Behind Axie Infinity's Engine | Jiho (Layer Zero)

Jeff ‘Jiho’ Zerlin—or jiho.eth on Twitter—was an early Axie Infinity community member before becoming the project’s Co-Founder. Ever since he could remember, Jiho was a gamer, collector, and entrepreneur. Jiho wouldn’t be the engine to Axie’s growth today without his formative childhood. This is what shaped him to become the community leader of the leading play-to-earn game in the world, Axie Infinity. Now—Jiho and the Axie Nation are taking things to the next level. Jiho shares the stories from his early formative years that shaped him to be the engine of Axie’s growth today, how community building changes in bull and bear markets, and what Axie’s secret ingredient is to the project’s lasting staying power. ------ 📣 ZERION | Trade Across 7 Networks and 500+ protocols https://bankless.cc/Zerion ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🍵 MATCHA | SMART ORDER ROUTING https://bankless.cc/Matcha 🚀 SLINGSHOT | LAYER 2 SOCIAL TRADING https://bankless.cc/Slingshot 🏦 GEMINI | TURN FIAT INTO CRYPTO https://bankless.cc/Gemini 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants ------ Topics Covered: 0:00 Intro 4:52 Jiho’s Formative Years 15:47 Jiho’s Evolution at Axie 23:44 Axie’s Staying Power 34:50 Community Building in Different Markets 39:50 Organizing Axie Nation 44:50 Investing in P2E 50:44 Axie’s Emotional Bond 58:00 Optimizing for the Metaverse 1:05:46 What Jiho is Optimistic About ------ Resources: Jiho on Twitter https://twitter.com/Jihoz_Axie Axie Infinity https://axieinfinity.com/ ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:00Speaker 00

  Some people might get the community rights and some people might get the economy right, and some people might get the scaling, right? Some people might get the art and the gameplay right, but I think putting it all together is where the magic happens.

• 0:14David Hoffman?

  Welcome to Layer Zero. Layer Zero is a podcast of unscripted conversations with the people that make up the Ethereum community. Crypto is built by code, but it's composed by people, and each individual member of the crypto community has their own story to tell. The Cypherpunks understood that the code they write impacts the people that use it, and Layer Zero focuses on the people behind the code, because Ethereum is people all the way down, and it always has been. Today, we are speaking with Jiho from Axie Infinity, and Axie Infinity might be one of the first organizations that knowingly is calling them a nation, and really, really fits that model. And I really think the Axie Nation is the right way to understand what Axie is trying to do.

• 0:55David Hoffman?

  And so that makes Jiho one of the first core community leaders of the Axie Nation. Has a very interesting vantage point as to how to view communities, communities growing around Web 3. I think, as we all know, like, all things in Web 3 all have communities around them. Everything that tends to work tends to also have its own community. And so we discuss how the Axie community has grown, the ways that it has shaped over the years during, in its various sizes, as Axie has progressed through its development. We talk a ton about what the Metaverse is, what it means, why people like it, and how it will be shaped in the future, and also just some other fun facts and tidbits about

• 1:40David Hoffman?

  Jiho, which I don't think you would get anywhere else. So, let's go and start talking to Jiho, right after we get to some of these fantastic sponsors that make this show possible. When you shop for plane tickets, you probably use Kayak, Expedia, or Google to compare ticket prices. So why would you limit yourself to just one exchange when you trade crypto? When you make your trades, you want to make sure you're getting the best possible price on your trade, and that's why you should be using Matcha. Matcha has smart order routing that splits your trade across all the various liquidity sources in Ethereum, and is also operational on Polygon, Avalanche... Finance Smart Chain and other chains. Trading on Matcha is super easy because it pools the liquidity for me in a single, easy-to-use platform and allows me to make a limit on-chain orders. So you can set and forget your DeFi trades and they will go through automatically while you're away.

• 2:23David Hoffman?

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• 3:04David Hoffman?

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• 3:48David Hoffman?

  Do you have something of value that you think you want to contribute to the Uniswap ecosystem? No matter how big or small your idea is, you can apply for a unique grant at uniswapgrant.org and help steer Uniswap in the direction that you think it should go. Thank you, Uniswap, for sponsoring Banklist. Hey, Jiho. How's it going?

• 4:05Speaker 00

  Hey, David. Yeah, doing well. Thanks for having me.

• 4:08David Hoffman?

  Yeah, yeah, of course. Where are you in the world right now?

• 4:11Speaker 00

  I am in Puerto Rico.

• 4:14David Hoffman?

  Oh, yeah? Well, are you? Do you live there? I don't think you don't live there, do you?

• 4:17Speaker 00

  I'm staying here for a bit. I got stuck here after Metaverse and, you know, just have a lot of work, so I didn't want to just stop traveling, so.

• 4:26David Hoffman?

  Well, Puerto Rico is not a bad place to get stuck at. So that must be a vibe. There's a lot of crypto people down there. Anybody from Axie?

• 4:33Speaker 00

  Uh, yeah, there is some Axie community members down here for sure. Uh, we play basketball, go to the gym together. Uh, so.

• 4:40David Hoffman?

  Hey, well, I'm sure you have a Axie friends all over the world. So no matter where you get stuck at, you can probably hang and find some, some members of the Axie Nation wherever you live.

• 4:50Speaker 00

  Yeah, that's, that's one of the best parts of the community.

• 4:52David Hoffman?

  Um, so where'd you, uh, grow up? Let's go back to your, let's go back to just like your formative years. Where, where'd you grow up in the world?

• 4:59Speaker 00

  So I grew up, I was born in New York and I grew up there for the most part. Um, yeah.

• 5:06David Hoffman?

  Grew up gaming?

• 5:07Speaker 00

  Yeah. So I, yeah, grew up as a gamer, as a collector. My dad is, my dad's an interesting guy. He's like, he's a polymath man. So he has like so many different interests. So he owned a gallery as, as a painter. He collects insects and fossils. He's really into like moths and butterflies. Um, he's actually an attorney as, as, as kind of, as for his profession. So he's kind of like doing a lot of different stuff. Uh, my mom is Korean. She's like a typical tiger mom. She was super strict. Uh, so I was always right, like trying to play games. She was always trying to get me not to play games. Uh, my cousins are Korean. I'm half Korean. Um, so Jiho is actually my name, uh, my Korean name.

• 5:47Speaker 00

  And my cousins would bring over like Starcraft, Diablo, World of Warcraft. It's kind of how I got into, into gaming a bit. Whatever game I played, my, my entire school ended up playing. Um, for some reason I was like the curator. Uh, and yeah, so I, you know, got, got really into gaming as a kid. I was an only child. So I think like I was, you know, just keeping myself occupied and trying, you know, kind of right in the early days, right? Like Starcraft, that was the first thing I ever did on the internet and you could actually kind of socialize from your, from your bedroom as, as, as a kid. Yeah. My mom sent me to boarding school because I was way too into WoW, vanilla WoW. Um, and that's basically why I left New York, went to New Hampshire. Yeah.

• 6:26David Hoffman?

  These are all Blizzard games. Is that a coincidence, or what's up with that?

