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NFT Culture Series Ep. 5: Sasha Fleyshman on the Future of Crypto Gaming, Blockchain vs. Real-World Art, and PFP Projects

Sep 21, 2021 · 71 min media

By Tom Shaughnessy

The Delphi Podcast Host and GP of Delphi Ventures Tom Shaughnessy sits down with Sasha Fleyshman, Junior Portfolio Manager and Special Situations Analyst at Arca, an asset management firm offering institutional-calibre products for sophisticated investors to gain exposure to digital assets. The two discuss the future of crypto gaming, blockchain vs. real-world art, PFP communities and adoption, and more!

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 Music Attribution:

  • Cosmos by From The Dust | https://soundcloud.com/ftdmusic
  • Music promoted by https://www.free-stock-music.com
  • Creative Commons Attribution 3.0 Unported License
  • https://creativecommons.org/licenses/by/3.0/deed.en_US 

Show Notes:

(00:00:00) – Introduction.

(00:02:22) – Sasha’s background.

(00:05:27) – The first game that clicked for Sasha. 

(00:07:20) – Getting massive gaming franchises into NFTs.

(00:10:23) – The future of multiplayer crypto gaming.

(00:12:57) – Gamers’ involvement in game governance.

(00:17:07) – Being an active contributor/player in game investments.

(00:19:45) – The importance of YGG DAO governance.

(00:20:23) – How YGG eventually expands to the U.S.

(00:23:07) – Sasha’s take on NFT PFPs and Punks.

(00:26:32) – Rarity vs. aesthetics / Buying what speaks to you.

(00:31:54) – Sasha’s preference of gaming over art.

(00:33:17) – Art Sasha is interested in right now.

(00:35:34) – Buying pure art on Ethereum vs. the real world.

(00:38:31) – Sasha’s take on the future of PFP NFTs and communities.

(00:40:06) – Whether PFP communities or project teams drive more adoption.

(00:43:15) – What qualities to look out for in an NFT community. 

(00:46:22) – Sasha’s thoughts on an NFT bear market.

(00:52:00) – Earning yield on NFT-based tokens.

(00:57:09) – Sasha’s thoughts on displaying NFTs.

(01:01:22) – Whales in the NFT space.

(01:04:11) – Technical safety of NFTs.

(01:07:14) – NFTs on other chains.

Interview Transcript:

Tom (00:00:02):

Hey everyone, welcome back to the podcast. I’m your host, Tom Shaughnessy. I helped lead Delphi Ventures. Today, I’m thrilled to have on Sasha, who is a junior portfolio manager and special situations analyst at Arca. Me and Sasha go way back. We’ve been friends. He’s one of the ones that I talked to very often. Sasha, how’s it going?

Sasha (00:00:21):

Good. Thank you for having me. A pleasure to be here.

Tom (00:00:24):

It’s great to have you. Sasha, tell me a bit about your background. How’d you get started in crypto?

Sasha (00:00:29):

I was in college, just about to get my chemistry degree, and I was pitched an idea on Coinbase back in 2016. A family member told me to just check it out, see if I liked it. From there, I got into Bitcoin and Ethereum very briefly. That was right before the 2017 run. So obviously, the interest rose in correlation to the portfolio rising. And from there, I just got into the white papers and the whole ICO era, started spending more and more time, going to classes less, going to parties less, and eventually, it engulfed me.

Sasha (00:01:12):

From there, just got an offer to come in for the summer at Arca, and the rest is history, and here we are almost four years later.

Tom (00:01:21):

That’s awesome. I’ve had Jeff on a bunch, the CIO of Arca. He’s an incredible guy. It’s interesting to see your path. I mean, not to fast forward a lot, but what was the drive for you on the NFT side, given this is the NFT series? What was the move internally or mentally for you to go from what you’re doing at Arca to having a renewed or a large focus on the NFT side?

Sasha (00:01:45):

Well, for most of us that are in the NFT space, we all have a similar shared history of being gamers in some way, shape or form. I mean, that’s more broadly to the whole crypto industry, but specifically for this sector, I grew up playing Ruins Escape and Diablo II, World of Warcraft, and the mechanisms for how the users interacted in game, especially for turning sweat equity into actual equity, where you could use PayPal on the side to trade for goods. You had the steam marketplace for things like CS:Go. There was always a glaring gap in between the amount of effort and time that gamers put into a specific game versus what they got out of it.

Sasha (00:02:35):

When Axie Infinity came out, the fit was rather natural, where you start aligning the users with the investors, with the project, and then it all becomes a mutually beneficial relationship. As the game goes better, the users are empowered and obviously financially benefit, which turns them into evangelists, which brings in more users. It just felt like it plugged a rather significant gap, so I really got started not so much in the NFT space as the gaming space, which then bled into the NFT space over time.

Sasha (00:03:09):

From there, all it takes is a little bit of a nudge, and all of a sudden, you start analyzing down the curve, and then you just start getting enveloped in the rest of the space. It’s become much bigger than that, but I think everyone that got started here has some history of gaming.

Tom (00:03:29):

I like that. What was the first crypto game that clicked for you? You have this history. You understood the issues. So once NFT gaming comes along with assets you can own and value you can accrue by gaming, it clearly clicked for you. I guess, what was the first game that clicked, and how involved did you get in it?

Sasha (00:03:47):

Axie was the first game that clicked just because it was… Even today, there’s not many games that are actually playable. Axie at the time was in their extended alpha. The trading card game, the turn-based game was live. Back then, axies were like five bucks a pop, so it costs me 15, 20 bucks to start a team and get going and tinker around with it. You’re not going to compare this to something like an Assassin’s Creed, where it has years of history, and hundreds of people developing on it full time. The graphics are just out of this world, and it’s using unreal engine, but this is new.

Sasha (00:04:32):

To expect those things right away didn’t feel right, so it started with Axie. I played a bit of Gods Unchained as well, which I found interesting, almost like a Hearthstone type scenario, but Axie was the first one that left me feeling sticky. I came back day after day. Obviously, as it got bigger, it was more difficult for me to be competitive, so I took a back seat as a passive supporter. But from there, I mean, I’m excited for the next 10 to 15 games that come out. Ideally, I’d replace any games that I would play today, which isn’t as much as it used to be.

Sasha (00:05:14):

I’ve been a bit busier, but ideally, every game I play moving forward will be NFT based, and give me the rights to have ownership of the assets I earned in the game. I think that’s a very core fundamental part of gaming moving forward.

Tom (00:05:31):

What’s your take on the gap right now? We have games today that employ crypto, whether it’s a governance token, whether it’s NFTs. You can get involved. You could own the assets, et cetera. We’ll keep it vague here for a reason, but what’s your take on getting to that level of having a Call of Duty, having an Assassin’s Creed? It seems like we have the mechanisms today to attract the crowd, but we don’t exactly have that level of gameplay on a crypto basis, right? When do you think we get to Call of Duty where you own your player and you own your weapons?

