95 - How Kevin Rose Invests in Web3

Kevin Rose is a veteran of internet growth. Kevin founded digg, the news aggregator site that pioneered community-curated content in the early days of Web2. With a macro perspective of all things digital, Kevin has thrived as a builder and investor on the cutting edge of the internet. His experience allowed him to understand the role of community and has played a key role in his transition from investing in technology to investing in culture and artists. Seeing creativity blossom has fostered Kevin’s conviction and confidence in the space, and when Kevin speaks, the digital world of today and tomorrow becomes crystal clear. ------ 📣 METMASK | YOUR HARDWARE WALLET'S BEST FRIEND https://bankless.cc/metamask-shows ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini​ https://bankless.cc/go-gemini%E2%80%8B 💧LIDO | DECENTRALIZED STAKING https://bankless.cc/Lido 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants ------ Topics Covered: 0:00 Intro 5:00 Kevin Rose and Digg 10:23 What About Web3? 14:53 Blending not Competing 23:25 A Hybrid Approach 26:53 Crypto & The Inevitable 34:04 Confidence & Conviction 38:15 NFTs for the Long Term 48:56 Backing Artists 55:54 Self Sovereign Industries 59:49 Interactive Utility 1:08:09 Experimenting & Innovating 1:12:30 Tokens and Content 1:16:30 Getting Exposure 1:20:20 This is the Metaverse 1:27:36 Rapid Fire Questions 1:39:12 What’s Next For Kevin? 1:43:00 Closing & Disclaimers ------ Resources: Kevin on Twitter: https://twitter.com/kevinrose?s=20 Proof Podcast: https://www.proof.xyz/ Tom Sachs Rocket Factory: https://tomsachsrocketfactory.com/ Ultra Scalable Ethereum: https://youtu.be/xjxyjgWiqLE ----- 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. Do your own research. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:07Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. This is Ryan Sean Adams, and I'm here with David Hoffman, and we're here to help you become more bankless. David, great episode. Kevin Rose, he's not all of mine. I'm glad we had him on the podcast. What a fantastic discussion. What are some of the highlights?

• 0:29David Hoffman?

  Two themes of this episode really stuck out to me. One theme is that Kevin is just a veteran of the growth of the internet. We've had a number of these types of individuals on that have just watched the internet be born in front of their eyes. And Kevin was lucky enough to be able to both be a builder and then an investor in the growth of Web 2. Kevin founded the Digg platform, which is an early version of Reddit, which was a little bit before my time. But I think that those experiences that he had watching Web 2 grow really kind of allowed him to understand the role in community and people as the content creators and the value creators for these systems. And the other thing that I think I really enjoyed was the transition from being a founder or angel investor into

• 1:13David Hoffman?

  technologies or companies, and instead in the world of Web 3, being an angel investor into artists or creators. And just the paradigm shift that that brings along with it as well. And Kevin, I know, is really just interested in seeing creativity blossom out of the Web 3 platform.

• 1:29Ryan Sean Adams?

  Yeah, it's super cool. I think Kevin's got a great perspective. So he was a builder in Web 2, right? It's like one of the first, he was building a Web 2 company, Digg.com, before it was even known as Web 2, right? So he's kind of a pioneer in that industry. And then he turned into a venture capitalist. So he's seen that side of things. And then he's also been like a media producer, right? So he's got sort of the hat trick of like builder, venture capitalist, and then also media producer, which is super cool.

• 1:58David Hoffman?

  Right up our alley.

• 1:59Ryan Sean Adams?

  Right up our alley, right? So he's got all of those vantage points that he brings into exploring the NFT space. And I guess a few things we got into the podcast is why he thinks celebrity NFTs are kind of lame.

• 2:10David Hoffman?

  And have jumped the shark. What he actually looks for in NFT projects and the differences between something that's new and creative versus something that's kind of like, you know, trying to ape the last trend and how to identify the next big thing moving forward. We've got to do an interesting discussion on the metaverse as well, like how that is going to shape up, what that's going to look like. And overall, it's really cool to just have someone on, vibe with somebody who's, I guess, does many of the same things we do, David, but is also like all in on crypto now. Like, you got the sense with Kevin, like, okay, you're like us. This has fully consumed your life now, hasn't it? Right? Like, you're all in now, and there's no turning back, and everything else is boring. So this is also

• 2:52David Hoffman?

  someone who I think intends to spend the next five years or so on crypto, if not longer. I always enjoy it when we bring fellow content producers on the podcast because they just know how to make good content. So the vibe of this episode is just three podcasters in a podcast together, having a good time. So I think you guys are really going to enjoy this conversation with Kevin Rose. So let's go ahead and get right into it. But first, a moment to talk about some of these fantastic sponsors that make the show possible. Fancless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan

• 3:34David Hoffman?

  and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswap ecosystem is the Uniswap Grants Program is now accepting applications for grants. We have been saying this for a while, and we'll say it again. DAOs have money and they are in need of labor. If you think that you have something to contribute to the Uniswap DAO, apply for a grant to Uniswap. Just look at the size of the Uniswap Treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a uni-grant at unigrants.org.

• 4:20David Hoffman?

  And help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. The Aave protocol is a decentralized liquidity protocol on Ethereum, which allows users to supply and borrow certain crypto assets. Aave version 2 has a ton of cool features that makes using the Aave protocol even more powerful. With Aave, you can leverage the full power of DeFi Money Lego's yield and composability all in one application. On Aave, there are a ton of assets that you can supply to the protocol in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have supplied collateral.

• 5:03David Hoffman?

  Here, you can see me borrowing 200 USDC against my portfolio of a number of different DeFi tokens in ETH. I'll choose a variable interest rate because it's a lower rate than the stable interest rate option, but I could choose the stable interest rate option if I wanted to lock in that interest rate in permanently. V2 also features the ability for users to swap collateral without having to withdraw their assets, trade them on Uniswap, and then deposit them back into Aave. With Aave, users can do this in one seamless transaction, saving you time and gas costs. Check out the power of Aave at ave.com. That's A-A-V-E dot com.

• 5:40Ryan Sean Adams?

  Bankless Nation, we are super excited about our next guest. This is Kevin Rose. He's an internet entrepreneur. He's a partner at True Ventures. He was a builder in Web 2 and is very much tuned into the rise of Web 3 that is now going on. He's also a fellow content producer. So if you recognize that mic quality, it's because Kevin produces podcasts. He's been doing this since 2003. He hosts Modern Finance, which is a fantastic podcast, as well as Proof. This is a newer podcast all about NFTs and the metaverse. Kevin, how are you doing, man? It's great to have you on Bankless finally.

• 6:13Speaker 02

  Oh, you know, I've been, I listen to you guys. This may sound odd, but I have a sauna and I try to do that. And I put you guys on this sauna. And so it's weird to be on the show, but it's so cool to see all the great content you've put out. I think that this Needs to be more of this type of content. So I always love seeing people that approach this space in a thoughtful way, in a way that is not scammy. I don't know if you've looked at some of the other cryptocurrency podcasts out there. There are a few of them out there that are a little pump and dump, you know, so it's cool that you guys are doing it right.

• 6:48Ryan Sean Adams?

  We've tried to occupy that niche and you know, I think that's what people appreciate. It's like this is a journey for all of us. And this is like a journey of self-discovery, right? So even this conversation, every conversation we have with someone, we expect to learn something new. So I'm excited to learn something here today, Kevin. And you know what's super cool about you saying this is because this is like full circle for me. Because I first got into web two, believe it or not, on Dig. Okay, dig.com. This is where I learned about web two, like the power of web two. I don't know, David's a youngin', you know, he's like, I don't know if he remembers the original Dig. But like, I remembered it when it used to look like this, Kevin. Remember that?

• 7:28Speaker 02

  Oh my god.

• 7:29Ryan Sean Adams?

  Okay.

• 7:29Speaker 02

  So that was actually my design. That's how bad, that's how you know it's bad. Yeah, I did that all myself.

• 7:34Ryan Sean Adams?

  So I remember these days, I also remember these days. And for those of you who weren't around at that point in time, like you were brought up in web two in the social web, okay? Back in my day, the web was not social. All right. It was like a one to one type relationship. It was you and the website. There was no notion of like a community. It wasn't a like many to website type relationship. And the innovation that Dig brought, which was absolutely incredible to me, was like, oh, we can create the front page of this website, like the front page of the internet altogether. It doesn't have to be like someone in a high tower telling us what content is good on the internet.

• 8:19Ryan Sean Adams?

  We can all collectively, as a community, create the front page of Dig. And it's similar to folks are familiar with Reddit, right? It's like with Dig, you would dig things, which is kind of an upvote. And you could bury things, which is sort of a downvote. And this was like the OG original website where you could do that. It was my introduction to web two. Powerful man and I'm honored to be talking to you today, Kevin, because you brought me into

• 8:44Speaker 02

  That's amazing.

• 8:45Ryan Sean Adams?

  Yeah.

• 8:46Speaker 02

  Well, thanks for saying that. It was, it was, it was a lot of fun, you know, it's like I was pretty young back then and honestly, it was just like right place, right time, kind of fun, new idea. And you know, there was new technologies that were coming online at that point with Ajax where you wouldn't have to leave a page, you could actually interact with the current page you were on. Which today, you know, when you click on something and you see a vote go up or something, it seems so, you're like, oh, of course, that's the way it works. It didn't always used to work that way. Yeah, you actually have to go to it. When I first launched dig, if you clicked on voting on something to dig something would take you to another page. So you go to another page and say, thank you for your dig. And then Ajax dropped and that was asynchronous JavaScript allowed you to do everything on page. So you could see all that stuff happening in real time. The numbers are going up in real time.

• 9:30Speaker 02

  It was, it was a lot of fun, but that was, you know, 2004. So that's a while ago.

• 9:34Ryan Sean Adams?

  When you started this in 2004, was the, the term web to you even invented?

• 9:38Speaker 02

  No.

• 9:39Ryan Sean Adams?

  Like the social web? Wait, how did that meme arise?

• 9:42Speaker 02

  Yeah. So Jason Calacanis, who ran Weblogs Inc., which was a collection of different blogs, like in Gadget and a whole slew of them. He came up to me and he's like, oh, man, and he's like, Dig, you guys are, are web two. And I was just like, I was like, do I, do I need to run like a software update that I didn't know about? Like, maybe I'm like, I literally was like, am I missing something here? What is this web two thing? And it was just this collection of different sites and technologies that were coming together that people started putting under that umbrella. So, you know, they lumped in us and delicious and Flickr and Facebook and Twitter. And there's a handful of us that Yelp and some others that were all kind of part of this, you know, web two founding crew.

• 10:24Ryan Sean Adams?

  So what do you think about this, this web three moniker? Are you, are you vibing with it?

• 10:28Speaker 02

  Oh, I love it.

• 10:29Ryan Sean Adams?

  Yeah. So what do you like about it? What does it add?

• 10:32Speaker 02

  I just, I feel like, you know, the promise of Web 2, at least when we were doing Dig, was that, you know, we wanted to have this front page that would be a place where the community could come together and they could vote on stuff and the best content. It was like a fully kind of decentralized way of voting on and making up the front page. But in practice, it really didn't work. There was just a lot of spam. There was just all different types of issues that we ran into to try and make that a reality. And then you have Reddit come and attack the long tail, which is actually is why they ended up beating us in the long run, is that they went after these niche communities and the

• 11:16Speaker 02

  aggregate of the niche was actually much larger than, you know, just any one front page that was Dig. We hit around, I don't remember what it was now, around 30 something million uniques per month. That's kind of where we tapped out and they just kept growing because of that long tail. But in reality, it was still, you know, these were like centralized organizations. They were like being, they were corporations that were VC-backed and it was, they very much had a mandate to go out and make money. I mean, they had to obviously pay the payroll and all the things. And not all of that is bad, but that means that, you know, we collected user data and we did kinds of things that all companies

• 11:55Speaker 02

  do in this ad-driven model. And I just love this idea of the true empowerment of the individual to come in, collectively come together, to raise funds in different ways, you know, not having to go down the venture route if you don't want to, and to decide and vote on things that are less about just what's happening here locally or in the United States. But it seems like the Web 3 audience is a much more international audience and people are collaborating in real time in unique ways I've just never seen before. So, you know, the rise of DAOs is a great example of this. You know, obviously, the open source nature of Web 3 and the collaborations happening around that. It just, it feels like a maturing of this original idea that was the promise of Web 2, but we're not actually

• 12:40Speaker 02

  seeing until now in Web 3.