• 6:30Speaker 00

  Those are, I think, a lot of the games that really defined me, I think, happened to be Blizzard games. I was also really into Donkey Kong Country, like during the Super Nintendo days. Zelda, like all green of time, I think I played through maybe 20, 20 plus times. Obviously, Pokemon, I still have my Pokemon collection from when I was a kid. I was an early adopter. I didn't know at the time, right, but I have a bunch of like first editions and shadowless that I was just collecting as a kid because I wanted them. Like I would sell shark's teeth and my drawings and stuff like that to scrounge up enough. And yeah, apparently my collection's worth quite a bit now, which is crazy because like that was all,

• 7:15Speaker 00

  yeah, and it just collected by me as a kid without too much capital.

• 7:20David Hoffman?

  And was it to play the actual Pokemon card game, or was it more about the collection?

• 7:25Speaker 00

  It was more about the flex, I think, and just I have this collector's instinct, right, where I just, there's some things that I just need, right? And I think it's similar to my dad. I think it's genetic. I think I inherited it from my father, right, where my dad has cases on cases of butterflies. I think he has like around 40,000 insects that he keeps in our house. So I think I just have that collector's gene. So, you know, I got really into, you know, I played Pokemon on Game Boy, but in terms of the card game, you know, I was an only child, so I didn't have anyone to play against me. So I would just collect them, you know, I was always, yeah, like that was, right, those were in the days of kind of, right, it's like if you wanted to play with other people, they had to like kind of come over to your house or whatever.

• 8:07Speaker 00

  So people would come over to hang out, but most of the time I was just by myself. Like I was one of the kids that bought two Game Boys so I could trade with myself, my red and blue version, so I could get the 150, right? You couldn't get 150. That was one of the genius aspects of Pokemon is you needed, right, like you couldn't get all 150 in the classic, right, in the classic versions unless you actually, right, like somehow traded with someone who had the other version of the game. I guess like the, yeah, the loophole was that you could just be both people.

• 8:37David Hoffman?

  Did you ever complete your Pokédex?

• 8:39Speaker 00

  I think, yeah, I think I had 150.

• 8:41David Hoffman?

  Yeah. Which was your starter? What was your starter Pokemon?

• 8:46Speaker 00

  I picked Charmander. I like reptiles. Like, I grew up having lizards and salamanders or not reptiles, like amphibians, but yeah, like I always had frogs, salamanders, reptiles, snakes, turtles.

• 9:06David Hoffman?

  So you picked the, yeah, right, gotta pick the fire reptile. You said that you were like the trendsetter for your, for your school's games. I want to unpack that a little bit. How'd that happen? Like, why, was it a coincidence or was it just you had the energy about the games that you liked and that ended up being enough? What was there?

• 9:28Speaker 00

  Yeah, it's strange where, right, like, yeah, I would, you know, I want, I just wanted people to play with me or like with Diablo, like I would get people and, right, I was like, you know, I wanted people to trade with on amicable terms or to kind of farm for me. I would gear them up and, you know, say, hey, get me, you know, send me some stuff later, you know, once you're up and running. So, yeah, I don't know. I think I was just really into it and my, I think also it was like my cousins were really, they're Korean. They were like really kind of ahead of the curve. They would get like the new Blizzard game as soon as it came out. So for some reason, I was always the one who would get this stuff first. And also, right, it was like also,

• 10:13Speaker 00

  I think my, my birthday was right around like where like, you know, games would launch. So I would always, you know, get whatever for my birthday and try to spread it to the rest of the school. So I had people to play with.

• 10:27David Hoffman?

  Yeah, a winter birthday?

• 10:30Speaker 00

  Yeah, I'm in February, early February.

• 10:32David Hoffman?

  Yeah, okay. That's pretty, that's pretty cool, cuz like, actually, we'll go in, go into that later. What was it, perhaps, I mean, you're kind of a charismatic dude. So when you come to, come to school with your games that you want to talk about, were you like a school socialite? Like, did you like to, you just like to just share stuff with other people and it just happened to be games? Or like, what was your role in, with your friends in school?

• 11:00Speaker 00

  It varied over time, but I think like, if you ask my, like, it's hard for me to, you know, comment on that, but if you ask my mom, my mom will say that, you know, everyone, for some reason, all the boys or whatever, like, wanted, you know, to be my friend for some reason, they would try to like impress me by playing games. I don't know, I don't know what it was about, but.

• 11:19David Hoffman?

  Do you see any of that still being true in your, your time at Axie now?

• 11:23Speaker 00

  I don't know, like, I mean, I think great, like.

• 11:25David Hoffman?

  You have an entire continent wanting to play with you at the moment.

• 11:28Speaker 00

  Yeah, thinking back, right, it's like, it should have been obvious that I think I could be a good, you know, a person to evangelize a game, to spread a game. It's, you know, it's come more into focus as things have progressed. So, yeah, it's, it's, it's, it's been, it's been a crazy journey. And, you know, I never, I never would have dreamed that I would be, you know, involved in gaming as a profession. I didn't know what I want to do with my life for most of my life. It's, it's only within the last four years or so that I've really, yeah, felt like I've, I've, I've found my calling.

• 11:59David Hoffman?

  Did you ever have like a entrepreneurial spirit as a kid, or is that also relatively new?

• 12:03Speaker 00

  I think I was, so I was, you know, selling shark's teeth. I sold candy in my lunchroom.

• 12:09David Hoffman?

  Shark's teeth, like, like, we're talking about actual shark's teeth?

• 12:11Speaker 00

  Yeah, fossil shark's teeth, like fossil shark's teeth, like 10 million, cuz my dad, he, we would collect fossils on the weekend, and he would, you know, he would let me take, you know, the ones that weren't perfect and, and sell them to the kids.

• 12:24Speaker 00

  So yeah, I was all, you know, I was kind of artistic as a kid too. I was, you know, selling my drawings. I would sell my drawings and paintings to anyone that came into my house, like my mom's friends, my tutor, people who came over to my dad's, uh, who came over to look at my dad's collection. So, you know, I think like, I have, I think I'm a people pleaser. Uh, so I, I think like, right, like also giving people what they want and right, having like some kind of beneficial two-way transaction, I think makes me, makes me happy.

• 12:55David Hoffman?

  So it wasn't out of like a, like a drive to save up for something that you wanted to purchase. It was more about like the transaction itself?

• 13:03Speaker 00

  I, uh, I think really there's a social element of it, but then obviously, yeah, like, you know, I always was saving up for something. Right. I, my shadowless Charizard, I saved up, you know, a while to be able to buy it. I think I paid 15 bucks or maybe 15 to 25 bucks. I think they're worth like 15K now.

• 13:20David Hoffman?

  Oh my God.

• 13:21Speaker 00

  So, so I saved up for a while for that. Um, I would create, my mom would, and I would, we would, I would actually create my own reward structures as well, where it was like, oh, if I do something good, I'll get a marble. Um, and then if I get 10 marbles, my mom would give me like $10 or buy me a Tory or something like that. So I was also interested in that kind of stuff. But yeah, I don't know. I would say I was relatively entrepreneurial kid. I think that there are more entrepreneurial kids out there. But yeah, you know, I had a little bit of that in me.

• 13:54David Hoffman?

  That sounds a little bit of a, uh, incentive gamification that you impose upon yourself by your mom. Is that, is that sound about right?

• 14:04Speaker 00

  Yeah, I would create the incentive structures that my mom would use to keep me behaved. Yeah.

• 14:09David Hoffman?

  And then of course, naturally, this just lends itself into game, like game economics design later, right? Like is that, is that a direct one-to-one comparison or am I reaching for something here?

• 14:18Speaker 00

  Yeah, I think, I think there's some, I think there's some parallel there. Yeah.