Sasha (00:06:05):

The main issue is that in the traditional gaming space with studios, I think the number is 95% in terms of mortality rate, and then you have to talk about funding, and you have to talk about length of time from development to product. The entire crypto industry, and this space is no different, is much more rapid in terms of its life cycle. We’re raising rounds. Not we, but the space is raising rounds early on into the cycle, pre-product, pre-beta, and we’re just iterating directly.

Sasha (00:06:49):

There’s a lot of upside to that, where users and evangelists can get it on the ground floor, but there’s also going to be a lot of pain points, where it’s going to take time to get this right. It’s going to take iteration, and there’s going to be some mess-ups, and there’s going to be some failures, but to get to the breadth and the level of the traditional AAA and gaming studio industry, it’s going to take time. I mean, this whole space is a few years old. The whole crypto industry is a little bit over a decade old.

Sasha (00:07:19):

The gaming industry is older than both of us, so there’s just a difference in the time that we have and porting over these traditional models into a new system. I think the first to do it on a grand scale might have to employ a little bit of bargaining, where the entire game isn’t on the blockchain, just some of the mechanisms like the assets themselves, because there’s just obvious limitations that come in. I don’t think we’re there fully on the development side.

Sasha (00:07:55):

I think that the most likely scenario is that a traditional game bites the bullet, and retroactively converts some other end-game assets into NFTs, and that will spur a whole new movement of growth in this sector.

Tom (00:08:12):

That’s a great answer. I mean, thinking back, I played a lot of Command and Conquer, Call of Duty, that kind of stuff. For me, it was more about, frankly, just having fun and seeing my buddies online and joking around and having fun, right? But I never frankly really thought about owning the weapons or transferring my reputation game to game. Obviously, it makes a lot of sense given our experience playing these games, but what do you think multiplayer looks like in crypto NFT gaming?

Tom (00:08:40):

When I go online in five years to play a game that’s fully crypto native, what does that mean for multiplayer? Am I in a guild with my buddies? Do we own something? Is there shared value? What do you envision that being like when someone new hits power on their PS6, and there’s a crypto link in?

Sasha (00:09:01):

I think that right now, there’s a lot of fair rebuttals to the whole crypto gaming industry that everything is turned from what you would consider the pure ethos of gaming, which is to have fun into a bit of a job into the financialization. I think that that’s rather opt-in. Again, we’re still very early, but there’s going to be assets that are free to own in the NFT space and specifically in the gaming space, where you don’t actually have to put capital in to interact with the game, and it then turns to a choice.

Sasha (00:09:37):

Do you want to play this game as a… The term would be a casual. Do you want to just casually play for fun on the weekends or with friends or catching up, or do you want to be a more diehard gamer, and get that opt-in benefit of actually reaping the rewards? That reward doesn’t always have to be monetary. There’s a lot of non-monetary value in every industry. Even doing a direct swap for an asset in one game, for an asset in a different game, if you decide that you no longer like game A, and you like game B, you can do a direct swap with no money being passed through.

Sasha (00:10:13):

All it is is just transferring the time and energy that you put into gaming as a whole as opposed to locking in that equity into one game and being stuck there, and feeling trapped in terms of getting out because of all the time you put in. In terms of multiplayer, I mean, I don’t think any of us know exactly how that’s going to work yet. I think that’s going to be interesting. I think DAOs are going to play a big part of that. I think that…

Sasha (00:10:39):

I saw a tweet last week that most DAOs are just discord servers, and that’s funny, but it’s also interesting, where a lot of gaming communities, even with your friends, you meet up in Discord. That just might be… If Discord’s listening to this, that just might be the next product line for them. I don’t view it as a net bad outcome. I just think that you have to tailor it to the needs of the community. I think we’re going to find out over the next couple of years. It’s going to be a learning process for everybody.

Tom (00:11:10):

No, that’s a good answer. It’s going to take a while to figure it out. I mean, last question for you on the gaming side before we switch over to the NFT art side. Do you really think that the gamers of the future “the owners of the games” who are the players, do you think that these people are going to want to be very actively involved in the governance of that game? Where do you see ownership over a game on the governance side blurring with actual development, right?

Tom (00:11:40):

The gamers aren’t going to be the ones picking colors for the land probably, or designing a gun, but they’ll probably have some sway over value flows and attributes and parameters and things like that. I guess, what’s your take? How involved would you want to be as an owner of the future of a game?

Sasha (00:11:58):

I think it’s very dependent on how active someone is in the actual game itself. For me, I own some Axie NFT assets, but I’m not a power user. I haven’t played the game in a while, so I don’t think I’m best suited to be involved in the day-to-day operations of what the treasury is being allocated to, what the updates are going to be for. But at the same time, someone that’s playing the game eight hours a day every day, or better yet someone that’s running a guild of their own, they have a much bigger stake in the upgrades and the updates of the system and how it affects them personally.

Sasha (00:12:39):

I think that they would be much more active. The one thing to remind everyone about is that the gamers that own some of the future of the game are going to be mixed in with funds. There’s going to be funds that own the governance tokens as well, so it’s going to be a mix. It’s not going to be just gamers or just funds, but instead, funds are going to have the new task of appealing to the gamers, and making sure that they align with what the gamers want, and the gamers are going to have to make sure that they stick together on something that’s important enough where they can’t just get shoved around by funds.

Sasha (00:13:19):

I know you guys have heard it enough, but Arca, we’re very big on ESG, and this is a huge social and governance perspective of how games progress and how projects progress. It’s not just people that manage money that are making decisions, and it’s not just individuals that are making decisions. It has to be a mix of the two, and there has to be some collaboration.

Tom (00:13:43):

I’m with you. It’s weird to think about the traditional model, right? You mentioned funds are owners of the games as are we at Delphi for a couple of… You’ve mentioned and not mentioned, but in the traditional world, I don’t know how active the funds were at the direction of the game. I mean, there’s large really successful gaming funds out there that I’m sure are pretty active, but it is funny to think through the difference between then and now.

Sasha (00:14:06):

I mean, this is a very unique space where we’re all hyperactively interested in what we’re actually touching. Any project that a fund gets into, there’s at least one person on the team that has a significant personal interest in what’s going on. I think it’s very helpful that you get these multi-sided opinions where one person’s looking at it in terms of how to protect their investment and how to make sure that the outcome is most viable for the growth of the token or the project. Then the other side is looking at it just from what is best for the game?

Sasha (00:14:44):

What is best for our UX, UI? What is best for the retaining of the users that are actually playing the game, and how do we make sure we don’t push them away, and how do we continue to iterate to give new features that bring in more people? These two are married concepts, but they’re not the same, and it’s good to have both sides because if one group is just looking at it from how to make more money, you might miss the forest for the trees. If the other side is just looking at how to make it the best game, you might fizzle out, because there is no continued valuation growth, which makes it much more difficult to expand.

Sasha (00:15:23):

I think it’s very healthy to have both sides work together.

Tom (00:15:27):

No, I’m with you. I’m going to throw out probably the most obvious question in the world, but how important is it for you and Arca to be active players and contributors within the games you’re investing in? I know this is an obvious answer, but I think it’s helpful for you to provide some clarity for people on the edge that it gives you as an investor to also be a power user or a very active, say, gamer in what you’re actually investing in.