• 12:43Ryan Sean Adams?

  Yeah, so Chris Dixon has this thing, this tweet, this mental model, of course, because he's, you know, Chris Dixon, that's what he does. Web one, and he says, read, it's all about read. Web two, read, write. Web three, read, write, and own. And like, I simplify this as like, web one is links, then we got to likes, and now we're on tokens. Do you think that's like, I mean, Dig was all about communities and such, but the communities could never really own the net result of what they were doing. I mean, what they could do is they could, they could form whatever links formed the homepage, but they didn't capture the upside in that. Is that what web three is all about? Is it about community ownership in your mind?

• 13:25Speaker 02

  You know, I think that web three, certainly that's a piece of it. Like, there's no doubt that we're able to capture value and spread value in unique ways that we haven't seen before. But that said, you know, I lump NFTs into web three and all the different things that come under that umbrella. So I would say that the ownership is a big piece. I think that organization of resources is a big piece. The way the kind of like grassroots bottoms-up approach to building products is a big piece. But yeah, I really love this idea of ownership being now back in the hands of the individual contributors. Like, they're the ones that are providing all the value.

• 14:10Speaker 02

  That's where the ownership actually should reside. But I also love this idea of brand building and company building being done at the community level. Like, just this idea that you can get together and grab 10,000, 100,000 people and go and build Bored Apes and what that's turned into. I mean, that's just like a beautiful idea of like, this like bottoms-up brand building. You see it with Cool Cats, you see it with some of the other NFT projects. And I believe the futures, the future of brands, like actual, whether it be clothing brands, or you name it, is going to be driven largely by community participation and community ideas. And that's really exciting to me.

• 14:54David Hoffman?

  There's definitely a cohort of these web two platforms, Reddit and Dig are the ones that come to mind where it really actually inspired some sort of, you know, integration into a community, right? So you pick your very niche community in Reddit and you see all the same people there on that one niche subreddit and you actually get to grow a name for yourself and having some sort of, you weren't owning the actual like exposure to the upside, but you had, you felt responsible for your community. And I feel like that's a decent number of these web two platforms really tapped into that, like the innate human desire to own, own some sort of responsibility, to have responsibility for something. And I think we all know in the web three world, it's that even more so. But I also want to

• 15:39David Hoffman?

  think like Kevin, you're a veteran of the web two world. And when we, when me and Ryan, when we talk about web two on the Bankless Podcast and really the whole entire industry, we're talking about it in this very negative way. It's like, oh yeah, web three is going to come and eat web two's lunch. Like web two will be destroyed by web three. But I, as somebody who's intimately knowledgeable about both of them, do you, do you really see that antagonistic relationship? Or do you see, how do you see web two also coming along and perhaps being inspired by web three? And because like it's not this web two is just going to like go down without a fight, right? Like web two, web two is going to come along with it. So how do you think these, these platforms like that incentivize community ownership and community collaboration? How do you think they're going to come along for the ride here?

• 16:23Speaker 02

  It's a good question. I think in some sense, you have to have, you have to start realizing that participation, like if you already own a big brand or you have a big web two property, you have to understand that, that it's no longer about a closed boardroom making decisions for the future of your business. And it's about opening up really everything to the community. So they can have a look inside of what's going on and figuring out, how can I incentivize these users to use my product in, in ways that actually deputize them and really empower them to help me become a better product and help me move faster. I mean, if you take a look at what happened.

• 17:03Speaker 02

  Discord last week or two weeks ago when they decided to integrate Ethereum wallets. And then all of a sudden, the gamers said, no, no, no, no, we don't want that. And they rolled back that decision. It was just like such a centralized move. I was like that nobody, the community actually really wanted, a lot of the community wanted on the crypto side and the NFT side, they wanted this product to be more, well, I shouldn't say less about gaming, but more kind of crafted and built, purpose built for their use cases. You know, Discord is obviously the place where, I mean, you know this, you have a bankless Discord. It's like, it's a place where people go to have conversations to share off, to share

• 17:46Speaker 02

  the different, you know, either tokens they hold or NFTs that they hold. And it's really lacking, like why there isn't a way for me to click on someone, see their wallet, see their NFTs, pin certain NFTs to the top, like really make it about this interactive experience in this web three world. And they came back and said, actually, no, we're not going to do that. This is what we decided as a company. That just feels so backwards to me. And I feel like if they're just setting themselves up for disruption. And I think every company has to understand that they need to start playing, like they really need to start playing in this world and figuring out what can they open up and start doing a series of tests. It's a very, it's a very scary thing.

• 18:28Speaker 02

  When you have something that's working, like to, to, to, to say, okay, I'm going to rethink my entire business model is, is really, I'm skeptical that they can pull it off, but I, I'm rooting for them if that makes sense. And, and then that said, you know, I, and I'm, when I talk about that, I think, I'm thinking of companies like Twitter, like Discord, like Facebook, you know, Meta, like I think, I think Facebook is just going to die a slow death. I'm, I'm sorry, I think it's garbage.

• 18:58Ryan Sean Adams?

  You don't think they're going to be able to make this transition?

• 19:00Speaker 02

  No, I don't. I, I,

• 19:03Ryan Sean Adams?

  Why?

• 19:03Speaker 02

  Because

• 19:04Ryan Sean Adams?

  Chris Dixon said, the one thing you could say about Facebook though, is it is still founder led. Of all the other, you know, fangs out there, you know, that one at least is still has Mark Zuckerberg, the original founder at its helm.

• 19:19Speaker 02

  I mean, you could have said that about, about, about Twitter until this morning. Right? So it's, I, I just feel like,

• 19:29Ryan Sean Adams?

  But you know, you said they're evil, right? It's like, uh, don't evil companies do fairly well, right? Like, isn't the corporation kind of a like a psychopath?

• 19:39Speaker 02

  Like, absolutely.

• 19:40Ryan Sean Adams?

  It's partially successful.

• 19:41Speaker 02

  And I think a lot of shareholders are going to be, be very happy. But we're flipping this, right? There's this world now where it was about optimizing. The outcome of your business should be optimized for the most revenue per user. Right? And, and now it's about really putting the community in the forefront of this and saying, how can we build the best possible experience for the user? And they will be bring value back to us, you know?

• 20:07Ryan Sean Adams?

  So in web three, users as the product doesn't work anymore.

• 20:11Speaker 02

  That's right. That's right. I think users, users need to be the ones that are more of the decision makers. And they're actually helping define the product, but they're not what's for sale. So that's, I think that's where, where this thing, whole thing gets flipped. If it works, if it's the, the issue we have here is that there's a lot of like,

• 20:33Speaker 02

  it's early days. So I'll give you an example. You could not build Twitter on any web three architecture as it exists today at the scale they're at today. It just would not work. Like, even, even if you want to say Slana at 50,000 transactions a second, whatever it may be, it's

• 20:48Ryan Sean Adams?

  Not even close.

• 20:50Speaker 02

  Yeah, it's just not gonna, we need centralized, um, infrastructure right now. So I think we're still a few years out from that dream happening. But there, there'll be bridges and to get us there. I'm a fan of this idea that there is going to be a hybrid approach. And I believe that there are a lot of things that we should absolutely have be decentralized. But then there are centralized organizations that actually do things quite well. Like, you know, I don't know that I would ever send my mom to Uniswap or to sushi, sushi or something like that. Right? Like, I'm just, she doesn't want to go there.

• 21:30Speaker 02

  You know, but that said, if Wells Fargo had a way for her to on-ramp into crypto in a way that she understood, I would say, Mom, yeah, why don't you click that button that says allocate 2% of my holdings into crypto in a way that is just like she doesn't have to think about private keys, right? And I think that we have to remember that there is a pretty large majority of people out there that are never going to be comfortable holding their private keys. And I like the idea there being customer service for certain individuals when they need it, right? So it's always going to be a hybrid. There's always going to be a Pepsi for every Coke, right? There's going to be multiple winners out here. It's not a winner

• 22:13Speaker 02

  take all market. I believe that when it comes to infrastructure and support services and also when it comes to coins. I don't think this is a Bitcoin or Ethereum take all. Like, I think there's going to be multiple winners here for different use cases. There's going to be purpose-built blockchains that are more performant for certain types of activities, right? And I just, I just think when I think of like some of the NFT stuff with Flow or just, you know, some of the stuff that Solana is doing and others, like I, yeah, it's hard for me to be a laser eye. I'm not a big fan of laser eyes. I think they exclude too many people or too many ideas.

• 22:51Ryan Sean Adams?

  You mean that literally the meme? Or do you mean like?

• 22:53Speaker 02

  Yeah, just like whenever I see the meme, I'm just like, you're excluding someone. Whenever you have a certain color laser eyes, you're excluding something. And for me, this is all about being inclusive. Like, how many, how many people can we bring along for the ride? And that doesn't mean, I love Ethereum and I love Bitcoin and Solana and I have a bunch of chains. There's a lot of shit out there. Don't get me wrong. Like, when I look at some of the stuff that's out there, there's a lot that I avoid. But I just feel like this is an expansive pie and we need to think about how can we bridge and include versus exclude.

• 23:25David Hoffman?

  Something you said, you said the word, the hybrid approach. And I want to unpack that a little bit. And there are plenty of platforms out there that I think are particularly conducive to a hybrid approach. Facebook not being one of them. Discord definitely being one of them. And we know that Reddit is like really going full steam ahead with integrating tokens. And even Discord, the way that Discord's set up, Discord is already a token company. Like if you want to get into the bankless DAO Discord, you got to have 35,000 bank tokens. Right. And so like regardless of whether they actually formally put that into the application, like Discord is a web three platform for the, for the communities that have integrated them.

• 24:07David Hoffman?

  And so there seems to be a lot of these web two companies that have leaned in towards the community brings the value and we are here to incentivize the community. And now that, and like there's room for them to really just more formalize that and let the community start to take that in their own direction. So I'm wondering if you are seeing like a schism between the web two companies, where there's the web two, which is like Twitter and Facebook that are kind of not really, they don't really have the surface area to do web three stuff. And then there's things like Discord and Reddit, which do have the surface area to do web three stuff, but they're still web two. So making, maybe they're more like web 2.5. Do you see like the, the future kind of heading in this direction?

• 24:47Speaker 02

  It's interesting because you know, you say Reddit's full steam ahead on, on their token. But I would argue they've been talking about this for a while now. You know, it's been a year and a half, maybe two years. Like, I think a better approach for a lot of these companies is just going to say, listen, almost like Discord in some sense, and that you say, we don't know what you're going to do with this in the web three world. We have some ideas of what we might want to do. You know, Jack had some ideas for integrating payments and doing some things inside of Twitter. But the best approach here is really just to open it up, provide some APIs and some SDKs that allow you to go in and extend it in new and interesting ways. Like the only reason why you're powering the whole bankless access on Discord is not because of Discord at all, it's because it got extended by, you know,

• 25:32Speaker 02

  a third party application that allows you to verify how many tokens. are in someone's wallet, right? So I think a lot of the things that that the ways that you can win as a web two company is to actually get power again back to the community to extend the product in in in new ways that they'll be the first to do it. And I think the most interesting innovation is going to come by tens of thousands of developers thinking of what to do with your product next. Not just the handful of engineers and product people you have, you know, working in your in your centralized organization.