• 14:22David Hoffman?

  Yeah. Why do you feel like you've enjoyed that so much? Like, most kids don't want to impose rules upon themselves.

• 14:30Speaker 00

  I think it was like, I wanted, I wanted something and I wanted, uh, yeah, I wanted like a clear path towards getting it. Um, so yeah, it was kind of like negotiation strategy, I think with, with my mom as well.

• 14:44David Hoffman?

  Um, let's see, do you think like, do, do you like the sense of, did you like the sense of achievement? Was that about it? Like, uh, you know, victory unlocked?

• 14:53Speaker 00

  Kind of, yeah. Yeah. I think, I think I do like transparent reward systems, I think. Um, I always, I'm, I'm, you know, tend to think about that a lot with, right, Axie, you know, not just within the game. You know, the game economy, I have like a, you know, I would say, you know, relatively small role with, but also, you know, the creators and the, and the community and how everyone, everyone kind of aligns incentives, uh, with each other, for sure. I find that, I find it fascinating, right? I think that's actually right, like, my understanding of Web 3, because I come, you know, I'm not, I don't come from a technical background. Um, and I come from a gaming, uh, background, the collector's background, right? So, uh, for me, right, like the, well, the huge unlock that I see with Web 3 is, you know,

• 15:34Speaker 00

  figuring out how to align incentives, um, and create these kind of sustainable economic engines to these open source technologies. And so that's, that's like a lot of, you know, how I'm looking at the space right now.

• 15:48David Hoffman?

  So from, for the out, the onlooker, the people that aren't like diving into Axie Infinity every single day and kind of just like knows that it exists and that it's extremely vibrant. Your role in Axie kind of just looks like this great community manager, like this great community leader, who's just like part of just like injecting vibes and energy into, into the community. Would you, A, A, do you agree with that, uh, take? And then B, if you, for somebody that would like to actually peer deeper into the scenes, what do you actually do?

• 16:19Speaker 00

  Sure, so I think that's fair. So I actually come from the community, which some people might not realize or remember in many cases. So I discovered Axie just like a lot of people, just like much earlier, right? Where I was one of the first, I don't know, a couple hundred people in the Discord. It was very small, there were around, you know, maybe five to 10 people there to kind of welcome me and walk me through. And you know, I was, I was super excited about it because right, like I was, I was an early CryptoKitty community member, right? And there was always, there was this notion like, hey, like, we need to be able to do more with these things. So it's not just about breeding and selling them, right? Like, there has to be some emotional value, there has to be something fun that we can do. So it's not just us dumping cats on each other, right?

• 17:00Speaker 00

  So we kind of, you know, there was a little bit of that already that the space kind of understood. And you know, so I, you know, I fell in love with the art and the fact that there was, you know, this roadmap towards a playable game that seemed achievable, you know, that really, that really resonated with me. So I just started, you know, I just came in and started doing all the things that I, I thought I could, I could help with, right? So like, you know, helped write the original white paper. I started doing a lot of the announcements and, you know, yeah, community building, right? Where in the early days, just doing unscalable things, like getting to know everyone in the community, sharing the vision repeatedly, so people understand like, you know, what we're building and why.

• 17:43Speaker 00

  So yeah, I think, I think like a lot of that is still applicable today where, you know, I do a lot of stuff around the community and the economy. I think it's very interlinked, right? Because, right, ultimately, what's, what creates the sustainable economic engine is, right, that people are spending, right, for fun or for status within the ecosystem, right? Like, that's, that's what's kind of subsidizing, right? The, the economy and this ability for people to actually earn.

• 18:10David Hoffman?

  Was it as simple as just understanding Axie to be CryptoKitties but with a game? Or was there extra magic sauce that compelled you in addition to that?

• 18:20Speaker 00

  Yeah, I think that was part of it, right? Like, we were just iterating, right? Like, I think a lot of it was, some people saw Axie as a fork of CryptoKitties, right? Like, the marketplace contract is very similar. The breeding contract is very similar. And a lot of the early community members, right? Like, you know, kind of gave up on CryptoKitties and came over to Axie. So, right, there was a little bit of that. Yeah, a lot of the people who got it immediately were like, hey, like, we, there was three weeks where we could breed CryptoKitties and actually make money, right? Like, how could this, you know, potentially last forever? So I think a lot of the people who were thinking through that framework were actually able to understand Axie, yeah.

• 18:59David Hoffman?

  And then, was it, was it in equal parts of like the fun of the game and/or with the tokenomics, the breeding? Or was it, were you actually thinking like, oh, this is actually a really fun game? I, I'm excited to play this. Or was it more about just like, oh, there's this fun, like, weird breeding economic system behind it? Like, was it, was it both or was one really compelling?

• 19:21Speaker 00

  I think it was a combination, right? Like, yeah, the idea that, right, like, you would actually need to spend time in game to earn the right to breed? I think that was like, right, like, one thing that just locked into place and seemed to make sense, right? Where you could basically, right, like, the problem with CryptoKitties was there's just a hyperinflation because people could just like, you know, keep breeding at will. Whereas, right, the idea that, okay, if you actually sunk human time, effort, and skill and to earn the right to be able to breed, right? This would, you know, act as a, as a way to basically, right, back each Axie with, with real human time and effort. So I think that was a lot of it, right? And then, you know, people were, part of it was just the community. Like, people were willing to help. People understood that this was a community-driven thing. They were really helpful. They were making awesome memes.

• 20:05Speaker 00

  They were making awesome, you know, there were, has, we had some initial early video content creators and stuff like that. So there's awesome art. So, yeah, I think, you know, it was a combination, right, of the community and, and the, and, right, the art and what promised to. You know, what was looking like it would be a pretty fun game.

• 20:23David Hoffman?

  So I, I, I want to unpack, there's so many things I want to unpack. I want to unpack first off the, the community aspect of it because isn't also, even though it's, Axie is like, it's, it's more than a community because this, A, the, the size of it is so incredibly large. It's like, you guys correctly, in my mind, call it the Axie Nation, especially because you have your own economy. But isn't the community at, at the very, very basic level also in competition with each other? Right? Like, isn't, isn't, isn't Axie kind of like a race for resources? And so like, yes, it's very like collaborative and the Discord is very like community oriented, but also isn't it competitive too?

• 20:57Speaker 00

  There, there is a lot of, right? At its base level too, right? Like the, uh, right? There's, Axie is a, right? Like in terms of the current product is a card battle game where you battle these pets together in PvP battles. There's a leaderboard, right? But I think there's, there's also right this, this collaborative spirit, which I think is interesting, right? Like, how do you turn like what's, you know, right now a PvP experience in terms of the gameplay? And why is it so collaborative, right? Because there is right this base, uh, ownership, right? Where everyone owns Axies, right? A lot of people own access tokens, right? Um, so, so yeah, it's, it's, uh, right. There's, there's a little bit of competition. I would say friendly competition as well, which can, you know, creates some camaraderie and, and bonding.

• 21:40Speaker 00

  But also right, there's this PVE component. The PVE component is like everyone in the Axie community against the world who doesn't take us seriously, who thinks that NFT games are never going to work, right? And we've always had that kind of underdog chip on our shoulder. And I think it's really important that we maintain that even as we get larger.

• 21:58David Hoffman?

  Did you just use PVE where the E is not just the game that you're making, but the whole entire universe? Is that what you just did?