Sasha (00:15:55):

I mean, it’s instrumentally important. That’s point number one. To know what’s actually happening and what’s going on, and to actually have fair opinions and constructive thoughts on what you’re investing in and what you need to talk about, I think it’s very important. You can’t just invest on a whim, and expect to keep up to date with what’s changing in the space. I will say that being a power user is a full-time job. Whereas I wish in my heart that I could do it, I don’t have the capacity. I think that things like YGG and there’s a couple others that are coming out in the near future.

Sasha (00:16:43):

I’m sure these are very, very important, not only in terms of the assets that are being owned that could be lent out to these power users that are basically just, in my opinion, digital mercenaries in the best sense of the word, but also, they’re a good pulse on the actual end-game market, where since I do not have the time to wake up, play the game, go to bed and start over, I can reach out to some prominent people in the guild, and ask them, “How are things going? What could be improved upon? What’s not going well? Is there anything that I need to take some time out of my day to jump in there and test myself?”

Sasha (00:17:25):

I think that leaning on people that are just better for the situation is something I’m just not ashamed of doing. I don’t claim to be the best at anything. I don’t claim to have the time to go over every sector and come through every document. Sometimes you have to make friends with some people, and work together. I think it’s very important. I also think that we have to give some credit where credit’s due, where YGG built something that is going to be instrumentally important, if not one of the most important parts of NFT gaming, where you can drastically reduce the time it requires to get users.

Sasha (00:18:09):

YGG is going to be very important. Governing the YGG DAO might be one of the most important things in the next five years for the NFT gaming sector, just because you can decide in the governance forum which games get the benefit of the YGG user pool. So from day one, you can have a game that just came out instantly have 100,000 users in day one. That’s powerful, and I think it’s going to be very important for people in the gaming sector to have some understanding of what YGG is doing moving forward, and how that impacts new games that come to market.

Tom (00:18:48):

How do you think YGG expands to the U.S.? I mean, Axie YGG has a great overseas presence, but what’s your take on the next couple of years for them?

Sasha (00:18:59):

I mean, that’s a good question, and that’s one that I’ve been thinking over a lot. I think that the main growth that’s happening away from the United States mostly has to do with the economic growth of this game and how… You see the stories where minimum wage is less than what you can make playing the game, and entry-level graduate wages are less, and that just hasn’t really perforated it into our wage levels. But I think for the growth to really get there, Axie and the rest of these games already have the crypto native gamers.

Sasha (00:19:40):

We’re already interested and very predisposed to enjoying this type of development. To get the much bigger sector of non-crypto native gamers, I think it all has to do around the graphics and the game play and the story mode and the utility. The land play coming out will be instrumentally important. The development of clans will be important. And at the end of the day, a lot of people just want it to be fun. I have many friends that play riot-based games, whether it’d be Valorant or League. They’re spending thousands of dollars on the game in terms of buying aftermarket skins, or buying game passes or this or that.

Sasha (00:20:19):

They also watch the growing e-sports industry, and they’ll spend a lot of time watching it the same way that you wake up Sunday morning and you watch football. This is a growing space, and people want to participate, but you get one or two chances per game to keep them there. There are so many games out there that if you don’t draw them in and make them want to stay, there’s just no opportunity cost for them. They can move on to the next game, so it really falls on our space to make sure that we come live to market with the best product.

Sasha (00:20:54):

If that means we got to wait one or two more years, I see no issue with that. There is no rush in this space. There is no fad of gaming. Gaming is one of the top industries in the world. There is no time crunch to get this thing to market just to hope that you didn’t miss the rush. If you build something that is great, it shouldn’t matter if you release it this year or in 10 years. It’ll matter.

Tom (00:21:18):

No, I’m with you. I’m definitely getting it right. I mean, I want to make sure that we have time to get your thoughts on the Gen Art space and the NFTR space. Definitely want to get your continued thoughts on gaming. We could do a whole another pot on it, but it’s a really interesting color. I mean, just moving back a bit, zooming way back out, just the NFT, PFP or art side is super interesting, right? Are you sold on punks in the space? I mean, it might be a good place to start given how rare they are and given their notoriety, but are you a punk holder? Are you bullish? What’s your take on them?

Sasha (00:21:54):

Unfortunately, I’m not a punk holder. I’m actually very… It’s a very sour subject because personally, I like buying. If I’m going to buy an RNFT, it has to… or collectible, I guess, is a better way to put it, it has to be something that I align with. There was a specific punk that had a beanie on, or they call it a knitted cap, but it’s a beanie. I was really interested in it, and I liked it a lot. I think at the time, it was 20 eth. I was just…

Sasha (00:22:26):

20 eth by any measure as soon as you convert that to dollars, that’s not an insignificant amount of money to most people, so I-

Tom (00:22:35):

No, not at all.

Sasha (00:22:36):

I was wrestling with whether or not I should do it. By the time I decided, “You know what, I probably should,” all of a sudden, I look back and it’s 50 eth. Then you have to go through the process again. Now, we are where we are. This was pre Christie’s and pre, obviously, the big run-up that we had in the suite buyer, but I don’t own any. I think that CryptoPunks is at the forefront of recognizable collectible NFTs, and I think that they will always have a non-zero value in the space. The hard part is that I don’t know how to value them other than social value.

Sasha (00:23:19):

By the way, social value and emotional investing is a very big part of how the world invests. It’s just something that me personally, I have a hard time wrapping my head around it. I would be just as happy to buy a CryptoPunk at 100 eth as at one eth, right? It means the same thing to me emotionally, but it costs much. The cost basis is much different, so that’s the hard part to find where I agree with what the market agrees on in terms of the value of the asset. I think that there is a space for this. I think it’s very important not only for social signaling and for community, but also for…

Sasha (00:23:59):

This is how I envision art proliferating. Many of us that are involved in the digital art space are rather new to art. I don’t own any fine art in my house. I don’t even own that much regular art in my house. It just never spoke to me, but digital art definitely speaks to me. I imagine that as our generation gets older and starts to accumulate more capital, as with all things in this world, I think we start to move digital, and the move has already begun, but I think we’re nowhere near the point of inflection where all of a sudden, all prominent artists are in the digital space primarily.

Tom (00:24:47):

I’m with you. It’s interesting to talk about Punks and their value, because I wanted to ask you a question on there’s statistical rarity with NFT drops. We go on Art Blocks. They’re having one right now, Democracity, as we record this. Gas fees are insane, but it’s beyond the point, but there’s a lot of drops. I mean, basically, every NFT drop has parameters that drive a statistical rarity. I mean, for squiggles, they have things like pipes and slinkies and perfect spectrums, and meld those together sometimes.

Tom (00:25:21):

For Punks, you have various traits like zombies and apes, what have you, but the statistical rarity of something is generally pretty different from the aesthetics. From talking to a lot of NFT whales, basically what I’m getting is they want to be in the right rarity bucket, and then they go for aesthetics, like pick the rarest bucket, then pick the one that looks the best. What’s your take on buying NFTs with the mix of statistical rarity versus what you actually enjoy looking at?

Sasha (00:25:52):

I mean, that’s a fantastic question.

Tom (00:25:55):

It’s a tough one.