• 26:01Ryan Sean Adams?

  It's funny that you say that it's like it's kind of like back in the video gaming world or how sometimes the mods become like better than the actual game itself like I remember like Half Life two just like right back in the day and Counter Strike was originally a mod for Half Life two that now somebody created, right?

• 26:16Speaker 02

  Totally.

• 26:17Ryan Sean Adams?

  It was like a better game in a lot of ways, right? And so like you what you're advocating to for for is like hey, web two companies, you don't have to be the center of top down innovation here. You don't have to decide every feature. Just open it up so that the community can mod, right? It's like, you know, Discord having the ability to like maybe add tokens as mods, add add its own MetaMask login as a mod. This sort of thing is is how you think innovation, how web two companies will cross the chasm to web three.

• 26:46Speaker 02

  That that sounds right to me. I mean, it's our early days with all this, but I mean, that's what we've been seeing that's been working so far.

• 26:53Ryan Sean Adams?

  Can we talk about your story a little bit, Kevin, here with with crypto? So I know you've, you know, you've you've been knowledgeable about Bitcoin since the early days, right? The early days when it when it kind of came out. It it seems also that you've had a renewed interest over the last, I don't know, year or so, 18 months or so. They partially through NFTs, but just walk us through that. So when did you first uncover crypto? And it's like, I think a lot of people, so if you're anything like me, it took like two two punches, right? It's like a one, two combo punch. First was the Bitcoin thing and I was like, oh, that's cool. But what can I do with Bitcoin? Well, you can hold it, Ryan. So I held it, you know, and that was it. But then it really took for me, it was like Ethereum and DeFi and understanding that world of smart contracts.

• 27:37Ryan Sean Adams?

  The second, you know, punch down the down the rabbit hole. And then I was like, I'm all in like it's over for me. It's like bye bye hobbies, bye bye life. I'm I'm I'm crypto now. This is what I do. Was your journey somewhat like that? Did you have kind of like, you know, two opportunities at it? Or has it been like, I guess, wearing it you gradually? What's the story?

• 27:59Speaker 02

  Yeah, I mean, if I think about when I first started getting into Bitcoin in the early days, like 2011 ish, it was, it was one of those things where, um, you know, I was downloading the entire blockchain back then and running it on locally, because that's what you did. And I was one of those people that sadly, I mean, we all have this story. We bought, we tripled, you're like, I'm out, you know, and then you went back out to Fiat and then you're like, oh, wait, I'm back in again. This is gonna stay. And then you rinse and repeat, right? Do that cycle like five times. And then finally, something kind of clicks where you just realize that something is so big and has so much momentum that this

• 28:42Speaker 02

  is a snowball that's just going to continue to roll down the hill. And it's like you, for me, um, it was seeing that and just kind of realizing like, wait a second, I don't have to sell during the next downturn. I can actually just buy more. And that's probably a better idea, you know?

• 29:00Ryan Sean Adams?

  And you can only do that if you believe it'll last more than one day, like more than one cycle, right?

• 29:05Speaker 02

  Right. And well, once you see enough cycles, it's funny, when I see these little bumps in the market now, they don't even faze me. They used to really upset me. I remember like waking up at like 2am being like, oh crap, what's Ethereum at? Oh crap, it's back down to $75? Like, oh no, like, you know? And now I'm just like, oh yeah, so, so what? Like, okay, a month will go by, two months will go by, maybe it's gonna be six, it'll recover. It's gonna be fine, because this is the future. I always come back to like, go ahead.

• 29:33Ryan Sean Adams?

  And by the way, if you're new here, that is the goal. Like, if you're new to crypto, is do what Kevin is suggesting, become volatility proof. That is like the best armor you can have. Learn to love the volatility, learn to ignore it. Just like, anyway, go on, Kevin, I just wanted to mention that.

• 29:49Speaker 02

  Yeah, yeah, I think that it's once you can kinda, I think it's right sizing the investment for you for yourself personally is a big piece of that. Just so that if you do see something get chopped by 20, 30, 40%, you're not freaking out, right? Like it's, I have a lot of friends that have lost a lot of money because they put too much in. And then when it got chopped, they were like, I'm gonna lose my house. That's not where you wanna be, right? So it's, it's just, if you can right-size it to where it, it's like you consider it like a crazy weekend in Vegas. And if it does go down 40%, you're fine. Then that for me was a big shift.

• 30:30Speaker 02

  Then like you, I just saw, I guess it's, it's, there was this, there was this thing that I had to understand. And I applied it to, to private kind of equities initially where you should always invest in the inevitable, right? Like what is the inevitable? Like what's, what is going to happen the next five, 10, 15 years from now? And so that started with electric cars and realizing that, or Amazon with EC2 and their web services and how that was scaling out. And people were going cloud versus just racking their own servers. And then, you know, I realized like this idea of there being blockchain and a digital currency. Like if you're starting a new country today, would you go buy printing presses?

• 31:12Speaker 02

  Would you really? Would you, like, everyone has smartphones, like, no one's like, how are the printing press company? Like the, they, there's only a few of them left. I know that actually there was a winery that I was, I was, I went to that they were buying printing, the old printing presses for currencies to like micro print the winery labels to prevent like fraud. But they were available, like you can just like buy them, like these old printing presses. You can buy money printing presses out there on the market? Yeah, totally.

• 31:40Ryan Sean Adams?

  That would be like proprietary, you know, but I guess the old ones.

• 31:43Speaker 02

  I don't know if it was US based. Yeah, exactly. It was some of the older, older tech that was out there. But it was just fascinating to me that they're, obviously they're printing less and less money these days because people are going digital. But just knowing that the future is going to be, you're going to be able to move money, you know, internationally in a matter of seconds. Blockchain is not going away. This is the technology that's here to stay. And once you swallow that and then you start to see DeFi enroll and the whole, the whole DeFi movement when that kicked off. I was like, wow, there's so many other potential use cases for this technology. We're in like probably first pitch, first inning here of just seeing where this is going to go. And that, that's when I swallowed the pill and I was like all in.

• 32:26Ryan Sean Adams?

  So what's, uh, what's more interesting to you or what do you, what do you, what do you think made you go more all in Kevin? Was it DeFi or was it NFTs?

• 32:35Speaker 02

  It started off as, as DeFi and it was just, you know, at True Ventures where I work as a partner over there. We, we don't publicly talk about a lot of our investments, but we do quite a bit in cryptocurrency. So, you know, I'd say this year alone, we've probably invested, I'd say 75 million or so into new crypto startups. And DeFi is, is something that we've been a big part of, um, whether, you know, it'd be the Aves of the world, or you name it over the last couple of years. So it's something that we track internally quite closely. And that was the big aha kind of big use case that I was looking for, that was more than just a store of value.

• 33:19Speaker 02

  And so when, when, you know, there was a lot of different, um, and there's still continues to be a lot of different things that people are playing around with smart contracts. And what can they do? Uh, you know, what can we fractionalize? What can we, you know, there's all these different, I've seen, I'm seeing home loans now that are fractionalized. There's like a whole slew of different things that are happening that are interesting. But I think the first kind of breakout, I'm sure you all would probably agree was, was that when DeFi started to break out. That was the first use case outside of the store of value that I was like, oh, this makes a ton of sense. It's just more efficient and it's, it's getting, you know, all of the margin is going away from big banks and they're going, it's being delivered back to the individuals. Like this is amazing. So that, that's what got me really excited.

• 34:05Ryan Sean Adams?

  I want to like underscore your point here about the inevitability of this, right? You said as an investor, you're always looking for technology trends, things that are inevitable, right? Because that feels like a rock solid investment to you. Some people aren't there yet, Kevin, with DeFi, okay? They're at the stage where they still think it's a toy. They still think it's got a narrow set of use cases. They still think it's just for a niche audience, that sort of thing. They'd say the same thing about NFTs. What gives you the confidence to think that DeFi and NFTs are so inevitable?

• 34:41Speaker 02

  Well, there's one, I would say this is, that's a fantastic thing that not everyone is there. Because if everyone is there, it'd be completely de-risked and there'd be no upside for us, right? Like, it's awesome that we're in the early innings of this because that's where you capture the most upside. You know, when I was an angel investor in Twitter or Square or some of these others back in the day, people thought it was like a silly little messaging platform when we were doing Twitter. They're like, these are probably your friends where you're at with that thing. Like, that's never going to get that big. And people laughed at it. They always laugh at it. You know, they always say that this is never gonna... But but part of your job as an investor is kind of projecting out, if this works, how big will it become and why will it work? And so when I, when I think about, you know, why people aren't there yet,

• 35:24Speaker 02

  it's they don't quite see the efficiency that I think that this whole idea of smart contracts brings into the equation and just how much bloat there is. You know, I have friends that work at traditional and traditional finance that are like wanting to get out of it and get it into DeFi as fast as possible because they sit around there at their desks at Goldman or Morgan Stanley. And they're like, what are these people doing? Like, there's just so much, like, there's so much fat to be trimmed there. And it's all going to go to DeFi. It's all going to be programmed. It's just, you know, it's like the rise of AI. Like, there's so many jobs, unfortunately, are getting automated away.

• 36:02Speaker 02

  I would say unfortunately and fortunately. Unfortunately in that it's a shame because we're losing a lot of great middle-class jobs. I would say fortunately in that some of this automation is actually really helpful. Like when you can have AI go in and analyze and detect lung cancer faster and better than an individual human. Like that's a great innovation, right? But that kills jobs. So I would say the same thing is coming to the banking industry. And we're going to see the automation and usage of smart contracts just get rid of all of that extra crud that has been sitting there in the system. I mean, take a look at the balance sheets of these big banks. They have a shit ton of money. And they're just like, they're making so much

• 36:45Speaker 02

  money because where's that coming from? It's coming out of the, that could be going back to the consumer. And that's the promise of DeFi. And when I think about, okay, as a consumer, what do I want? Do I want the banks to have more money? Or do I want to have more money? It's a no-brainer. Consumers, when the tooling is right, and it gets easy enough for the average person to take part in, and that might be via Square. It might just be, you know, I have this, there's gonna be, again, with the how to web two companies bridge to web three, there's going to be the risky way or the do-it-yourself way, which is all of us. We're like, okay, we're hardcore into crypto. We can go in there. We have no problem interacting with smart contracts.

• 37:26Speaker 02

  We want that eight, nine, 10, 12%. And we're willing to play that game, right? And then there's the, maybe I just want 5%. And I'm going to do that via Square, the Cash App. And I'm just like, I don't know, but there's this high-yield crypto savings account that if I tap two taps with my phone on my iPhone, I'm getting 5%. And that'll probably be the on-ramp for a lot of people. And then there's the do-it-yourselfers that'll go the extra step. So I think we're going to see a whole slew of different things. And then there's going to be the big banks that just don't get it at all. And they're going to go kicking and screaming out of this market. And they're the ones that are going to be the most screwed in the long, long run. I think it's, you're going to see a lot of web two companies actually do quite well in the space, because

• 38:07Speaker 02

  there's still some innovation there versus them being big, old, you know, multi-hundred-year-old

• 38:14David Hoffman?

  So Kevin, you pay attention to a lot of things, not just DeFi, but you're also into NFTs, but also just outside of crypto, you're kind of the Tim Ferriss type where you're also into like health sciences, you're into a lot of different things.

• 38:28Speaker 02

  I blame Tim for a lot of that, but yeah, that's.

• 38:31Ryan Sean Adams?

  Too many interests.

• 38:33David Hoffman?

  So, but now that, especially with NFTs just taking the crypto world by storm, how much of your day, of your time, of your mental resources are you allocating towards crypto? Has it kind of subsumed your life like it's subsumed ours?

• 38:47Speaker 02

  Yeah.

• 38:48Ryan Sean Adams?

  Has there been a flipping?

