Today, I'm excited to share our newest show web 3 breakdowns similar to our business breakdown series. Web 3 will have its own dedicated feed. So make sure to hit the Subscribe Link in our episode notes, or find it on your preferred podcast player. The first episode of web, three breakdowns covers the board, a pied Club. You'll hear from guests. Are at Golden will also be coming back to host his own web through breakdowns moving forward. We are sharing this first episode here to make sure no one misses this launch, please enjoy. This episode is brought to you by coin.
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This is web three breakdowns. Web 3, breakdowns is a series of conversations, exploring innovation in the decentralized internet. Each episode. We will focus on a different topic. We will cover nft projects crypto ass.
Assets. Blockchain based, protocols and businesses, being built with web, three architecture. We will talk to Founders artists, investors and influencers to understand this emerging ecosystem. Come join us down the rabbit hole to find more episodes transcripts and a library of content to continue your learning visit. Join Colossus.com., All opinions expressed by host, and podcasts are solely their own opinions posts. And podcasts guests, maintain positions in the Securities, discussed in this particular.
Guest, this podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Welcome to our new show web 3 breakdowns. We want to be your on ramp into this new
decentralized world and through conversations with Builders creators and investors will do our best to help you understand and navigate this emerging ecosystem. First up. We are breaking down the nft project and cultural phenomenon or debut Club to help break down board Apes. I'm joined by Eric golden former portfolio manager at Fidelity and current board a poner. Eric, and I start with an overview of the board APA club and his path to owning an mft in the collection.
We then use board Apes as a lens to understand how nft projects are not just creating rare art, but strong membership communities to be on the cultural differences between nft communities. It was fascinating to hear how projects are differentiating themselves with IP ownership, roadmaps and douse, please enjoy this breakdown of the board of Yacht
Club.
So Eric, we like to begin these things with just a simple overview of what the thing is. In this case. We're going to talk about the board a Piat Club. My personal favorite example of just the madness and interestingness in the crypto world today. It's not a company so usually we do companies but we'll start the same way here with board Apes. Can you just give us a high level overview of like what is this thing literally give us a couple numbers a little bit of History. What is the board API club and then we'll dive into all the interesting details beneath the top level surface stuff.
Thank you for having me. And I'm glad you started off laughing because I can tell you, this is going to be a little bit different than tearing apart cash flow producing company. So the board of yacht club is a generative art collection in the space of pfp, which stands for a profile picture. It started in April, 21st is when the project came into being and sold out around, May what these things are. Are fun. 10,000 pictures of board, Apes that have 170.
Eight different characteristics from spinner. Hats to Gold fur and each one of them is unique but part of the collection called the board of Jaclyn and if you think about the collection, so there's 10,000 of them there. N FTS, people collect one or more of them. What are the motivations for? Owning one that are distinct from? Let's say a pure piece of art that you might show people but doesn't have a membership criteria to it. Like how is this something more? Something different? So if you zoom out, I think for me of how I got into this this
Not what I thought I would be going. I got into crypto late and by late, I mean everyone who was after 2013 that seems to be a big demarcation. And so I was in the crypto in 2018 2019 and I was buying it, the coins. I really didn't know much about it. But went on Twitter most of the information was coming from Twitter and Discord and on Twitter you would see this crypto punks and I really wanted a crypto pumpkin would go in there Discord. And I was lusting after these things. I was looking at them and saying, I just want one but
When I went into the Discord and I met these people, they've been in Bitcoin since like 2010, they own glyphs. They just knew everything and I felt like such an imposter. I was like, I'm new to this space. I'm just trying to get skin in the game to understand it. I really didn't feel like I would belong and so when the board a project happened, it had come right after Top Shot. So Top Shot came out at the end of nineteen. I got big into that in the beginning of 2020 and people were treating basketball cards. And it really was this first
There's n of T is and Rohan has a huge. The founder of dapper Lads gets a huge amount of credit of kind of onboarding us into what is an mft. And so at that point Ironically in April larvae Labs was about to issue. Their second project called me bits and I actually bought two of those and I thought it was the most ridiculous thing I could ever do. I'm minted a human and a pig, a pig was very rare and I showed my wife and I'm like, look, we just minted a digital kind of person, that's wearing some new fake and I'm like, you can trade this thing.
For like thirty thousand dollars whole thing's crazy. And I put up as my avatar and I was trying to like make this personality and just play around in the space and the Apes were like kind of taunting me and they were this new project. They start off at $200, me B came out at like the equivalent of eight thousand dollars. And so this was kind of a blue-collar project, that it had a vibe in a culture. I wanted to be a part of and so I ended up buying some boar tapes and joining the group and joining the Discord and learning more about it. And I would say like,
A lot of people, especially I bought it in May. So it's a one month after lunch. It was kind of this silly thing which was like we wanted to be Punk's, but we weren't punks and we bought this picture of an ape and it was this fun lure of what would happen. If everyone got rich from investing in crib, do what would you end up doing? You would create this really cool bar and club to go hang out with your friends which resonated with a lot of people like you're working really hard. You want to make a lot of money, but what's it all for? It's just to go hang out with your friends. And so this culture War
Added between me B and apes. And we were joking about it. What group you're going to join? It was all very playful and fun. We were watching the price of their project which is quoted in the floors. So floor is the cheapest. You can buy something at there was was to Ethan. Ours was .32 more like someday. We're going to cost more than any bits and we were just joking about it and the Discord and talk about like what this project could be. And so it really wasn't on buying a piece of art. I think this is beautiful. I want to hang it on my wall. Although I did really like it. It was more symbolic of
In our community and having a shared belief of the people who are on the frontier that are willing to kind of fail unconventionally, but came into crypto around the same time. We weren't the crypto punks. We weren't the first to get there, but we were totally okay with that. We were this new group that really wanted to have fun and teach each other. There's another famous podcast that always asks, what's the kindest thing? And I really felt like the board of job club exemplified that when you went into the Discord, you're like, I don't know what Defy is. What is Solana? And why do all the VCS?