Sasha (00:25:56):

I think that there’s three main sectors of any collection of NFTs. There’s the floor NFTs, where you’re just buying the floor. Floor is the cheapest that you can grab, and you’re just basically getting an index exposure to the growth of the space or of the collection itself. Then there’s the upper echelon NFTs, and the collection where it’s the super rarest, the legendaries, this or that, that have immense value within that sector because it’s viewed as a kingmaker piece. But then in the middle, you have this chasm of it’s not exactly a floor NFT.

Sasha (00:26:35):

It has at least one trait that’s interesting, but it’s definitely not an upper echelon NFT, and nobody really knows how that metal operates. It’s a big question mark. I’ve been watching what Paradigm’s been doing recently. They tokenize the floor prices of a few NFTs, and made them fungible. Then recently, I can’t remember the name of the person there, but I’ll have to give them props later. They created another product, I think, 48 hours ago. That was essentially Martindale shares for that mid tier chasm to try to find how to value something in the middle.

Sasha (00:27:10):

I think that this is a big push in NFTs where the assets themselves are non-fungible, but we’re going to start to create fungible markets. That’s what you’re seeing with the fractionalization of assets. You’re going to see that with what’s being done at NFTX with these indexes and these vaults. This is just going to continue to happen, especially as the high tier ones start to price out of people’s ranges. This is just going to continue to happen even with the doge NFT drop on me. This is just not going to stop anytime soon, but for a specific project, how I look at it, I mean, it just depends on what my parameters are.

Sasha (00:27:54):

For the most part, I’ve shifted to buying things that make me happy.

Tom (00:27:59):

Sasha, if I had… No. No, it’s a good answer, and it’s a tough question. Not to put you on the spot, but if you were looking at two NFTs, one is statistically rare, the rarest, number one, and then you have the statistical rarest, number two, but you love the way the second one looks, and they’re the same price, would you ape the second one?

Sasha (00:28:18):

I would go for the second one.

Tom (00:28:21):

That’s fair. That’s good. I would do the same thing.

Sasha (00:28:24):

I think that we missed the plot a bit on the interesting part of collectibles. This is across any collectible space. You can go from physical collectibles like sports cards and memorabilia to digital collectibles like right now. But if I had a choice between a LeBron James Jersey or a Mike Trout Jersey, and let’s just call the LeBron James Jersey more expensive, but I’m not a LeBron James fan, I’m going to go for the Mike Trout Jersey. You go for the things that speak to you. So if you’re talking about relative insignificant rarity status, you go for what speaks to you.

Sasha (00:29:08):

Now, if you’re talking about a floor price versus the rarest one, and you’re getting offered it at the same price, you’re going to go for the rarest one, and that’s the monetary benefit that’s speaking to you. But at some point, you have to let go of that and just focus on what speaks to you. For me, I really like beanies, so I make sure that if I’m going into any collection, I try to find one that has the beanie in it. That’s not because I think beanies are going to be priced better than anything else. It’s just that makes me happy as a collector.

Sasha (00:29:38):

Everyone has to find what makes it enjoyable for them, because I’m just being frank. What’s happening this year is not going to continue happening for the next five years in terms of the rapid growth and the just Cambrian explosion of offerings, and the rapid price accrual of all these assets. This never lasts forever no matter which sector you look at, and that’s not a knock on NFTs. That’s just the reality of markets. I am very cognizant of the fact that things are crazy right now while also trying to keep true to the fact that at the end of the day, I still want to… If I’m buying things, I have to enjoy them.

Tom (00:30:17):

So you’re right in between. A lot of my guests on here, basically NFT or Gen Art collectors on the art side, you’re on both sides, right? You focus on gaming. You have a keen focus on Gen Art and just pure art, but it sounds to me like… Well, I don’t want to get my own view here, but if you had to pick to focus on one bucket or the other, let’s say pure art, generative art, Art Blocks kind of world versus the stuff you can earn a yield on that may play a role in a game later like Axie or Ember Sword land, specific Axie, stuff like that, where do you think that you would spend more of your time?

Sasha (00:30:56):

This is not a knock on either space. Just for me, I’m much more aligned with the gaming side of things. It’s just something I understand better. It’s something that excites me more and that I have a more direct opinion on, and I would consider a value add to. Art, I mean, until two years ago, I think I own three pieces of art. I’m very happy to be along for the ride, but I’m in no means vetted enough to speak to it or to have an educated opinion on like, “This art is more valuable than this art based on the strokes or the design or this or that.”

Sasha (00:31:35):

That’s just not my field, and I don’t pretend that it is. Gaming is just something I understand a lot more. Again, it goes back to pure interest. You’re going to do better at things that you are naturally interested in, and I’m very naturally interested in gaming. I just think that learning about all the sectors of NFTs will help me when I focus on gaming and how to bring value there.

Tom (00:32:00):

Is there anything on the pure art side that interests you right now? I mean like the degenerative art movement, Art Blocks. I know we’ve talked a little bit about AIR, well, I mean off the pod, but what on the pure art side interests you?

Sasha (00:32:15):

I’ll start off by saying something that, again, is an unspoken truth where this space is very attrition based. I think over the long term, again, these all have non-zero values and benefits, but over the long term, this just isn’t sustainable. But then on the other side, to make it a little bit happier, I think that there’s arguments that you’re not buying the art. You’re actually buying the provenance, or you’re buying the token wrapper and what it represents in terms of utility or benefits, or you’re buying into the community, or you’re buying into the artist.

Sasha (00:32:49):

I don’t think it matters which one of those you fully subscribe to. I think it’s important to understand that the art is the vehicle. The art is what you see. It’s what you interact with most, but it’s really not what you’re buying. For most of the… Especially for these 10K R and G projects, you’re buying a VIP ticket to get into a club. You’re buying the rights to be a part of a community. That’s no different than buying access to a clubhouse or a golf group or… Bored Ape Yacht Club is a good an example, a yacht club.

Sasha (00:33:25):

It’s no different. This is just represented with a token, with an overlay of art. What interests me is what people are doing with the art. I like seeing the social token aspect of this art, and that bleeds a bit into POAPs. That bleeds a bit into the social tokens themselves, but what a lot of major sports teams are doing right now, that’s very interesting, where you can buy this one-of-one NFT, but it also gives you the right to have a banner put up in the stadium, or sit court side, or meet a hall of famer.

Sasha (00:34:03):

That’s what you’re buying in my opinion. You’re buying what you can get with the art, not the art itself. I’m talking more about the ones that are sets. One-of-ones, you’re definitely buying the art itself, and that’s a whole different ball game.

Tom (00:34:17):

I brought this up on a couple of pods, but I love his takes. I’m trying to… I was trying to remember the tweet one for one, but I’m going to mess it up. But Zhu Su tweeted that when you’re buying crypto art like ethArt… I’m paraphrasing a bit, so I might botch it a little bit, but you’re buying the most important pieces of the culture of Ethereum, right? In the traditional world, buying a Picasso is obviously, owning the Mona Lisa, obviously extremely high valuable things. Do you get the sense that those buying pure art are doing that today, like buying a Beeple, buying the first curated drop on our box, which is squiggles?

