SPEAKER_00: Okay, everybody, we've got a great episode of This Week in Startups for you. Today, we're going to talk about free speech on social media. Getter, the social news app for the right-wing folks, is getting hundreds of thousands of downloads this week because Joe Rogan joined the platform and a bunch of his fans are over there. I created an account, Jason Calacanis, over there if you want to follow me. And it's the one-year anniversary of the insurrection at the Capitol. And we have a pretty wide-ranging discussion about the challenges of running moderation on social media platforms at scale, including the decentralized ones that exist in the crypto space. Plus, Molly brings up ProPublica's investigation into Facebook's role in the January 6th riots, attacks, insurrection, whatever term you like to refer to it as.

SPEAKER_02: Because, of course, it is officially the one-year anniversary of that event. Though, that is not our only topic of discussion. We also talk about the New York Times reportedly buying The Athletic for $550 million and whether Disney may have missed the boat on that one. We also, Jason has a great interview with Jiho Zerlin from Axie Infinity, the largest NFT game. I, for one, was riveted by this conversation. They've had billions of dollars of NFT sales. And just trust me, your jaw is going to drop when you hear how much people are paying just for one of the, basically, the little, like, fighter characters.

SPEAKER_08: And now we say, at the same time, 3, 2, 1, it's going to be a great episode. It's going to be a great episode. 3, 2, 1.

SPEAKER_11: It's going to be a great episode. Stick with us. That's my sign-off. Let's stick with it and see if it works. We're going to work on that. That was amazing.

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SPEAKER_02: We cannot not acknowledge the fact that it is January 6th today. It's the one-year anniversary of the storming of the Capitol. And so our news story today is actually very much in the vein of a lot of the things that have happened since, which is examining, you know, how social media played into this, how this led to the, of course, very high-profile suspension and finally booting of Donald Trump, former President Donald Trump off of Twitter, and the various apps and kind of this pro-free speech social media movement that sprung up as a result. Parler obviously is, you know, essentially dead and gone since the Capitol insurrection when it was going to briefly be the Twitter alternative. Downloads, though, there is a new one of the Twitter-like social media app, Getter, have spiked primarily because, and this probably happened to Spotify also, Joe Rogan joined the platform earlier this week.

Jason Calacanis: We teased this segment yesterday, but I have to be honest, today feels like a better day, a better day to talk Getter.

SPEAKER_23: Yeah, I actually signed up because I saw the Joe Rogan thing, and I always like to just have my account.

SPEAKER_00: It is like using Twitter in year one. It is an incredibly light version of Twitter. It's an exact copy. And so when you make an exact copy like that for a portion of the audience, it's going to be a hard business to actually make work. And I think making the anti-censorship, making the censorship-resistant Twitter is going to be very hard for them because you're going to get every maniac to go on there

SPEAKER_23: to do something that makes you censor them.

Jason Calacanis: So they're going to literally stress test it. You're going to have the exact same problem that Parler had immediately, which is like you instantly got legit terrorists, legit Nazis, legit child porn. Yes. And that was the end of that because once you run right into the law, you have to moderate your content. Full stop.

SPEAKER_36: Yeah.

SPEAKER_00: So what happens is if you basically say, I'm creating a space where no rules apply, which isn't exactly what they're saying, but like less rules apply, you're basically doing a dog whistle, you're flashing the red cape to the bull. And all of a sudden, just every maniac is going to come there and be like spreading some conspiracy theory or the Sandy Hook kids weren't actually murdered as a false flag, like the Info Wars guy likes to say, which is just the most loathsome thing in the world. And then you basically inherit all the worst people in the world. Now, I'm not saying Joe Rogan is the worst people in the world. I don't believe that. But whichever side you lean towards, you're going to get those people. So if you lean towards Bernie, you might get the communists who are left of him who want to literally ban billionaires. And if you take Joe Rogan and Ben Shapiro, then you might get the crazy Alex Jones who are to the right of them.

SPEAKER_35: It's just whichever way you lean, there's going to be a group of people who are going to lean even further.

SPEAKER_02: And as our producer, Justin, points out in our group Slack, advertisers just love that edgy content, right? You're sort of walking the line because advertisers like engagement. And that is why Facebook and YouTube have simultaneously gotten away with promoting very divisive content. And there was a big, I'm just going to point you to the story, the Washington Post and ProPublica collaboration that came out yesterday that looked really, maybe the day before, or the fourth, I think, really, really, really in-depth look at all of the ways that Facebook and Facebook groups undoubtedly incubated the violence that happened on January 6th. So much so that, you know, NBC, Brandy Zadrozny from NBC News, she and Ben Collins have done incredible work on misinformation. They posted a story about all of the violence that was being plotted online in advance of January 6th. They posted this last year, like January 4th of last year. And Brandy tweeted about it yesterday and said, you know, I almost didn't want to do this story because it just didn't feel like it was news. And then after the riot happened, then Facebook said like, oh, I don't think that was planned on Facebook.

SPEAKER_43: Sheryl Sandberg was out here like, I don't think we had anything to do with that. So anyway-

SPEAKER_00: Obviously, if Facebook was, if Facebook is the dominant platform and it really allows this kind of speech and they take a light hand or they had taken a light hand, they probably still do, of course, that's going to be where it's going to be. So in their defense, like if a bunch of people on Verizon phones are plotting in, you know, private groups in iMessage, you know, is it Apple's fault or Verizon's? I don't know. If it's in Facebook and they see it, and that, I guess, is a question. I think they really pushed groups because they wanted to have the, let's say, edgy speech be for a smaller subset of people. They actually, I think at Facebook thought that was a solution. It actually is not a solution because what you're doing is driving the bad speech underground. I have always been a fan of, let these people have their speech

SPEAKER_03: so we at least know who they are. And where it is. Yeah, exactly.

SPEAKER_29: And where they are. And Facebook not only, like, buried the speech in groups so that it would be harder to see in public, which every researcher told them was a bad idea. They then recommended the groups to people who showed up on Facebook. So they'd be like, oh, hi.

SPEAKER_47: They care about his engagement.

SPEAKER_29: I see you came to Facebook and you searched for a company that turns classic cars into electric cars. Would you like to join this group plotting an insurrection to the capital? I mean, that is how, like,

SPEAKER_02: you know,

SPEAKER_09: this algorithm was. Here's the analogy. If YouTube, if you were watching Ben Shapiro on YouTube

SPEAKER_00: and then you got, like, I don't know, Milo Yiannopoulos, who was banned, or Alex Jones, who was also banned for YouTube. Imagine YouTube didn't ban those two, but they said, hey, by the way, if you like Ben Shapiro and his, you know, super far-right position, which I'm fine with, by the way, I don't have a problem with Ben Shapiro necessarily. I mean, the anti-trans stuff is a little bit weird. It feels a little weird. A little? He's a little too obsessed with it is, like, kind of my point. You know, like, some people who we knew when we were growing up were, kind of, like, anti-gay. Yeah, we're on to it, bro.

SPEAKER_56: Yeah.

SPEAKER_00: Yeah, and then they came out 20 years later. It kind of feels a little like that to me, like, a little weird.

SPEAKER_46: But putting that aside, our lives just, our lives online just ended, by the way. Yeah. You have to.

SPEAKER_57: Anyway,

SPEAKER_46: no, it was, like, a very big trend when I was growing up.

SPEAKER_02: No, no, I know. I mean, because, like, now somebody is going to be like, did you hear that Jason suggested that Ben Shapiro is secretly trans?

SPEAKER_00: I don't think Ben Shapiro is trans. No, I don't know. I think he's trans. He's a little too interested in trans for it to be an opinion. I think it's a little bit of an obsession for him. Yeah. And when I see somebody obsessed with it, I think they probably want to hang out with trans people and be friends with them. Right.