• 22:07Speaker 00

  I think, right? I think Dgen Spartan once talked about that, right? And like life in terms of like PVE, P and PVE. So, um, yeah.

• 22:14David Hoffman?

  It's an interesting tool to rally a community behind because there's no better enemies that exist to rally a community than the faceless ones, right? And especially the gargantuan faceless ones, like, "Oh yeah, we're gonna take on everything." Can you just unpack that a little bit more about the significance? Is that like an idea that you have, or is that more like a codified part of the Axie culture about how, "Oh yeah, we're going to take on the world"? Or is that just the vibe that you get after you read between the lines?

• 22:43Speaker 00

  I think it's maybe half, right? We saw in the early days that the community was rallying against, always had some kind of something or someone to rally against. In the early days, we had this beef with the CryptoKitty community where they thought, "Oh, this is just a CryptoKitty clone, they're never gonna do anything." So yeah, there's always been, I think, and from the early days, we saw that that was a good strategy. And I think it's also true that people, because Axie is so cute, I think they don't take it seriously. And I think it's just been us proving the doubters and the haters wrong, month after month, over this journey.

• 23:26Speaker 00

  And I think that's part of the fun, I think. So yeah, I think it's part of our culture, and I think it's also something that the community leaders, not just myself, right? Community leaders understand is an effective strategy for getting everyone on the same page.

• 23:43David Hoffman?

  I want to keep going down this thread, but there's a question I have that I think if I don't ask it now, I might lose it. And that is, a lot of the games that I play, Diablo, both 2 and 3 included, Borderlands comes to mind, a lot of these games just end up all in the same state, which is grinding. And me personally, that's when I tap out of the game. It's like, "Okay, I will go through level 0 through like 99, but once I'm at 99, I'm out, I'm done with the game. I don't want to grind the same things over and over and over again." Have you guys thought about this at Axie, and how have you kept people engaged post-grind? Once you get to the grinding stage, how do you keep people entertained?

• 24:25Speaker 00

  Yeah, I think obviously, the fact that you have ownership of the things that you're grinding for, I think helps, where you can potentially convert it into something that's helping you in real life. I think that all games with staying power have, basically...

• 24:44Speaker 00

  Had interesting social elements to the ecosystem where with WoW, WoW gills, right? There are people who play WoW, not because they find WoW enjoying, but because all their friends that they've met online are playing WoW. So it's like if they quit WoW, they're gonna lose all their friends. So the social, the social systems are really important. And yeah, I think like, right with Axie, right? It's like people, they just want, they love being part of the community. They love learning about Web 3. There's always something fun to look forward to, right? Like, we're constantly iterating and building new experiences on top of the Axies, right? Like, we're, the, the current product is actually our second battle, second version of the battle system. We're coming out with the third version of the battle system.

• 25:26Speaker 00

  So everyone's like, right, like, we have this like, when V3 meme, um, stuff like that, right? And then, um, it's, it's just like, we're building out in public. So people feel like they're building together, that they're collaborating together, that everyone, you know, that there are these connections. And it's, it's just far more than a game, right? It's, it's a place to have fun, to bond with each other, to flex your crypto, uh, kind of extravagance. Um, so it has, it has a, it's, Axie is rewarding, right? So people ask always ought to come to this topic, right? It's like, is Axie fun, right? And I've actually, we, we talked to you and I've listened to some of like the thinking from the founder of Eve Online. And right, and he talks about his like, right, like game,

• 26:08Speaker 00

  people talk about fun, but actually what games should ultimately strive to be is to be rewarding in the same way that we find our lives rewarding, right? So if you talk to any random person, right, they might, they probably, right, like, they might not find their life fun all the time on a day-to-day basis, right? That might not actually even be good, be good, right? Fun is probably a poor thing to optimize for, right? But ultimately, most people find their lives worth living and, and rewarding, uh, through, through different, uh, you know, through different forms of kind of, I guess, value, if that makes sense. There's right, there's, there's social, there's economic, um, right, there's building a legacy, right? And I think, and, and I think the thing about Axie is that it's, it's actually, right?

• 26:51Speaker 00

  Like harnessing this kind of like idea of Ikigai, right? Where you're, you're, you're, people feel like they're part of this movement. They're building something that's substantive and important. And yeah, they're having fun and making friends while doing it.

• 27:06David Hoffman?

  There's a line that I remembered Joe Rogan saying, "Once upon a time," where he was recounting the story of this person that he met that had this like kind of basic like production, behind the scenes job at some like live music venue. I don't know, it's irrelevant. But, and just like kind of this normal guy, but he was like in some like insane top 10 tier World of Warcraft player. And like the line that this individual left with Joe Rogan was that, "I am such a nobody in the real world, but in World of Warcraft, I'm like one of the biggest celebrities." And like, Joe Rogan was harping on the fact that the guy was talking about how he's nothing in the real world. And like, the contrast that

• 27:50David Hoffman?

  he was giving was like, "Oh yeah, he gave up, he gave up his real world identity in form of this like fake World of Warcraft identity." And he just deposited all of his like, you know, mental energy and mental motivation into this fake world, this like, this World of Warcraft world. But I think when you kind of take a context of what you just stated, where it's like, "No, World of Warcraft's not supposed to be fun, it's supposed to be rewarding." And then also, we talk about integrating assets into things like Ethereum, where, you know, there's USDC on Ethereum, which is connected to the Federal Reserve, and how can that be fake? Right? And so like, you know, the game, the thing, the assets that you find in your game are just one steps away from being the reserve

• 28:32David Hoffman?

  currency of the world. How can that be fake at all? And so like, the takeaway that I just got out from what you just said is that, you know, with games not supposed to be fun, they're supposed to be rewarding. Like, we're actually trying to recreate the real world, but in a digital world, right? We're not, we're not trying to make, we are not trying to make the digital world fun, you're trying to make the digital world real.

• 28:53Speaker 00

  I think that's also, that's also a functioning definition of the metaverse, right?

• 28:57David Hoffman?

  Totally.

• 28:57Speaker 00

  Right? This, this idea that our digital identities, our digital items, our digital experiences and lives are starting to merge and, right, like, become just as important and just as substantive and rewarding as our lives in the physical world.

• 29:14David Hoffman?

  Yeah, I think there's a, hopefully a transition happening where like games are no longer just like supposed to just serve you like dopamine on a platter, but they're supposed to serve you emotions of all types, like responsibility, like the things that you would find out in the real world, like loss. I think there's a big component of Eve Online, which is loss, where like you go and you build your ships and then like you get like hijacked by pirates and you lose all of your stuff. Like that's, that's a real emotion that you're going to feel as a result of that. And it's not fun at all, but it's very, very real.

• 29:47Speaker 00

  Yeah, the, you know, the most, right, the more, the sustainable game economies, right, are going to mimic parts of life that we don't like in interesting ways. And that's also right. It's like as a, as someone who works on games, right, that's something to think about is like, right, like how close to, you know, everyday physical life do you want these games to be? And what is there, is there, right, is there some hybrid that is like a nice, I think, middle zone that it might be, you know, preferable? So yeah, it's, I think that's where a lot of the design space is.

• 30:23David Hoffman?