Own it. It was just this amazing sharing Community, where, with my eight, I could speak in a way that immediately got me into a circle of people. I wanted to associate with, and I wanted to learn from, and it was really a club. Not a piece of art. When I was gonna say, I own this rare thing. I'm going to hang on my wall. It's a really helpful back story because I think so much of what's interesting about this project in particular, but maybe an ft's RIT larger is the community function that all of a sudden, these digital assets, the scarcity.
Will assets become membership cards, like a unique brand of membership card, and I'd love you to talk through that in a little bit more detail. So first, I want to flush out. There's 10,000 of these things. You said, I think there's 170 attributes. Just gives people a sense of the scope today. Like what is the price for today? How much did they get traded? Like, is there a lot of turnover in them? What is the hierarchy of Rarity? What's the spread between the cheapest and the most expensive? And how is that determined? Like just a little more meat on the bones of the hierarchy because I think these details are those
Things that the community latches onto us things to talk about and it's like watching sports or something, right? It's the detail that makes it come to life. So give us a little bit more of that detail today. There's been 15 ape sales. My watch it pretty closely. Ironically we couldn't be recording this at a better time because the record was just broken that a Trippy. If you look at it online, it's an ape fur. That looks like a hippie tribute. I die skin with a crown and heart sunglasses just sold for 2.7 million.
There's now, that's unusual. I mean, it's actually not last week. We had two Mutant sales, which we'll get into it. You just went for 1.4 million. But today the cheapest eight you can buy which is 35 youth. But based on its price action, that's about 140 to 150 thousand dollars give or take. So, that's the cheapest. You can get, there are bids for over 1,000 defund, some of the gold, the rarest apes, and the most desired. And so I would say, people looked at the class system that I developed with crypto punks.
Are you had aliens, which were the rarest of the rare and then different levels? And so, you've got this, a lot of the ways these pfp you start to price. You can think about pricing curve is there's a floor, which means generic nothing special. And then there's kind of a mid and then there's a steep function for the rarest ones. And so those ones go from at this point. Now we're talking about multiple millions of dollars for one of these things. And if you think about the activity, that this distribution of Rarity creates in the community, talk to me a little bit about that, like how
Matter. And why does it matter other than, like, bragging rights or status signaling and maybe that's the whole function. So these prices have gotten astronomically High. Very, if I rewind back to the fun part, there was a cheetah fur and a DMT for, and the TMT for is this psychedelic fur and they started these gangs called the cheetah gang versus the DMT gang and like, we're all for the money. There's some teenagers, everyone's Anonymous for the most part. So it's a wide group of people but like the cheetah gang was threatening, the DMT gang. And so you kind of have these like, subgroups
Established and then they would create their own Discord. So I'm part of a Discord called the rarest club, which is a club owners that own. Some of either, they own a collection of Apes where they own a bunch of them that equal significant investment and or they own, some of these rarer ones. And the reason why that's helpful is a lot of the largest transactions are happening between counterparties that are off open City. If you listed on the exchange, maybe it will get price there. But a lot of the rare Angel trade amongst the group of people who know,
They want to sell something for several million dollars. I mean, this is still early to give you numbers. I just saw galaxies report and I think they have open sea, has 70,000 active daily wallets. So people have quoted the space at 300,000 but she have 70,000 people doing this or at least wallets using it. The amount of people had a grasp and 2.7 million dollars on a rare ape as a small Universe right now. And so, for trades like that to happen, you really need to know like glue is the buyer base who would actually want to collect something like this.
Talk now about the value of holding these things, beyond the purely digital, they release this thing called roadmap 2.0. And again, I want to come back to. There's a difference between owning a piece of art saying the extreme, you own the Mona Lisa, that's incredibly valuable. Maybe it appreciates over time. It's a piece of culture. Like there's all sorts of interesting art specific angles that will probably cover more in other episodes. But in this one, I'm really interested in sort of the membership and Community specific angle. So, how is this organically?
Roadmap managed. How does the community contribute to it? Are you excited about it? Like what do you think this might become? If each of these ten thousand things is effectively like a membership card into a club roadmap. 1.0 was a scavenger hunt where we were going to give away an ape and also a certain amount of teeth. So the first roadmap was pretty basic but the big finale was releasing of the mutant Apes, which really was a way of extending the club. So if there's 10,000 people that were part of the original,
They had always planned to make that number and total 30,000, but was really fascinating was the way they went about Distributing. The second batch of the 20,000 and what was interesting about it is? Most of the wealth of the money paid. For those mutants went to original owners and some went to the board of Yacht Club Founders themselves. So, there was this economic thing where they delivered to original holder serum and that serum. If you combined it with your eighth, would create a new Mutant 8 and then you could sell them, but you
That for free, the value of that, the day it was dropped in u.s. Dollars was between 15 and 60 thousand dollars. So everyone who owned a just got 15 to 60 thousand dollars and I came on the heels of us already getting aboard, a dog, which we could have sold for probably 15 to 20,000. And so, if you were an early, you've been paid back your investment already through the airdrop mechanisms, which you can talk about some more, with a board of got called itself. Raise the actual Founders raise, something like 90 million dollars.