Tom (00:34:54):

Do you feel that that is the same thing as the traditional world? Does that map one-to-one? Because if it does, there’s a lot of value here. If it doesn’t, that obviously impacts that thesis.

Sasha (00:35:06):

I don’t think it’s one-to-one, but I think that there is definitely a positive correlation. I mean, I’ve definitely signaled with NFTs before. When EIP 1559 came out, I bought that. I don’t remember exactly what it’s called, but it’s like the two hands-

Tom (00:35:20):

Yeah, there’s 1559 of them.

Sasha (00:35:22):

… where the money went to the devs, and that was something that I was comfortable spending on. I felt like it was a nice way to pay homage to them. That’s definitely social signaling. Definitely as you go to the upper tier ones, what is it called? The rare Pepe ones, that’s going off right now. You have Autoglyphs and Fidenzas and CryptoPunks. These are all historically significant. Even Curio Cards is starting to catch again. I think that there is a part of that, and I think that only gets in at the upper tier, but I think in my opinion, this is not very popular.

Sasha (00:36:05):

I think that the historical buying the oldest one, like these Ether Rocks or this or that, or the MoonCats, I’m not a big subscriber of older means better. I think that only really applies to a few. You can’t just say everything that’s older is inherently better. Maybe I’m not going to make it, but that’s just my opinion that there’s a few of them that the on-chain timestamp matters, that it was the fundamental shift of what was happening, but it just doesn’t make sense to me.

Sasha (00:36:40):

CryptoKitties is not rocketing higher, and it’s because nobody wants them, and they don’t do anything, and it’s a vacant project, but it’s older. So theoretically, if we’re following the same thesis, they should go higher. I think at some point, you start to run into how many of these older projects can be immensely valuable moving forward, and at what point do you separate? Just because it’s older, it doesn’t mean it has any value at all.

Tom (00:37:03):

Now, CryptoKitties is quite the narrative violation for a lot of these thesises. It’s interesting. I haven’t really paid too much attention with it. I mean, it’s so long ago, but I guess the middle of the pack here, I guess it’s hard to… What’s your take then on CryptoPunks, Bored Ape Yacht Clubs, the PFP side like the 10K drops? It seems like for you, this may be a mix of just an art play, but it doesn’t have the use of some of the gaming NFTs. What do you think happens to that class of NFTs?

Sasha (00:37:39):

I think it’s entirely dependent on the community and the team to determine how much of a lifespan the project has. Like Bored Ape Yacht Club, there’s a reason that we all continue to talk about it. They weren’t the first one, but they’ve done an instrumentally beneficial job to their holders in terms of creating value. They had the mutant club. They have the, what was it, Kennel? What was their secondary? I think it was like Kennel Club.

Tom (00:38:09):

Yeah, [crosstalk 00:38:09] Kennel Club.

Sasha (00:38:11):

They have secondary offerings. They have partnerships. They have… All these projects are starting to integrate with Sandbox in the metaverse to make sure that you can not only have a profile picture, but now you have a 3D render, and you can voxelize it and go use it in game in a little community. I think it’s very, very dependent on the team and the community to make sure that there is value in being a part of that “club,” because again, to me, these are just tickets into a VIP access room.

Tom (00:38:44):

You bring up a really good point there, probably another question for you. What you’re saying now is Bored Ape Yacht Club, their team did a lot for the community and the holders on continued drops, continued narratives to help retain and drive that value. A lot of the, I guess, NFT communities today are driven by the holders or the stakeholders, probably not as much by the teams, right? Think about something like Loot or end project where you just drop a list of words or items or numbers, and you’re hoping eventually the end project is used in some massive game, but obviously, the link between the drop and hiring 100 super skilled game devs is obviously very high.

Tom (00:39:24):

But, I guess, in your take, in what you’ve seen, are you bullish on the community driving value for these PFP NFTs or others, or do you think it’s entirely team dependent right now?

Sasha (00:39:41):

As of today, I think the team… In terms of a risk factor, I think it’s more risky that the team just says, “You know what, we’re leaving in the hands of community. Now, we’re walking away.” That would be a big blow, right? Especially they raised all this money, and they got all these secondary fees, and they just say, “We’re done.” I think that would be a big hindrance to the project. I think moving forward, community becomes much more important. Well, all of a sudden, you have derivatives, and you have spinoffs, and you have community run events and community…

Sasha (00:40:14):

This is all part of the evolution and life cycle of these projects. I know there’s going to be some people listening to this. They’re like, “There’s just too many of these. This space isn’t big enough to sustain all these projects,” and that’s probably true. I think you start to see some merging going on, not like M&A, not traditional, but you start to see communities start to group together. And if you have NFTA or NFTB, you only need one of them, and you can put it into a contract, and both sides get spit out NFTC, and they start to glob together into bigger and bigger groups.

Sasha (00:40:46):

I think that’s going to start to happen. Maybe not now, maybe not in the next six months, but it’s going to be inevitable because to be frank, some of these roadmaps for these projects are just unachievable. The team size, the… I know a lot of people dropping NFTs also have full-time jobs. It’s like, “You cannot execute on some of these roadmaps.” It’s you want-

Tom (00:41:08):

Oh no, we’ve seen some of the decks. Five million RAs make a massive game with five people in 12 months. It makes sense.

Sasha (00:41:15):

I mean, you want to. These people want to do it. It’s not like they’re malicious. It’s just sometimes, they’re in over their head, and that’s not a knock on them. There’s a lot of interesting things going on here. Everyone’s excited, but you have to be rational for a second and say like, “This is not going to continue at the pace it has. It’ll still grow. It’ll still be a lot of value, and I think it’s still very…” I’m still very bullish on this space. It’s just I can’t back it the last six months, and use that to forecast the next five years.

Sasha (00:41:46):

It’s just not possible. If it happens, I’m more than happy to eat my words, because it would be great for everybody, but I just don’t understand-

Tom (00:41:54):

The real story there is insane. No, I understand what you’re saying. I mean, just to go back though to the community versus the team aspect, what do you look for in a strong community around an NFT drop, or not even a drop? What do you look for in the community that shows you that, “Hey, these guys are here. They’re going to build. They’re going to take this to the next level. They’re not just here for price?”

Sasha (00:42:17):

I think it’s very touch feel. There is no seven steps to success in terms of finding the right projects. Discord is a great tool like going in and seeing how these people interact. You’re going to get a lot of noise on the days preceding and immediately proceeding the drop. Everyone’s going to talk about price. Why is price up? Why is price down? I didn’t get to mint. I’m upset. But over the next few days, after that, when the herd thins out to the people that want to be there, you can tell really quickly.

Sasha (00:42:53):

It’s a bit harder when the price is going up, because everybody’s happy when they’re making money, but I like watching most of these projects on the offset. People are playing. R and G is something that predates NFTs. R and G farming is a tested model, and all the people are doing is they’re minting 100, hoping to hit a rare one, and selling the floor ones. Usually, what happens there is that the price is initially depressed below the mint price, because they’re waiting in the factor of trying to get a rare one, which means that they’re valuing the non-rare ones below the price that it costs to mint.

