Today we have a very special guest, Yat Siu, the chairman of Amimoca Brands. Yat welcome to the UNIC's Metaverse course. Thank you for having me, great pleasure to be here. So were going to go through our normal motive. Before i get to the hard questions about the future of the metaverse, i think for the benefit of our audience, can you first give us a little bit of your background and how that pathway ended up with you now been spending a lot of time in the NFT world. Sure. Generally speaking I think I'm a little older than the most of the people probably in the crowd. I'm a child of a 70's, I grew up in Austria in Vienna, to a family of musicians and so with this experience gave me a little of the experience of the world of art and actually i had to study music myself as the an only Asian child you know a Chinese excel of musician family. Everything you 've read about Asian ..  is all true. I was kind of forced to do that, but that gave me an appreciation of arts. I grew up in Austria and for those who remember Austria was sort of those country right at the edge, of sort of you know was basic in eastern bloc countries, the soviet bloc as it was during the cold war era and my mum used to work at the commercial post and she was in east Berlin, i would visit her and meet her i could saw how the communism was really look like, and for those of us was a kind of eye opening in one hand, but you know Austria was really a social democracy experience that and i wasn't very good compared to my peers at music for what i tried for, so I ended-up using a computer in the 80s called the Atari ST to basically code on it, to give me a slight edge in composition, actually a pretty big edge, where I could basically compose music through the computer. And you have to remember that in the 80s, that was still the time when it wasn't even OK to use a calculator in school. So it's readily using a computer to help you make music. It was definitely not cool. But I uploaded this piece of software onto a pre-internet service called CompuServe. And that was back in the day when people were using acoustic operas and modems. And I uploaded this software, and I got appreciated for it. People started sending me checks in the mail and, you know, keep doing a long story short. I ended up having got invited to take a job at Atari to basically do precisely what I was doing as a hobby. It kind of sort of moved me away from the world of music, basically into the world of, I guess, tech or broadly pre-internet type stuff, which to me was really the precursor of, I guess, what we now describe as a metaverse. And I sort of fast-forward because I've had in various careers where I basically continued this entrepreneurial journey, eventually, where I started one of Hong Kong's very first internet service providers in 1993 or so, which is very early. And it was even that was one of the browsers we actually ended up using was Mosaic, so even just pre-net-scared. So super, super early. And one of the first products that we were working on was VRML, which was basically a VR version of HTML. So it was obviously that didn't work out. But it got us involved in the world of SGI and so on. Anyway, so much of the software we're using was all open source because we didn't have much cash. Then we were first working on net BSD and then eventually moved over to Linux, which then sort of evolved into creating basically a company called Outplace, which was a company that became one of the very first cloud computing businesses. It used to be called ASP in 1998 to 2000. So experience.com boom and bust, right? Built a business that eventually was acquired by IBM some years later to basically become sort of the cloud computing lab here in Asia. Under Lotus Notes, that's we built one of the biggest email companies in the region. But we also power a lot of US companies. And that was built entirely on Linux. And again, big, big, big era and open source and so on. Because we had a non-computer enterprise and because IBM doesn't like to acquire companies with founders, so they acquired the business for cash flow and growth, but they don't like the founders, I had a two-year transition period. And then I basically went into sort of a little bit back into the entertainment media route into mobile gaming because I had a smartphone and I saw the opportunity there because I was a young father and really sort of had our team build children's applications that became very popular and then sort of realized the potential of the smartphone, went into mobile games. And that was sort of my first, I guess, big experience of what happened to the web because everything we're building was open source. And then when we were building on the App Store, we actually were one of the biggest gaming developers on the App Store between 2011 and early 2012. And then in early 2012, mysteriously, well, not so mysteriously, I guess, all of our apps were deleted from the App Store for apparent violation of App Store rules. And that was kind of a shock because we didn't think we broke any rules, but the problem was we were based in Hong Kong at the time. I had employed at that point, something like 160 people. We were having, it was a reasonably sized gaming business before its time, having millions of customers. And you'll find articles on the web about the sudden disappearance of our apps and the mystery around it. And we were deplatformed because some people at the time when Apple was sort of a cappuccino didn't call us, didn't tell anyone. They just said, you know what, we don't like you for, I guess, what apparently was our marketing practices, but we never got to speak to anyone. So we never really knew what happened. I took several years to get back into the App Store. But that was sort of our first big experience in terms of what happened in terms of open source, web one to web two centralization. And sort of struggled a little bit as a game developer thereafter because we couldn't come back in the platform for almost two years. Then fast forward, we owned the studio in Canada called Fuel Powered that basically shared an office with another company in Vancouver called Axiom Zen. And for those of you who know a little bit about the history, Axiom Zen was a creator of cryptocurrencies, which eventually led to the creation of Dapper Labs. And the co-founder of this company called Fuel Powered that we owned became ultimately a co-founder of Dapper Labs together