Hours and that second sale combine that with the fact that one of the interesting things about NF T cell is every time it's a transaction happens. The board of Yacht Club gets 2.5% in a royalty. So if you have a million dollar sale, you have 25,000 dollar dollars going into the kitty and so these numbers are wild but since April, they've done over a billion dollars in sales and raised over 100 million dollars in revenue for this organization to do what I will with. And so you ask the question.
Kind of two parts. One thing that made board Apes unique was they let the owners take the IP. So I own my ape. I can start a beer company, a coffee company. We can start the board investor yacht club together. Like there's all of these things that you can do because you own your own ape roadmap 2.0. Right now is literally just a picture teasing out a lot of different things. And so, the first thing that's coming up as called 8 Fest in New York, which I'll be attending where we literally rented a yacht to go out on the Hudson River.
Thousand of our friends to hang out. A lot of us have never met each other. We're also throwing a huge party in Brooklyn, and there's a bunch of other activity is happening for this week. So that's kind of the first Meetup in real life. And then there's teasing at things that people are guessing about are speculating. You can pull the picture up, one is a game, which a lot of people are talking about, like, a game that group could play in the things that we only have some sort of partner that as assets. The other that I'm most excited about, is it? Looks like there could be an actual bar in Miami, the funniest
Thing is like this meme. Becoming a reality. We were joking about what would happen. If this all took off, imagine, we had her own Yacht Club. We're just hanging out at a bar together. And in fact, that might actually happen, we're going to build one. And then the next one was Dow, which is really become, I think going to be the big next thing in crypto. It's been around for a while, but I think that it's gaining steam of, okay, if you bring all these people together, how do we think about governance? How do we think about what we do with the money? And so, if you become a member of the board of Yacht Club your voice, you can
Go into the Discord. You can say, this is what I want to do. People will work together to say. I want to do this on my own or try to make recommendations of what actually the yacht public should do. So, yes, I'm extremely excited about roadmap 2.0. I never really thought there would be anything past roadmap 1.0, to be honest. I thought we would do this. We would trade it. It would be this iconic thing. You own that when you looked back at time and say, okay, when ft is became the mainstream onboarding to crypto which I really believe I have to use will do or die.
Our club had a really strong place and how that all happened, but the brand and the strength has gotten so powerful. They've actually been able to generate something. I think far beyond anyone's Wildest Dreams where now, we're comparing it to Ferrari and Rolex and supreme and saying, like this is going to be an international Global brand. And how do we handle this? And what do we do with it? Far more than I think what we could have imagined at the outset say a bit more about how that's all governed today. I'm sure it's less than 10,000 people. Since a lot of people own more than one or maybe
It's less than 30,000 since there's the mutant off spin. Let's say it's 20,000 people. That own one of these things are quote unquote members. Is it the original four Founders that are basically still the stewards of this brand? Decentralization is very nice sounding but in the end, most things centralized power accrues to a small subset of a user base, etc. Etc. How does that work? Today? Like who carries the flame, so to speak for this brand? Yeah. So according to open, see there's 15,000 unique members across the
Thousand. So on average people have to the four Founders who are Anonymous, but have really fun names. They're in charge of steering. The ship was interesting about how web three works. Is the consumer owns the asset. So, we have this unique alignment of incentives. If you think about a company that sold 10,000 things and the price went from $200 to 150,000 dollars. Any company. Today would say, we need to issue more Supply. We can sell a million of these things but
But what's unique about how this worked is that there's this view of we as owners want the assets to appreciate and we want there to be value and the founders are getting a benefit when there's turnover or there's a trade and the membership as new people come in or as someone sells something from 2.7 million dollars. They benefit from the ongoing transactions of the actual underlying assets. What's interesting to me is the four Founders are completely in charge of where we're going, but the community has, I steal like an artist.
Owner more than I feel like I just bought an asset and I own like an avatar in a video game. I really feel like I'm part of something much bigger than myself. If you think about some of the mechanics behind this, I think it's really important to dive into the details. The thing that really sparked my interest is this notion of Ip ownership. So that leads me to believe that there are other profile picture projects, or other entity projects, where that's not the case where you don't own. The IP just walk through that fork in the road. So what's an example of one where it's not owned by the owners?
It seems contradictory talk me through the implications of One Versus the other. So I've talked to a couple of legal friends about this. And right now, I have three Frameworks that we've learned about. The first was when larvae Labs, who's the creator of crypto Punk's? First launch them. I believe that they kept the copyright to themselves and they made some changes. But essentially it's something like larvae Labs holds the copyright to the project. I think there's pros and cons all of these. What that means is lava Labs can do a deal with a Hollywood and agency and say used
But then they also license the crypto Punk's to the owners to use. And I think there's some fine print of like up to 100,000 dollars in value. And that was the original nft connection between the creators and the owners. It was a copyright owned by the parent and then license to the owners when boardings came around. Its first big addition to the nft space was they just said, let's give all the IP rights to the owner. So you own your ape and the boarded Yacht Club what they retained was. You can see for on the park.