SPEAKER_59: You know, I think that's actually what it is.

SPEAKER_60: Maybe try to understand it instead of,

SPEAKER_36: yeah, yeah. Like, he should just go to, like, I mean, he would, I think Ben Shapiro wants to be a guest judge on RuPaul's Drag Race. I think he secretly would love that. That's,

SPEAKER_29: did I go too far? No, honestly, I just, I have no idea because I have never listened to him

SPEAKER_02: and I'm just, I'm waiting for all of his stands to be like, what?

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SPEAKER_71: and then it says, oh, by the way, we have a group over here run by Milo Yiannopoulos and Alex Jones. Would you like to join it?

SPEAKER_72: Would you like to join it? Exactly.

SPEAKER_71: But their videos were not public. You had to join it and let's say you had to be approved. So the people

SPEAKER_00: who are the mods looked at your history and what channels you subscribe to and if you subscribe to Rachel Maddow, they wouldn't let you in but if you subscribe to these other, you know, more right viewpoints, they would let you in.

Chamath Palihapitiya: What that lets you do is, it's kind of like joining a country club where like all the members are a certain demographic and then you might hear jokes that are racist

SPEAKER_00: or whatever, right? That's kind of what Facebook did in their group's architecture. Now, did they do it intentionally?

SPEAKER_09: I don't think so. I hope not.

Jason Calacanis: I mean, I think they promoted the hell out of those. You know, you didn't have to. I think they did it for growth.

SPEAKER_02: And it happens on YouTube. Exactly. They did it for growth and they wanted people to join these groups and so they promoted them relentlessly and then the fact is that they found out that a ton of their groups were basically hate speech, you know, anti-vax and plotting violence against, you know, the government to overthrow the results of a free and fair election. So like,

SPEAKER_00: yeah. Anyway. Capital attack is a great raw shock test of intellectual honesty, I think.

SPEAKER_82: Yeah.

SPEAKER_00: You know, I'm good friends with David Sachs

Chamath Palihapitiya: who's my bestie and he keeps calling this like an outing and not a big deal and then when I press him on it, he's like, well, of course, if you beat up cops

SPEAKER_00: and you broke things, you should be prosecuted and I'm like, well, wait, which is it? Are you like doing a Republican talking point that like they were staying within the, you know, stanchions? Like some Republicans like, oh, you know, they were like walking through the stanchions and I'm like, I'm sure there are people at the back of the line who this was just like a fun weekend at Bernie's. Like it was like a crazy, you know, a music festival kind of experience. But the tip of the spear

SPEAKER_86: was insurrectionists. It was a spear

SPEAKER_71: designed to find Vice President Pence and attack him and to find Nancy Pelosi and to beat her. Like I actually believe if they had found Nancy Pelosi, they would have beaten her and killed her and if they found Mike Pence, they would have beaten and killed him. I mean, am I crazy? Because I watch them beat up cops and I watch them break the windows and I watch them grab any weapon they could

SPEAKER_00: to beat police officers. If they'll beat police officers, what the heck do you think they would have done if they found Pence or Pelosi or AOC or anybody?

SPEAKER_29: It's, it's look, it's all, it was all on TV in real time. Yes. It is all recorded. There is no argument about this whatsoever. Whatsoever. And the only question is what's it going to look like as we move forward

SPEAKER_02: with these sort of increasingly splintering information biospheres. And so you see these apps that are an attempt to sort of further splinter that whether they're going to work, I don't know. You see social platforms struggling with the concept of how to promote really engaging content that might be bad for society, but that isn't so offensive that advertisers pull out because, you know, advertisers were boycotting YouTube over terrorist content. So it's, I think like the simple, the simplest thing to say here is that every platform that comes along like Getter and says, we're going to be the 100% free speech platform. And I take issue with that characterization because, you know, my belief is that censorship is a tool of governments, not private companies who can do whatever the hell they want with their platforms, particularly publicly traded companies that have a fiduciary responsibility to their shareholders and investors, not the people who are flapping their gums on their platforms is going to run into the exact same problem over and over and over again. There is no such thing as a totally unmoderated platform if that platform is a business. Yes.

SPEAKER_00: And there are crypto decentralized versions of Twitter that have been around for a while. And so, Masterdon, I think is the one. Masterdon is the Twitter competitor where you get onto any server

SPEAKER_95: and, you know, Masterdon.social and it's never

SPEAKER_00: taken off. But theoretically, if you were using Masterdon, you could be doxing people, threatening people anonymously. And this is where, you know, nobody being in charge, which is a theme we were talking about this week in crypto projects, et cetera, and centralization versus decentralized. I mean, do we really want a world where nobody is in charge of an at-scale social network? Like, imagine, do the thought experiment of Facebook not being owned by anybody. Right. And none of those rooms can be banned except by, they can never be banned, but you could have law enforcement go to them because they are coordinating attacks like January 6th or worse or like a Sandy Hook or, you know, any other like violent attack. Do we really want a censorship-proof at-scale social network? I don't think I want to live in that world. Well, nobody lives in that. That seems to me

SPEAKER_102: to be incredibly dangerous and I'm a free speech advocate, but to not be able to take down, you know, child porn or threats of violence or doxing, that seems incredibly dangerous.

SPEAKER_02: I mean, we're just seeing like smaller and smaller ripples of what the entire internet used to be, right? When the internet became the World Wide Web and then it was a totally unmoderated, you know, completely wide open view of society and then everybody was like, whoa, whoa, whoa, whoa, we need to create search engines for this. We need to create safer spaces within this and we need to, and you start, like it started to get moderated and whittled into more manageable chunks and then those manageable trunks got out of control and they were like, whoa, whoa, you can't be doing that in our bulletin boards and our BBS groups and we need to like put a filter here and like this is just what it is unfortunately like or fortunately a natural evolution of like a mirror on society into a version of society that we live in every day. Yeah,

David Friedberg: except this is global and at scale and instantaneous and moving fast and there's philosophy

SPEAKER_106: grows at a pace

SPEAKER_00: that's different than, you know, I don't know, a Ku Klux Klan, you know, white supremacy group, you know, in the South, it might take them 10 years to grow to 100 members.

SPEAKER_107: Whereas a group on Facebook could grow to 100 members in the first hour.

SPEAKER_03: And you can create

SPEAKER_02: 100,000 fake members overnight. Yeah, so it's a, it's just not, it's not a one-to-one comparison, but like the real world to these social platforms.

SPEAKER_00: I mean, Reddit is a perfect example because they kind of took the Usenet, the BBSs and they became super toxic and then they wanted

Chamath Palihapitiya: to have advertisers to dovetail back to producer Justin's point in the chat while we're reading this. Like it's going to be hard for, you know,

SPEAKER_00: Getter or any of these projects to have any kind of advertising outside of like Mr. Pillow or wherever that idiot is who sells pillows and thinks, you know,

SPEAKER_110: that's the Venezuelans you know, rigged the election because, you know, they're so good at running countries and yeah. Yeah. Anyway. It's still,

Jason Calacanis: it is one year later and remains a messy world I think is our takeaway here.

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SPEAKER_116: and paramilitary.

SPEAKER_103: Facebook groups had 650,000 posts attacking the legitimacy

SPEAKER_02: of Joe Biden's victory between Election Day and the January 6th insurrection. There were 10,000 of these posts per day on average. This is from the Washington Post ProPublica piece. And lots of the posts that were quoted were talking about quote,

SPEAKER_120: civil war in the streets.

SPEAKER_119: Breaking news. I just saw from one of our amazing Nody Gang members,

Chamath Palihapitiya: Yada, the New York Times is going to buy the Athletic for $550 million. Wow.

