh, to your last point, I mean, the main, other than Binance, the main exchange for trading alluvium tokens is Sushi Swap on Eth. Yeah. And so like, you know, gaming is going to benefit all the infrastructure from ETH that's getting, you know, posted for data availability and settlement to the actual DeFi primitives like Sushi Swap. Like a rising tide will lift all boats. It will be lumpy. Like alluvium will probably have days where it's making more fees than, you know, the L2 that it's based on. Immutable might have some days where like, if all the games are firing, it's like the most revenue generating blockchain that exists. But generally like a rising tide is going to lift all boats.

• 1:13:55Speaker 00

  And I'm more concerned at the margins about an ecosystem that's trying to create like a mini ETH. You know, we have like a mini DeFi protocol and like, we have like smaller NFTs that are cheaper. Like, I just don't think that's like a differentiated use case of block space. And it's also not the same quality as ETH. I think what you're going to need to have to fill all this block space is differentiated use cases. And so like, I'm more bullish on like a gaming chain, you know, that rolls up to an ETH chain. And I'm more bullish on like, I don't know, maybe even like an NFT specific chain that rolls up to the ETH chain. But like recreating mini versions of ETH, I don't think is a good use of block space.

• 1:14:33Ryan Sean Adams?

  Okay, so let me just unpack what that means. When you said Sushi Swap was the biggest exchange, like maybe the deepest liquidity for alluvials, which is kind of, these are the assets of alluvium.

• 1:14:45Speaker 00

  Fungible token.

• 1:14:46Ryan Sean Adams?

  Fungible tokens, okay. So these are the tokens, the ERC20s of the alluvium ecosystem. So how does that work practically? Is just all the activity happens inside of the mutable chain? And then when people want deep liquidity to actually like exchange their alluvials, then they just bridge back to like, you know, ETH L1 right now. I mean, in the future, that could be an L2 with deep liquidity. And that's where they sell it. And so effectively, what's the knock on effect of that? More consumption of block space for Ethereum and for DeFi and actual use of, you know, the DeFi protocols through these on-chain assets.

• 1:15:25Ryan Sean Adams?

  And that's essentially the upside for everything in the crypto economy is that where we've just provided the banking, financial infrastructure for all of these games, all of these on-chain games that we're creating.

• 1:15:39Speaker 00

  Right. Like, you know, for most people, DeFi isn't something that you do. DeFi is something that facilitates something that you're doing. You know, you want to get an asset, you want to get out of an asset. It's not like you came on-chain to trade DeFi. It's like you came on-chain to play a game and there's an ownership aspect of it. And a lot of it is like kind of infrastructure-esque. So, you know, like, I think about ETH and I'm not concerned about block space demand there. Like it takes like somewhat chaotic of an afternoon to send Gua to 100 for most of the day in like a semi bull market. For most of these other L2s, like I just don't understand, if you're not vertically oriented with apps, how you drive block space demand?

• 1:16:22Speaker 00

  Because it can't just be a mini version of ETH. It needs to be something that's oriented around gaming or. Some other consumer use case. And I think that's kind of like where we net out is that maybe like the generalized L2s of today are not really kind of what ends up being powerful tomorrow. It's like value capture, especially in this space is so fleeting where OpenSea can be worth 13 and a half billion one day. And then, you know, a year later, it's worth, you know, 900 million or whatever it's worth today on secondaries. I think you could see some of that happen with, you know, the abundance of L2s that we have today.

• 1:17:01Speaker 03

  Only thing I'd add is that I think we're also just sort of discounting the amount of scale that successful games have. And, you know, one example is a game that we've been talking to, and they did their initial mint of sort of just like badges as NFTs that if you're in the Discord or if you're participating in the ecosystem, you get one of these NFTs and it grants you access to like the alpha or the beta product as they start testing new features and things. That mint alone was 40% of all transactions in March of this year on Polygon. And that that's just one game that hasn't even launched yet.

• 1:17:41Speaker 03

  And, and so, you know, you think about the scale of like something that just hits, you know, a million or a couple million of monthly active users, that's probably probably more activity than we've seen on chain yet in any of the markets that we've been in over the last few years.

• 1:17:56Ryan Sean Adams?

  Can I ask you guys a question? So, so how many gamers are there worldwide right now?

• 1:18:00Speaker 03

  Three billion play.

• 1:18:02David Hoffman?

  Billion?

• 1:18:03Ryan Sean Adams?

  Billion?

• 1:18:04David Hoffman?

  There's like eight billion people?

• 1:18:06Speaker 03

  Yeah.

• 1:18:06David Hoffman?

  Three billion are gamers? Hang on.

• 1:18:08Speaker 03

  True.

• 1:18:09David Hoffman?

  Does Candy Crush count?

• 1:18:10Ryan Sean Adams?

  Yes.

• 1:18:11Speaker 03

  Yeah.

• 1:18:11David Hoffman?

  Yes.

• 1:18:13Speaker 03

  No, three billion console games. Three billion people play a digital game every single month. Yeah.

• 1:18:21Ryan Sean Adams?

  All right. So there's three billion. Okay.

• 1:18:23Speaker 03

  Yes.