• 38:50Speaker 02

  There's been a flipping for sure. It's, it's, it's hard because I have two kids too. So it's like, I gotta balance that as well. But I would say, you know, for my day job as a venture capitalist, it's, it's been interesting in that it started off really focusing on, you know, layer one chains and then kind of some of the DeFi related projects and some of the layer two scaling solutions that are coming to Ethereum. And then we did a lot of investing in and around those arenas. And then NFTs just kind of really hit me hard in January of this year. And I went, I like went all in.

• 39:31Speaker 02

  And so that is where I spend the majority of my time nowadays. And I do that because we invest in that area. I can't, I'm trying to think about how much I can actually disclose of the stuff that we're doing over true, but you know, I'll, I'll come out and say it. We are going to, as a venture company, hold NFTs on our books. Like we will hold in custody, actual NFTs and own them as digital assets for our LPs.

• 40:01David Hoffman?

  Wow.

• 40:02Speaker 02

  So that's, that's happening. And so that's, that's coming very soon. We already, you know, I led.

• 40:09David Hoffman?

  Every single person that owns an NFT is like, oh, which one? Which one is it, Kevin? Which one do you own?

• 40:15Speaker 02

  Well, it's funny because we, you have to be really careful. So I'll give you an example, like. Um, let's just say, you know, our, our fund is 750 million right now. Let's say our next fund is a billion plus. Let's say we earmark 50 to 75 to a hundred million dollars just for NFT purchases. Like, I don't want to crush the individual investor here. So I have to be really careful when I, and tread lightly when I go into these markets. Like, I'm not about lifting the floors here. We're not about flipping pieces. When we buy and hold an NFT, we'll do it for a decade. You know, it's like, this is, about being patient capital. Like, that's the way that True's always operated, and that's part of the reason why I do love the firm.

• 40:56Speaker 02

  But I think we're gonna go and, and we'll probably buy up a lot of the, you know, blue chip NFTs at this point. There's a lot of like, you know, whether it be the Autoglyphs or the CryptoPunks, or now Bored Apes I put in that category. There's, you know, some of the early kind of artists that were, whether it be the, you know, Hakataos or X copies, or, you know, just a lot of the really early individual artists. So those will be one of one works. So it's, it's, it's a little bit of everything, but in a, in a responsible way that doesn't crush the average consumer. So let's say that there's a new PFP project that is really interesting, and I'm not a huge fan of PFP projects,

• 41:38Speaker 02

  but every once in a while, I'll, I'll, I'll get the bug and I'll go in on one. We're not gonna go and buy a hundred of them, right? We probably go in and buy, you know, five. And, and just do that a lot and, and not crush the initial launch, but more just either buy, from individuals at a later point in time. So it's, it's, it's tricky. But then again, we're not deploying all this capital at once either. So you have to imagine that when you do get that big of a budget, you go out and deploy that over a couple of years, uh, maybe two and a half years or so.

• 42:09David Hoffman?

  So NFTs are really, really new, and there's, we have so much to talk about with, with NFTs. And, and so you're talking about going in and, you know, putting NFTs on the balance sheet as like a treasury asset, as an investment. But they're so new. What makes you think that they are actually like, maybe NFTs as a concept is here to stay forever? But the whole thing about like, The NFTs industry is that there isn't any one specific NFT that represents the whole industry. It's always like moving, they're kind of like fads. So like, it makes really a ton of sense for investors to invest in the long term. But why do you think NFTs are actually like the long-term thing? Like, maybe it's just like people's attention move from NFT to NFT to NFT.

• 42:51David Hoffman?

  Why gives you the conviction that it's actually the NFTs are actually going to be the cool NFTs that we care about in five to 10 years?

• 42:57Ryan Sean Adams?

  How do you know, Kevin, you're not buying Beanie Babies?

• 43:00Speaker 02

  Right, yeah. It's a good question. I think there's a couple of things there to unpack. And obviously, NFTs as a term, as a kind of a blanket category, they just encompass so many different projects, right? So there's like, and

• 43:16David Hoffman?

  It's just a token standard.

• 43:18Speaker 02

  Yeah, it's just a token standard, right? So they can be utility NFTs, they're used to unlock and gate access to certain things. There's a thousand different things that this type of token standard can be applied to. I would say, to answer your question, though, there are the initial projects that are the first, like the first to have done something technical. And I think that historically, when we look back on some of these projects,

• 43:43Speaker 02

  you know, whether it be 10, 20, 30, 40 plus years from now, there will be value in the people that have pulled off something technically interesting for the very first time. So, you know, when CryptoPunks launched, they kind of really helped. There was no ERC 721 standard, like there was no, but they helped define that, right? So I think historically, that's a very important project. And same with Autoglyps being the very first kind of on-chain, fully on-chain NFT. Like, there's, there's, these types of projects, I believe will always hold their value, if not continue to rise from where they are today. So, we will be thoughtfully going in and looking for these first,

• 44:26Speaker 02

  like, who are the early artists doing really interesting things in the space? And holding them as kind of more of the blue chip NFTs. And I would say that applies to artists as well. So, in some sense, you know, I think that there's a lot of froth in the PFP 10,000 market. You know, when you take a look at new projects dropping every other week, that is not sustainable. That is Beanie Baby land. That's where the Beanie Babies live, is all in that. Because it's, it's basically

• 44:55Speaker 02

  Um, you know, it reminds me of the ICO craze. Do you remember the ICO back in the ICO days?

• 44:59David Hoffman?

  Oh, yeah. How can you forget? Yeah.

• 45:01Speaker 02

  Yeah. So, so, okay, I'll give you the ICO playbook. Fantastic landing page, some cool looking graphics. White paper link, of course, got to have that. List of the team there and where they went to school or where they've worked at previously. Hopefully somebody either worked at Google or had a cousin that worked at Google. Didn't really matter, but it had to be on that page, right? And, and then there was a token sale that happened, a countdown timer and get in now.

• 45:29David Hoffman?

  Percentage filled.

• 45:30Speaker 02

  Just the future.

• 45:30David Hoffman?

  Yeah. Eighty-six percent filled. Yeah, right.

• 45:33Speaker 02

  Exactly. So that was the playbook and that's kind of what we're seeing with the PFP side of things as well. There's a roadmap now with PFPs or will you see? We plan on doing this with them. We're going to do commercial licensing. We're going to do comic books with them. We're going to do who knows what like it's just like that's. There's a backstory and a lore that has to go with them now. So they're these little business units, right? I am less bullish on those because there are so many of them and it's, it's the same in that that playbook is getting pretty tired. Again, who are the ones that did that first? You got the Bored Apes, the Crypto Punks, the Cool Cats, some of these earlier ones that I think will always have that, that, that staying power because they were so early in that space. So those are the ones I'm a little bit more excited about.

• 46:17Speaker 02

  Less so about the new ones that are dropping every other week because there's just a lot of noise in there. But then I think I go back to like, you know, who are the artists behind some of these projects? So I'm more interested in the individual artists, like the X copies of the world and some of the other like really well-known artists and is more so on the generative side as well. I think we've finally have seen the emergence of a new art form. Not that generative art hasn't been out for, for, for many years. It's just been a really hard thing to capture. There's never been a way to capture generative art. Back in the day, I remember going to art installations like in the early 2000s in San Francisco that were generative and they'd be like, hey, look at this, like my computer is doing this really cool generative art. And you could actually like buy the little computer.

• 47:01Speaker 02

  And like have it and as like a one of one or whatever. And then like, of course, the computer dies or whatever, right? So you gotta like get a hold of the artist and figure out how to recreate it. And it was, there was no lasting way, no durable way to actually capture this. And so I'm, I'm pretty excited about some of the early generative art and that it can actually be captured on the blockchain for the first time and stored and transferred. So that's really exciting. So I, I guess I would say there's no easy answer to your question. I think it's, it is, but you have to be in it all the time and kind of pay attention to who the emerging artists are. What they're doing that's unique and novel and then back those individuals. So sometimes that means buying their drop. Sometimes it means commissioning one of ones with them.

• 47:47Speaker 02

  You know, and so that's kind of what I've been paying attention to is, is, is really less about the, the, the insert animal character times 10,000 with a funky hat and more about individual artists, unique stuff on the generative side, unique stuff that's coming on the music side. Like Mike Shinoda from Linkin Park has a really interesting drop that's coming out here in like three days on the, on the music side that's, that's generative. I, I just, I, that and the idea of being able to break up rights and, and have those as NFTs so that I can own future royalties for some, for some music or other things that are happening in NFTs. Like it's all just so new and it is scary.

• 48:29Speaker 02

  It is, it is, it, there are certainly going to be baby babies in this whole mix, but there's also going to be some really lasting breakouts that, that I don't want to miss. So I'm going to play the game and I will absolutely get burnt. In the world of venture capital, we expect about eight out of 10 investments to go to zero. And that's kind of what the game I'm, we're playing here as well in, in an NFT land is all, the vast majority of them are going to go to, to next to nothing. But there will be some, some, some big players that emerge.

• 48:57Ryan Sean Adams?

  I think I just made a connection here. This is, this is kind of the, you know, the, one of the dots I felt like was connected for me this, this episode is going, going back to true, right? You know, you guys are a venture capital firm. And so some people might ask, you know, why are you investing in collectibles? That'd be like, you know, your venture arm saying, yeah, we're gonna, you know, go buy some Picassos. But, but also we're going to invest in like, you know, the, the New York emerging artist space and find the best like paintings in the market and kind of double down on that. It's, it's very different than investing in a company, right? You're investing in a collectible and you're not investing in a cash flow, a future cash flow.

• 49:39Ryan Sean Adams?

  So on the surface, it feels like it's, it's kind of a different thing. But here's the, the dot that was just connected for, for me is venture is all about finding individual, unique entrepreneurs and their teams and investing in them. Something you just said there about NFTs that you're interested in, Kevin, is we find the artist, we find the creator and we back the creator, we back the artist.

• 50:00Speaker 02

  Absolutely.

• 50:01Ryan Sean Adams?

  That to me is the common denominator because what does venture do? The same thing that a good NFT curator investor does is find unique individuals, right? And invest in them, whether it's an entrepreneur or a creator in crypto, in web three, they're kind of fusing to become one in the same. And so that's what you're doing, the same kind of thing that your venture firm has always done. You're just bringing that from entrepreneur to creator and finding the artists in the NFT space.

• 50:31Speaker 02

  Right.

• 50:31Ryan Sean Adams?

  Do you see it that way too?

• 50:32Speaker 02

  Ryan, you, you absolutely nailed it because we've always said internally that we find the best entrepreneurs and we let them lead us into new markets. So they're always the ones, I would say like probably 80 plus percent, 90 plus percent of the new deals that we do at True are just founder referrals going back to us. And so we're, we were watching our founders move into crypto, move into DeFi, move into NFTs. And you know, it's, it's both, how can we support and back the platforms, you know, so our investment in art blocks, right? On the generative side. And then how can we support the individual artists? Cause they are just entrepreneurs. And then also providing them with resources, you know, like for a lot of these people, it's funny.

• 51:15Speaker 02

  I've, I've probably interviewed a, a little over a dozen, a pretty well-known NFT artist now on proof. And I would say that. The vast majority of them, this is life-changing money for them. They have never experienced anything like this in their life. And they're, they're, they're kind of like blown away and scared and freaked out at the same time. And there's mental health issues that go around this. There is just, there's a roller coaster of emotions that come with this whole new world, including like, I had an artist friend that just doesn't understand key management and lost $50,000 right after they did a sale.

• 51:56Ryan Sean Adams?

  Yeah.

• 51:56Speaker 02

  And it was because, you know, they're artists, you know, they, they, they don't, they, they haven't been trained up technically. So it's like, when we think about this at True, it's like, we have to provide, the same way that we've always provided additional resources, the way that, you know, a lot of other venture firms do, like for our entrepreneurs, like we have to provide it for artists as well. So we have to figure out, what is the product at True that we can build for them to help support them on, on this journey? So that's, that's part of the, part of how we think about it.