SPEAKER_00: That is a great deal for the New York Times because the Athletic

Chamath Palihapitiya: has a great subscriber base. I don't think the Athletic should have sold. I think they should have gone public. They should have kept going with that subscriber base, but okay. I mean, it's a great deal for them. They'll make some money, but I would not have sold. I think the Athletic could have challenged ESPN. It could have been a $5 billion company, but sometimes it's hard to raise money for media companies. But this is going to be a great deal for them because they're trying to drive subs

SPEAKER_00: and they don't have Trump in office to drive subs like they did for four years. Oh, they mean

SPEAKER_29: the New York Times? I was like, why would the Athletic be, oh, okay, slow burn. Slow burn over here.

SPEAKER_126: The Athletic is like, you know,

SPEAKER_00: it's a subscription-driven sports site and you can only read stuff on there if you're a subscriber and the New York Times subscriber base has been growing. Yep. And they don't want to be competing against the, you know, this is the thing about ad-based businesses as you do venture capital, you'll see. Anybody who says they're going to have an ad-based business, it's like, are you sure you're going to have an ad-based business at scale? Because, gee, the duopoly of Google and Facebook seem to be running that business now online.

SPEAKER_130: It's very hard to compete and now Amazon's in it.

SPEAKER_103: So this is,

SPEAKER_02: Producer Nick says this is essentially even with their valuation in their last round in January 2020 when they raised at a $530 million valuation. So does that suggest they were in some trouble?

SPEAKER_95: Suggest they hit a wall

Chamath Palihapitiya: in growth and they couldn't raise additional investors. So what happens sometimes is, and we had the founder of The Athletic on, I'll get the episode number in a moment, and they were doing well, but there's a concept of natural audience,

SPEAKER_00: so a natural number of subscribers you can reach or it becomes incredibly expensive to acquire the incremental ones. So you kind of get the easy ones and you're growing very fast, but then to get the next group of people, so you get the top 10%

Chamath Palihapitiya: of the market, but get in the next 10% becomes very expensive. And then investors go, you know what? Eh, I got other software investments

SPEAKER_130: I can work on. That would be a better place for me to put the next $200 million late stage deal.

Chamath Palihapitiya: So they probably couldn't get that $200 million they needed for their next deal.

SPEAKER_00: But The New York Times looks at it and goes, well, we can reduce our churn. We already have subscribers.

Chamath Palihapitiya: So if The New York Times reduces churn for, and they have a lifetime value of, say, $1,000. If you had a lifetime value of $1,000, you know, you only need X millions of people or hundreds of thousands of people.

SPEAKER_00: Let's say this is a lifetime value of $1,000 for a New York Times subscriber. 500,000 incremental New York Times subscribers pays for this. Yeah. That seems completely possible. I don't know how many subscribers The Athletic has, but I got to think they were close to a million. I mean, that would be a good, I mean, you have the meditation apps hitting millions, right? I think Headspace has a million. And sports,

SPEAKER_127: I don't know if you know this

SPEAKER_103: about America, but sports is pretty popular.

SPEAKER_00: It seems to, based on what I see on the weekends on Twitter, 1.2 million subscribers for The Athletic. Wow. That means, I think The Athletic's 100 bucks a year or 50 bucks a year. So if it's $50 a year, that's 50 million in revenue. So it's 10 times their top line revenue, so it's probably a good purchase, it's probably a great purchase for The New York Times and a great outcome for the founders of The Athletic

SPEAKER_130: and a bad outcome or an okay outcome, a push basically is how you would look at it. It's a push

SPEAKER_145: for venture investors.

SPEAKER_29: I feel like, side note, The New York Times is the Amazon of media. See, they're really on a massive acquisition.

SPEAKER_02: I mean, they're acquiring all the talent, all the productions, like I actually feel like this is a bit of a loss for the media environment too. It's like, it's getting to the point where there's not going to be like an independent standing because the time you also have

Chamath Palihapitiya: all these independent folks, like I bet a lot of the Athletic top folks leave and do their own sub stacks or own podcasts and then it'll be because if you're a top person at The Athletic, you were probably there as a top performer, you know, columnist in Desire, that's a desired columnist. You were there because they were paying you well and you want to get equity in The Athletic that would be a little bit of a pot sweetener. I don't know if they're going to make any money those top contributors so they'll probably leave to go to sub stack to start their own podcasts and be independent.

SPEAKER_08: So 1.2 million subscriptions for The Athletic. New York Times is doing this to hit their goal of 10 million subs by 2025. If they had 10 million subs

Chamath Palihapitiya: in 2025 paying, you know, 100 bucks a year, you know, it's a billion dollars a year in revenue. Pretty great. So quote from The New York Times article the site now has about 600 employees roughly 400 of them or editorial staff members making it the second largest employer of sports reporters in the country behind Disney-owned ESPN. And I really think there should have been a venture capitalist who backed The Athletic to go after ESPN or a merger between ESPN and The Athletic would have been great or Disney supposedly wants to spin out ESPN

SPEAKER_130: and have them, you know, be more independent because it's always been bundled. Disney.

SPEAKER_02: This feels like there could have been a good bidding war between Disney and The New York Times for this.

SPEAKER_00: You know, Disney to get scooped by The New York Times would be like Facebook losing Instagram to Twitter, which they didn't, right? And in fact, Google was super pissed off that Facebook was able to buy Instagram. From my sources,

SPEAKER_130: Larry Page was infuriated that Google did not win that billion dollar deal for Instagram. Really? Yeah, big time. He, like, made some changes. Really wanted it. I mean, just imagine

SPEAKER_00: you bundle the athletic subscription with Disney plus Hulu and ESPN. Like, oh, you bought Disney plus or you bought ESPN plus whatever Hulu. You get athletic with it or you're reading athletic and they upsell you. That's genius. Like, you're paying six, seven bucks. That was a whiff. That's a big whiff. Yeah. Bad job on the M&A team at Disney, which is the best M&A team in the business. They bought Disney, Pixar,

Chamath Palihapitiya: and Marvel. But Bob Iger, who I've been trying to get on this program, producers, because his book is so good, you know,

SPEAKER_130: he's not there anymore. So that's probably why they probably just aren't as sharp on the M&A.

SPEAKER_00: All right. So I guess next up is my interview.

Chamath Palihapitiya: I was able to interview Axie and Finita co-founder Jiho Zerlin. They've got over two million players and it's really crazy, Molly.

SPEAKER_00: You basically earn crypto. You pay like two or 300 bucks to buy your characters in order to play in the game. So imagine you were playing Grand Theft Auto or Call of Duty and you earned cryptocurrency while playing. Not a ton, but if you were a top player, you earned 10 to 25 bucks, I think, a day. And then consumers can buy crypto and kind of be owners in this. They're kind of on the cap table by buying into this currency, which would be as if, you remember the World of Warcraft days. Imagine when all these World of Warcraft players were playing if you and I didn't play World of Warcraft but we could buy the swords or the gold or mana, whatever it was in that game that they used as a device. We could buy that as an investment.

SPEAKER_02: Pretty crazy, right? This is fascinating. This is such a fascinating interview and I'm really excited for everybody to hear it. I, for one thing, am shocked and should not be shocked at how much people are willing to spend like $70 per token. I don't want to give too much away about that but what we're going to find and I had a thought while listening to this that if you wanted to turn an asset class into a cryptocurrency you would do it by creating an in-game economy and then basically being like no problem we stress tested this as a currency already. It's working. Here, you know, here's the market for it and then you just like

Jason Calacanis: unleash it into the world because they're building it. It's very cool.