with others. And we became an early investor at Dapper Labs and it's the publisher of Cryptocities in our region. When we saw that we were really fascinated with what non-fungible tokens could truly represent as digital ownership. What wasn't described as a metaverse back then, but really in terms of virtual societies and in terms of the gaming universe. And I think we weren't the classic crypto og's as in we didn't enter the world of blockchain because of Bitcoin or because of an Ethereum ICO. In fact, none of that interested us because we were very financial in nature. But when we saw NFTs that fascinated us because of the fact that the business model of Cryptocities early as it was also put the control of the manufacturing of those digital cats entirely in the hands of the users, which was also a very powerful concept, which in the traditional gaming world was never seen before. So all of these things led us to this point and sort of fast forward. And this was in late 2017, in 2018 we built such conviction. And it was a really bad time in crypto, if you may recall. Bitcoin was like $3,000 and Ethereum was floating in the low hundreds, right? That's actually when we built our biggest conviction, perhaps not having been burned by any previous experiences. We just went all in and we started to not only build our own experiences, we acquired a small gaming company back then called Pixel that was building something called the Sandbox for instance and helped them basically grow their business. We were early investors in 2018-2019 companies like Sky Davis with the creators of Max Infinity and OpenSea and of course Dapper Labs and Wax and Decentraland. And today over 380 companies that we both invested and supported and also helped build over the course of the last, almost five years now. So yeah, so that's a little bit of the origin story and how we got into it. And maybe I'll close a little bit in terms of how we feel about this space, we talk a lot about true digital ownership or digital property rights as we see it as the foundation of what we think is a metaberson. That's basically our mission. And the background, in terms of my background having grown up in Europe with a certain kind of political system, having experienced also, I guess what used to be called Eastern Europe, then having worked in America, which gave me sort of a perspective of capitalism that was frankly a big culture shock. And then I came to Hong Kong, for those of you who know anything about Hong Kong, that's like capitalism Uber drive. It's even more capitalist if you will. Totally free markets, right? And those were sort of these perspectives all helped shape some of our thinking over time as to the opportunity and the perspectives as we see the opportunity for this open metaberson and digital ownership. Wow, that's an incredible origin story. I mean, you've been through a lot of the iterations of the internet, pre-internet, which is very interesting. But let's talk about Animoca as it is now. Ooh, because, you know, it does a lot of things. And in some areas, I think it's more active in the other areas, it's more passive investor. And there's, I think, some pre-blockchain gaming in there as well and then also blockchain gaming. Can you give us a sense of how the company's structured, what the important parts are now from a quantitative perspective, what the strategy is going forward? How much do we think of it as an operating company versus a holding company or something like a fund? Give us your vision for Animoca. So first off, it is absolutely an operating business. So we didn't start up as a fund and while we are now looking at potential fund options, that wasn't really sort of how we were set up, which is very different from a classical perspective. Because we've been so prolific in our investing, we often get sort of rated alongside other VC firms like A60Z, but we're not that type of firm, right? Like for instance, when we made the investment in OpenSea, we did it because we wanted to help grow the NFT space and also sell our NFTs that were from instance like Sandbox, on OpenSea, right? So we looked at it as a strategic perspective rather than purely from an investment return perspective, but it also gives us a very long-term lens. But I think there's a few things that come into the thinking. The first thinking was around sort of what is building on chain really mean, before we had even coined or sort of thought of but sort of before the term, I mean, Web3 has come about, which is really sort of that if you're building on chain, then you can share in its network effect, but you can share the benefits of the general growth of an ecosystem much like an economy, right? So that means that, and if this is to be open and kind of like what the true promise of the original internet was, like for instance, with open source and sort of open information, then we can monopolize this. It doesn't work in a monopoly way as Web2 has evolved. So that means it's better for us to sort of facilitate the growth of the ecosystem through to this ethos of decentralization by having minority stakes in many players as well to help fuel it, right? It wouldn't help if we say, for instance, own open sequences. That doesn't really work, we think. But if we become sort of an early investor and we sort of funnel the many of our early NFT projects into open C to help it fuel its growth, while sharing it in its success, then there's going to be a mutual benefit across the ecosystem as we see it. And so that's a big belief that we had. So we ended up investing very broadly. And it comes a little bit on sort of the heels of looking back because I draw a lot of parallels between the evolution of Web1 and Web3, say, well, the early internet evolved a certain way. And I think Web3, which is sort of obviously the better version of the internet in the future as we see it, revolves in similar patterns. What would I have done in hindsight? To me, what I'm seeing with Web3 is almost like having the benefit of going back into the future, right? And then sort of being able to sort of see what would I do? Well, I would probably invest in many of these companies as well. If I had a chance to invest in Amazon or invest in Facebook, perhaps, or invest in Google and those companies in the early days as I'm building my own business, then we can create a healthier ecosystem as opposed to one that is built around sort of trying to sort