Cast but they own the logo of born. A stay on the board, a brand, the parent brand. So I can't go create a hoodie with this logo on it, but I can create as many hoodies as I want with my Apes on them and sell them and do what I please. And so that was a version, isn't a third version. I forget what they call it. But basically this one is just the whole thing is just given to the community, do whatever you want. There's no rules. There's no nothing. You want to create something. Nobody owns anything, just full distribution. And so I think where we've discussed it, which has become interesting.
Is different people in traditional Finance or other people on Twitter that I have done this thing of copy and paste a picture to kind of say this is all foolish and there's this view of like well, how does a property rights work? Do I have to go after every person that copy is my eighth and the truth is, you do. But the community gets really upset when that happens. It will actually go to Twitter and be like, they're impersonating thing. Whereas of crypto punks. There was a project that just took a punk and flipped it from right to left from left to, right. They just mirror the image as angry as it.
Wasn't as silly as that sounds. Patrick, it got me into this fascinating thing. I'm like, what is art, and what is creation? And what happens when people are inspired by other people, but in that case, crypto punks was able to represent their entire brand. Go to Open Sea and say, take it down and so we're still in this experimentation play Phase of how our property rights being transferred to the owners. And what are they doing with them? And we have a couple of Frameworks and I'm sure we'll see more as more projects come online. So, one of the things that I'm always curious about in anything is like,
What is the fundamental behind the asset and beautiful thing about Bitcoin or gold is? There is none. It's a collective story or an agreement that grows or doesn't or whatever. And so price is kind of untethered Beyond just the imaginations of the owners. Whereas something like a theorem that gets used a lot or Solana that gets used a lot or in this case board Apes relative to say, crypto punks, that seem to have much less going on in their ecosystem. You can map their value onto some underlying thing. That's not just price speculation.
And supply and demand. So how do you think about that as an owner? Like you cared? These things are worth a lot of money today. It would be unsurprising if they were worth five percent of that amount in two months or something for some reason because there's not a huge amount of underlying fundamentals. So as someone interested in FTS, how do you think about that concept of earnings equivalent or cash flow equivalent? Or I don't know what the unit of fundamental is, but how do you begin to map old models onto this new world? I think it's really hard. It's a question. I ask myself.
Every day looking at the prices, when crypto Punk's was released. It was released with no road map. That's been a big distinction of. Like, we're just putting these out to the world very much like Bitcoin. When boarded showed up. They said we're going to do something and there was a question like what are you actually going to do? And so I think that when I look at valuation, I would caution people at this is still wild speculation, people playing with what's possible. But board its is by far the group that has my attention of delivering and actually building a
Brand and has a lot more plans for the future and where they've accumulated all this money. Now, it becomes an execution. So without any Venture Capital, they've generated over a hundred million dollars on their balance sheet to do what they will and you have a very passionate loyal Community. I think of Chris Dixon's thousand, true fans just hit me. I was like, oh I totally get it. Where you've got 15,000 people of which there's definitely thousands of extremely loyal fans that want us to what's possible. And so I
I think people are doing discounted cash flow analysis on their ape. I think they're comparing them to other assets if anything and doing relative value. That's what I'm doing and saying. When I first came into the space, I wanted a punk that's our gold or our treasury, we're basing stuff off of and how much should a board a be in relation to a punk. How much should have worn a be in relation to a piece of art, like Dimitri's ringers. And so you're comparing it to other assets. The interesting thing is that they actually have like, with the airdrop.
Mmm, they actually did start to generate cash flow, but I'm not thinking like that's going to be a professional thing. I think that's a one-time thing because then you get into how this suddenly does start to slip for people to feel like ponzi's where you're like, oh I'm constantly going to issue a new thing issue a new thing and I can see why people are amassing the skeptical which they should be, but I think that the brand is actually going to be able to build out IP that will be valuable. And I think that we're getting into a space that's fascinates me. Is that your conference room? Elbows and was talking about intangible.
Value. And it's so hard for a good analyst to put that on a balance sheet. As a former portfolio manager, you're trying to Value companies and intangibles where all of the values going, but we have no good accounting metrics and what I'm telling you is I'm buying and tangible value. I don't know how to measure this yet. And I don't think we have the words or the measurement mechanisms. We're just not at a place where you can say like, oh, well, that's what it does. And if T's are starting to get into D Phi, which everything just feels like you're going towards this acid, unlock
The markets or Price Discovery and you're starting to see and if to use drift into the defy space. So with that, I think you might be able to do a little bit more of a traditional analysis, but I don't think we've figured out yet. What's the best approach to Value these things? And so if anyone asks, I usually don't talk about this stuff and here I am on your broadcast because I don't want people to think you just buying for $200 or goes 250,000. Eric just DME the next project that's going to happen. We could walk away. It's still very speculative asset class. What do you mean by NF?
Are going in to defy. What does that mean? So what that means is what I'm interested is a new and a few project comes on. I'm very interested in what new aspect is it attic. We've seen the social status showing people. Hey, I was earlier. I own this really value Asset clearly. This is entertaining. The question is utility what type of utility can these things bring in. So utility to me is innovation on the prior projects. There was a project. I don't know who the first one to do. It was but one that's by far, the most popular are the most.