Sasha (00:43:30):

So when they blow out of them, usually, the price goes down for the first couple of weeks, and watching how the community interacts then is very important to me, seeing… There’s projects I see that start to freak out, and people start to capitulate and yell at each other, and seeing how the project leads respond to that. I’ve seen good. I’ve seen bad. There’s also projects that are like, “You know what, it’s down 50% from where we minted it, but we really like what’s going on. We’re buying more, or we’re happy, and here’s this little art rendition I did of this.”

Sasha (00:43:59):

I think it’s very touch feel, and you have to get in there and just decide for yourself, but there’s definitely a lot of alpha into interacting with the community, whether passively or actively, and understanding how people feel because the space is much different than the fungible token, where there’s going to be people that are outwardly speaking to why they own tokens, and there’s going to be people that are hiding in the shadows. At the end of the day, you don’t know who’s who, because when tokens had exchanged, they’re all mixed together.

Sasha (00:44:29):

Whereas if you’re selling NFT, it’s directly tied to your address, and it’s very unique and, you know per NFT whose is whose. Maybe not their names, but you know their address. It’s much different in this space. I think it’s actually pretty good in terms of keeping people honest.

Tom (00:44:48):

I’m with you, and the community and what you said earlier on this can continue forever is an interesting point. I think we all agree that there’s no way that the momentum and NFT aping and pricing could go on forever, right? You’re in a hype cycle. I think it’s already started to cool off a little bit, but if we were to go into a larger cool off, I’m not saying we are or aren’t, but would you have a laundry list of things that you would want to buy, or would you see that retrace as like, “You know what, this is where these things should be accurately priced because they don’t have as much value as a gaming NFT long term, or land or items?”

Tom (00:45:27):

What would be your take on, I guess, the state of the market? And if we did see cool down, is this something you would opportunistically enter into, or is this something that you’d be like, “All right, now, we’re back to reasonable prices?”

Sasha (00:45:40):

So state of the market, my favorite way to do this, I don’t say that… I don’t pick a price point, or I don’t pick a date, but I like to use baseball. I feel like we’re definitely around the seventh-inning stretch here. We’re not early in the cycle, and maybe we’re not done, the eighth and ninth inning could be crazy, but I think in the life cycle and on a time duration, we’re towards the end of at least this cycle. In terms of prices, I mean, it just depends on what you consider to be “blue-chip.” If it’s something that I think has a space in this sector in the next five years, then you’d be buying it all day.

Sasha (00:46:22):

If it’s something that just caught fire, but you really don’t align with it, then no. I think that… I mean, honestly, some of these ones that don’t have the fervent communities, I mean, there’s 75%, 80% to drop before they probably catch a bit. The bear market’s going to be ferocious whenever it happens, and it doesn’t… We’ve seen it in the rest of this market, and it doesn’t kill the market. It’s just like that’s how it is. These things are insanely priced relative to the mint price that people are sitting on.

Sasha (00:46:55):

People who have not yet monetized are sitting on a lot of gains. People who have monetized have just sold it off at a higher cost basically to someone else who’s going to start to get itchy once it gets low, right? They’re going to start to freak out. It’s like you’re going to start to see… I mean, there’s going to be capitulation, and that’s not a knock on the NFT market. That’s just, again, one of those realities of markets. I think that this one is just going to be very, very overdrawn in terms of price movement just because it’s the first time.

Sasha (00:47:25):

I think it’s going to be the first real big one. It’s going to catch a lot of people off the sides that are living life very high right now, and have never probably gone through a full bear market cycle in crypto, and have yet to fly too close to the sun, so-

Tom (00:47:42):

Well, it’s funny. I mean, the last bear market predated the craze in NFTs. I mean, in your opinion, there’s a lot of new people here that have never gone through a bear market. They don’t know what it’s like. I mean, you and I have been through a couple, but I mean, they’ve never been there.

Sasha (00:47:55):

Yeah, and you always say you’re prepared, but I think the only difference between being in one before and never being in one is knowing what you’re supposed to do. When you’ve never been in one, you’re just caught off guard, and you’re flat-footed. But it’s not that people that have been in one before can avoid the next one, it’s just that once it starts happening, they know exactly how the process works in terms of how it’s going to feel, just how bad it can get. It’s much easier to be prepared when you’ve done it before.

Sasha (00:48:27):

This is not something I wish. I don’t wish for this to happen. It’s just going to at some point.

Tom (00:48:31):

No. No, I’m with you. I mean, lessons of past bear markets are like… I mean, the first one is emotionally and mentally make sure you could stay in the game, to make sure you’re building your project, your company, your knowledge, whatever. I mean, the second one is allocate as much as you can. Not a financial advice here, but usually, that’s the best time to buy or add, right? But it’s hard when the people today that you’re describing, like the NFT whales, they’re generally fully allocated to NFT, so they don’t have 25% or 50% of their net worth, and Eth or USDC take advantage.

Tom (00:49:05):

It’s hard and it makes the case that a lot of NFTs are obviously going to go to near zero, right? I mean, if that happens, do you think that value will flow back to the Punks, the squiggles, the rare ones, or do you think that the whole market takes a hit?

Sasha (00:49:21):

I mean, the whole market will… I mean, I think the whole market takes a hit if that scenario happens the way I think it does. I just… Markets can take… Remember, Punks a year or two ago were a couple of hundred dollars or, what, .25 ether, maybe one eth. They’ve grown just as rapidly, and they have a bunch of new holders as well, right? You have people that… You have famous sports players that own Punks. They’ve definitely not been through a market like this before, so I don’t think that they are immune to this.

Sasha (00:49:55):

I just think that whoever can bunker down and survive is probably best exposed for the rebound and for the continued growth. But I think just like anything like the 2017 ICO boom and bust, some of the tail projects died off. And from there, new projects were born, and you got DeFI. From this, you’re going to have a bunch of projects die off, and some of them will merge to survive. And then from there, you’re going to have new projects that are built and that grow.

Sasha (00:50:26):

I think that there’s a lot of differences in this market to other markets, but I also think that there are some similarities that people don’t like to admit. The cycles are going to be the same because people are the same, and people are constant in any market.

Tom (00:50:42):

No, that’s fair. One of the things that you have some good points on that other guys haven’t mentioned is just the ability to earn other tokens based off specific NFTs, kind of like earning a yield there. What exactly does that mean? If you could give some examples, that would be awesome.

Sasha (00:50:59):

I mean, again, this is all just research based, but there are projects out there, for example, like CyberKongz or Sup Ducks, and I’m sure there’s a couple others. There’s Bonsai. These are projects that have an asset in terms of the NFT. And by holding the asset, even Hashmasks, they’re actually technically the first ones to do this. You have the asset, and you get a fungible, typically an ERC-20 token that is dripped to your asset every day that you own it, and that’s… they’re trying to use it as a pure utility token.

Sasha (00:51:36):

You take the asset. You can use it to rename your art or to buy accessories for the art, or in some cases to breed or to do all sorts of things in the community. These assets have monetary value. They have markets. I mean, they’re not liquid, but they’re markets. From there, you can start to map out an APR, and for some of these projects, it’s between 50% and 80%. That’s significant. I mean, how size can you get in that? That’s up for interpretation, but these are things that are starting to come out where you start to mix DeFi and NFTs together.