of obtain zero-sum outcomes because we would have sort of influential stakes in this. I mean, it's almost like if SoftBank was investing with the purpose as opposed to just for money, what would the internet look like, for instance? Because they had stakes in many of the early companies that had a potential influencing factor. But because they generally only cared about returns, it was only simply about maximizing it. But actually, there is a kind of forced power that comes into having sort of capital value attached to some form of sort of positive influence that you can create, right? So that's kind of how we looked at it. And so therefore, investing in many of these companies became part of the strategy of Animal Care Brands. And where it almost appeared to some people who looked at us and said, aren't you like a metaverse index fund? Well, no, we're not. But it could be translated this way because we consistently, even during this time, are investing in companies that help fuel this. And it also means that from an investing perspective, we don't need to look at a return solely on the returns of the company we invested. As a fund, you need to make sure that every investment has a return on the one company you've done. And if it doesn't have like a 100x or 20x or 30x return, then maybe it's not worth it, regardless of it maybe being very good for the ecosystem, because that's not only a mandate. But in our case, we can make investments. For instance, we have probably close to 20 guild investments. And you would say guilds aren't necessarily the best kind of investment, right? Because it's a fairly low barrier to entry. But what guilds do do is that they train people about the metaverse. They bring people onto Web3 games. They recruit them, right? They do all this stuff. And they also invest in these gaming assets and help people in the gaming sort of Web3 world to sort of learn about blockchain games, or bring Web2 gamers onto Web3, for instance. So even if they don't return in terms of the equity investment, they would probably create sufficient economic return in terms of the flow of capital going through all of our portfolios and our companies, like for instance, buying assets, or bringing in gamers, or creating more adoption, that it actually becomes valuable for the entire ecosystem as a whole. And the only way to do this is to have a broad sort of exposure to the ecosystem on top of building, right? And then we have the projects that we're building ourselves, whether it's the sandbox, the pandemic, the galaxies, or the racing, or for instance, most recently, the tiny tap, which is basically sort of education, and NFTs, and digital ownership in that area. As areas that we think that we have core expertise that we can help build and develop. We're about 1,000 people today worldwide. We have something close to 25 sort of subsidiaries, or wholly owned groups, which companies like Sandbox would fall under, and over 380 sort of separate investments. And obviously, as we've grown so much, trying to sort of create sort of partnerships between them becomes more challenging. But one of the big benefits of Web3 is that it's actually very natural to do so because of the fact that it's permissionless. Like, you don't need to have an agreement with OpenSea to basically sell the assets on OpenSea, for instance. Nor do you need to have an agreement with Hugo Labs, for instance, to be using someone's board aid from a sort of let's call it licensing perspective, because it's already embedded within the license rights of perhaps only that NFT, or certainly Hugo would agree that, right? So you can actually have already a sort of call it a cooperative methods without opening up an API, creating a contract, right? Web2 companies have a very hard time creating, you know, sort of this sort of overused word synergies, right? But in Web3, it's much more natural to do so because it's all on chain and it's all permissionless. And so we see this effect happening very naturally. Therefore, we feel that the broader the space grows, actually the more network effects the crew, one of the big thesis points we have on digital property rights is the fact that, you know, these network effects basically can compound on top of each other. But they can compound on top of each other if there's only one platform, right? But, you know, the diversity of this is the fact that hopefully thousands and thousands of platforms start to sort of create different type of network effects on top of our digital ownership, which is why we invested in things like NFT lending platforms or layer one or layer two blockchains on top of, you know, gaming assets or guilds basically, or, you know, brands that basically onboard users onto the metaverse, right? All of these are effectively adding to the network effects of digital ownership in one form or the other. So which of all these things are your main operating activities? What are the big ones? Well, I mean, we think of ourselves as splitting ourselves 50, 50 in terms of the investment activity, because obviously, especially during the bull run, you know, that part of the portfolio ended up just exploding. But, you know, we, again, that was more sort of, I guess, half a sense of the market. But of course, one of the major ones was, is of course, Sandbox, right? And Sandbox is probably our most famous sort of subsidiary asset in terms of operating income. But then the other things, for instance, that we do sort of our involvement, for instance, in partnership, they have, for instance, with YUDA, are involved with Bitcoin that we basically were a launch contributor. And the fact that we would sort of receive basically sort of, you know, part of the launch contribution tokens and helping sort of assist in the launch of the other deed, for instance, is a part of our operating activity. These are not our investment activity. But on top of that, we've also made an investment in YUDA itself as well as an investor. So we have a dual role in this one where we are both an operating partner, making games, for instance, or sort of helping launch NFTs, for instance, or sort of assets, while we're also investing, right? So these would be examples of that. And, you know, Sandbox is probably most well-known, but obviously the work that we do with, you know, with you guys, critically important, most recently also the work that we do with CoolCats, we think is going to be pretty cool. No