SPEAKER_167: There are millions of people playing. I think they have 2 million players a day or something to that effect. And fun game. Totally.

SPEAKER_00: And a fun game. I mean, this is the this really does feel like, you know, I have I'm a skeptic

Chamath Palihapitiya: of a lot of crypto projects and even in this project, I think, you know, oh my God, there must be a lot of like, you know, speculation going on here.

SPEAKER_23: But people spend a lot of money on video games and get a lot of value. So if you pay 50 bucks for Call of Duty or you spend 20 bucks

SPEAKER_00: a month on Fortnite, you know, costumes or whatever and you're spending $200 a year on Fortnite but you're getting five hours a day of value from it or 10 hours a week, it's a pretty good deal versus movies or music or other entertainment options. Yeah. And kind of cool that you have a stake in it.

Jason Calacanis: In this case, making five to 20 to $25 a day,

SPEAKER_02: which, you know, it sounds like if there are people in the Philippines earning that money or I don't know, I could imagine like my kid would be stoked about that.

David Friedberg: It's going to be a really hard conversation when you say like, hey, stop playing video games. Where's that going to get you? And they're like, well, I made 100 bucks today

SPEAKER_23: or my characters are now worth $20,000 mom and I paid 200 for them. So I've got $18,000. I can pay for college next year myself.

SPEAKER_03: I don't need your allowance ever again.

SPEAKER_23: Exactly. I mean, it's kind of the dream to get paid for video games. Like being a video game tester. I remember in the 80s, people were like, you can get paid

SPEAKER_135: to be a video game tester and play video games all day. I'm like, yeah, good luck with that. I think there's like 10 of them in the world,

SPEAKER_00: but it's a good interview

SPEAKER_135: and I hope you enjoy it.

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SPEAKER_181: All right, everybody. We've been hearing a lot about NFTs. We've been hearing a lot about blockchain.

SPEAKER_183: Obviously, video games with purchases inside, whether those are swords or mana or tokens has been around for a long time. These two things are coming together and the leading player in that space is a company called Sky Mavis. And that's a game studio that makes a game that you've probably heard about if you're anywhere around the crypto space called Axie Infinity. It is one of the top five most played blockchain-based games and number two by Monetary Value. Today, we have the founder or the co-founder, I should say, Jiho Zerlin. Did I pronounce your name correctly? Zerlin, yeah?

SPEAKER_184: That's correct.

SPEAKER_183: All right. Welcome to the program. Just starting right out, what is the difference between a game

SPEAKER_185: that is based on crypto, blockchain, NFTs, et cetera, versus a normal game?

SPEAKER_187: I'm looking at, does this app

SPEAKER_188: need to be using blockchain? I usually look for applications or industries where there is an extractive middleman or middlemen that are basically taking a majority of the value when, in fact, the users of these projects are actually generating the majority of the value. So, in my opinion, an NFT game or an NFT-empowered game is a game where the community is also sharing in the success of the game.

SPEAKER_187: And this is right through exposure by owning different tokens, whether that be NFTs or governance tokens that represent some stake in the ecosystem.

SPEAKER_192: Got it. So, in this first game, Axie Infinity,

SPEAKER_183: maybe we could just show a video for people who are watching because now Spotify supports video if you're watching This Week in Startups on Spotify or we have a video feed on Apple Podcasts or if you're watching at youtube.com

SPEAKER_195: such this weekend. But I'll ask you to basically, Jiho, to sportscast us and tell us what we're seeing.

SPEAKER_183: So, we're putting it up on the screen now and I see a bunch of little cartoony characters talking to each other or fighting with each other. What are we seeing here? Sure.

SPEAKER_188: So, Axies are fierce and adorable digital pets. Each Axie has six different body parts. Those body parts actually correspond to the cards that they're drawing in battle. So, the idea is to knock out your opponent's Axies by playing cards

SPEAKER_187: that are going to be strategic based on the situation and the Axies that you're actually attacking. Certain Axies are stronger against other Axies. They have kind of like types that kind of have their advantages and disadvantages. Some Axies are really great at taking damage and absorbing damage to protect their teammates. Others are better at attacking and taking out the enemy Axies. Got it. Axies can be bred. So, there is

SPEAKER_188: a whole breeding component that is tied into the battle system. And so, the population is actually right. The genes are actually on the blockchain. So, you can think of it as there is this Mendelian arms race that's happening with these digital pets where the population is actually

SPEAKER_187: evolving over time based on what's becoming popular and what is called the metagame.

SPEAKER_192: So, people are building these characters.

SPEAKER_195: Do they have to buy these characters in order to play? Is it like, you know, playing coin-operated video games in the 80s and 90s where you put quarters in? Or can I just start playing this on my PC or my iPad or a console? Where is it played and how do you play as it were?

SPEAKER_187: So, right now in order to play you actually need to purchase a team of three Axies or you can actually borrow a team from someone that's willing to lend it out to you for perhaps a percentage cut of the resources or the in-game tokens that you're actually earning while playing.

SPEAKER_216: Axies, I guess.

SPEAKER_187: Axies right now I believe are around $70 each.

SPEAKER_183: Got it. So, for $210 you can start playing the game. Do you lose the Axies if you lose the game?

SPEAKER_195: Is it like playing Marbles in the old days or, you know, some other game where you have something at stake?

SPEAKER_187: That would be a fun game mode. Yeah. But right now that's not the case. So, each Axie can only be battled or each team of Axies or each account can only battle a certain number of times per day. So, that's really the thing that Limit that limits how much you can how much of the in-game resources that you can actually earn.

SPEAKER_225: Right. And how many people have bought these trios of Axies?

SPEAKER_187: So, right now there are just about 2.9 million unique addresses that own Axies. There are around 2.5 million people who play every single day.

SPEAKER_116: Wow. So, this is not an insignificant number of people. This is, in fact, probably more people than play any VR game right now on a single day. These So, if you sold about 3 million wallets own them and they cost 200 apiece have $600 million worth of these Axies been sold?

SPEAKER_187: So, the total lifetime volume on our NFT marketplace is actually $3.8 billion. Why? Because some Axies are actually worth significantly more than 70. There are $70 that have sold for hundreds of thousands of dollars. We also have other NFTs in our ecosystem. We have things like land and land items. So, one thing that I also

SPEAKER_188: want to get across is that, right, this, the game that you just saw is actually just the first of many experiences

SPEAKER_187: that we're building in the Axie universe. So, we are actually building a new upgraded version of the battle system that will allow people to get started, fall in love with the game, learn the game mechanics before making any kind of significant economic decisions. We think that that's going to be a game changer. We're also working on a land-based game, kind of like a town builder where you're building up a little village and building structures.

SPEAKER_231: Clash of clans or age of empires.

SPEAKER_187: Clash of clans slash age of empires

SPEAKER_188: slash Dardew Valley. Got it. If we're thinking in terms of traditional games.

SPEAKER_234: So, when hundreds of millions of dollars have gone through the system, does your company get those or are those people

SPEAKER_236: trading with each other? How does that work?

SPEAKER_187: So, the way that we align incentives is so that our in-house NFT marketplace, which is processed over $3.8 billion of NFT volume, that has a 4.25% marketplace fee. That fee is actually taken and sent to a community treasury. And Sky Mavis, the way that we kind of have exposure to that is we own around 20% of a token that basically has governance rights over that treasury.

SPEAKER_192: Got it. So, you've created your own currency

SPEAKER_195: in the world. You get 4% of all transactions that occur. If a billion dollars goes through, that's 40 million. If 3 billion goes through,

SPEAKER_183: that's 120 million. That 120 million, your company gets 20% of, which is 24 million, which rounds up to 25 million. So, that's how you make your money, that 25 million. But the rest of the community gets to put those, that dollars

SPEAKER_240: into what? Game development? Where does the other 100 million or so go?