Sasha (00:52:18):

Then you move down the stack, and you have projects. I just saw, I think, Wicked Craniums came out a couple of days ago and said, “We’re not going to give you tokens, but if you stake your NFT, you have the right to an airdrop of a new NFT.” That’s also interesting where people can get art for owning art or get collectibles for owning collectibles. I think that’s where we’re moving in the more immediate future is now that the projects are made, and now that you have the community and you have the consistent volume and you have the excitement, how do you maintain interest, and how do you keep the community involved and active and moving?

Sasha (00:52:54):

I think Bored Ape Yacht Club hit it on the head, and I think a lot of these other projects are starting to hit on it too, which is you just got to keep on iterating and keep on making sure that there are things happening. It doesn’t have to be free money here, free money there. It just has to be experiences. It could be some people did the comics. Some people are doing a short-animated series. Some people are doing a very basic interactive app on your phone.

Sasha (00:53:21):

It doesn’t… I don’t think it matters so much what it is as it is, “Will it keep the community interested in owning their asset?” Because at the base level, you have the pictures that people like, your profile pictures that just they’re fun to show and they’re fun to use, and like, “I show it to my friends. I show it to my parents.” They’re interested, but they don’t know what to do with it. For some people, the answer is what can I do with it? Why should I hold it not just today and tomorrow, but why should I hold it for the next six months, and why should I hold it for the next 10 years?

Sasha (00:53:53):

These are answers that are going to start being found out over time.

Tom (00:53:58):

I’m with you. I mean, what do you think, though, on what the tokens do that are associated with these NFTs versus the NFTs themselves? Do you think there’s a dichotomy between value flows and accrual there, or is it just achieving different things? How do we think about that for those owning these collections?

Sasha (00:54:18):

I mean, I don’t think so yet. I think the tokens that come from the NFT themselves, I think they’re more complimentary, and they’re used to enhance the experience of the NFT itself. I haven’t yet seen one that it’s a token that has a claim on treasury or claim on an asset. The NFTs are definitely the main exposure thus far, and the tokens underlying are used to modify, enhance, or alter the NFT itself.

Tom (00:54:50):

Got it. No, that’s helpful. It’s interesting to see how fast they iterate. It’s weird though. You want an NFT community and team that iterates, but you also don’t want them pushing out junk though, right? You want, I guess, thoughtful innovation, and I guess figuring out what is thoughtful and what isn’t is a big deciding factor on the underlying community.

Sasha (00:55:10):

Yeah. I think junk is… I mean, less so helpful to the people getting the junk, but I think junk is also helpful to find out what people don’t like and what people don’t want and what not to do. There’s a lot of… I mean, you see it happening in real time where a project will come out and say, “Hey, we were going to do this, but it wasn’t received well by these guys and their community, so we’re thinking about tinkering it a little bit, and this is what we propose,” and then people iterate in real time.

Sasha (00:55:35):

We’re talking about weeks. This isn’t months and years. This is weekly iteration. I think we’re… Whether or not some of these projects survive, if they’ve done a lot for the growth of how to structure these things moving forward, I think that’s important.

Tom (00:55:50):

No, I’m with you there. It’s definitely, definitely important. I’m trying to think of what else we have to talk about here. We covered a lot. I mean, the other side is just the gallery side of things, like where you display your NFTs, where you showcase them. From an investment angle, I’ve always had trouble reviewing those decks because I don’t know how they accrue value, but I guess that’s a later problem, but what do you think on just displaying your NFTs, signaling that social status? What do you think about that side?

Sasha (00:56:16):

I think it’s the most important next step for this space is to accurately, precisely and, in a visually appealing manner, display and interact with your NFTs either in a metaverse or even just on a website. As of right now, I would make the guess that 80% to 90% of people that have an NFT, if OpenSea went down, and Rainbow Wallet went down for prolonged period of time, they wouldn’t know how to view their NFT, and that’s a lot of trust in two central bodies. I think there has to be a way to show your NFTs to interact with them.

Sasha (00:56:57):

I used it on cyber a couple of weeks ago. I made a little metaverse, and sent it to some friends and family. I can tell you, as of yesterday, I had 145 views on it. I’m assuming it’s all my friends and family, because I don’t know who else would want to see it, but I’m getting texts from people saying, “This is so cool. I’ve never seen it like this before. I didn’t know they moved. I didn’t know they had audio. I didn’t know that I could click on it to interact. I don’t even know what this is, but I like it.”

Sasha (00:57:24):

I’ve had a couple of people ask me how to buy them, and obviously, I’m not in the business of… Even friends and family, I’m like, “I’d rather you just learn about it first,” but it’s much more… This is how you go from a couple 100,000 to a million people to 10, 20, 100 million people getting involved, because not that it’s tactile in the sense that you can touch it, but it’s visually tactile. Until you can see it and interact with it, and you can take your mouse and spin it around, or you can click on it and enter into the space of it, it’s just such a different experience.

Sasha (00:58:01):

I’m very bullish on the non-monetary prospects of galleries. I think I’m going to try my hardest to find a gallery that fits my needs. So far, I’ve been tinkering with all of them, and they’re all interesting. I’m also speaking to a couple of people that make web three integrated frames, where I can have a digital frame in my house, and obviously, it’s basically a modified TV, but the difference is that it attaches directly to my wallet, so you keep the provenance aspect of, “If I own it, I can show it. If I don’t own it, I can’t.”

Sasha (00:58:33):

I think any way that we can get to better display these, whether it be AR, VR, whether it be in the metaverse, whether it be on your wall, I think all of it’s very, very important for the growth of this space, and that part is severely lacking right now.

Tom (00:58:48):

What do you think is more important, displaying the art in the real world, like me putting a TV up in my living room and showing people, “I wish I had a Fidenza, but showing people what a Fidenza looks like,” or do you think it’s more important to showcase this in VR like NFT Oasis, in other worlds? It seems like it’s probably more important because those people have a greater understanding of its value, but what do you think there?

Sasha (00:59:12):

I’m going to go the other way and say that it’s not sexy, but I think it’s more important to show in the real world, because I think people in this world already have a basic understanding and will… They’re easier to enjoy it and to get to be interested in the real world. I mean, first of all, more ad traffic, more foot traffic. You’re talking about galleries. You’re talking about museums. You’re talking about storefronts. I could put it in my house when I have guests over.

Sasha (00:59:41):

It’s just many more conversations can be had, many more introductions can be had in the real world right now. I think the metaverse is important. Obviously, if I didn’t have to pit them against each other, I think they’re both good, but I think the real world is the less sexy answer but the more realistic one, at least, right now.

Tom (01:00:01):

That’s fair. It’s definitely a little bit more realistic, and it’s easier to showcase to people than… I mean, everyone’s going to come over, but it’s easier to have it in a Zoom background, I guess, for now. That’s fair. I guess just on the other… The other thing I want to talk about is just like the whale side, right? Do you think that whales here are a threat to the NFT space? There’s obviously some prolific collectors. I love their collections. I’m not really talking about them.