pun intended here, right? And then, of course, the other area on that we are putting a lot of emphasis on in terms of growth is Phantom Galaxy. This is probably the very first web 3 AAA game that actually has a playable game that you can do right now. And that's a big area of development that's sort of ongoing. And of course, we're very, very excited about new areas of what digital property rights can deliver, like what we did with TinyTap. You know, this is part of our model. When we acquired TinyTap, just like when we acquired Sandbox, this was an existing web 2 business. All right, it didn't start from nothing, right? And then we used it as a foundation to bring customers in the web 2 paradigm that they're in into web 3. And there's a business that already has revenue and therefore is sustainable as a business. And therefore, you know, when we add sort of the property rights and the network effects that can be impossible with digital property rights, we actually amplify that business, right? And so that's part of our operating procedure, in part because we understand, you know, I guess traditional gaming and the web 2 world. And obviously, I've grown a better understanding in how to build web 3 products and services. We're still learning, of course. But I guess it's all relative because the NFT space is relatively young. So even four or five years of experience might be considered fairly experienced in this world. Okay, there's many, many different things you just said. And so I'm gonna try and break them up so we can talk about them because they're all very interesting. Tell us first about Sandbox. So Sandbox is, I think it calls it something a reverse, discipline something a reverse. Yeah, it's an open metaverse. Yep. So what does that mean? What is it trying to accomplish? What approach should open? What approach should not open? How should we open the meta? So the Sandbox, the inspiration of Sandbox really, you could say, is sort of Minecraft on blockchain. One of the reasons why it's voxel and style was intentional is because voxels is one that everyone can participate in. You can create awesome constructions without having to have sort of, you know, 3D talent and sort of, you know, the onboarding is quite straightforward. One thing that most people who are not in the gaming space don't fully recognize or realize is that the two biggest games in the world are Roblox and Minecraft. And so this kind of game environment, I think is very suitable because both of them have already embodied a sort of let's call it pre-web three quasi-narrative. In the case of Minecraft, it's open source. Minecraft itself has an ecosystem that is actually fairly decentralized, not because of the licensing structure of Minecraft, because of the fact that, you know, you could run a Minecraft server or you could do mods or you could do all these type of things. And that basically creating an ecosystem that is what's keeping Minecraft alive and actually thriving as opposed to a centralized approach where, you know, in this case, Microsoft would be responsible for all activities and growth in Minecraft, which is not the case, you know, in very much so in Minecraft, it's a community that is continuing to build on top of it. Roblox is similar, but with a slightly different concept. It's more central, it's actually centralized, but you're building new game experiences within Roblox and building new sort of echo, it's sort of pre-menversus experiences for players to experience. So Sandbox is essentially doing the same thing with one big difference, which is that you have ownership of these assets, you own the NFTs outright, you can do whatever you want with them, you have the freedom to transact as you love to say, right? Which means that, you know, we have no problem with you taking the asset and doing something else with it, for instance, right? But of course, Sandbox itself has a limited supply of land. People are developing on it for experiential reasons. Right now, one of the main reasons why you'd want to build on Sandbox is because most landowners have an asset value in their wallets somewhere between half and million to $2 million, which is fairly substantial, which means that you are able to target a certain kind of audience. So in a way, Sandbox has become kind of like, I don't know, Fifth Avenue, if you will, right? Or Landmark or whatever, sort of big, big, big major district you want to think of because of its concentration of a certain kind of audience, which is why big brands, whether it's Gucci or Adidas or Snoop Dogg or whatever, are launching sort of experiences on there. It's also virtual land is something, again, from an onboarding standpoint, much more easily understood in terms of what it means because you understand property rights in the form of land more clearly than property rights in the form of other things because it feels a little bit more sort of elusive even though you have rights attached to it. Most people don't think deeply behind it. But if you own a piece of land or you own your house, then you more clearly think of it as property rights and it's an easy translation to that. How you think of the Metabras in Sandboxes, that people are building experiences that they can branch out from within the Sandbox. So the South China Morning calls, recreated Hong Kong's harbor as a way to preserve its history in the Metabras, for instance. Snoop Dogg famously built his mansion and then he sold sort of his collection, the doggies, there's a way sort of for access and membership. So it's like a, you can think of this almost like building a sort of a national economy of a small scale, right, that might today have the economic output of a small island nation powered by the sand token, which is basically sort of, you could call it its sort of utility token. And of course the land itself, which is what you need to have to build on top of it. And we think of this as, from the ethos standpoint, is very open, you can build whatever you want on it, it is yours and you're free to move it somewhere else. I mean, meaning that if someone wanted to potentially do a vampiric attack on Sandbox and recreate Sandbox too, but what they think is a better version, then they're free to do so. It's nothing restricting them from doing that. And of course the assets can be traded on all the various marketplaces. How many people own a piece of land in Sandbox or how many addresses have this