SPEAKER_187: Sure. So, right now, all of those funds are actually just being accumulated in the community treasury. It's possible that there will, right, it may be the community will like to use it for different initiatives, but it's also possible that we, people can stake those tokens and then receive tokens in return, right? So, the treasury

SPEAKER_188: could theoretically be streamed out and sent to the token holders, of which we're only one of men.

SPEAKER_243: Are people making money playing the game or speculating on the value

SPEAKER_245: of these characters?

SPEAKER_187: There are some people who are making money by playing this game. We just went through a horrible pandemic. Places like the Philippines and Venezuela, these are places where, right, if you're able to earn a couple of dollars a day by playing a game, then, right, that can be pretty life-changing. So, yes, there are communities where this is making a huge difference. I'll also say that, of course, right, part of the reason that this works and that there aren't just millions of these games out there is that you need to have the right mix of a fun game, an amazing community, and a well-balanced economic system, right? It's not, this isn't a new parallel universe where, right, money just grows on trees and anyone can basically get rich, right? This is a system where there are some people who are, right, spending money for fun, for pleasure, for convenience, and then there are others who are trading their time for capital.

SPEAKER_183: Which is not unprecedented, people might not know this, but a game, World of Warcraft, which has almost 5 million monthly members, which you're pretty close to, and I'm sure you've taken some inspiration or at least notes on, had a phenomenon called gold farming,

SPEAKER_195: which wasn't just to that game, but people used to in China and some other places, Manila, I think, five or ten dollars a day is a good living in front of a computer. They could basically play the game, get some gold, and then sell it to somebody in the West who wants gold, and they would do that typically off of the platform in

SPEAKER_116: some fugazi kind of way, but you've built this into the economy here, correct?

SPEAKER_193: Yeah, I think

SPEAKER_187: the key difference is that, right, rather than forcing these people who would like to engage in this type of behavior, forcing them to, right, kind of hide the behavior, right, threatening them with bands and forcing them to go into party websites that can be quite dangerous to use often, right, we're encouraging this, we think that this isn't a feature that many gamers would like, we believe that game assets are property, that they're digital property, and that when gamers are given digital property, right, you start to see really interesting behaviors emerge, right, where they become super evangelist, kind of dedicating their lives to the game, right, like, people wake up every morning and say, like, you know, how am I going to help the Axie, Axie Infinity today, right, and that's because they're seeing themselves as, right, not just players, but also part owners of this ecosystem.

SPEAKER_195: It's pretty fascinating if you thought about it like World of Warcraft, if the first million people in World of Warcraft who really popularized it, if they were to get some sort of kickback or payment for every person they brought onto the

SPEAKER_102: system, that would be kind of like affiliates, and those things have existed. But here, because you have this token that represents, that they probably have bought into and own, or these Axies characters, they can flip those to make money or rent them out to make money.

SPEAKER_188: Yeah, sure. And we also even had this event where when we released our token, it's called Axis or AXS, the Axie Infinity Shark. When we released that, we actually said, hey, there are 10,000 people in the community, you've gotten us to this

SPEAKER_187: point, we're actually going to take a snapshot of your activity, like how many Axies you own, how much land you have, how many battles you've won. And we actually ended up, one year later, after the token had gone up about 100,000%, we ended up making good on that promise and dropping around 100 million dollars worth of tokens to those initial 10,000 missionaries who helped us get this project off the ground.

SPEAKER_254: So, are Americans allowed to play the game, or are you

SPEAKER_195: caught up in this, like, is it a security, are you paying to play a game? Because if you think about a utility token, by

SPEAKER_183: definition, you know, a lot of the

SPEAKER_102: people who are speculating on cryptocurrencies, I mean, they're buying Ethereum or whatever it is, or Solana, they have no intention of using it. I would think the overwhelming majority of people buying your

SPEAKER_116: tokens are actually using them in the game, so they are, in fact, a utility in the game, correct?

SPEAKER_187: I think the key difference is that, right, like, unlike many projects these days, we built a functioning game, we built a community, long before we even released the token. So, this is a rare example where the token for the project actually came two years after we started development. So, we think that that's really the model. We, unfortunately, don't see that too much, and this, recently, over the last year, things have been very schizophrenic, right? And I think founders have been forced to make difficult decisions, I'll say, or maybe, right, the incentives are way different than in a bear market where you're, you know, kind of like building community, so I think that's been one of our advantages as well is, right, that we, you know, we've been able to work on this for three to four years, almost four years now, and we've learned a lot along the way, and we've been able to take things methodically, and we haven't been kind of pressured by anybody really.

SPEAKER_195: It's incredibly hard, though, to just play the game. You can download the game, obviously, on iOS or play it on your Mac.

SPEAKER_183: It's available on a lot of different platforms.

SPEAKER_102: However, you have to open up a wallet, I believe, go to Binance or some marketplace to buy

SPEAKER_240: the, is it AXS tokens, or are they just called AXS tokens, or AXS is how it's, how do people say it?

SPEAKER_259: AXS, AXS.

SPEAKER_195: So they have to go buy AXS tokens, so you have to be a kind of a crypto head to figure this out. It's a little bit of a hard on-ramp, is that correct?

SPEAKER_188: Sure, it's definitely still quite difficult, which I think is actually great.

SPEAKER_187: It shows that there's huge opportunities ahead. This will get easier. For now, it is quite difficult. You do need to create a run-in wallet. Interestingly, we actually were working with a fiat on-ramp where you can buy AXS tokens or in-game resources directly using a card or credit card or debit card directly from the wallet, so you don't have to necessarily go out to a different crypto exchange. But yeah, it is quite difficult. I think that's also part of the beauty though, is we've been able to, despite all these steps, onboard millions of people into crypto. 75% of our users have never used crypto before. 50% do not have a bank account. So I think this really is a golden moment where we're starting to see the path forward, right? And that, yes, it's still incredibly difficult to get started with this technology. Yes, we need to make it a lot easier. But if we have these engaging, beautiful, fascinating projects, there are people that will jump through the hoops and start going down the rabbit hole.

SPEAKER_234: So people can also just, if they

SPEAKER_195: think this is an interesting project, like if they thought Call of Duty was an interesting game or World of Warcraft or whatever, they can

SPEAKER_183: just buy AXS tokens on Coinbase at this point and just buy them and hold them thinking, hey, this

SPEAKER_195: game could get a lot of traction at some point. Are people doing that as well?

SPEAKER_187: That's definitely one of the major ways that people find out about the game is, you know, they might buy AXS tokens first and then say, hey, this game, it seems like it's doing really well, like I want to be a part of this, right? And then once you own the token, that's some incentive, right? Some, some research, some excuse to basically start doing some research and learning more about it. So that's definitely a common way that people have started to get more and more involved in the project. I think the amazing thing, right, is that historically, so I was never really interested in crypto. I grew up as a gamer, as a collector. I was also very interested in like military and economic history. I wasn't, I wasn't interested in, uh, in crypto when it was just about Bitcoin. But then when I found out about NFTs through the, you know, the kind of the early project CryptoKitties, I thought, hey, this is something that appeals to the gamer in me. This is something that appeals to the collector in me. This is going to be huge. And it's some way that, right, non technical people, they don't necessarily have to feel at a disadvantage, right? So it feels a little bit safer and like you're not necessarily playing with outside of your zone, uh, as a non-technical person.

SPEAKER_183: So when you create a company like this and you start selling these tokens, the market cap now of the tokens, I understand it's over $20 billion. And how many of those, how much of those tokens does the company own? Because all of this is public information, I understand, right? like the, the ownership of the tokens.