  There's another line that I hear also from, also on Joe Rogan, but this one came from Elon Musk, where he was talking about why Instagram did bitter, but has got bigger than Twitter. And Elon Musk said it's limbic resonance, as in Instagram resonates with people's like more reptilian brain much better than Twitter does. Twitter makes you think. It makes you like actually use your brain. Instagram doesn't. You just, you just vibe in Instagram. It makes you feel emotions. And so maybe the version of the metaverse that delivers reality rather than just dopamine is the one that humans gravitate for because we're striving for that, that same kind of feeling, right? We're striving for that, you know, responsibility, all the things that make us human. And so maybe it's the successful

• 31:07David Hoffman?

  games of the world are the ones that don't just deliver dopamine on a platter, but are the ones that allow people to like use their deeper parts of their brain.

• 31:16Speaker 00

  Yeah, especially the ones, right, the ones where it's where people feel okay, I think, spending 12 hours a day and right, it can't just be right, all all pleasure. Speaking of Joe Rogan, we were Joe Rogan, Axie was actually mentioned on Joe Rogan.

• 31:32David Hoffman?

  Really?

• 31:33Speaker 00

  Last week, like he was, he was looking into it, you know, looking at the the website, he had it up. So we were trying to get in touch with him. But that was like, that was an amazing moment for the community.

• 31:43David Hoffman?

  Yeah, I think Joe Rogan is like on the cusp of just like going down a lot of the Web3 rabbit holes, but and everyone wants to talk to Joe Rogan, obviously. But it's just, I think it's just, it's just gonna take one of us to break open the doors. So if it's you guys, congratulations, if that if that's coming your way, that'd be pretty cool.

• 31:59Speaker 00

  That's interesting, because I think the the flow of the conversation was, hey, like, you know, what do you think about Meta and what, you know, Facebook, formerly Facebook is now doing? And then, right, somehow, right, it's like, right, like, rather than showing anything that Meta was doing, they actually showed Axie Infinity. So if, yeah, if we can be right, if we can be the poster child of, you know, this new digital revolution that's happening, I think, I think that's gonna be awesome for for us, for Ethereum, for for everyone.

• 32:28David Hoffman?

  So how did you go from like one of the just the early members inside the Discord to an actual team member?

• 32:33Speaker 00

  I just, you know, I showed up and I saw all these, all this work that needed to be done. And I started doing it, you know, in the early days, I didn't get paid. We didn't even have, we didn't have money. We didn't have ETH. So, you know, I was getting paid in Axies initially, ended up, you know, working out really well, like, you know, some of those Axies are super rare right now. So yeah, you know, just started figuring out, you know, what needed to be done. So a lot of the initial team members, they're Vietnamese, right? Mas Munhe, who's like our artistic genius, Chong, who's like our CEO, he's an engineer. They're Vietnamese. So right, there's, you know, there's a little bit of a language barrier, right? So I thought, hey, like, I could come in and, you know,

• 33:15Speaker 00

  do some communication, you know, try, try to build excitement and understanding of how big this could be within the community.

• 33:24David Hoffman?

  When you saw the potential behind Axie Infinity, did you, in what potential did that forum come in? It's like, oh, there could be a lot of people playing this game? Or like, oh, these axes could be really, really valuable? Like, which one was the one driving you?

• 33:37Speaker 00

  Yeah, I think it's a combination. Like, I think also, like, the limbic system thing also resonates because it's like, hey, like, these are cute. Like, people are gonna like this. This has the chance to really change gaming. We understood that there, right, like, we understood that there are problems with gaming in those early days. I know because we rewrote the white paper in about February or March of 2018, and we talked about some of the problems in gaming, right? That, right, like, basically, right, in traditional gaming right now, majority of the value is not going to the people that are creating a majority of the value, right?

• 34:20Speaker 00

  The app stores, the game publishers are taking like north of 50%. So it's not even the game, the money isn't even going to the game developers. It's a lot of it is going to these middlemen. So that's why, right, like, crypto is just like, right, like, sort of textbook definition, right? This is not advanced stuff. It's like, wherever there are huge extractive middlemen, right? You remove that middleman and you give it to the builders and the community members. So, right, this is, Axie is just that principle, I think, applied to a game.

• 34:49David Hoffman?

  And, I mean, so much of people, so many people must have come into the Axie ecosystem, more or less with that mindset or something similar to it, as opposed to like, oh, this is gonna make me rich mindset? Because like, while Axie definitely started off the conversation of like, oh, crypto gaming is like a financial opportunity, it didn't start there. Like, so have you noticed since the mooning of the AXS token, a difference in the people that come into the Axie Nation? I'm assuming you have.

• 35:20Speaker 00

  This is something that I talk to Peter Pan about a lot, right? Is community building in a bull market and community building in a bear market fundamentally different problems. Sometimes require fundamentally different people. But yeah, it's something that we, we think about a lot, right? Is like, right? You get this, right? Like bear markets, you'll have a small number of missionaries and then, right? The entire world finds out about you in a, in a, in a bull market and maybe, right? The, the cycle repeats and, right? You end up with more missionaries than you did at the end of the last cycle or the beginning of the new cycle. So yeah, it's like nature, right? It's like, it's like nature is healing. But yeah, definitely as, right?

• 36:01Speaker 00

  Our audience becomes more mainstream, you start to run into, you know, different types of problems, right? Like, you know, gamers are not super nice as a demographic, right? So you start to have, like, our, you know, your, your community starts to become closer to like a League of Legends community. And some cases, or some of them are starting to start to become like that. But I also think that a lot of them are, you know, able to learn and understand, right? That this is, this is a movement and a lot of them are receptive to the education. And that's also why it's important, right? Like, I think a lot of the projects that are trying to copy us, they don't have this, like, older, right? These veterans who are gonna come in and, you know, basically tell the new kids what's up and what this project is really about.

• 36:44David Hoffman?

  Yeah. Is there like a schism between the OGs and the new members?

• 36:49Speaker 00

  Yeah, I would say some of the, some of the OGs are a little bit reclusive and hesitant to, you know, engage with the, with the newcomers. There are others that are there, like, you know, that are, you know, more public facing and, you know, think that and prioritize really educating the new faces. But yeah, like, just like within any society, right? It's kind of like, oh, like, you know, people come in and, you know, there can be like class, it's like, it's almost like class rivalry, right? And generational rivalry, yeah.

• 37:22David Hoffman?

  How have you guys, have you guys had to deal with that? Or is that something that has been like, it's a, maybe a, just a small friction? Or is it actually something that you guys have had to address intentionally? Just the differences between the generations.

• 37:36Speaker 00

  Yeah, I think like, I think empowering people to build bonds. I think like the content creators, like the OG content creators too, right? Like they, they do a good job because they also are like, they see them as their followers and, and stuff like that. So it's something, it's something that I think is a difficult.

• 37:57Speaker 00

  It's a difficult kind of phenomenon that's happening, but it's also, it's a luxury in many cases because a lot of projects, they don't, they don't have any of that, right? They, they just have maybe, I don't know, a very small community and many of them might just be super new and only focused on the token go up.

• 38:13David Hoffman?

  I would imagine there's some like dynamic, like tribe dynamic where you have the village elders and then you have like the punk kids. And the kids want something that the village elders don't, and maybe the village elders know best. But you can't only listen to the village elders because like you gotta also include the punk kids, right?

• 38:30Speaker 00

  It's politics, it's politics, right? Like, and it's, it's not like, I feel like I'm a politician, right? Like I'm, I'm a, I have, right? Like we have constituents, constituents, right? And I think that's what this is, yeah, it's, it's, we're starting to see the rise of these kind of opt-in nations, right? Where it's not like, right? Like the management is still, right? Like mostly top-down, but right? Like it's opt-in, right? So I, I think that's also, that's what we're starting to see more so than like fully decentralized co-management structures is, right? Like you get to choose who your, who your leaders are, which I think, right? Is like that right to choose, I think is, is a key distinction. Yeah, well, and I think we'll also start to see, right? Like, right?