set? So there's about 250,000 active players and the actual land owners is probably somewhere between, I think it's 13 to 15,000 people, something like that. And what's an active player in the Scumps? Someone who basically engages at least once a month in the Sandbox. And one of the extremely great criticisms of blockchain based whatever is this way, and actually quite anything that's metaverse is that the daily numbers, daily user numbers are quite low relative to web2-related and its purposes are traditional gaming. Yes. What's your response to that? Well, I think the point on this one is that first, and we can maybe later on talk a little bit about the economics of gaming as an example, is that the people who actually are engaged in these environments are almost equivalent of paid users. So 250,000 users in a web3 game has far more economic output than even I would argue 10 million gamers in a regular game. So I'll get to that shortly. So that's one thing. And the way that one should measure the economic impact of Sandbox is more than that of a GDP. So imagine if you had 250,000 people in a village of some sort or a city in this case, right? Probably village in China, but maybe a city in Europe, right? You would be able to sort of measure some kind of economic output of its value. And because there is ownership and there's transactions and there's commerce that takes place, digital as it may be, you have value that comes far deeper than just someone who has a one-sided fake transaction in this case in form of a game. So the value of a user in the web2 game is, you know, cents on the dollar, if anything like that. Whereas a transactional value, a commercial value of a web3 user is closer to, let's call it like a low GDP country, for instance. So there were thousands of dollars to you as supposed to worth, you know, 50 cents or 20 cents. So that means if you have a few hundred thousand players in an ecosystem like that, which is also what you see in other web3 games like say, Axie Infinity, it will drive millions and millions of dollars of revenue and value because each user basically has more economic activity as they do in the context of, you know, I guess real value. In the web2 gaming world, what most people don't appreciate is that somewhere between 97 to 99% of all gamers don't pay. But it does drive, the entire gaming industry is a $200 billion industry of which the majority comes from what's known as free-to-play gaming. But that free-to-play gaming comes only from the conversion of a low single digit percentage of users. For all of you here who play games, you might ask us a question, what was the last time you paid for the game that you played? Or if you ask your friends who play games, how often do they pay? And it turns out, you know, actually I think the industry average is more like 1.5 to 1.75%, so it's very small. But they fuel that, right? And what happens is that in web3, you could say effectively, every gamer is an economic participant of some sort. And therefore, you know, 10 million users in a web2 game might not even have the same economic output as 100,000 web3 games, because you would translate it backwards in terms of conversion. And then the conversion numbers in terms of value is very different, right? If you buy a piece of land, or if you buy NFT assets in a game, your average R-proof player is paid R-proof is far, far higher than it would be in a web2 game. So therefore, small user numbers aren't a problem. In fact, I foresee a future part of the reasons why we invest so prolifically, that because of these unit economics, you can have far more sustainable web3 games, because you don't need to appeal to a game that must have 10 million users to be successful. In the traditional gaming world, if you have 10 million users, you're a ho-hum, right? If you're in just a couple million users range, that's considered generally a failure, because you can only monetize users in sort of very low value. You can't be sustainable, right? But in a web3 game, if you have 100,000 users, which are, I guess, similar to this concept of your true fans, who will have strong economic activity, you can sustain thousands of games more easily, which is better. Indie game developers today are constantly struggling, and many of them are dying, because they can succeed, because their unit economics don't work, partially because of the platform, because of the fees involved, but also because of the fact that they have to, in this business model, get to a huge size in order to even just be break-even, which is really hard. And that's the weakness of a web2 versus a web3 versus model. But, sorry, because there's something that I didn't understand. Obviously, the landowners, the 13 to 15,000, have spent a lot of money for their land. That's much more than any, I think, gamer would typically spend on their game. Are you saying the GDP is driven off that, or because the other 250,000 monthly users who are not about land owners, what are they? Oh, yes. So for instance, yeah, so if they're buying, for instance, NFTs to participate in sort of, not every person who wants a doggy and Snoop Dogg is a landowner, but he wants to participate in basically Snoop Dogg's experience in his mansion, so then he would have this NFT, for instance. Or, for instance, with all of Xs, they sell fitness NFTs, and so you can have membership in their virtual world in the sandbox. That's a customer experience that people are paying for. These NFTs might go for $10, $20, $30, but they still go for value. So there's an economic transaction value. The other thing is that there's hundreds of metaverse builders on sandbox who basically are building experiences for third parties. With a biopice of land, I want to basically build an experience. Well, maybe I don't have time to build that experience. So then I go and recruit one of these metaverse builders, which are all over the world, pay them a certain amount of money. And that, too, creates economic activity, which then creates value in the ecosystem. And the way that sandbox makes revenue is outside of selling primary sales, also, as we all know, NFTs, and takes a cut of secondary sales in a low-simple-digit percentile. And that's basically part of it. So think of it almost as a VAT, if you will, of building on the sandbox. So OK, I didn't catch the last one. So let's say, $3,000 NFT. And you're counting as that part of the economy makes sense. Does