• 52:23Ryan Sean Adams?

  How badass is it though, that the creators for a change, the artists for a change, get to be the rock stars of this movement, right?

• 52:32Speaker 02

  It's so cool. And they're getting royalties and it's baked into the smart contract. It's so cool. And they're getting paid over and over again. And then they're going out and they're backing other artists, which, so we're seeing this kind of Renaissance thing that's happening. I, I believe this is lasting. It's here to stay. But like with any new market, like we saw with the ICO days or anything else, there's, there's going to be some, some, I wouldn't call them scammers, but there's just going to be some fad to it, you know, baked in. And it's a, it's kind of a rush to see how quickly someone can launch a new project. And just, it's, it's buyer beware. You just really have to say, and close your eyes and say, does this team have what it takes? Do they, are they in this for the, this quick sale?

• 53:15Speaker 02

  Or are they going to be in this to build something that's, that's lasting and durable? And that's, that's a hard one to answer.

• 53:22David Hoffman?

  One of my favorite experiences I've had recently was when I was at NFT NYC and I went to an in-real-life NFT gallery where you could actually like meet the artists and talk to them and they could talk to you about their art as if it was just, you know, the normal art world, which now this is the normal art world. And so I met this guy and I bought, I like swept the floor on all of his, like, he minted 10 one-of-ones and I bought all of them. And then I met up with a guy the next day for like breakfast, just to get to know the guy, because now I'm an investor in this artist. And so I wanted to get to know him. Like, I wanted to get to know the guy that I put a bunch of my ether. I gave him a bunch of my ether, gave him a bunch of the

• 54:05David Hoffman?

  art. And like, I was just like blown away by some of the same language that we use to discuss things was some of the same language that venture funds, when they invest in businesses or projects, would also use. And so he was talking about, well, now that I have these NFTs that are out there, I have some sort of like responsibility to my investors to keep on producing more art because they want me to blow up, right? Like, they want me to become known as an artist. And it's the same thing as when like you bring on angel investors into your startup idea. Like, the angel investors, they, it's like an advisorship. They want to help you also blow up and become

• 54:48David Hoffman?

  very, very successful. And then they were talking, he was, the conversation was really just the dividing lines between what is a financial startup versus what is an artist startup is like becoming very, very blurred. And the relationships between early seed investments, or just, you know, buying art from an artist, they're starting to become the same things. You want to see the artist succeed. You want to do your best to help those artists succeed because you are now have financial exposure to these artists. And like, the parallels are almost, they're almost the exact same thing.

• 55:21Speaker 02

  Yeah, absolutely. And then you add in DAOs on top of that, which you can join. Those are just big collections of these people coming together around a movement. Or, you know, I'm in an NFT DAO called Flamingo DAO. And we, we basically, you know, have these weekly calls where we get together and talk about all the new and up and coming artists and who we want to back. And, um, you know, how much do we want to allocate per new project? And it's just a really fun process, but everyone kind of collectively comes together to support and help, uh, increase the awareness of these new artists that are coming out.

• 55:54David Hoffman?

  And this very much feels like the, the ethos that we've been hammering about crypto from day one is self sovereignty, right? Like, we don't need some top down platform to support this economy. We can do it ourselves. Like, we don't, we don't need to have this gatekeeping about like who controls, like Spotify controlling all the music musicians. We can figure out how to connect the investors and the artists in the same space at the same time, using the same new money. Uh, and have these economies be bootstrapped by themselves. Have like the, you talked about how the artists would receive life changing money. And then they would go buy other artists' art, right? And it's hard to generate this flywheel of some internally native economy.

• 56:34Speaker 02

  Yeah. Yeah, it, that's, that's happening. And then the other crazy thing though, and this is funny because I'm a VC and I'm saying this is like, in some sense, VCs have to be very careful because they could, uh, go away or quite a few of them could go away. Because you have these DAOs that are forming up that are better at fundraising, they're faster at decision making. And they, uh, are really powered by the people versus just being a handful of unknown LPs that are backing venture capitalists, right? So it's kind of a, a new way. So we're kind of, you know, true, we were always thinking about how can we reinvent ourselves? And so for us, you know, we've done some things we've never thought we'd do.

• 57:18Speaker 02

  One, we've invested in DAOs directly, which is crazy. We didn't know that was even going to be a thing for us here just a couple of years ago. We've backed anonymous founders now, which is nuts. Like we backed somebody by the name of Shade, which is like the shade from a tree. Like we've like had anonymous founders that we've given money to. But we have to think about also how to be. You know, there was this old model in VC where you had to come in and you would try and buy up 20% of a company. That was kind of like, you know, all the, the big VCs, that was kind of their target ownership for, for most companies.

• 57:53Speaker 02

  Many times I push back on founders and say, you do not want that much venture capital. Don't muddy the waters here, like have, involve more DAOs, less VC, more DAOs, right? And, and let's, let's figure out how we can get that community support behind you versus it just being a handful of small VCs that may not even have the sway that you want in this new world, right? So in some senses, like if you're getting a project off the ground, do you want five VCs that barely understand what you're doing to invest? Or would you rather have five DAOs each with, you know, hundreds of members that are going to be your best brand advocates and champions, right? And so

• 58:32David Hoffman?

  Twitter armies.

• 58:34Speaker 02

  Yeah, so, so we're, we're, we're treading very lightly and want to make sure that we don't own too much. So we actually try and dial back. You know, when, when a new net, like we're buying into a coin, uh, you know, sometimes when I see these VCs that own, you know, 10, 20% of a, of a coin and you see this big chunk, you see that pie chart when you go into, you know, like yeah, EtherScan, yeah, and you see they're like, oh, there's, there's so and so VC and this is massive chunk of the pie. And you're just like, it doesn't feel right, you know? So, uh, we always like, we talk about single digit percentages. Like if, if it's a new network launching, it's like oftentimes like two or 3%. Not, not, not getting greedy and really trying to put, actually have a more diversified ownership than, than less.

• 59:19Speaker 02

  So it, there's a whole new world out here and a whole new way for VCs to think about this. And I think a lot of them just aren't going to get it and they won't adapt. And, um, it's, it's going to be interesting to see what happens over the next few years.

• 59:31David Hoffman?

  Yeah, that's the double digit. Invest in Facebook in order to get exposure to the metaverse.

• 59:36Speaker 02

  Yeah, exactly.

• 59:38Ryan Sean Adams?

  I just think to myself that double-digit pie chart just screams, kind of, buy my bags, right? It doesn't scream like, I'm here for the community. It's just, you know, it sends a different message. But I want to go back to NFTs as an investment. And your breakdown earlier was pretty helpful, Kevin, where you're talking about like PFP NFTs and then one-of-ones. And part of what you said is like, hey, you know, your investment style is to, you want to own the blue chips of the previous revolutions, right? You know, the things, the projects that did something new for the first time.

• 1:00:13Speaker 02

  Right.

• 1:00:14Ryan Sean Adams?

  But then you also want to look for, what are the next revolutions going to be? And so I think that's where we are in the NFT space. It's like, we're figuring out what we do next with this NFT, this ERC 721 standard. And we've done some PFP things. We've seen one-of-one arts. What's next in your mind? Do you think it's like utility, access-based NFTs? There's been some buzz around that. Maybe we could define it and get into it. What's your take on celebrity NFTs? Do you think mainstream is going to jump in here? What's your take on the next big thing to get excited about in the NFT space?

• 1:00:55Speaker 02

  Oh, yeah. Yeah, there's a lot to unpack there. I think that on the celebrity NFT front, I worry that those are probably the best, the worst investments that are out there. Because it's, I, there's a lot of, it's funny, I was talking to, to bring up Mike Schnoda from Lincoln Park, I was talking to him on my podcast recently, and we're talking about celebrity NFTs. And one of the things I respect about him is he didn't jump into this, even though he was like way on the stream, almost before anyone else. But he didn't jump into this because he saw it as kind of like, the obvious thing. Like, the obvious thing if you're a celebrity is just to slap your name on an NFT, right?

• 1:01:37Speaker 02

  And he's like, that's not interesting to me. That's the obvious thing. And oftentimes, sadly, it's not even the actual celebrities that are doing the artwork. So they'll come in. Then they'll work with and they'll commission some artwork to be done and then they'll put their name on it, right? And that's not that, that's just a collaboration with someone that's not really that interesting to me. It just, it just smells like a grab for quick cash. And so I tend to avoid that type of stuff. The more interesting projects are the ones that, you know, that I'm seeing that are around, what can we do with NFTs in terms of them being a

• 1:02:16Speaker 02

  more kind of dynamic entity versus just a static one? So, you know, some people are working with multiple NFTs to combine them and burn them to create new original works of art. Some people are trying to figure out, how can I pipe in kind of live data into the NFTs themselves so that they change and evolve over time, based on, you know, it could be environmental conditions, it could be a whole slew of different things that gets piped into there. So just looking at the artists that are willing to say, I see this as something that's programmable and what can be, what can be done here. So that's the kind of stuff that I get

• 1:02:55Speaker 02

  pretty excited about is some of those mechanics. And that's not to say that you should go out and just because something is being done for the first time, you should go out and buy it. But it does kind of grab my attention and it makes me consider whether or not it's a project worth that kind of further investigation. I've seen some really interesting stuff like Tom Sachs did something recently, like well-known artists that are coming into the space that say, I already have a following in the kind of trad art world, but I'm now want to embrace NFTs, but not just to make NFTs, but do something new. And so when Tom Sachs came out with his Rocket Factory, are you guys familiar with that NFT series at all?

• 1:03:36Ryan Sean Adams?

  I've, no, I think I've heard of it, but I can't even visualize it. So

• 1:03:40Speaker 02

  So yeah, this is a really fun one. So, you know, traditional artist has a great following, sells, you know, plenty of artwork on the more traditional art side, came in and said, okay, I'm gonna make a rocket factory. So what is a rocket factory? So you have to made all these individual kind of cones, like the top of a rocket, all these individual different bodies of the rocket and these different tails of the rocket. So these are three separate NFTs.

• 1:04:04Speaker 02

  That's it. So you probably, you may have seen the news where Budweiser actually bought one of these rockets. Oh, yeah.

• 1:04:10Ryan Sean Adams?

  Right. That's where I heard it. Yes.

• 1:04:12Speaker 02

  Right. So yeah, you claim the different components and then you merge them. It burns the individual NFTs and creates your final rocket. Now, the question is, do you want to keep your final rocket as an NFT? Or do you actually want to schedule a launch for your rocket? And if you schedule a launch for your rocket, they actually turn it into a real physical rocket and then launch it. And then they actually film the whole thing. It comes down on its parachute, they ship it back to you, and now you have a Tom Sachs, like original, actual, physical piece of artwork that is the rocket sitting in your house. So. That's amazing. Yeah, it's just a fun, different take on like, how can we play with this idea of digital and physical kind of interacting?

• 1:04:55Speaker 02

  Another great example here is if you see with these different rockets, that you can do a Franken rocket, which is a different, like a McDonald's nose, a NASA body, and a Tiffany and Company tail. That's a Franken rocket. A pure rocket would be like all McDonald's up and down or, and of course, they didn't get any of the licensing. So all this is done on the like, this is, it's not shady. They're not getting sued for it, but you know, Tiffany and Company did not endorse this. Yeah, exactly. But it's just a fun way for an artist to say, I'm going to play with this world of NFTs that, that in a new and novel way. And I like projects like this, you know? It was, it was just, it's just trying out new and interesting things that haven't been done before.

• 1:05:38Speaker 02

  So we'll see more of this done from traditional artists. It's a fun thing to track.

• 1:05:44Ryan Sean Adams?