SPEAKER_102: So how many do, does the company own? And then in the treasury of the company, I guess, versus say investors in the company or just people

SPEAKER_240: who are, uh, buying them themselves.

SPEAKER_187: Sure. So Sky Mavis owns around 20% of the, uh, circulating supply. I'll also say that the fully diluted valuation is 20 billion plus, but I, I believe that the circulating evaluation is maybe five, five, or 6 million. I think that went down today.

SPEAKER_102: Oh, okay. So of the people who have them, there's a bunch of people who, uh, may be holding them, who can't sell them, or they're not in circulation yet, but

SPEAKER_195: essentially, you know, if this takes off, you have this incredible, basically

SPEAKER_102: like public, it's almost like you're a publicly traded company where people can buy in and buy shares of the company and bet on you. And you have an unlimited amount of capital now to produce games is, is that

SPEAKER_187: correct then we have a very special opportunity. And, uh, right. I think in crypto network effects and first mover advantage are real and very powerful. Um, and right. I think people see that we're, we have this amazing community and we have something that the rest of crypto really needs, which is users, which is attention, right? This is the ultimate manifestation of maybe the attention economy where we've actually been able to onboard millions of people, uh, into this ecosystem. And right. They're also, you know, going to be looking for other things to do, right? Like we've onboarded them to our decentralized exchange just called Katana that has around 31,000 daily active users right now. And so, you know, one of the most used, uh, defy applications, uh, in the world as well right now. So we have this opportunity where, right. We have this attention and I think we can, uh, divvy that up among many, many other, uh, projects, um, so new games.

SPEAKER_234: And yeah, yeah, who's going to make the new games is community make the new games or is that what you think your company is

SPEAKER_183: going to be specializing as you make new games, or is it possible you could say to a game developer who makes traditional games, Hey, why don't you just use our AXS token? We've got all this money sloshing around. We'll gift you, you know, $10 million in, uh, tokens to make your, I don't know if it was

SPEAKER_102: angry birds in the early days or, you know, some other game clash of clans in the early days before they became a billion dollar franchise, you know, if

SPEAKER_277: you had some, uh, you know, indie game developers, you could just give them these tokens to, to start building.

SPEAKER_187: That's definitely part of the vision where we want to make it really easy for both community developers and third party game developers and these indie studios and maybe perhaps even, you know, large triple A game studios that are interested in NFTs that gets, you know, to come into our universe, use our infrastructure. So one of the things that I also want to mention is that we've built this scalable NFT infrastructure. It's called Ronin, uh, and just on Ronin, uh, Ronin did more volume, NFT volume than all other NFT scaling solutions combined in 2021. So, you know, we show with, we've shown that it's battle tested and there are many game developers that are super eager to, you know, build on top of Ronin. Why?

SPEAKER_188: Because you, you get access, you get instant distribution to this incredibly strong, uh, community.

SPEAKER_116: Um, so let's pull up this chart here. This is the AXS relationship or the access relationship for the token. Explain to me what we're seeing here. You have players, the game universe, community treasury and

SPEAKER_183: access holders all in this kind of, uh, flywheel. So maybe you can walk us through this chart of how the ecosystem works.

SPEAKER_188: Definitely. So at its core, right? Like if, if, uh, if someone wants to get more axes or that

SPEAKER_187: they're a new player or an existing player expanding their collection, they need to actually buy those in a peer to peer transaction, right? Where do those axes come from? Those axes come from breeding. Uh, and in order to breed axes, you actually need to burn, um, some in-game resource, right? The only way to actually get that in-game resource is by playing the game. So if there is, right. So basically the way the economy works is that if there is demand for axes, then right. There is demand for in-game resources, right? So then it's basically, uh, it's possible to price the in-game resources. Then we, we come to a system where, uh, players can actually earn by playing the game. So this is a chart, uh, depicting kind of the access token ecosystem. Uh, so players can actually earn this token by playing the game as well, by placing on the leaderboard, uh, when they're spending money, that revenue, uh, is actually going into something called the community treasury players can stake those tokens and then receive, uh, kind of rewards from the community treasury that are, that are, uh, coming in, you know, through, uh,

SPEAKER_290: What does it mean to state for people who don't know to stake the token?

SPEAKER_187: Staking means, staking is a system where you can lock up your tokens. It's a way of signaling that, Hey, these tokens are locked. I'm not going to be selling them. And then once, once you stake or lock these tokens, you can then, uh, in many cases, like vote on different proposals or your L you then become eligible for words.

SPEAKER_183: Got it. Uh, so just super complex here. But, uh, if I'm understanding it, I'll reflect it back to you. When I play the game, I can earn, uh, axes by playing the game.

SPEAKER_257: Uh, resources that can then be used to free axes. Got it.

SPEAKER_183: So I get the, I get the, basically the components that could then become an axes. Cause I earned some other, um, minerals or whatever in the game, then that becomes axes. Now I've got something of actual value that I could sell to somebody else. Um, if I played the game and I was a top 10 player for 10 hours, what would

SPEAKER_195: the value of the, and I was able to put those resources to work, to make axes, what would those be worth? Ballpark.

SPEAKER_188: So it's, it's a definitely rewards scale quite heavily as, as you become, you know, a quite good player.

SPEAKER_187: I believe some of the best players are earning around maybe 20, 25 to $30, uh, per day. Um, and then you can, you can enter tournaments, uh, you know, to win much larger prize pools. All right. I think like it's very, there is a flaw, right? Like in the system right now, as it's currently designed, which is right. That it kind of requires that there's always this constant demand from axes. A lot of it is coming from new players, right? So one way, uh, that we will address this in the future is right. As we build this, uh, universe out, people will be able to upgrade their axes, right. For, you know, kind of cosmetic, uh, benefits and, you know, just to increase the rarity, right. And then you might be either burning in resources or perhaps releasing axes permanently and getting some crafting materials that are then used to enhance the appearance and perhaps even the power of your axes. This is kind of like part evolution. Um, and it's, it's something that is really, uh, it's really needed in the longterm. Um, but we've really focused kind of we've, we've had to be super lean. I think we've been able to move quickly. One of the reasons that we've just prioritized, uh, features that we thought would get us, uh, to become a household name in crypto. But, uh, yeah, so, so the, the game economy is, is still very, uh, it's still in, it's in a very early state. Um, and yeah, you know, but we have a lot of awesome additions that we'll be adding over the next couple of years.

SPEAKER_102: Is it hard to manage this relationship between the people who want to speculate on crypto and the people who want to play the game? Because people playing the game, let's

SPEAKER_195: face it, 25 bucks a day, being one of the top players, if you run the top players, you probably play poker or be a developer, or you're just wickedly smart and good at, you know, games of skill, which is kind of feels like a game of skill, right? Um, I think it would kind of fall into that category. It's $25, not enough money for you to quit your day job. And you probably have plenty of other options to make 25 bucks an hour driving DoorDash or whatever.

SPEAKER_102: So, but then you have all these speculators, uh, playing the game. How do you balance what the speculators want in buying tokens? And let's face it, that could be, you

SPEAKER_249: know, very, um, lucrative for you as a company versus what the game players want.