sandbox take a commission on that NFT? It does. It does take a commission on the primary. And then on the secondary sales, it takes a small clip of that as part of it being originated from the sandbox. And so those NFTs are minted on a sandbox-specific contract? Yes. So there's a tool that sandbox has where you can create them as a voxel builder and so that it can also be used inside the sandbox. And so if those are, for example, the access NFT, it lets you get into a building in sandbox. They have to be minted on that contract. So I think the point is that they could be. But I think if someone was to build, for instance, an NFT for access outside of the sandbox, they could do that too. But usually these brand partnerships, in particular, working conjunction with the sandbox, because sandbox with then, for instance, promote it. So there's also a little bit of this marketing effect. Because when sandbox basically promotes it to their audience, you're willing to give a part of your revenue share, shall we say, to the sandbox because it can amplify your message. So it's not just the platform itself. It's a little bit like the app store. When you're paying a revenue share to the app store, you're not just paying it because it gives you access to the platform. You're also paying because it might feature you. It might promote you. It gives you something that gives you more customers. So that's part of the trade you're making when you're sharing revenue. That makes sense. Question, the visualization of sandbox. I'm walking around in sandbox in my browser. How does that happen? What do you mean, how does that happen? I mean, it's built in unity in terms of the front-end ship. That's how it's built in unity. Great. Yeah. So my model, my mental model for most of the blockchain-based metaverses and games is that the in-game assets, I think we can basically consider them completely decentralized because they're NFTs. And so I could say without any partnership with sandbox, I could say I'm going to do an air drop for anyone who has a sandbox NFT in their wall. Right? That's right. Absolutely. And I could say I can build a lending platform that people can post their land for collateral. And again, I don't have to do a partnership with sandbox. In fact, I think NFTFI and Pawnfire really do that. And I could say I'm going to build my own super core game. And I can treat sandbox land as doing something in the game. And again, I don't have to talk to sandbox, correct? Correct. Absolutely. So at the end of environment, digital objects, you have this level of decentralization, composability, all of the general benefits of NFTs. And it's a huge step forward. I was a kid to do this with a traditional one, two-game. Correct. And that's the whole frame around digital property rights. You need to enjoy your digital property as you do your physical property. Now, the part that still has, I think, a level of centralization and counterparty at risk, if you're obsessive about these topics, like I am, is the rendering. If you receive this opinion and said, block this application in your Unity server, because that's whatever violating something, just each law or what. It's threatening national security. Making something up, right? Yes. Effectively, you can do it. And because you're a company and you know, and you're going to have to do it. Is this fair? That's fair. But I think the point of perspective is that on our platform, you then don't have the ability, let's say, if something bad happened, that we may have to take action on the platform at the sandbox. But that doesn't mean, and thinking of this key thing, is that we have the ability to revoke your ownership. So this is the principle. So no matter what happens, we might have to censor you for whatever reason. But we can't revoke your ownership, right? And that's an important principle, which means that someone else can build an experience around it. Or maybe you sell it to someone else, at least, because maybe you're not allowed to use it. But at least, it's yours to do it as you please. Or you want to keep it anyway, just because if there's a reason that we can allow you access because of some sanction rules, as you say, or something else like that. But the ownership is still yours. Because there's some concepts where people talk about not just revoking ownership, but literally destroying the asset or some version of that. That's not something that we do. This makes perfect sense to me. This is how I understood it. It is obviously a huge step forward versus if it was just, if it was just an account on a web2 type game, and you receive that same order, it's just, bye bye, baby, right? The person who's walked out, the person's walked out. They don't have access to any of their things. And they'll never get them back. That's correct. Yeah. And that's a classic album with web2 games and web2 universes. Yeah, it isn't that theoretically why Vitalik got into crypto. Right? So that he got robbed in some web2 game, is that correct? It was more than Warcraft. I think it was some powerful staff or something. They nerfed it. So this is slightly different. They didn't take his ownership. But what they did, if I recall correctly, is that they changed the attributes and made it not as powerful or not powerful at all. And so all the effort he spent in doing this, I think he described it, he cried himself to sleep and realized the horrors of decentralization. I don't know how much of this is drama or real, but either way, right? It happens to gamers a lot. And I think one of the other things that we're excited about the spaces, remember, there's like 3.4 billion gamers today. That's more than close to 2 thirds of the world's internet. So they're already very engaged in this virtual goods. And you ask any gamer, do you own your stuff? And they actually believe they own it, even though according to the terms of service, they don't. But imagine if these assets were actually on chain, even if the game shuts down. Yes, maybe the original utility dies. But as we have seen in crypto, for instance, actually third parties might emerge and say, hey, you know what? I can access this incredible community by creating value to them. And so instead of building a brand new game and having a form of it from scratch, I can actually make a game or an environment to address an existing audience of which a percentage might come over. That really reduces, that's a very practical