• 39:15Speaker 00

  Like more, more decentralized contribution, creation, building, and also maybe, yeah, potentially kind of like decision-making for the, for the future, for the, you know, the future direction of projects. But it's, I think there's a lot of research and experimentation that's been going on, going into that kind of stuff. And I think like the optimal, I think the optimal strategy is also, right? I think Vitalik talks about this, right? Is like there are different communities that want different levels of, right? Different trade-offs, if that makes sense.

• 39:47David Hoffman?

  The Axie Discord is the largest discord in the world, if I'm getting my numbers right. And I would imagine managing that is just an absolute nightmare. And if you call this thing a nation, and you're calling what you're doing politics, how are all these different factions organized? Like, is it a representative democracy? Or do you have, like, you know, the content creators over here, and then you have, like, the players over here, but then you have, like, the casual players over here and the advanced players over here, and then you have, like, the actual builders? Like, how is this, how is this nation organized?

• 40:19Speaker 00

  Yeah, so our Discord is interesting, right? Because our Discord is actually an interesting example of how we've attempted, at least, to tackle this in the short term, where we actually have a Collabland integration. So you basically, right, Collabland will read your wallet, see what NFTs you have in your Ronin wallet, and then assign you a role, right? So if you have three Axies, you at least get to speak in the general chat. If you have 10 Axies, you might be able to speak in the economy chat, right? If you're a landowner, you get to speak in the landholder chat, right? So, yeah, it's kind of right, we have these, you know, parallel forums for discourse. And then there are people who float among them.

• 41:00Speaker 00

  And, yeah, we have community, you know, moderators and volunteers that kind of, you know, guard dog the Discord, right? Where you're trying to make sure that people aren't misleading people, people aren't trying to scam the new players and things like that. So it's fascinating. I've spent a lot of my life in Axie Discord. And, yeah, I mean, Discord as a product changed my life. I think I actually, yeah, so I am still, I think, the number one, like, by messages in Axie Discord with, I think, like, you know, a couple hundred thousand.

• 41:33David Hoffman?

  My god, wow, that's insane. You talked about guard dogs in the Discord, make sure that people aren't scamming people. If we're using a nation metaphor, that feels like the police.

• 41:44Speaker 00

  Yeah, it's like more like vigilante justice, I would say. Maybe a little bit.

• 41:48David Hoffman?

  Neighborhood crime authors.

• 41:49Speaker 00

  Right, we're trying, yeah, we're trying to like, we're trying to figure out, like, I think this is a question that we think about a lot in conjunction with the rest of the entire ecosystem is like, right, like, what is the level, what is the correct level of like, community, right, like, the community driving some, some initiative and norms within, within the ecosystem and, you know, what needs to be kind of like more of, more of a firm, something closer to a rule or a law, right?

• 42:12David Hoffman?

  Right. Yeah, that's, that's nuts. I can't imagine how, how much of a, how tall of an order that is. Do you ever fear that, like, what happens if Discord goes down? Like Discord has gone down at times, like, what would, what would the Axie Nation do if Discord, like, died for a week?

• 42:30Speaker 00

  Yeah, so I will, I will point out a data point. Our monthly 30-day volume topped out at the same week that we hit the Discord max. Right? So it's like, we solved, right? Like, we were able to build this, you know, EVM scaling solution to scale our game to millions of players. And then what's the thing that might be holding us back right now is like the 800,000 cap on a Discord community. Right? Because I feel like being a part of the community is such a fundamental part of the experience that, right, like, you're probably, you know, you're not getting as engaged community members. You're having a lower activation, hard activation rate, right, in terms of like, I don't know, growth marketing terms, right?

• 43:11Speaker 00

  Without having people actually able to join that main Discord. So I'll, I'll, I'll say that it's, it's interesting and yeah, like, we're definitely overexposed and overly reliant on Discord. I think, eh, you know, like, there are some web three, you know, alternatives that are starting to maybe pop up, but it's, it's still so early. But I do think that that is, right, that is the next wave of. Innovation, I think, right around like basically social coordination tooling, right? So we're starting to see, you know, I don't know, these token gated forums started starting to pop up. So which might be like an early iteration of that. They're not quite as real time as Discord. Discord, right, like the server stuff is like, you know, it's gonna be hard to it's hard to get something to that to that level.

• 43:57Speaker 00

  Quickly and right, there's a reason, I guess, right, that maybe Discord is inherently unscalable, right? Like, why, why don't they, why won't they let us get to get to hit a million in our Discord, right? It's, it's, that must be a very, very, very, it must, it must take like a lot of like server power to, to keep that thing going.

• 44:16David Hoffman?

  Totally, yeah, it's, it's like if the breaking of Discord while you guys are doing the all time high in volumes on, on Ronin. Is like, well, we actually got web three to scale more than web two, like web two broke.

• 44:30Speaker 00

  That's, that's right, that's the paradox. Yeah, that was a paradox. I felt, I felt like, yeah, that's, that was, that was interesting. I think it shows right that we're facing a lot of the, we're facing a lot of the problems that these NFT games are gonna face in a year, two years. We're facing them first and we're gonna, yeah, we're gonna have to solve them first for them, for everyone else.

• 44:48David Hoffman?

  So as the AXS price just went absolute bonkers of the, one of the resulting downstreams impacts of that is like so much. Angel investment, seed investment, seed round startups came as a result of that. Like once you, it kind of felt like, you know, when Bitcoin went from $0 to $1,000. All of a sudden, the next thing that happened was that we had like 10,000 Bitcoin forks. Now we're kind of seeing the same thing, like AXS went from like a $3 million market cap, which is basically nothing. To where it is now in the multi billions. And now after, as a result of this, we have like an infinity number of play to earn games being like invested in right now. Like.

• 45:29David Hoffman?

  If you had to guess, what percentage of those will have any sort of like meaningful adoption? Like 5%?

• 45:39Speaker 00

  Yeah, probably like very small number, yeah. Around like 2 to 5% sounds directionally correct. Think we'll might have to see a lot of consolidation. And this also goes for the guilds, right? We also saw an explosion of funding rounds for guilds for the games. So yeah, we might need to see consolidation around that. And yeah, it's going to be hard for all of them to succeed. But yeah, I think like we'll also may see, right? Some important projects come out of this class, right? I think that's, you know, generally how crypto works, right? Where even Ethereum was, you know, I think funded, you know, by Bitcoin, right? Like that's how you paid in the ICO, I think. So yeah, it's, you know, it can be overwhelming sometimes, right?

• 46:23Speaker 00

  And it seems like, yeah, everything got comped against us. And I think like people don't understand, people are like, hey, like, yeah, if you just make a game with better graphics, like, it should have a higher market cap, right? But they don't understand like the work that's gone into this in terms of the community building as well and the thinking around, you know, the economy and nourishing these content creators and everything, the relationships, social capital in this network. But yeah, I think, you know, we also are, you know, extremely bullish on, you know, these player-owned digital nations, right? This, you know, this part of the vision for Ronin is to be this scalable place for some of the next generation of these experiences.

• 47:07David Hoffman?