SPEAKER_187: It can be quite different. There's so many different types of stakeholders within the economy, right? And, and within the ecosystem, there are people who are just, you know, battling for fun. There are people who are like battling very competitively and trying to climb the leaderboard. There are people who are just collecting axes because they think that they're cute. There are people who breed axes because they, you know, want to see what type, what all the different visual combinations are and then try to have the rarest, uh, axes. Uh, there are people who, uh, you know, also are renting out. Axies to people and kind of seeing it as their own little business, their own little digital pet business or store. Uh, there are people who are buying axes and hoping to just flip them. So there are so many different, uh, archetypes, but I think that's also one of our strengths is that we have, there are so many ways for people to get involved. Uh, it can be difficult. I think, right, we have to prioritize, in my opinion, the, the needs and the desires of those that are playing for fun, uh, because they're in essence funding on the network. Uh, so the people who are playing for fun, as well as, right, the kind of long-term builders who, right, really see this as a exercise and co-creation, um, with us. I think like, you know, if I had to pick two archetypes of people, I, I think generally

SPEAKER_188: those, those two buckets are, uh, the ones that we have to, I think, be in super close contact with.

SPEAKER_183: Unpack for us how renting and scholarships work of these, uh, axes in the game.

SPEAKER_302: Um, so one of the things that we've done is we

SPEAKER_188: have disconnected the ability to use an AXE from the actual ownership of the axes. So you can play on an account that you do not own.

SPEAKER_307: How does that mechanically work?

SPEAKER_187: So the axes are stored in a, in a, in a blockchain wallet, but the actual gameplay, right, in order to play the axes, all you need is a QR code. So, so what you could do is you have your own axes, you can share the QR code that allows someone else to play with them. And then, right, someone else can play, play with your axes without actually being able to steal your axes if, you know, something goes wrong. Yeah. So, so that, that was like a new thing that we hadn't seen before. And because of that, that allowed, right, this new model where people are, you know, you know, being able to trustlessly, uh, lend out, uh, their game assets, their axes in this case.

SPEAKER_195: Um, can they revoke the ability for somebody? If they let them have the QR code to rent it, can they revoke it?

SPEAKER_197: It is. So the QR code expires every few weeks.

SPEAKER_183: Got it. So if I had these for fun, I could just tweet my QR code and say, anybody want to play? Go ahead.

SPEAKER_195: And first person who gets in, gets to use it kind

SPEAKER_187: of thing until you would want to only share it with one person.

SPEAKER_195: Okay, got it. And then, uh, they can learn how to play the game, et cetera, and, and go from there.

SPEAKER_102: But people are buying up, how much did they rent them for a day? Uh, or for a month?

SPEAKER_313: Are they renting them by the day or by the month?

SPEAKER_188: So basically what the, what they'll do is just agree to a split of the tokens, right? So maybe, you know, 40% of the tokens that they earn, they'll

SPEAKER_187: send back to the, to the owner of the action.

SPEAKER_101: So that's fascinating. This would be as if in world of Warcraft, I had a level hundred, whatever wizard.

SPEAKER_102: And I was like, I'm not going to play this month. It's finals. Anybody want to play this character for a month? Don't do anything stupid, but, uh, whatever, you know, you make in world of Warcraft, I get half, you get half kind of an interesting model.

SPEAKER_193: Definitely. And the thing right in the world of Warcraft, you can't trust someone to do that because they can go on your

SPEAKER_187: account, right? They could drop all the, they could drop some of your stuff, they could ruin everything. Right. So it is really, I think interesting where you're basically, uh, separating ownership from usage. Hmm.

SPEAKER_116: Fascinating. Uh, and so how many years were you building the game before you introduced all the crypto?

SPEAKER_187: So we started building Axie in 2018.

SPEAKER_318: Wow.

SPEAKER_187: In the beginning, you couldn't see your Axie. So when I found Axie, I actually found that about, found Axie as a community member. And I found it and you couldn't see them yet. And then there was one day where all of a sudden, Hey, there's an unboxing. You could see your Axies, then you could, uh, then you could sell them, then you could breed them. And then there was a very basic auto battle system. Um, that was in 2018, uh, right. That got us to our first couple of hundred users. Um, we then, uh, kind of expanded the vision by having a land sale. And then we released the current battle system. So the current product, which has gone to millions of people was actually built by less than 10 people about two years ago. Um, so we actually have a major upgrade, uh, that's on the way, but, uh, yeah, it's been a very iterative process. Most games, right. Uh, they can take years and, um, yeah, we, we, this is a very, uh, I think we're building in public alongside the community and from way before a traditional game developer would have showed anything for the world, I think a fundamental difference, um, in how these games are built, where they're kind of built alongside the community where you're

SPEAKER_188: getting constant feedback. And because people have a stake in your project from such an earlier, uh,

SPEAKER_187: point, uh, from such an early point right there, you automatically have like people who are willing to be your testers and give you, in many cases, harsh, uh, feedback. Cause right, uh, there, there are real economic implications for the project failing for, for many of them.

SPEAKER_234: Um, tell me about the whales behavior in the system. All these systems have whales, famously Zynga.

SPEAKER_102: Some of the whales are spending a thousand, $10,000 a month on tokens, mono, whatever it was, you know, the game device was, what are the whale spending playing the game, uh, and buying items or bundles or land, et cetera.

SPEAKER_187: So I've talked to many of the wills. Some of them are just, right. They're collectors where they, they might want the rarest Axie. They'll then, you know, they, they can then use that to meet other like-minded whales. Uh, some of our whales have started kind of syndicates where they're, uh, right. You know, kind of done really well for themselves by basically making social connections and then, um, basically using their position and their fame within the Axie universe to kind of accumulate, uh, social capital. There are others that see this as kind of like, you know, one of those, uh, management Sims where, right. They just want to help people and they want as many scholars as possible. Um, and, uh, yeah, they, you know, they, they're kind of more looking for glory. So they might be looking to start like a guild that is very prominent that wins a lot of tournaments, um, as well.

SPEAKER_188: Uh, yeah, I think like also, like it's really important that we also, uh, encourage more,

SPEAKER_187: more whale spending in the future. I think the current, uh, system doesn't necessarily have enough options for them to kind of show off, uh, within the game and just to spend for fun and pleasure. Right. So that's the example of that would be, right. Like having super rare items, um, that they might need to burn, uh, a lot of in-game

SPEAKER_188: resources for, or just kind of sacrifice, uh, axes, uh, to receive.

SPEAKER_247: There's also this concept of people buying land. I guess some people call it buying land in the metaverse.

SPEAKER_183: I don't know if you consider axi land metaverse, I guess it kind of is, but I see here on the marketplace that somebody is selling a plot of land, uh, for, uh, it's sold previously for an one Ethereum or 1.2 Ethereum, but it's not selling for 16 or asking 16.95 Ethereum, $59,000 for mystic plot minus 49, minus 29. Are, are people really buying virtual land for tens of thousands of dollars?

SPEAKER_102: And what do they actually get? Um, in a piece of virtual land for $60,000, they're buying land for millions of dollars.

SPEAKER_188: Uh, the highest single sale for a, the single, the highest sale for a single plot of plan of

SPEAKER_187: digital land actually happened with an axi infinity where, uh, a Genesis plot, one of only 75 actually sold for $2.5 million, uh, dollars worth of ether. Uh, I think it was around 550 ETH, uh, I believe just, just two months ago. So people are buying this land for a lot of reasons, right? So they, some believe that there are going to be great tokens, um, of real value that can be generated by, uh, building out that land out. Uh, some think that there'll be like advertising value, right? If they're, if, if the game does well, and there's a lot of eyeballs, right? Then, right, then eyeballs and eyeball, whether it's, is it, so there is a limited amount of space or digital space.

SPEAKER_183: So just so we understand there's a, there's a land that you can travel through in the game. That's different than the heads up card game that we saw before. But there's also like land you can travel around in, and there's a limited amount of it and they own it. And so if like in world of Warcraft, if we're all playing this map, or if in call of duty, there was one very popular map or fortnight, you own that you could put advertising on

SPEAKER_102: it potentially in the future, or when people come to play on it, they might have to pay you to play in that area kind of thing.