user acquisition sort of tool that you can use. And it gives more freedom in terms of ability to create maybe multiple experiences, because you're really just adding value to the owners of these assets who they might be willing to become your customers. And let's call it the fantasy, which I think will become reality, but not with existing sort of games, is imagine a fortnight, which sells skins, which is basically like digital fashion. It was on chain and was as free as a sandbox was. Then someone else around the world can open a new game called Fortnite Fashion Week. And he can invite every player who owns skins from Fortnite to come to his world and just experience it, not for battle, but for something completely whimsical or different or whatever, which is how innovation is driven in most of the world, right? Because you have the freedom to do whatever you want. And that's the beauty of it. And what will then happen is that thousands of other game companies will do the same thing. Who benefits the owner of the skin, the owner of the asset, because they become, their experiences and the utility becomes richer as a result of having much more use cases as in much more network effects. But the original environment, which is what we believe in, which is in this case would have been Fortnite, benefits as well, because it becomes the center of that. People go there to buy the skins so they can get membership in a thousand other services, right? So it actually is how we imagine Web3 to build it is why we coin talk about Web3 as sort of sharing the network effect because of that concept. It makes perfect sense. Let me, I bet I'm not going to get much out of you on this one, but I have to ask. Sure, of course. I can yell that, I can yell that by someone if I don't ask. What can you tell us about other side? Ah, hahahaha. Yes. Feel free to lay out all the details and everything that's going to happen. There's only a few people watching, it's fine. So, I definitely won't tweet it, it's fine. I can certainly tell you that I would get yelled at if I said anything deeply about other side. Ha ha ha ha. So I think the one thing I would say, first of all, the announcement obviously of New CEO of Yuga is certainly very exciting, right? I think it just indicates a little bit in terms of where the direction of Yuga's going, what their ambitions are. And I think that's an awesome development. Should probably give you an indication as to the scale and ambitions of what the other side wants to be and is going to. People have already seen the demo that was put together obviously in partnership with Improbable. And there's many more things developing which I can't talk about, right, unfortunately. But no one saying that if anything, just if you look at historically at the incredible creativity and talent that Yuga has demonstrated every time when they do something, you know, is sort of proof from our perspective to be excited about stuff. And sort of to dovetail, although it's not directly related, you know, some of the interesting activities, controversial as it may be that's happening, for instance, even at, you know, Bitcoin which is separate, but it's obviously tied as sort of let's call it the token that is utilized there. It's also evolving into a life of its own that's completely different with, you know, community members now joining the special council after just coming election and driving changes there as well. Sort of, I think there's this great sort of community and sort of really democratic experiment in tying basically sort of, let's call it the community of Bitcoin together with the world of Yuga under the other team. But I'm afraid other side, I'm afraid I can't say much more than that. But I appreciate. I appreciate you trying. I have to try. Before we do grand vision stuff, I want to ask one question about something in your portfolio that's different. And you had started with me a few weeks, months ago, I think. And tell us about TinyTap, which is very good for everything else we've discussed. Correct, yeah. So first, what TinyTap is, and we just completed another auction of a thing called six teacher NFTs and generated about a hundred and 90th or some version of that, right? Which, you know, across six teachers is a substantial amount of money for anyone who knows anything about, you know, how much teachers are being paid. So what is TinyTap? TinyTap is originally a web2 platform that was a teacher marketplace where teachers basically create content out of their spare time. And someone, you know, parents can then subscribe to this content and pay the teacher some fee. And that's really what this is, right? It's basically a tool or a teacher could create an app very easily because they don't know how to do that. And today, I think like over a hundred thousand plus teachers are using this to create, you know, kind of like a side income, call it like a side hustle, right? This platform basically generates sort of a service value to some of like 8.6 million families that subscribe basically to it and has a user base for that. What we did with TinyTap is we created this concept of true digital ownership. So one of the things that we believed that all content will become assets in web3, right? Because they become embedded as a digital property, right? Means that not only can they crew network effects, they become platforms in and of itself, right? If you look at, for instance, the ownership of a board A or a cool cat, actually the ownership of that asset means that you're not just owning, you know, a JPEG as it were, but you're actually a member of a platform. People come to you and say, oh, you own a board A, I have a T-shirt for you or I have a game for you or I have a service for you or I have a whiskey for you or I have a discount for you, right? Basically owning those NFTs become a platform. So that's the thesis in general for all things around content. So here we want to make teaching content become such a platform. And the very first network effect of that platform is the earning power that these NFTs already have through this concept called publisher NFTs. Since a teacher already makes money from this content, small is it maybe, let's call it a thousand dollars a year, he or she gets paid, which is a meaningful but small amount of income relative to what the average teacher gets. I think the average teacher paid in the US is something like 40 to 50,000 less. But