  So of those like 2.5 to 5% of these play-to-earn game startups, say we're on the other side of this and like that 5% exists and we see which ones they are, what do you think will be the thing that they needed to have gotten right in order to make it through that filter?

• 47:23Speaker 00

  I think it's a combination, it's honestly a combination of things, which I think is what is going to make it so hard. Because some people might get, some people might get the community rates, and some people might get the economy rate, and some people might get the scaling rate. Some people might get the art and the gameplay rate. But I think putting it all together is where the magic happens.

• 47:45Speaker 00

  I think, yeah, Web3 community building. I mean, I'm, you know, maybe I'm biased. People, everyone tends to think what they do is important. So I think Web3 community building is, you know, is a difficult journey that requires like blood, sweat and tears, and there are no shortcuts. I think the art, it has to be like the right type of game, I think. One of the, one of the underappreciated reasons for Axie's success is that people love their Axies. People, right, they feel bad selling their first team of Axies, their first Axies.

• 48:15David Hoffman?

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• 50:26David Hoffman?

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• 51:11David Hoffman?

  NFTs don't, they don't really, they're not the first thing that people go to like liquidate when they need to cover their margin positions, which many people in DeFi have. Can you, do you have your own experiences about like your emotional attachments to Axies that you might be able to share?

• 51:27Speaker 00

  Sure. So yeah, there are a bunch of Axies that I would never, that I consider priceless that I would never sell, right? Like my first Axie number 707, right? That was what kind of introduced me to the universe and started my journey, right? Like I bought that thing. I thought it was awesome and right? Started, I felt like, okay, I'm part of this project now and I have to, and I have to start working.

• 51:50Speaker 00

  So yeah, I think right like that emotional utility, right? I'm not sure if that's a term, but let's, I think, I think it makes sense, right? It's like, there's this emotional utility where, right, like, right? NFTs don't work if everyone is buying NFTs to try to make money, right? Like, uh, it's just the, the, the, the laws of the universe don't work like that, right? There has to be, right, there has to be, uh, this

• 52:15Speaker 00

  notion that, right, you're kind of spending money. There are people who are spending money on NFTs rather than just, everyone can't, cannot be an investor, right? Just like, yeah, I think we talked about this, right? Like, like when you buy a Pokemon card, right? You, you buy a Pokemon card because you just need it, right? Like, the fact that you, there is liquidity for it, right? Like, can allow you to justify spending, you know, a, a large amount. So I, I think that's a, a lot of where the future is and, right, like, what people, what people need to understand. I think this is also something that we don't do a necessary, a good job of communicating as a space to the public, right? The public sees this, you know, they see us as

• 53:01Speaker 00

  these degenerates that are, right, online, right? Like, make, and all the headlines about, are about people making millions of dollars or whatever. And, uh, we have to do a better job of communicating, right? The emotional utility, the emotional aspect, um, the pride and joy of showing off these NFTs. Uh, I think, I think that's super important and, um, in, in the education process and, and, you know, expanding the community and getting more people involved.

• 53:29David Hoffman?

  Has this at all turned into a more like concrete strategy with the future of the Axie ecosystem? Like, you guys are trying to inject emotion into the game?

• 53:39Speaker 00

  Yeah, I think things like, right, like collector's badges, right, like,

• 53:47Speaker 00

  so there was an interesting, there was an interesting change that we made where by accident, right, like when axes were fighting in battle, they stopped making facial expressions like grim, stopped grimacing or when they're attacking or getting attacked. And that was like a big issue for our players, right? So we realized that, right, like these small little details that make axes more lifelike, they're, they're really important. So I think axes, right, like for example, if you log in and you haven't logged in for two weeks, right, your axes should be, right, like treat, acting like a dog or a puppy when you get home after a long break, right? That, so I watched a documentary,

• 54:28Speaker 00

  like, why do we love dogs? Why do humans love dogs? It's not actually because we think that they're cute, right? Because there are actually a lot of people who have dogs that are kind of objectively ugly and they still love them just as much as, right, dogs that are actually, right, objectively cute, right? And a lot of the reason that people love dogs is because dogs actually love humans. Dogs show love and affection to humans. They reciprocate it. I mean, that's actually what makes us love our dogs the most, right? So basically, in order for people to love their axes even more, we have to basically create systems where the axes actually can show affection to

• 55:11Speaker 00

  their owners. So that was a conversation that I had with, with like the art team and the animation team, and they seemed really receptive to it, so.

• 55:22David Hoffman?

  As a developer, that sounds like a really fun project. Hey, make these NFTs, these animated NFTs, make them show love towards the people that, that own them. And like, we, we could go, like, we talked about how, like, the, you, you talked about how the NFT industry doesn't really do a very good job of advertising the emotional bond that people have to their, to their, like, you know, NFTs and the external world just kind of. Thinks that there's these pixels with price tags. But also, if we really want to optimize for that price tag, we would probably be trying to create NFTs that are more like stronger conduits of love between owner and NFT.

• 56:06David Hoffman?

  Like this probably would be good for the valuations of these things.

• 56:11Speaker 00

  I think so, right? Like ultimately, yeah, there has to be, right? Like a combination of aesthetics, utility and scarcity, right? And that's where I think that's where I wrote this about this in, I think, like 2018, right? It's like the triple threat framework for adding value to NFTs. And yeah, like, you know, we, we, I think people kind of understand the scarcity part. They kind of, they, you know, they understand the aesthetics. And I think gaming, right, in general is all is an answer, an attempt to answer, right? Like, what does, what does true utility for these things look like? So that's, that can be, that can be seen as, okay, like you're using these things in a game. But I think it's also, right, like you see these as part of your life. So, yeah, it's, it's really important.

• 56:56Speaker 00

  So there are actually a lot, the people, the virtual beings industry has started reaching out to me a lot over the last year. Right? What? Because I think what they see is, okay, when people think about AI or intelligent, yeah, basically like intelligent characters, right? A lot of people, they, they think about, okay, like, how do we get a hologram? Or, or right, like a virtual influencer that, right, like, that seems lifelike. But I think we're even lower hanging fruit is how can you make a virtual pet? That is more lifelike because the barrier, right? The, the, there is no like Turing test, right? Like with a pet, right? It's, it's like, it's, it's, it's a lot easier, I think, to simulate

• 57:40Speaker 00

  that, that experience of a real pet than it is to, to simulate the experience of speaking and interacting with a real human being, I think. So I think the virtual being space or the virtual life space is actually really, really interested in, in Axie. So, yeah, there is definitely some stuff to explore around that as well.

• 58:00David Hoffman?

  Earlier in the conversation, we were talking about how good games, especially good web three games have migrated from just like trying to serve dopamine on a platter to its players to creating much more realism. And we talked a little bit about like loss, right? Like when you lose in a game, like you should actually have lost something, either monetary value or something scarce, because you know, there's, there's, there is no joy without loss, right? You can't, there is no such thing as one sided happiness. You have to have sadness to also have happiness. And I think, and you also talked about how like, you know, the, the, uh, the working definition for the metaverse is something that is just the digital world, but just trying

• 58:40David Hoffman?

  to replicate, uh, replicate our actual world, but in, in virtual format. And so like my mind is going towards like the, the version of the metaverse where like, I think the way to onboard people into the metaverse is like, find ways to optimize for love, right? Because that's at the end of the day, that's all what people want. Like, you know, we all like, some people get trapped in the money game, but really people forget that, you know, money is just, you know, a means to an end. And usually everyone's end is the same thing, which is love. Uh, and so maybe that's the alpha for any of the, you know, web three game developers here is like, yeah, you're actually trying to build love into your game.