  So, so the formula here is you have kind of a mainstream artist from, from trad art, by the way. I didn't know that was a term trad art, but I love that, using that. And then you combine that with like some novel thing that you can do, almost some utility. Something that is much more innovative than the like copying all the projects that came previously. And that to you is sort of a recipe for success. Is there like a utility element to any of this too? Right? So like, you know, Gary Vee, you know, some of his, some of his NFTs, they provide access to conferences. You know, they like you, you get surprises in the mail. It's all sorts of like, other artists have, have talked about

• 1:06:30Ryan Sean Adams?

  access to Discord, for example.

• 1:06:32Speaker 02

  Yeah.

• 1:06:33Ryan Sean Adams?

  Do you think utility is going to increasingly become an important part of the NFT experience?

• 1:06:39Speaker 02

  Yeah, but I think this is going to be the future of monetization for creators with their communities. I think the utility side will really shine. You know, so for example, you know, just to talk about my own, own bags for a second. So at Proof, you know, we're going to be launching a utility NFT that will allow you access to, just as you said, like, you know, podcasts with no ads, which I already do no ads anyway. But it'll, you'll get the podcast early, you'll get access to the private Discord, in-person meetups, collaborations I do with other artists, like it's, it's just going to be a whole slew of different things that as a content creator, you just add on value over time as that creator.

• 1:07:20Speaker 02

  I mean, it's some, very similar to, to what you all are doing with, with your DAO, you know? It's like, how can you take something and, and put a fence around it and say, if you're really a true fan, this, you're doing it with tokens though, right? 3500 you have to own, is that right?

• 1:07:35Ryan Sean Adams?

  Yeah.

• 1:07:36David Hoffman?

  Yeah, there's different tiers, yeah.

• 1:07:38Ryan Sean Adams?

  And that's, this, this is kind of separate. It's kind of like, you know, our, our concept was like, launch a DAO with the community we have and see what they make, you know? And so it's, we just, it's totally the communities.

• 1:07:51David Hoffman?

  It's kind of mind of its own.

• 1:07:53Ryan Sean Adams?

  Yeah, it's got a mind of its own, which is a little bit different than I think if we were doing like NFT of the type you're describing, which gets you additional access to things. Yeah, but, but tell us more about it. And one other comment I think I'll, I'll say, I'm curious your perspective on is, we found the tooling to do what you're saying. I don't know how it's been with Proof, but like, very rudimentary.

• 1:08:15Speaker 02

  That's right.

• 1:08:16Ryan Sean Adams?

  It's just, it's hard. Like, there are no shrink wrapped packages to spin out an NFT token if you're an artist and to create a token gated community and to like add features to your fans. Like, everything is bespoke and it's difficult.

• 1:08:33Speaker 02

  Well, it's getting, it's getting a lot better. So that's, that's the cool thing is every, have you heard of Unlock Protocol? Yeah.

• 1:08:40Ryan Sean Adams?

  I've heard of Unlock, yes.

• 1:08:41Speaker 02

  Yeah, so if you go to unlock-protocol.com, like, this is basically a way to take NFTs and, and, and put various things behind these kind of locks that you created. So it's like managing membership around NFTs. So, you know, this will, this will allow you to do some of the integrations that you were talking about, like where you, you block off certain, certain content on your blog. And, but you're right, it's like really early days for, for these types of, this type of tooling to be done. But, you know, I imagine it's just going to, it's, it's certainly going to be here in the next six months. Like, there's so many different entrepreneurs that are working on, on

• 1:09:22Speaker 02

  kind of creating this. It's, and it's very doable, right? All we have to do is look into someone's wallet and say, do you hold this NFT? If so, you have access to this resource. So, for me, I'm going to be doing a bunch of, you know, there's a, I'll probably, you know, have a small gallery in New York or LA that moves around and travels around. If you want access to the gallery, you bring your phone and you use the app to unlock access with your NFT, you know, like, to get behind that door just by holding this NFT, it's going to be something that we all do. I was talking to Mike Shinoda about this, like, you know, if he's, if you're, if you go to 10 of his concerts, do you get a special NFT that allows you early

• 1:10:04Speaker 02

  access to the 11th one on Forward? Like, this proof of attendance, I'm sure you all have heard of, is really interesting, these popes that, that people are collecting. This, this idea of, once you have enough cred in a certain, within a certain organization, you know, certain things start to happen. Certain resources start to become available. So, I'm, I'm really excited for, for NFTs as they're, as, as Gary was very smart to kick that off and say, this is about providing extended access to all the things that I do through, through these NFTs.

• 1:10:37David Hoffman?

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• 1:11:22David Hoffman?

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• 1:12:06David Hoffman?

  there are markets for over 30 various different crypto assets, including many of the hot DeFi tokens. And it's one of the few exchanges that has liquid DAI markets. Gemini just launched their Earn program, where you can earn up to 7.4% interest on 26 various crypto assets. If you're tired of paying fees in DeFi, or you don't want to worry about DeFi exploits, but you still want to earn interest on your crypto assets, Gemini Earn is the product for you. Another product I'm stoked to get my hands on is the Gemini Crypto Back Credit Card, which gives you 3% cash back on all of your purchases, but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH, so whenever I buy something, I get a little bit of ETH bonus back to me at the same time.

• 1:12:51David Hoffman?

  You can open up a free account in under 3 minutes at gemini.com/go-bankless. And if you trade more than $100 within the first 30 days after signup, you'll be gifted a free $15 Bitcoin bonus. Check them out at gemini.com/go-bankless.

• 1:13:07Ryan Sean Adams?

  I want to highlight another thing that I'm noticing, Kevin, in your approach to investing in this space is like you're actually going out there and experimenting and doing things, right? So like, if you have a thesis that every creator with a fan community is going to have some sort of token gated access, some sort of fan token, whether it's ERC 721 and NFT, or whether that's another token, the best way to go figure that out is to like, you're a content producer, so you try and experiment with what you're doing with proof. And like, that gives you a lay of the land of, okay, where's the tooling in terms of maturity? What's missing? What does an artist actually need to think about when they're launching one of these things to their community? And you kind of learn by

• 1:13:51Ryan Sean Adams?

  doing. Has that been a key part of your crypto journey and your success today?

• 1:13:55Speaker 02

  Oh, 100%. I think you just have to go out there and play and experiment, not even just as a creator, as anyone. One of the main things that I talk about on my podcasts is, you know, there's, there's so many times where we mention these things and, you know, you just, you think about playing in this world of DeFi, or this world of all these new things that are, that are happening. And one of the biggest mistakes that you can make is just to listen to podcasts. Like, you have to go and actually install the software and, and put in, put in 500 bucks, 700 bucks, whatever it may be, even, even if it's, consider education and, and go test out. And it's unfortunate because gas prices can be so high that they eat up everything, but-

• 1:14:37Ryan Sean Adams?

  Just go try it on Polygon or like some other, you know, side chain.

• 1:14:41Speaker 02

  You gotta go kick the tires. Exactly. And, and you'll, you'll probably lose some money, but it is, it's like, it's like buying the best textbooks. Like, you're just going to learn so much by doing that. So I'm, I'm a big fan. I know that when I launched this proof NFT, I purposely didn't promise a ton outside of just a couple of basic things, because I know that over the next three years, I'm going to probably launch a good dozen or so things that, you know, half of them will fail, but all have been the first to have done it. And it'll be like, why not? Let's just try this. What happens if we, if this works, you know? And then also-

• 1:15:15David Hoffman?

  You gotta leave room to over-deliver.

• 1:15:18Speaker 02

  Yeah, exactly. Exactly. That's it. I mean, you guys do this quite well with, with all the, the great content that you put out. So, by the way, I don't know if I ever told you this, but I, I subscribed to your newsletter as of like, maybe a year ago or something like that, I started paying for your newsletter. It's good content.

• 1:15:31David Hoffman?

  OG, appreciate it.

• 1:15:32Ryan Sean Adams?

  OG right there.

• 1:15:33David Hoffman?

  Yeah. Do you have the, the bankless Po app?

• 1:15:37Speaker 02

  I don't.

• 1:15:38David Hoffman?

  If you if you if you pay for the newsletter, you get the you make the baby with Po app. Yeah.

• 1:15:41Speaker 02

  Amazing. I didn't know that. It's awesome.

• 1:15:44David Hoffman?

  Yeah, we actually have one every single year. So yeah, you can have the 2021 and well, now now you would get the 2021 one.

• 1:15:50Speaker 02

  Oh, that's awesome.

• 1:15:51David Hoffman?

  The ideas of obviously just like marketing attendance, like how long have you been around?

• 1:15:57Speaker 02

  Right.

• 1:15:58David Hoffman?

  As for just like analytics for our customer base, like it really lets us know how much they really care, right? Like, oh, you've been around since 2020. You've collected it's 2025. You've been around since 2020. You have all five Po apps like, oh, man, you are really committed. And it's just a great way to have insights into who your actual community members are.

• 1:16:15Ryan Sean Adams?

  Yeah, and we don't really know what else we're gonna do with it is is kind of the interesting thing.

• 1:16:19Speaker 02

  You don't have to know, right?

• 1:16:20Ryan Sean Adams?

  You don't have to know at the start, right?

• 1:16:22Speaker 02

  Maybe five years from now, you'll decide to do something really cool with it for people that have been around with you that long, you know?

• 1:16:27Ryan Sean Adams?

  Exactly. It's definitely an option on the future.

• 1:16:31David Hoffman?

  So Kevin, there's NFTs are insanely fun because of how much surface area they have. They have all of the surface area. That's what they are. Non-fungible tokens means they're gonna be super unique. But a lot of people are can be bullish on NFTs and not want to like expend the mental bandwidth to like have the upside to them. How how would you if somebody came to you and was like, I want exposure to NFTs, but I don't want to have to pick and choose between any of them? How how do I get exposure to that? Do you have an answer to that question?

• 1:17:00Speaker 02

  Hmm, it's a good question. You know, in some sense, there is the game like that you kind of alluded to, which is the person that pays attention that is like that is buying the latest BFP drops and they're flipping and they're so actively in it that that's the game that you have to give up like half your life to or more, right?

• 1:17:20David Hoffman?

  Yeah.

• 1:17:20Speaker 02

  And so I would say that the thing that's really tough is that all of the stuff that we know to be good stuff that meaning that we can look at it and say, gosh, wouldn't it be great if I was able to afford a CryptoPunk or a Bored Ape? Because they're just they're so massive now that they'll just go down in history as as being these these firsts, right? That we've been talking about. The only way I know to play in that arena is, and this is, I was talking to my sister about this actually, is just like go and buy a fractionalized NFT. So that's, that's what a lot of folks that can't afford a CryptoPunk are doing, is they'll go on like fractionalized.art, or there's a, there's another one I know that's, actually it's not out yet, but I can talk about it in the next few weeks.

• 1:18:05Speaker 02

  But there are these, basically these smart contracts that go in, they take a high-value NFT, they lock it in the smart contract, and they create a token that is associated with that NFT, and then you can buy that token. And then, you know, people buy and sell it, it's liquid, it's, you know, they add liquidity to Uniswap for that token. And you can go in and just own 1/1000 of a zombie CryptoPunk, right? And so if you in your head are thinking like, okay, this is something that I believe is going to go up over the next couple of decades, but I can't afford $400,000 for a CryptoPunk right now, today, then it's the, it's the easiest way to get some exposure to some of these high-value assets

• 1:18:46Speaker 02

  without actually having to go and, you know, pony up the cash for, for a whole one. So that's the only thing I can think of. Other than that, it's just really about going in super deep and just understanding, and trying to identify who the next, you know, X copy is going to be before they blow up. And I think a lot of that is happening on Tezos, actually. It's that whole Hen ecosystem. And all of the, I don't know if you've, you've paid much attention to everything that's happening on, on Tezos with like Object and Hen and these, these sites that are just like, so many people are minting on Tezos because,

• 1:19:25Speaker 02

  and it kills me to say that, I'm not a huge Tezos fan, but primarily because it just, they're having scaling issues like everyone else, and when it slows down, it kills me. But people like it because it's green, it's proof of stake, you know, which obviously Ethereum's going there very soon. But they, a lot of the up and coming artists, when they can go on Tezos and they can mint something for $5, like that's, that's a win for them versus having to go out and deploy their own smart contract or mint for hundreds of dollars, right? So you see a lot of scrappy up and coming artists that are on, on Tezos, that are minting on Tezos. So.