• 1:18:23Ryan Sean Adams?

  What, what portion of those three billion own crypto, do you think?

• 1:18:29Speaker 03

  I don't know if you if there was a Venn diagram, I'm not sure how much those circles would intersect. But like crypto is first and foremost, a demographic and geographic phenomenon. It's more popular with young people. It's more popular in developing countries than it is in developed countries.

• 1:18:44Ryan Sean Adams?

  And so I'm wondering if in addition to block space consumption and DeFi consumption, all of these things is like, or finally, and maybe this is a recycled 2021 narrative. And by the way, all the the, the, the good narratives do come true in the fullness of time. Okay.

• 1:19:00Speaker 03

  Oh, yeah. Best narratives are multi cycle.

• 1:19:02Ryan Sean Adams?

  That's right. Well said. So we got three billion gamers and their first experience with crypto is not like buying Bitcoin or Ether. Like we all thought, you know, hard money, guys, come on. They don't care about that. It's they've just played a fantastic game. And now they see the value of crypto because they've just, you know, mined a bunch of alluviums. Sorry, mining is probably the the wrong term, but they've played hard to earn these alluviums. And now they're you're selling it in crypto. And that turns them on to, oh, what is this asset called Ether? Right? And like, do they become net buyers of that? I mean, could, am I getting too bullish there? Or do you think this is really an onboarding mechanism that we haven't tapped into fully yet?

• 1:19:47Ryan Sean Adams?

  And and could actually pump our assets, guys?

• 1:19:51Speaker 03

  Bring it home. There we go.

• 1:19:55Ryan Sean Adams?

  Just wondering.

• 1:19:56Speaker 03

  My, my guess is that in a year or two's time with, you know, what's to be hundreds of of games launching, we're going to have 100 million people, net new people into the Web three ecosystem with private key ownership. Whether or not they know it, I think, doesn't really matter. You're going to have 100 million people on chain in a few years' time. Most of that's going to be driven by games.

• 1:20:18Ryan Sean Adams?

  Okay, well, let's close this out, guys. This has been a fantastic tour. You've gotten me excited about crypto games again, and I haven't felt this excitement in a good 18 months or so, I would say. I'm pretty excited, so.

• 1:20:29David Hoffman?

  When's the last time you played a game, Ryan?

• 1:20:30Ryan Sean Adams?

  Uh, it's been a while, David. Let's not get into that.

• 1:20:32David Hoffman?

  More than 18 months.

• 1:20:33Ryan Sean Adams?

  I have fond memories.

• 1:20:36Ryan Sean Adams?

  I like that, you know, I gotta pass the torch to a new generation of gamers here, but, um, so we mentioned Illuvium, right? And that's coming out, um, imminently. Is it available right now? Like, tell us about the games tomorrow. Okay, so at the time of recording-

• 1:20:50David Hoffman?

  Today is the 27th of November.

• 1:20:53Ryan Sean Adams?

  Yeah, so we'll get this out soon. So it'll be out by the time you guys are hearing this episode. And so is that the game, if you were to pick one game for people to get started, that showcases the glory of crypto gaming for crypto natives now? Would it be Illuvium? They should go check that out.

• 1:21:07Speaker 03

  Yeah, go check it out. It's the first one that's launching that's like, you know, the, of the major crypto games, I would say there's like maybe two or three of those. And then there's kind of a whole long tail, but like, if you really want something that's high fidelity, that looks amazing, it's Illuvium.

• 1:21:24Ryan Sean Adams?

  It's Illuvium.

• 1:21:25David Hoffman?

  Do you need a GPU?

• 1:21:26Speaker 03

  No.

• 1:21:28David Hoffman?

  Oh.

• 1:21:28Speaker 03

  Yes, you do. For some versions of the game you do, yeah. For the, for the-

• 1:21:33David Hoffman?

  Depends on which game you're playing, but you need to play it on a computer.

• 1:21:37Ryan Sean Adams?

  Okay, okay. So that's the game. And then, uh, as far as you platforms out there that are, that are kind of crypto gaming platforms immutable, is that, is that kind of the biggest one? Are they, you winning the most market share at this point?

• 1:21:50Speaker 03

  I would, I would say that that definitely seems to be the case so far. Um, but once the, yeah, Illuvium is built on immutable, I think that's the start of when we see these games launch and where they aggregate. But immutable seems to have all the technology pieces that we've been missing the last few years.

• 1:22:05Ryan Sean Adams?

  There we go, guys. All right. Well, it's an exciting time to be in crypto, crypto gaming, leading into, uh, 2024. We, uh, we're gonna do it this time, everybody. So, uh, Michael, Vance, thank you so much for joining us. This has been a lot of fun. Thanks, guys. Thank you. Appreciate it. Bankless Nation, if you want to dip into the archive and hear what we are thinking about crypto gaming about 18 to 24 months ago, we'll include a list of previous episodes for you. I think a lot of those Mind how far we've come. Those concepts are multi-cycle, right, Vance? I'm pretty sure. Exactly. Got to end with this, of course, risks and disclaimers. None of this has been financial advice, neither crypto financial advice nor gaming financial advice. You could 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 in the Bankless journey. Thanks.