Successful is called cyber Kong's. It would cyber Kong's. Did was when you bought one of their nft is, you started earning tokens for every period of time you held it. So if you held it for a week, you got x amount of tokens. And then after you saved up enough tokens, you could then create the next tier of the membership. And so why that's really interesting is its incentivizing people to hold for a longer period of time and then you have this economic value. You knew that if I held it for x amount of
X. I could collect enough tokens with those tokens. I can create an empty and sell it. And so then with tokens, now you can start to create liquidity pools, you can get into staking, you can do all the things that people are doing and the device space, but connected to an F2, instead of catch it to a token. Now, I say that with all of the caveats, I can that what's been really interesting about this next step into D Phi. Is this question of are these Securities? Are you going to have regulation? Like what are you stumbling into from? The silly art?
Our community. This is a fun project to, oh, wow. I have a cash flow producing a set without supposed to be registered with the SEC. Let's talk about fungible tokens in non fungible projects. If defy starts to become a part of your traditional fungible, cryptocurrency start to be a part of these communities. How do you think that works in some detail? Like I think they actually even announced plans to do this a couple weeks ago within the board of Yacht Club. So let's say there's an ape token. How do you
Think about that as a new element of this ecosystem that's being built. I'm really excited about it. When cybertronics took off that, there were several other projects at all issue tokens, and all of the nfc's would token started to go Stratosphere. Everyone started to rise. And so, like, everything in this type of space. I mean, God created called when token because everyone's like, born a, it's like what are you going to do? Everyone was waiting, and this is where I really respect the founders is they're not out there pumping their
Eject or not telling you to do this. Do that. They were really quiet. Every time they've been quiet, then it heads down, actually building, but the pressure had gotten pretty big of people asking like, are we going to get a token to? They announced, they were working with two of the top law firms in the space to do this? Right? It basically assured everyone that again board Apes is a bit of a leader in this space of being like if we're going to do something we're going to do it, right? And so that put my fears to rest of like, okay. These aren't just issuing a token to be a global figure out the regulation later. They're actually being very thoughtful of every
Move they make at first, I was like, oh, this seems so, like all this icos from 2017. That seems bad. I was giving me a bad feeling, but the more I dug in and talk to different people in the group, as well, as Outsiders of what it could actually be used for. I think it's possible. You can imagine having a token that you can use in the real world as well as in the matter versus, I think that's extremely interesting. So if in fact we have a club and the club has a hotel room. Imagine if the only way to stay there was to use currency purchase in this ecosystem.
And so, Patrick wants to go or Miami and stay at the club. Just like if you went to New York and stayed at the Yale club and you would need a reference from someone who's a member. There you go to the yacht club and the way you use your membership was you had x amount of tokens to actually go and use it in a real world. I think you'll also see it in this idea of the metaverse, which is an overused term, but this notion of like if you want digital assets or you want to add towards possible in the game or sandbox or these other places, you can play around that, that currency could be used.
A way that helps you interact with either your avatar or games or the places. You're going to interact or walk around. There's a quote from one of the anonymous. Founders, whose pseudonymous name is Gargamel, and he said, your ape is your MX black card and that's kind of sounds like what you're getting at here. That the combination of your membership token will call it. This non fungible, your unique ape with some sort of fungible currency would be the two assets that mattered in this ecosystem, and the utility becomes the things. We talked about earlier. The club in Miami.
Me the ability to do all this different stuff, perhaps, partial ownership of a supreme like brand that the brand itself becomes valuable and you have participation in it. I like that phrase. Your ape is your MX Black Card. Any other ways that we should think about that? I want to take a side story real quick because I love it. One of the Apes created an MX black card with your Avon it. So one of the members literally created where I was a little bit nervous. I haven't done it, but I definitely want one because you're handing your credit card number over to a company, but they're making.
It looks like an Amex black card, but then, instead of having the Spartan warrior in the middle. You have your own a plays Ratchet on it. And it's an actual credit card is the actual physical car, physical card after Gargamel said that someone went out and built it. I don't know where I've ever existed with this type of innovation and energy to like just do what you want to do and create these things. And it's such a positive group of people that were like, that's a really good idea. My age should be my black card, and now you can make your a pure black card. And so I just
It's a Wonderful story about people, actually just going out and doing the things that they want and that wasn't sponsored by the group of came from Gargamel's quote. I want to go back to a little bit of the mechanics of this world and this will be a bit abstracted away from just for tapes, but you've done a nice job in the past explaining to me, like what some of these terms mean and how if there's gonna be a lot more of these projects, there seems to be a lot more demand than Supply right now. So I'm sure we'll see more how it actually works. So the first is unconsummated minting, it makes sense to me to like go on a website and send some cryptocurrency.
Pay for boar tape and a secondary market. Like that's kind of like any other asset I would buy. But in terms of origination and how these things come into being described this to us, like, what are the different paths that project creators? Have pursued, what do you think are the pros and cons of those paths? Just walk us through this kind of been paying origination concept for an empties. Let's say four different versions, big iterations. There's traditional minting, Dutch auction, minting meant passes and white listing is the newest one.
So, the original ending, which is why four dates did is, it's just called free and fair, and they posted on their website. Maybe they announced it. Maybe they don't. But back then, projects didn't sell out right away. And they said, okay. Hey, at this time on this day. You can come on. And if you pass .08 youth, you're going to Mint and create an NF T in that moment and you go on and you would create one. Now, if we look at what it up happening as project got more popular passport Apes, when you would go on and you would pay your point O 80s.