• 1:20:05Speaker 02

  That for me is kind of where I pick through the up and comers and try and find, you know, really interesting, unique artists on that platform. So that would be the place where I would say to spend some time for sure.

• 1:20:19Ryan Sean Adams?

  That's some good insight and definitely some good alpha. I mean, I, some people are asking like, are NFTs really for everyone, right? When like gas fees are so high and it costs so much to mint and, uh, you know, every transaction like they're, they're so, the existing ones are so expensive. So having these like playgrounds, being able to identify the next big thing is super important. But I want to zoom out and ask another question because, you know, part, earlier in the podcast, we were talking about Facebook, right? Which is now Meta. This is Mark Zuckerberg's bet on the metaverse, right? Now we've just been, you know, spending an hour or so talking about crypto and NFTs with you here, Kevin. And, um, I want to know if what we're talking about is actually the metaverse. Like, have we been talking about the metaverse?

• 1:21:04Speaker 02

  We have been talking about components of the metaverse for sure.

• 1:21:07Ryan Sean Adams?

  Well, what is the metaverse then? How does it come together? How do these components form to create this thing? Everyone just started talking about in 2021, which is this digital reality. David and I think of it as very much like digital property rights for the individuals, but there are other definitions of this thing. What is the metaverse in your mind?

• 1:21:31Speaker 02

  So many people like to think of the metaverse as like this VR experience. That is just like, oh, you have to own Oculus to participate in the metaverse, you know? And, and for me, I, I would say that I've always been known as a hater of VR. I've always thought it was like very, remember when the Wii came out? We all got super excited about like swinging and playing tennis and doing bowling for a little bit.

• 1:21:52Ryan Sean Adams?

  I remember VI or VR sort of platforms, like I didn't, did Sony ever have one at one point in time? Wasn't there some old janky version? Like, it's been the promise, I feel like for every five years. It's always been, yeah, it's just three, five years away.

• 1:22:06Speaker 02

  It's a great wow factor. A demo is quite well, right? Like, everybody, everyone can agree that we all can have fun in VR for the first couple hours. And then the question is, does it have that, you know, is it sticky enough to beat out just a couple of friends sitting on a sofa, you know, playing Call of Duty, you know, just with their, their standard, traditional way? And the answer at this point is no.

• 1:22:27David Hoffman?

  As somebody who's put in 50-plus hours into an Oculus headset, playing golf in VR with my friends, I'm gonna go ahead and take the other side of this argument. I think it's very much the social element that is really what VR really has optimized for. It's not really the games. It's playing games with your friends. And if you have other friends playing games with you, VR is pretty tight.

• 1:22:47Speaker 02

  I get that that's, I get that that is a very fun experience. I think that you are in a very small group of people. Like, how many, how many people are doing that? What, what is?

• 1:22:56David Hoffman?

  The other three people I do it with are in a VR startup, so they're in the industry, yeah.

• 1:23:00Speaker 02

  Right. See, I've seen, in terms of like concurrent active users in VR, it's like in the tens of thousands. Like, it's not, it's not big. Like, but, that said, you know, I've, I've played some awesome boxing games. I've done a bunch of these drawing things with friends. Like, I, too, I have, I have the latest Oculus sitting upstairs, and it's because I wanna give it a shot. Like, every two or three months, somebody will be like, "You gotta try this out," right? But it still hasn't replaced, you know, the standard PlayStation or Xbox just sitting there for me. But, I, I hear you. Like, there's, you know, and I do believe, at some point in the future, it'll be the right combination of price, form factor, battery life, all the things, like the nausea stuff, like, they'll figure all that stuff out. But in the meantime,

• 1:23:45Speaker 02

  I think the metaverse, really, today, for me, and everyone defines this a little bit differently, I think of it as more, uh, components, reusable components that have a defined, open-source definition, that we can move around to different experiences and platforms. And they could be 2D, they could be 3D, they could be Oculus, they could be whatever. But I, I believe that, when I look at what's happening with some of the NFTs and how they're getting wired up, whether it be like the 3D Kongs, or the Mi Bits, and how they're creating actual models for them, so that they can be used in these kind of metaverses, um, you know, Crypto Voxels, or whatever it may be, or Sandbox, um, it's, it's-

• 1:24:29Speaker 02

  I don't believe there's gonna be kind of one winner take all here where it's gonna be like, oh, of course, it's just Facebook. It's that's the metaverse. I think it's gonna be a bunch of different experiences on different platforms that we can take our components, own our stuff and bring it with us and move it around. Our property, exactly. So if we have a really cool me bit that we like from Larva Labs, we can move it into five or 10 different games. And seamlessly, it'll just be connecting our wallet and it'll come with us. And I believe and I hope that is the future of these digital assets is we can just quickly and easily move them around through these different worlds. But it's really early days.

• 1:25:14Ryan Sean Adams?

  Reusable components you can take with you from environment to environment, right? It's like owning your own inventory. There's almost in the gaming world, these are like items. How important do you think is decentralization in that definition?

• 1:25:31Speaker 02

  I think it's a pretty, pretty big piece.

• 1:25:34Ryan Sean Adams?

  Is it like fundamental? Is it like, so, I mean, someone might argue from Facebook, might argue that, hey, like Facebook can provide you all of the items and guess what? We created this standard and it's a world adopted standard. It's the Facebook 721, the FB721, and you can port it to all of these other ecosystems because they've also adopted this standard. Is that the metaverse? Or do you think decentralization has to be part of it? Because without that, individuals don't really own anything. Your thoughts?

• 1:26:09Speaker 02

  Well, it's, it's, it really depends on how Facebook approaches these digital assets. And I don't think they've, they've yet kind of shown their hand here. You know, there was the old school Microsoft way of saying, hey, we're, look at us. We're, we're like, we're friendly. We play with everybody. But in reality, it was kind of like still trying to lock you into their walled garden. I'm probably dating myself, but that was the way Microsoft used to operate. And I, I worry that Facebook is kind of optimized for more of that type of world than they will a truly free and open world. So we'll, we'll see. I, I think it's on us as, as individuals to, to push the agenda and to

• 1:26:54Speaker 02

  say, this is what we demand, that it be something where I can take my components elsewhere. And I think it's going to be really difficult, especially for some of the large, larger game manufacturers out there where the bulk of their revenue comes from selling skins and it comes from selling these assets. Why would they want you to bring your own like into their game? Like, they're just missing out on revenue. So I think there's a huge opportunity here for indie developers to, to come in and kind of really do some, some work here that embraces this new tech. Like, it's going to be web three native folks that are going to get it, right? It's, it'll be the, the older ones that already have, this is part of the, the revenue stream that are going to be the last to, to want to, to adopt it.

• 1:27:36David Hoffman?

  Kevin, as we come to a close here, we want to throw some rapid questions your way and we'll kind of just hit on a number of different subjects. You ready for them?

• 1:27:43Speaker 02

  Yeah, let's do it.

• 1:27:44David Hoffman?

  All right. Question number one. Are you ever going to go bankless?

• 1:27:49Speaker 02

  That would be very difficult for me because I believe in a diversified, I still believe that equities kind of, you know, play a part in my overall portfolio construction. And so in some sense, I have to have centralized, I guess I could request the stock certificates and put them in a vault somewhere.

• 1:28:11David Hoffman?

  Well, we're, we're bankless maxis, but we're, Ryan and I are also convenience maxis too. So, but neither, neither of us.

• 1:28:17Ryan Sean Adams?

  We have a Wells Fargo account.

• 1:28:18David Hoffman?

  Yeah, we, neither of us have actually officially broken up with our banks yet.

• 1:28:22Speaker 02

  Yeah. I mean, there's, there's certain things that, that like, you know, you just have to, I'd imagine that for me to be, to get rid of my checking account is probably another decade out. And I, but I think that will come through a, a new, modern form of that. I don't, we'll see.

• 1:28:41Ryan Sean Adams?

  Do you think one chain will dominate over the others? Or do you think it's like a purely multi-chain world? There will be thousands of chains. What's your take?

• 1:28:50Speaker 02

  It's a great question. I believe that there are chains now that have enough traction that it's going to be hard to unseat them, just like some people still use Oracle databases. I think that there is, there's, once there's enough around something, it tends to stick around for a while. There will be use cases that emerge that specific chains will address better than others. And, you know, for example, like R-Weave for file storage, right? That's, that's a really interesting play on, on file storage that sticks around for

• 1:29:35Speaker 02

  several hundred years, right? Ethereum is not going to tackle that anytime soon, right? So I think there'll be various specific use cases. I do believe that with speed, we will see new blockchain use cases. So, and I would love to throw a question back to you because I've never, I don't believe I've ever heard you talk about on the show. I know you guys all have, you got the Ethereum poster hanging in the background, but I'm curious on, on the Solana front, like I believe that type of performant tech will unlock very interesting use cases in DeFi that you wouldn't normally see even on a Layer 2 world. So, um, yeah, I'm, I, yeah, that's a long way of saying I believe it's going

• 1:30:20Speaker 02

  to be a multi-chain world, but I just want to hear the 30 second from both of you on what you think of Solana.

• 1:30:24Ryan Sean Adams?

  Yeah, I was gonna say, I don't know if we can, I don't know if we can wrap that up in a, in a rapid fire type format, but I guess my TLDR would be, we very much agree that high throughput chains, I guess, or low transaction fee chains will unlock a massive amount of use cases. So totally with you there, new use cases, things we've never seen before. We also think that chains like monolithic chains like Solana or like Polygon, Prove a Stake or something like that, they also have their fit, right? They're net accretive to the ecosystem. And so they're bringing more users in. And that's fantastic and users should go use whatever chain they feel like they want like they want to. There shouldn't be dogma about it like, oh, I have to pay $10 because then I'm an Ethereum seller, right?

• 1:31:11Ryan Sean Adams?

  Further, though, we also believe there's an episode we put out around modular versus monolithic blockchains. We actually think the monolithic design that Solana is optimizing for is kind of a dead end.

• 1:31:21Speaker 02

  Ethereum in its current phase.

• 1:31:23Ryan Sean Adams?

  Yeah, and so we're very bullish on layer twos and rollups and actually maximizing the the base chain for decentralization or the consensus layer in a modular blockchain design for for decentralization. But this is a whole topic, can of worms.

• 1:31:42Speaker 02

  Yeah, it's interesting. I want to I want to listen to that episode. What was that?

• 1:31:45Ryan Sean Adams?

  Check out that episode. It's called, is it Ultra Scalable Ethereum Modular Versus Monolithic? We'll include it as a link in the show notes, too.

• 1:31:53Speaker 02

  So what you're just so I can just summarize a little bit, you're saying, give me security at the base layer, make it more modular, get the and and that is better than having less security but more performance at the base layer.

• 1:32:08Ryan Sean Adams?

  Yes, because.

• 1:32:09David Hoffman?

  So just like what you were saying with how many different chains will optimize for very many different use cases. Ethereum, the L1, needs to optimize for decentralization so it can sell that product, which that product being decentralization, to other blockchains. And with these other blockchains, we consider these L layer twos. And so there's a lot of use cases that decentralization is really an afterthought. But you still want decentralization. And so if you want to make an application-specific blockchain that optimizes for execution and throughput, you can do that. You just tap into Ethereum and you get Ethereum to give you its decentralization. And this is rollups, right? And so just like how like Solana is optimized for execution, Ethereum is optimized for decentralization.

• 1:32:54Ryan Sean Adams?