Tom (01:00:25):

Talk more about the predatory ones preying on people. Do you think that that’s an issue today in the NFT space or not so much? I know that’s a weird question but…

Sasha (01:00:37):

This is not a great corollary. I look at them the way I used to look at Bitcoin miners back in 2017, 2018, where they were handling the primary issuance and the inflows, and therefore were the primary overhang. They would take advantage of that by… Manipulating is a strong word, but timing the market in such a way where they would have an impact. I think it doesn’t matter what sector you’re in. You’re going to have people that take advantage, and you’re going to have grifters, and you’re going to have people that are just flippers.

Sasha (01:01:12):

You’re going to have people that use a project to get their following excited, and then just dump it on them, and extract value in a predatory fashion, but I don’t think that’s an NFT-related problem. I think that’s a market-related problem. From my understanding, those type of people are less and less important the more the space matures, because more and more money come in, which causes them to have less of an impact on direct projects. I’m very hesitant.

Sasha (01:01:43):

This space is so new that anyone calling themselves an NFT expert, I think, outside of a few very small amount of people, I think that it’s not a fair term. I don’t think there are many experts in this space right now. I think we’re all learning, and we’re all learning very fast and very rapidly. This space is three, four years old at most. It’s very hard to be an expert in something that didn’t exist five years ago.

Tom (01:02:12):

No, I’m with you. It’s hard for people to make the case that they know everything when it’s all being created in real time. I mean, they have an edge on understanding these things, but I totally agree.

Sasha (01:02:21):

I just worry when we give too much social capital to some people. Some of them are actually doing their best to help the community and do their thing, but that’s a trust-based thing, and you have to be able to trust them. I would be very cautious. I know some of the bigger people that are great people, and they’re very helpful, and they have the best interest in mind. I also know some people that are on the other side of the spectrum, so I would just exercise caution in trusting other people when discussing this sector, in general, the world, any sector.

Tom (01:02:59):

You got to take people’s opinion with a grain of salt, especially when they might be large holders of whatever they’re pitching you on, just a bias. Last question for you, Sasha, just on the safety of the space, do you have any concerns on the tech stack of this, like where these assets are stored, the metadata, whether NFTs are fully on-chain? I feel like it gets a little vague, and there’s not really a lot of conversation here. I guess, because it’s at odds with the ease of NFTs versus the technical stack, you feel like you’re back in the DeFi world, but what’s your take there?

Sasha (01:03:34):

This is actually another rather large worry of mine. I like supporting small artists and people that aren’t very well-known in the space. My worry when I go about that is that typically, they don’t have the capital to store this on chain, on eth, right? That’s rather expensive. Hosting on IPFS is more doable, but for how long can they host it? And then Arweave is just starting to come off and become a very big thing for storage, which I’m very excited about.

Sasha (01:04:09):

But my issue with buying into lesser known projects is one day, my token could be a pointer to nothing, and I have the provenance. I know that I bought it, and I know that nobody else can take that from me, but as much as the front-facing art isn’t what you’re buying. That’s why I said earlier in the podcast, it is important that something is there. If it’s just a white screen, nobody’s going to be interested. If it’s a question mark, nobody’s going to be interested, so it has importance. It’s just not the most important thing.

Sasha (01:04:40):

I think the developments on Arweave and the hosting is going to be very important. I think some of these bigger projects should be absolutely looking to store all this on chain, especially with the kind of revenues that they’re pulling in here. That should just be a gift to the community that this isn’t going in. Even if the team goes away and everything, if IPSFs explodes, if the whole database explodes, it’s still on chain. I think that’s very important.

Sasha (01:05:07):

I would ask that any big project that can afford it should do it. Also, there are some updates happening in the minting process. We work with a team called Chip who is trying to go front to end on their minting, and create a all-in-one minting solution. I think standardizing some sort of minting process will help for the cross compatibility of these contracts, and to make sure that there’s a process. It’s definitely… I take it into consideration every time I buy something that there’s a risk I run that if it’s not stored right, it could become valueless just because there is no value in a forgotten and left-behind project.

Sasha (01:05:49):

It does matter, and I think it’s going to matter even more as we go forward. I think it’s going to press people to do the right thing, whether it’s beforehand or whether it’s retroactive once they gain some revenue.

Tom (01:05:59):

No, I’m with you. It’s extremely important. A big fan of Arweave too as well. I think what they’re doing is awesome, especially it’s a long time coming. It’s very necessary. Definitely agree. Sasha, sorry, I had one more for you. NFT is another chain. Solon has started to take off with a couple of drops. Their monkeys are ape copies, stuff like that. What’s your take on NFTs on other chains like…

Tom (01:06:22):

I guess primarily, it comes down to if they’re actually doing something different and or if they have the creative juice that we’re seeing on Ethereum, which is this bias, because there’s more creative people there to begin with, so it might actually be nice to see drops in other chains that have fewer teams working on, if that makes sense, but what’s your take on, I guess, NFTs and other chains beyond Ethereum?

Sasha (01:06:48):

Personally, I don’t own any NFTs that aren’t on Ethereum except for one asset that I was airdropped that’s on Matic, which is just basically close enough. The reason being is that I’m a big believer in the concentrated value of NFTs. I think that the value of NFTs comes from the market in which the NFTs proliferate, and fragmenting out NFTs between different chains just doesn’t feel pragmatic to me in a much different way than fragmenting out liquidity for DeFi for instance.

Sasha (01:07:30):

They’re just not going to be cross compatible in the metaverse, or it is going to be very difficult to interact with them together, especially if they’re not UVM compatible. I’ve yet to… I think that would change. Again, like you said, if I saw a brand new NFT on a different chain that was unique and caught my attention, then I’d give it a look. But right now, there hasn’t been anything other than maybe Star Atlas, because it falls under my gaming itch. Anything other than that, it just hasn’t been interesting enough for me to get off zero there.

Tom (01:08:03):

That’s fair. That’s good reasoning.

Sasha (01:08:07):

Yeah, but I hope to be wrong.

Tom (01:08:08):

Good stuff.

Sasha (01:08:08):

I hope to be wrong because… I’m not immune to the fact that it’s expensive for a lot of people right now. As much as this is a capitalist type of economy, I just don’t… I want people to be involved. I want my little brother to be able to buy one and enjoy it. I want my parents to buy one, and be able to enjoy it. Right now, it’s rather expensive, so I’m not against it being on other chains, I just don’t personally see the viability today. I’m more than willing to change my opinion when the time comes.

Tom (01:08:43):

I’m with you. Sasha, is there anything we forgot to cover, man? We covered a lot in 60, 70 minutes.

Sasha (01:08:49):

No, I think… I mean, this is a perfect little tease for the next one that I’m forcing you to bring me on.

Tom (01:08:54):

It won’t be forcing at all, man. I love jamming with you. It’s unstructured. It’s one of the most fun forms of podcasts to do, so really appreciate your time, man. I’ll definitely… Excited for you to force me to do another one soon.

Sasha (01:09:08):

Thank you for having me. I appreciate it.