SPEAKER_187: Sure. Things like that. Or you could even build experiences on top of that land and maybe, right. But what if you were, you know, built in kind of a game and then there's like this arcade set up where, you know, people might need to pay a small amount to play that game.

David Friedberg: Got it. So the person who pays $2.5 million on this, you people think it's crazy, but if they

SPEAKER_195: were buying $2.5 million and it was, I don't know, let's say a landing page as part of a website, and this was the early days of Yahoo and you got the Yahoo finance page or something and you had the rights to the advertising on that page, it could actually pay off over time, uh, it's kind of a way to think about it. Definitely. And I mean, the million dollar home.

SPEAKER_187: For status, right. It's like, if you own a Genesis plan, then right. You get to go maybe, right. You get invited into special chat groups and, and it's, it's a way to socialize. Why do people like, you know, we get into existential questions that are hard to answer. Right. Like why do people spend tons of money in the physical world on, on things that, you know, might not make sense to those who don't have millions or hundreds of millions of dollars.

SPEAKER_183: Yeah. I mean, if people go to a club and buy some rare bottles of champagne and they spend a

SPEAKER_195: hundred thousand dollars champagne, popping bottles at a club, it makes no sense because you can buy the same champagne for a thousand dollars without sparklers and people dancing around your table with it. So there definitely is something for that, but I think actually the more interesting thing is, well, what if it actually did generate revenue in the future, then you would be a shareholder in the game when people buy those plots of land and you do that land sale that

SPEAKER_116: goes into your community treasury. I take it. And then the company gets 20% and the community gets 80% or something similar.

SPEAKER_187: Yeah. So when we do, so 25% of the land's been sold so far in the future, uh, if we do, uh, you know, the land sales would theoretically, right. But that revenue would go, uh, into the community treasury.

SPEAKER_234: Uh, any ideas on licensing this or partnering with folks?

SPEAKER_183: I could imagine somebody like a Disney or grand theft auto must be watching what you're doing here and saying, you know, we sell grand theft auto, uh, you know, for some amount of money or people buy in game stuff, man, if grand theft auto was built in, on your platform or in a similar fashion, I mean, people could buy different areas of different cities or from world of Warcraft.

SPEAKER_338: So is there some thought to license IP or just keep making your own games?

SPEAKER_187: Um, we are interested in bringing very well recognized and beloved IP on top and bringing that into both the Axie universe and as well as Ronin. Um, so we're kind of like incubating that, uh, IP within our universe. Um, it's, it's definitely, it's definitely the, the path forward. Um, but yeah, it's going to be a long journey as well.

SPEAKER_341: What would be the dream I pay if you could pick anyone, I think, hello kitty, just to

SPEAKER_188: say something maybe that some, some people might not say because hello kitty is great. Like a powerhouse, uh, it's, I believe like the most, uh, you know, the most valuable IP

SPEAKER_187: in the world, um, and it, it, it does incredible amounts of, uh, revenue. And right. There is kind of that overlap where you have that kind of quiet aesthetic. So another thing that I'd like to say is that, right. Like, uh, we haven't even started our kind of merch rollout. And I think that's also going to be, uh, kind of a aha moment for everyone. Cause if you can sell merch and then use the proceeds from that merch, uh, to back the end game economy, right. It's like people are buying merch for fun, right? Like it's because they, they think it's cute, right. And, uh, so we, so I think like when people understand that, uh, element, um, and how we can, uh, harness that type of spending in the physical world to enhance our digital nation, I think that's also going to be kind of a key moment in, in our history.

SPEAKER_119: Well, I mean, I think at this point on the way you're going, you could just buy some Sanrio,

SPEAKER_183: the, uh, the parent company of Hello Kitty. I mean, I don't know what they go for, but I think you could make a run at them.

SPEAKER_102: Um, any problems you're facing right now as a company, trying to keep this together in this crazy world, what's the biggest challenge for you day to day?

SPEAKER_188: Yeah, I think scaling out the team, making sure that right. We're, uh, getting the personnel that we need, um, but also, right. Like being able to push forward the current project, I think just like prioritizing

SPEAKER_187: everything, um, it can, can be, you know, it can be really difficult. Um, I think exponential growth always breaks things. Like there were times where our servers were going down, uh, right. Uh, it can make the economy much harder to balance because right. Sometimes if everyone hears that you can make money by playing a game, right. Everyone's going to come in and read it, but obviously there have to be people that are, there has to be a ratio, right. A balanced ratio between people who are spending for fun and then people who are playing for, uh, playing there and basically, uh, so maintaining that ratio. Sometimes you can get out of whack and then, uh, uh, and then, right. There's a lot of economic volatility and, you know, there's real, there's real economic value at stake and, you know, so the stakes are high and I can cause, uh, right. Emotions in the community. There can be like drama and things and things like that. So, uh, yeah, we're dealing with a lot of really interesting questions and issues. These are issues that are traditionally maybe dealt more by like founders of a nation rather than, right, people who are building their first game.

SPEAKER_247: Yeah. It does seem like the people who are buying into this vision feel like they are

SPEAKER_195: citizens and they care about the governance of it and the direction of the company. So you really have to keep them in mind because they're making big investments of time and money, capital, emotion into this. It's a fascinating project and would love to check in with you in about a year and

SPEAKER_171: see how this is all going, uh, more games coming. I take it. When's the next game going to launch?

SPEAKER_187: We hope, we hope to have some awesome, uh, game launches this year. So, uh, that, that basically Axie Infinity Origin, uh, is our upgraded battle system.

SPEAKER_188: Uh, the art will be better. The, uh, the effects will be better.

SPEAKER_187: It'll be more fast, uh, more, more skill-based. Faster. And I think most importantly, you'll be able to find it on the app store and start playing and exploring without any, you know, without having to spend.

SPEAKER_290: Got it. So you could do in game in app purchases and have the ownership exist there.

SPEAKER_102: This apple and Google allow the purchase of, cause I know they weren't really into crypto, but they do allow people to buy video game stuff. So if you're buying a sword in a apple game, that's totally fine. But if you were to buy cryptocurrency, that would not be fine. So I, I get, how do you think about that? And our, how are the platforms?

SPEAKER_187: It's something that we're trying to educate the different app stores around and, and work towards an amicable resolution, right? There are different paths forward where you do some, some, some, there could be some things that are in app purchases and for others, it could be maybe linking out. I know obviously linking to an external payment processor, right? This is a huge debate or point of contention right now. Yeah. Big lawsuit, right? With epic games. Yeah. Moving. Yeah. Things are moving, I think in the direction of being more open. So yeah, you know, it's, it's really exciting.

SPEAKER_195: And well, I suppose you could let people play the game without having ownership

SPEAKER_183: through, you know, buying in-app purchases. And then if they want to have ownership, they would figure out that you can also own these characters and not just use them one off in the game, or it could be two

SPEAKER_195: tiers of game people who own their characters and people don't. And that could be another status thing.

SPEAKER_188: There is a, yeah, I think, right. Like one of the things that crypto has not done well so far is having some, right.

SPEAKER_187: You go from like, in terms of thinking and in terms of funnels, right. You go from awareness to like heart activation, right. It's like, okay. Right. Like the first thing that you have to do is like actually buy, buy, buy something. And I think almost all cases, right. So the ability to learn and kind of, you know, fall in love with the universe and a community before actually having to go down the rabbit hole. So, um, I think that's, I think that's going to be, uh, really important.

SPEAKER_341: Well, I think it's a fascinating project. Congratulations on all the success, another five or six year overnight success in the making and, uh, keep at it. And we'll look forward to watching these new releases come out later in the year. All right, everybody. We'll see you next time on this week in serves. Bye-bye.