  But it does mean that Ethereum is going to have this weird sort of puberty type era, this awkward phase era that we're in now, where the actual usage has to transition from the Ethereum main chain onto Layer 2s, right? So like ultimately, in this modular design, Ethereum mainnet is actually just a chain for other chains to settle on top of. It's a settlement hub and users should get off.

• 1:33:22Speaker 02

  It's weird that we're there.

• 1:33:23Ryan Sean Adams?

  They should migrate off.

• 1:33:23Speaker 02

  Yeah.

• 1:33:23Ryan Sean Adams?

  And it's weird that we're in this hybrid place. Like, like, we're very much, we don't think gas fees will go down sustainably over the long run. They can't. Like, they'll just go up. And so Ethereum is in this awkward phase where like users are still kind of stuck on the main chain. They hate gas fees.

• 1:33:40Speaker 02

  Especially because they have to bridge right now. And bridging is like, when I think of, I always put my like hat on, my consumer hat on. And, you know, we've all done the, the crazy, you know, Matic over back and forth and through the woods and it's horrible.

• 1:33:55Ryan Sean Adams?

  Yeah.

• 1:33:55Speaker 02

  Nobody's gonna do that. Like, I have a hard time doing that. I'm just like, why am I doing all this? It's like 10 hurdles just to get to a, to an L2 and back, you know?

• 1:34:04Ryan Sean Adams?

  Yeah, you can't. But we do think that like bridges will come from centralized exchanges and the soil will get easier in the future. But anyway, okay, it's back to rapid fire, Kevin, because we still got some questions. Why is Dogecoin still a thing?

• 1:34:19Speaker 02

  This just goes, it speaks to the power of community. I mean, one of the things that I'm a believer in is that we have to start thinking about, you know, these PFP projects of 10,000, these, anytime you, community is actually part of the product, right? And so even though there hasn't been any technical innovation going on there, people want something to rally behind. I mean, and this, and Doge is, I mean, I was buying, in, in, playing with Doge, I actually had the founder, Jackson, on my show, on my podcast.

• 1:34:57Speaker 02

  Gosh, I guess eight or nine years ago, eight or years ago, something like that.

• 1:35:00Ryan Sean Adams?

  Yeah, cuz he quit. He's out now, right?

• 1:35:02Speaker 02

  Yeah, he's out. Yeah, and he hates it now, but he had a pretty long rant on that whole thing. But I think one of the things that I really loved about my initial conversation with him that long ago was that he was all about understanding that this, a community can come together, work together, and do amazing things. And they were sponsoring NASCAR back then. They were doing all these really crazy things. And they feel like they're owners in the project. And this is theirs to like, own, hold, and it's a game that they want to play partially. And it's partially because they think of it as like, well, at least back in the day, is that was their tipping currency. So it's a brand. At the end of the day, it's a brand.

• 1:35:46Speaker 02

  And I think that any modern project also has to be part brand, you know?

• 1:35:52David Hoffman?

  So Kevin, let's fast forward 10 years into the future. NFTs have exploded. Everyone's got their own NFTs that they like. Layer two ecosystems vibrant. Crypto gaming is blossoming. Where's Bitcoin in this world?

• 1:36:06Speaker 02

  Hmm. This is the hardest one.

• 1:36:09David Hoffman?

  Yeah.

• 1:36:10Speaker 02

  Yeah, it's, this is, I want to hear you guys' answer on this one.

• 1:36:16Ryan Sean Adams?

  I want to hear David's.

• 1:36:18Speaker 02

  You know, it's funny. It's a weird thing. In my head, this sounds so odd because it's cryptocurrency. But in my head, Bitcoin is like bonds. Like, I like have a little Bitcoin because I'm like, that's my little safe nest egg over here to the side. You know, I don't think of it as anything kind of like sexy and innovative, but I think of it as something that is just going to give me a nice, reliable, long-term store of value slash return over the next couple of decades. And, you know, with the happenings happening every four years, I can't imagine it doesn't continue to at least track the market if not outpace it. So.

• 1:36:56Speaker 02

  I don't know. I'm I'm not a seller because of that reason. I mean, it's the OG. It's like in some sense, you have to kind of pay respect and and always hold a little. So.

• 1:37:05David Hoffman?

  It's the is it the Crypto Punk of cryptocurrencies?

• 1:37:08Speaker 02

  Almost. In some sense, it is, you know. So I I am not. I'm never gonna say like I I'm not a seller of Bitcoin, but I'm not buying anymore, if that makes any sense. It's just like it's my safe. It's my safe crypto, as weird as that sounds.

• 1:37:25David Hoffman?

  No, it seems like a very, very reasonable take. I think it's like the the ETH BTC ratio, which a lot of people are looking at right now, and you can it's a fractal, right? You can go down the line like Solana versus ETH, like Avalanche versus ETH. All like ETH versus BTC goes up in bull markets and down in bear markets. And then the same thing with all coins arise in bull markets and all coins die in bear markets. If we are bullish on this as an industry, everything else is therefore going to outpace Bitcoin, because that's what happens when this industry grows.

• 1:37:56Speaker 02

  Right.

• 1:37:56David Hoffman?

  But Bitcoin also never actually goes away itself either, right? A lot of things do go to zero versus Bitcoin.

• 1:38:03Speaker 02

  I well, and there's these purists, though, that are on the other side of that, that are that I I feel in some sense, I have a couple of these friends that are. I I won't call them crazy, but I I can say I won't call them crazy, and that makes them sound a little crazy. They they're like these people that they're obsessed with like this trial, this Craig Wright trial, and like they're like. They're like they're so they know every little intimate detail of everything on the Bitcoin side. And and for them, they don't care about like programmable money. They're not really interested in any of that. They're just like, give me, give me, give me basic crypto. I want basic crypto, you know?

• 1:38:42David Hoffman?

  Right.

• 1:38:43Speaker 02

  And and so I feel that that is always going to have its fan base, right? It's like you don't have to figure anything else out. There's no funky, how do I get to a layer two and back? It's just basic crypto. And so I I just um, I I I imagine that stays around for quite some time.

• 1:39:02Ryan Sean Adams?

  Yeah, I totally agree. I can say this confidently, Bitcoin will appreciate relative to fiat. So that I am pretty certain of. Kevin, this has been fantastic to talk to you, man. Really enjoyed this. I gotta end with this question because you are totally dialed into the crypto space. It's obvious you spend so much of your working time there now in the kind of the Web3 world. So what's next? What's next for Kevin? Do you got some projects that you're excited to launch? What can you hit us with at the end of this conversation?

• 1:39:34Speaker 02

  Yeah, I mean, I think for me, I really do want to start exploring how we can embrace community. And so with at proof, just specifically on the NFT side. And so, you know, the proof is going to be called the proof collective that I'm coming out with. It'll be launching in December. Yeah, and folks can just sign up for my newsletter at proof.xyz and I'll do the announcement on there. But that's going to be a way for me to play and test out different ideas. A whole slew of different things that I have ideas around that I want to play with. And it's going to be a fun NFT to do. I'm going to do 1,000 of them, basically. And it's going to be the most hardcore kind of NFT collectors that hold them.

• 1:40:17Speaker 02

  And then these 1,000 people will have access to all these crazy experiments, more or less. And yeah, there's like, I'll give you one like, one fun one that is just I've been toying around with. And I think this is applicable. I'm talking to a few different artists. And I think that there's something here. Basically, let's just say you're, you have this utility NFT, right? And this utility NFT gives you access to a special, I wouldn't call it a club, but just a special, actual, physical space that you could go to. If you've ever been to like Soho House in New York or any of these kind of places, right? So say you have access to this place where you can go in, use your NFT to check in.

• 1:41:00Speaker 02

  And there's a gallery, you can check out other NFTs, you can even display your own as you walk in into different spaces. So just figuring out how, as you walk around through physical spaces, your NFTs kind of follow you around would be interesting. And then having live artists kind of perform there as well. So you can imagine there being, let's just say there's a night a musician comes in, does a live recording there in front of the however 50, 75, 100 people that show up that have that specific NFT. You then take that live recording and instantly both press it out to vinyl, give the option to either press it out to vinyl or also send it to you in a NFT form that you could then destroy and get receive one of the vinyls in return. But just of that

• 1:41:42Speaker 02

  actual attendance, that place that you went on that specific occasion. And so I'm just trying to figure out, I mean, it's just one of a thousand little ideas of how can we bring more of this experience into real life environments for, you know, holders of this type of thing. I believe that there is interactive, real world, when you're a member of something like this, you will then be able to participate both in terms of enjoying something new and also when you walk in bringing the environment with you, if that makes sense.

• 1:42:16Ryan Sean Adams?

  Yeah, totally. That's awesome, man. I do think there's something special about the NFT community, you know, at this point in time where you get a bunch of them together, holding a common NFT and who knows what you can do with it.

• 1:42:27Speaker 02

  Yeah, absolutely. And then other artists like getting together to actually create artwork live would be a ton of fun. Like, how cool would it be if you could actually go to a private event and you watch people make a live artwork in front of you up on a projector and then you walk out with that NFT because you were part of that live event? Like, that's freaking awesome. Like, that would just be so much fun. So I think that that's the cool thing about NFTs is it gives you this, this like open license to just go play and experiment because it is so art driven that you can, you know, just try anything and just see if it sticks.

• 1:43:01Ryan Sean Adams?

  Yeah, playing experimentation, that is the name of the game in Web 3 in the NFT space. Kevin Rose, you were my guide to Web 2. That's how I first uncovered it on DIG. It's, it's fun to meet you on the other side in the Web 3 world. This has been a fantastic conversation.

• 1:43:15Speaker 02

  I gotta thank you guys for, well, thanks for having me on and I gotta thank you guys for also educating me. Like honestly, as you all know, there is just not enough time, right? There's not enough time to check out every single project and every and so I'm so heads down on the NFT front. I need someone to like feed me all the DeFi and all the coins and all the other stuff that you all are talking about like. It's it's been nice to to get that education from you. So thanks for putting out great content in a in a way that that is authentic. So.

• 1:43:44Ryan Sean Adams?

  Absolutely. Yeah, we're fun to do. I couldn't imagine doing any anything else. It's it's absolutely a blast. Does get exhausting at times though, David, right? But I don't know. What else would we spend our time doing? Once you go crypto, you don't.

• 1:43:57David Hoffman?

  It gets exhausting, but then, yeah, like as soon as I stopped doing it, I'm like, well, I could do more.

• 1:44:02Speaker 02

  Right. Well, then you get FOMO, right? Because you're gone for two days and the entire world changed yet again. And you're like, I just missed the entire world changing again. Like, I need to get back on.

• 1:44:10Ryan Sean Adams?

  That's what happened to me at Thanksgiving. Apparently, this Constitution Dow people token started mooning and I like already redeemed mine and like, what? Come on. Just missed a couple of days and you miss a lot in crypto, but Bankless listeners, you are not missing out on anything. Because our job is to get you educated, keep you up to speed. Kevin Rose, thanks for joining us on Bankless. This has been a blast.

• 1:44:32Speaker 02

  Thanks for having me.

• 1:44:34Ryan Sean Adams?

  Bankless Nation, a couple of action items for you. Number one, subscribe to Kevin's podcast and newsletter. That was mentioned in the show. Proof.xyz. You'll find it. Link in our show notes as well. Also, you can follow Kevin on Twitter. We'll include his handle in the show notes. We'll also include a link to our Modular Chains versus Monolithic Chains podcast that we were making references. So if you haven't listened to that one, you want to get a feel for what at least the Bankless thesis is in the emergence of modular versus monolithic. Blockchains, Ethereum versus Avalanche and all the alt ones. Go tune into that podcast too. Risks and disclaimers, guys, of course. NFTs are risky. Eth is risky. Crypto is risky.

• 1:45:15Ryan Sean Adams?

  But the beauty of Web 3 is you get to own this risk yourself. You could definitely lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:45:28David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups where we summarize the week in crypto and other

• 1:46:13David Hoffman?

  fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.