You would find yourself What's called the gas War. Because most of the nft is right now greater than probably 95% around a theorem and there's other networks that do this, but most of it's on ethereum. And so at that moment in time, like, oh, I'm like, I think this is a great project and Patrick. It's a great project for, there's only ten thousand. And so what ends up happening is you're like, you'll say I'll pay more gas and etherium to move up the line to make sure I get one of those 10,000 on it. What ended up happening was yet as evolutions of other projects where people like me. B did a Dutch auction and I was
Is pretty popular and art blocks where you start at a really high number three eith and say if you want to pay up, go ahead, you'll guarantee it. But if you want to wait, the number will slowly decrease and you can buy it for Less. Mid passes was a way of saying, okay. I'm going to sell and then ft and try not to have a gas were, even though they still caused out and then at a later date, you could burn your men pass for a new item. And white list is the newest one, which is my least favorite actually of all of them where you get added to a list and those people
Have access to the mint, and there's a lot of questions over who gets to decide who's on the list, but after you meant it, so let's just say use a traditional method. You have a minting date. Everyone goes in, there's a gas for there's going to be ten thousand tokens distribute it. There's a couple of paths that I can take one is if it's generated on chain and one of its off chain, and so, this is another issue that people were worried about at first, where, what do you do in off chain mint. There's can be a period of time between minting and reveal. So there's a question.
Dover is where is there? Any funny business did the data leak out? So you bought this NFP and at first you see nothing, you see a general image and the case of board games. I think it was a skull and then you're waiting for reveal day and on reveal day all the attributes suddenly appear and you can see what you want. So there is a lottery like game to it. Where people love minting because if you went in on the board a mint, you paid .08 and you got a gold fur ape. Even on day one, that was going to be worth multiples more than a fluoride. So, back to our Rarity. There's a fun.
What about minting? That's a bit more of the speculation Lottery of. Oh, I really hope I get one. And so what ends up happening is after meant the price usually goes up for an exciting project because there's a positive EV associated with. What are the odds of actually getting one of those rare ones? And then right after reveal the price plummets and for new people. This is a not an exciting experience because you like, oh, it's doing great. Don't even know what it is that I crashes. And that first kind of Crash is the EV being taken out the expected value that. Oh, I
Can't get the rare one. So what's the floor worth? I just sell it before and then a floor gets established and then you start to figure out how much to Rarities. Actually cost talk a little bit more even in Greater detail about minting like literally what is happening. So you're sending .08 Heath. Where is that going? How is that being sourced? Where does the picture itself lives some live on chain some live off chain, like literally what is happening from a flow of B standpoint? When something is minted so you are conducting your wallet. Typically
A website, like you mentioned and that website is, then when you log on your signing a contract and that contract is saying I'm allowing my wallet to interact with this contract. And by sending point 0, 82, that contract the contract saying in exchange, if you're one of the ten thousand people will deliver you a token, and that token will be a unique identifier. So, if you own token, 3204, that's your total. The next question is, what is the token?
And for actually equal when you have stuff that was generated on chain, which means that the actual contract actual token has some of the some, if not all of the descriptive data or the actual image that's considered the most secure because it's all Unchained. The problem with it. As people have learned with studying different blockchains is that takes up a lot of space and so if we put all of the art on chain every time we move it around, it's really expensive and cost prohibitive. And so people came up.
The pointing to a decentralized server in this case ipfs where you're actually linking to another server and that server holds the image. Now. This has gotten people worried in the past, you'd go through for anyone who's not in crypto, but is that we call it fun, which is fear, uncertainty, and doubt. And everyone freaks you out and says, oh my god, you bought a website link. That's really silly. And you're constantly told like this is the dumbest thing you've ever done, which kind of is a self-selecting process of like how far in the frontier? Do you want to go? I personally.
Of it. So, ipfs is a decentralized server where you can store the image. There's another service called are we've where people have started to download and protect their assets because they're afraid what happens if the link exchange? What happens if the service goes down, I don't actually own it. And so that cause for some buyers they'll only by on chain part, independent of what it looks or what it does. But you lose a lot of flexibility. If we're going to stay on ethereum with what you can actually build unless you do something, like I described the 4th day in.