• 59:17Speaker 00

  I think, yeah, it's, it's right. Like these, these real emotions, right? It's like, uh, I don't know, what is the, what are the hierarchy of needs? Um, what is like Ikigai, right? I think like some people, they, they say that Axie is interesting because, yeah, it operates right at the intersection of what I want to spend my time doing, what I enjoy doing, or what I feel super passionate about. Um, so yeah, I think, I think replicating these, right? Like we, we talked about, right? The people, people, they say, oh, like NFT games, they're not fun enough, right? Which is, and fun is some kind of like arbitrary ideal, but actually, right? You know, the founder of Eve Online, right? He says like, don't optimize or don't, you know, chase fun as

• 59:59Speaker 00

  a, as a developer, right? It's like, you actually want to, you know, create professions within your ecosystem, right? Like you want to create a rewarding experience. Um, and I think, right? Like, yeah, I think, right? Like what we're seeing is that our digital lives are becoming rewarding in the same ways that our

• 1:00:19Speaker 00

  Physical lives are hard, they're difficult, but we ultimately, most of us find them rewarding in some way or another.

• 1:00:28David Hoffman?

  Do you think that software, there's that meme that software is eating the world, right? And now with Ethereum and smart contracts, software is also eating finance for like the first time ever. And there's generally been the pattern that anything that software touches, it generally improves. And so now we have this concept of like the metaverse where software is just straight up eating reality and outputting like a different one that perhaps is improved. Like it could get real dystopian, but it could also get real like utopian as well. Like, do you think that like, do you agree with the trajectory that like software is producing a new version of reality that perhaps is better because that's how we can code for that?

• 1:01:13David Hoffman?

  We can code it to be better?

• 1:01:16Speaker 00

  I wouldn't, yeah, it's hard to say better. But what I'll say is, right, I think it's creating this base level of access to ideas, relationships, and communities, right? Where for most of human history, we were forced almost, right, to basically be a part of the town, the community that we're kind of physically born into, even the nation state. Whereas what we're now seeing are these opt-in nations, opt-in digital nations, opt-in digital communities that are starting to fulfill a lot of the needs and desires of what it

• 1:02:01Speaker 00

  means to be a human being. And, right, like if you're born into a, if you're born into a very difficult situation, I think it provides some opportunity out where, right, you can meet people from anywhere. Around the world, learn from them, right? You're not just like, you know, being limited to the people and ideas and circumstances of where you're physically born into. So that's one thing that I'm starting to see, right? And I think it's interesting that, right? The first scalable impact that we've started to see is, right? Like, you know, people going crazy over Axie and places like Venezuela and the Philippines,

• 1:02:46Speaker 00

  right? Where there is, you know, very low access to, right? Like, yeah, opportunity, ideas, things like that.

• 1:02:56David Hoffman?

  Well, I think that's a really optimistic version of the future. Obviously, there is the tug of war behind like, well, you know, you can't actually go live in the metaverse, like, you know, the metaverse will not put food on the table, only real resources in the real world definitely will. But it's also hard not to be just extremely optimistic of, it's just easier to discover things that you care about on an emotional level because of exactly what you talked about, like, the internet allows you to go take a beeline for the things that you care about, where if you were born in some, you know, small town population of just like 1,000 people in some like flyover state or some, you know, third world country where

• 1:03:40David Hoffman?

  like your hobbies that you have can't really be fully expressed, maybe the metaverse allows a more direct route to expressing some of those interests.

• 1:03:49Speaker 00

  And I think, right, like, one key point that I think just popped up into my head is it allows you access to people in a direct access, almost, to people in a different socioeconomic class than you, right? So you could be a Filipino Axie player, and you can join a guild, and you could meet, right, like, you know, really enlightened Web 3, you know, people from all over the world that have been in this space for six years and kind of learn from them. And when, right, like, when very rich people spend within these, right, digital economies, there's more, it's more of a... It's more of a perfect trickle-down system, right? For example, right?

• 1:04:31Speaker 00

  So if someone is rich and just wants a bunch of axes, they're buying axes from the marketplace. That there is, right? Like, direct value transfer from someone in a developing world spending for fun and to increase their collection to people in emerging markets that are, right, seeing this as a way of ascending in the universe or their socioeconomic status. So I think there's more, right? Like, this one been one of the, I think, like, the super controversial things, right? About, I don't know, the last 40 to 50 years of, you know, global macro policy, right? Is like, right? Like, how efficient is this idea of trickle-down economics? And I think we haven't really seen, right?

• 1:05:17Speaker 00

  Truly efficient mechanisms of having those types of trickle-down mechanics actually work, right? Where, you know, arguably, when rich people spend in the physical world, a lot of that spending goes to other rich people. Whereas, I think, when rich people spend in the digital world, there will be more of that value captured by, yeah, you know, I guess, people who are, you know, I guess, who don't have that much capital.

• 1:05:45David Hoffman?

  Jiho, what about the future makes you optimistic?

• 1:05:51Speaker 00

  I think that the future is going to be scary. I think the future is going to be actually be more free, and there's actually going to be more responsibility in that. I think, like, we're starting to see the technologies that will allow us to be, right, more autonomous. But there will also be, right, like, a battle. And I think, for me, like, what I find, like, I always felt like I was a revolutionary without, you know, any cause to be involved with. So I think, like, right? Like, if you're that type of person, right? Like, I think our generation has reason to be optimistic because I think we are a lucky generation in that there will be significant causes to take part in,

• 1:06:36Speaker 00

  which is, right, like, some people might feel jealous of people who lived during, I don't know... The, I don't know, like very peaceful eras. I think we're not going to have a peaceful era. I think it's going to be full of conflict and schisms and different ideas. But I think those are the most interesting times to live in. And I think our generation and the people who are involved in this ascension of Web 3, we have a chance to be, yeah, looked back on for generations to come. So we actually, it's almost like a generational opportunity that will come with a lot of, yeah, it's going to be hard. But I think, like, at least we have a cause worth fighting for, which I think some generations

• 1:07:21Speaker 00

  didn't have the chance to, like, maybe like the baby boomers or something like that.

• 1:07:24David Hoffman?

  I think being adaptable in the 2020s is going to be a very, very important property or characteristic for, you know, making it through this crazy decade. Because I also think it's going to be one of volatility and chaos. Any other characteristics come to mind as to what would be useful properties or characteristics, personality traits for people to lean into as they navigate in the next decade?

• 1:07:48Speaker 00

  Yeah, so I think, like, yeah, open-mindedness, curiosity, yeah, just being open to making friends with anyone, anywhere in the world and forming like deep social and kind of economic relationships with people over the internet, right? I think, yeah, I think, like, and then just like being willing to, I don't know, waste a lot of time online, right, trying to click the right combination of buttons to go down these interesting rabbit holes. And I think this is, you know, so I think like the, yeah, the willingness to kind of wander and, right, like, some people, I don't know, are so goal-oriented, but I think sometimes

• 1:08:32Speaker 00

  you just need to kind of absorb information. So I think having that willingness is also going to be really important.

• 1:08:41David Hoffman?

  Jiho, thank you for joining me on this episode of Layer Zero.

• 1:08:44Speaker 00

  Thanks for having me. It was a lot of fun.