The example you gave earlier of you as a board, a boner got serum and the mixing of serum and your board have created. One of these mutant Apes. Again. Is that just all kind of mediated the same way? Like, there's some smart contract. That's just like, if you press a button on a website or something like the thing happens and then your wallet is filled with this new token. That was super cool. And that was an innovation that they've been working on from the beginning. The board eight dogs that were gifted was really just were shocked at, this is going so well. How do we repay the
T-that wasn't on the roadmap. The mutants. They were working on since the beginning and that was super cool. And so what happened was, if you were in a polder, you got one of three serums M1 M2 or Mega, so there is going to be 20,000. Total mutants created 10,000 were going to be part of a public sale 10,000 or going to be distributed to the existing 10,000 holders. And so, if you got em one, there was really 7,500 and ones 2502 s, + 8 Meg has and everyone is excited that
Clay, you can take any ape and the ape couldn't you take three times? So, if you had a gold egg, you can make your original goal tape. And you can make the M1 gold ape, the M2 goal. They've and possibly the mega when the serum came out. It was really interesting, just a play with the assets where you could keep the serum and keep your a bun. You tasted. So, people are saying, oh like I wonder if my unmutated paper will be more valuable if everyone mutates and mine's a virgin and then people like no I want to collect the whole set. I want to have my original, my M1 M. I am to our
I put them all together and keep them as a bundle and so people are playing with it differently. But what the mechanics whereas on the website when you went on there you catch in your wallet. You said this is the ape. I want to mutate. You connected it with another nft. And then combination of those nf2 use created a third nft. So is a new mechanism that allows you to actually mint the third one. But there was no gas or there was no trouble with it because we have been are dropped the serum. So the beauty is if people look back at their original owners and
Okay, the owners are going to get first crack. That might not be the best way to open it up to people. So there was the public sale but using the serum, through an airdrop allowed everyone to get this and then you could today you can go by serum if you want and you take your a but hasn't all been done yet. Some people are still sitting on their Sarah and waiting to either sell it or use it in the future. One of the things that's so interesting about this story is the inversion of usually in the world of business. First comes product, then comes distribution, then comes
Access sometimes businesses have started with distribution, build new products and had success that way. This seems to be the first example of like, the term bottom-up brand. That first comes community that sort of bootstrap into existence. The community then starts doing stuff. It sort of headless. There's the four guys, of course, who I think are stewards. But the Black Card example is a great one. What other examples of this bottom-up brand concept are the most interesting to you in terms of what you've seen in the board of Yacht Club so far. And any
Thoughts on just that as a big Trend. Yeah, so I think that there's definitely been lots of people testing and being entrepreneurial with their apes and trying to make things happen. I think, one of the things that caught me off guard was the celebrity status in two ways. The first is celebrities joining the club and being able to talk to them like normal people. That was a big shock to me that I had made a post about how I'm a huge fan of Daryl Morey, and I knew it was collecting an FTE is and so Cuban was
Joking about something I said, I made a bet that like Darrell is smarter than Cuban and I'll buy a board a before Mark Cuban did and sure enough then Darryl retweeted that my silly Anonymous account. I already own one and then Cuban quickly followed on. It's like, when are you going to be able to talk to people like that? Steph? Curry joined Dez, Bryant Shaquille O'Neal and they came into the Discord like normal people. It wasn't their Handler saying, like, how do we get access to it? And it was just a person, joining a club and everyone went crazy.
You are interacting with some people's greatest heroes and these celebrities coming in the other side of that coin, which has happened, which again is surprising. But again, it's similar to that black card status. Is if you're a black card, holder other vendors want access to who the black card holders. Are you want to show them? Hey, these people have assets are willing to take risks. What's interesting? And then a few space is with your ape. We've gotten free drops from other creators just to get the stamp of approval that if the board Apes like it maybe this product has legs.
Eggs, so it's served in a way that I never anticipated of every day. Someone says like, oh it's scary because it is all decentralized and keeper. Like checked your wallet, you get this free token and you're like, maybe I do but someone did and I get nervous about that a little bit of a great way to scam people because these things are very expensive, but you do get access to a lot of different things. We've talked mostly about the neat aspects of all this and much less about the investing side, the potential for earning. Let's say a
Old rational return and not caring at all whether you hold onto an ape for a day or a year, like to view them as trading Vehicles. Let's say which people love to gamble. People love to trade. Do you think that there's room for an mft like investment story? That sounds like there really aren't those today? There's crypto investment firms. I'm not aware of any major firmware. It's a fund and it's just buying and selling n FTS. Is that just gambling to you? And if not, how do you think?
This evolves as these things becoming investments just like, you might describe art as an investment or some other collectible as an investment or some other utility security as an investment. I'm just curious since you come from the investing world, how you view this through that lens versus this great Community lens, that we've spent most of the conversation on. I believe that there is one major issue. But before I get to the issue, I'll split up into three categories. I believe you could create a 10 ft fund and do a Buy and Hold on. Really what are considered?
The Blue Chip or historically significant pieces of work in this space. And if you're betting on Webb's, three, being a big deal and you also believe that nft is, will be the big onboarding to mainstream into this world that you could build a portfolio and lock it up and wake up in 10 to 20 years and it could have significant value. If you're right about that. I believe there's an ability to trade the assets coming from the fixed income markets. It's an over-the-counter market and this is much similar the bid-ask spread, right?
Right now, onboard H is probably 35 youth. Someone will sell it and someone will buy it for probably 30, maybe 20, 80. So the bid-ask spread is five to seventy which in today's dollars is twenty to thirty thousand dollars. Now. This is not the most liquid, but when you're used to bid-ask spreads and ticks, you can drive a truck through this. So, clearly you have a, in a liquid small market, and there's opportunities to trade assets, but by and large, it is speculative. And a lot of people are betting on the next project or the next thing to go up.
And people are playing it like a lottery and there's a lot of gambling and so it definitely has those properties. I think the risk is that we talked about about going down the rabbit hole. If I was sitting in my old seat with my full-time job looking at this, I would say this is crazy, all gambling and it's insane. And while that's a lot of it. I think that the gamblers are the ones that are willing to try. If the see that there's an edge, whether it's people can have careers and daily fantasy sports. When we were going to like high school. I never thought that would be like a real thing. And so you definitely
we can speculate in the space and a lot of it is gambling. But I believe we're seeing the formation of a new asset class. And so I believe that the experimentation is going to lead to more utility in the form of I think gaming is the big one that's coming. Is already here axi and was said, but I think we're going to see more and more introductions of play to earn gaming, which is going to unborn a lot of folks. And then I think the next level is seeing in real life, utility of what you can actually use these things for it's going to become more. Ubiquitous for people going to be used.
Our tickets to a sporting event and then we had to print out PDFs and then when you had QR codes, but why am I not just getting my tickets and NFC Forum going to the game and when I'm there and Mark Cuban knows I'm there. They can air drop me a pass for me and my kids to be like, oh you were at this game. And if you collect ten of these then you're going to be in the Super Fan Club and be entered into a raffle to win the playoff tickets. And so I think nfc's will become far more ubiquitous as it becomes in real life and so from an investing standpoint,
Ain't interested in all three of those areas. I'm interested in the long term Buy and Hold assets. That if you ever get your hands on you want to put away and say this is my Mona Lisa or my prized possession. I'm interested in the ability to trade and move around the markets where you can make money. And if I'm bullish on East, which I am and this is a good way to get more East than I would do it. I think you can speculate and that's okay. As long as you do it with money, you're willing to lose and you're not tying up funds that you're saying. I need these. I think that's okay. And by doing those three things
I think your best position to see what's coming and know who actually is going to unlock a lot of this value and create the things that are going to make and have to so ubiquitous in our future given how much time you spent on this in your comment earlier than 95 or something like that percent of these projects are on aetherium. How do you think about the infrastructure in this space? Like Solana is the obvious one that people tend to ask about the theorem has its benefits. It also has its drawbacks. Do you think that most of this activity, this nft asset class? That's
Emerging. Well, whatever you want to call, it will be primarily on a theory. Mm. Yes, know if not, why not? I mean, I'm grateful for how much you've taught me about Solana and I'm not a maxia by any means of all of the Blue Chip long-term assets. That I would hold and put away for 10 to 20 years. They're all in etherium end of sentence, period glyphs Punk's, ringers xcopy. These aren't onslaught of their on one chain and they matter a lot. That's not going to change. I have begun to play with.
On 10 ft is the idea of it is that their lower cost, so you can do lower-cost projects. And I think that's really interesting where my first experience with that was on Maddock polygon with zed run, and that needed to me at 38,000 horses. The horses are running 10 to 20 races per day or whatever. We're at now, with fatigue. So you have a lot of transactions and if you did that on a theory, own Zed could never run and so they're using an L2 chain for that and that's working decently. Well, anyone who's been in
Crypto and has ever used a bridge to cross streams knows how heart palpitating. That moment is of like where did my money just go? I think we will see. Nft is on other chains. I think that for utility and access and things we want to move around quickly that are lower cost. There's definitely a place for other chains to use. NFC is if you look at NBA Top Shot and went rohan's built flow, is a private blockchain and what that allows is to do some really cool things that there is no transaction costs. You can use credit cards. You can go back to your users, a balance, but
Not currently a closed while environment which I believe will be opened up over time. So I totally see another place for other block chains. And the adoption of n of T is I think it matters if I was working with a content creator like you and you were saying, okay, where should we place our enough to use the question be like? Well, what are you creating? Are you creating the once-in-a-lifetime full Patrick experience? And it's going to go for six to seven figures, then we're going to want to go to a theorem for that if we're doing a conference token that we're
Going to use once and it's got to go away. I'm much less inclined to use that I serum because I don't want the guests to show up and when they show up we're having a gas surge because there's some trading going on and they can't get into the show. So we would want to use Solana or Matic for Speed. So I think it kind of depends on what a Nifty you're creating and what your use cases are. Is there anything about the board? A yacht club specifically that you think is most Innovative or exciting as a project that we haven't covered. I would just say that the fact
That it was pushed by the community, so hard. It was my first experience of actually feeling the consumers feeling like owners. Like, I don't know if that's really sunk in the people of the bypassing of the Venture Capital folks to fund ideas and this connection of creator with owner. And so I think that what board Apes showed me but really kind of expands my view of the whole universe. Is that the ability
Tea for Content creators or businesses to connect directly with their, in consumer and remove. A lot of middlemen is just mind blowing. When you think about the possibilities, the idea that Taylor Swift could connect with her fans, without Ticket, Master Live Nation, StubHub Google search. All of the things in the middle that are taking money away from Taylor and out of her consumers pockets, and they're not going to go away forever. But the fact that we could make that connection a lot closer.
Wild to me. And then the second thing I learned from board Apes, is that it really starts to make? You think about what are all the assets? Like we love markets. We love price, Discovery as Finance people. What are all of the markets that currently don't trade? Not because they shouldn't but just because they're too small or they haven't been unlocked yet and the fact that we actually could create new assets and have all of these new markets is just the most exciting thing I've ever seen. I think that's a great place to end it. I think the possibility remains much larger than the present.
Reality is like the nice way of saying it. I think and maybe the healthy skeptical way of viewing this ecosystem as burgeoning possibility and certainly for me, you know, I try not to have opinions too much on anything. I do publicly just because it's much more fun to listen to other people's views, but I do think like that is the most interesting thing here where you closed with which is the possibilities for community and interaction and new business models that get unlocked by this technology and I can't wait to watch it with you as a friend.
And continue to learn from projects like board ape. I think many people will be a part of creating one of these things in the future. And so it's a great introductory lesson to I think probably the most interesting of these projects today. Eric. Thank you so much for breaking down, borders with us
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