if you go to like sort of middle America, it ends up being closer to 25 to 30,000 US, right? It's quite small if you think about this is per annum, right? And we all felt that it was kind of ridiculous that probably the most important contributors to certainly sort of one of the most important contributors to society, if not the most important one, certainly for the formative stages of a children actually are so terribly underpaid, right? Now, when you take something that makes a thousand dollars a year and you allow it to have capital formation because let's call it someone can now buy it for 10 or 20% yield, he's willing to pay five or $10,000 for the same content. Still share in some of that revenue to the original teacher but he or she becomes the owner of that. This is what we do with real estate or with other forms of ownership. And this is real cash flow that's coming in. You now get the benefit of capital formation as we have seen in the world of real estate, for instance, or other kind of assets. But the beneficiary of a teacher who used to make $1,000 on this content annually now getting paid $10,000 one off on it and some revenue share thereafter, or fees as it were, is life-changing, right? And the first fee NFTs were sold. I think the most expensive one actually was sold for like maybe $60,000 or $70,000 for NFT that was making $15,000 a year in terms of income. Which frankly, from a yield perspective sounds very, very attractive, but from a teacher perspective is incredible life-changing money because it's basically almost two times your annual salary. And the very first thing she said is, she's gonna reinvest it, she's gonna make more content. And that's the whole thing about Web3 because you're rewarding the people directly who would reconribute back into the ecosystem. Which by the way is how also one of the reasons why Web3 games works well. Because when you reward gamers, you're rewarding the ecosystem of players who give back to the ecosystem you're in as opposed to the ones that are just there to extract. So the hope basically is that we can turn this teaching content that is alternative ways of learning math or curriculum or philosophy or physics or whatever. That might just make a couple hundred dollars or $1,000 a year and sort of enjoy the benefits of this capital formation. Bring in third parties who are willing to obviously pay more for it because of the yield benefit, but then may also become their marketers. Remember, many teachers don't know anything about entrepreneurship, they make great content, but they don't know how to market or sell or whatever. And so this marketplace then also becomes a way in which a teacher could be tied in with someone who has maybe sales skills. He's investing in it, but he's gonna try to make it worth more because he's gonna promote the content so it can make more revenue and the all win. Which is basically sort of where I think the next stage of content evolution will go. And we started doing this with teachers partially because I was an early investor in TinyTap, so we liked what they were doing. And partially also because I have a personal interest in education, I think a lot of people who become young parents start to have an interest in education because they go, well, certain things don't work out the way they maybe we need an area. And so that's how I sort of got to know the guys in TinyTap and then felt that we could help. And we're sort of early days, but it's very promising and it's just another example of what digital property rights can do to your content. Okay, let's go for some big picture stuff. Sure. What is your definition of the metaverse? So we define the metaverse as a real metaverse, the open metaverse as one where it must begin with your ownership in it. Like meaning that if there's no way in which we can't have ownership in this metaverse, this virtual construct, then it's meaningless and therefore it's not real. So we could go into something like, let's say Fortnite or even Roblox and we could feel that it is some kind of virtual experience, but it's kind of, as we describe it, like going to Disneyland, right? It's like, yeah, fun, whatever and that's fine, but it doesn't mean anything because it's purely extractive and you don't build on top of it. Things like VR and AR and these other interfaces to us is experiencing what you own in the metaverse. In other words, it starts with the ownership, right? And then it's ways to experience the ownership rather than being the metaverse itself, right? So that's generally how we define it. It starts with digital ownership. Okay. How do we view the likelihood that the mega social media platforms that have huge installed user racism are spending gigantic amounts of money on their metaverse initiatives? How do you do the likelihood that what we're doing now is nice and important but still fairly small and then Facebook eventually rolls out a good enough product that has everything except for decentralization and people kind of roll into that instead of learning how to use Ethereum and MetaMask and all these types of things. So, if you had asked me this question two years ago, I would have considered, and I think I did write about this as potentially the biggest existential threat that the big platforms like, I guess, Facebook now rebranded Meta would do, but I no longer feel that because not because of what happened recently in terms of Facebook having to sort of lay off or the fact that Meta has not succeeded so far in the efforts but because the unit economics make it clear that Facebook cannot make it economically sustainable with the kind of unless they tax it heavily. And to me, this becomes the biggest detractor of it. Like, why would you want to pay 50% close to 50% is 47% which by the way is very close to the tax rate of North Korea, fun fact. But either way, right, why would you be willing to pay almost half of what you make in perpetuity to the platform so it can maintain its version of the metaverse when you can go into an open framework and literally just give up 5% of it. And maybe you were willing to pay 10% for the services but that 47% must come commensurate with services worth the 47%, right? You might be willing to live in Scandinavia because you pay more taxes because they give you services and therefore it's okay to pay more taxes. But it's very hard to see right now what that would be. And so it's going as a type. I made this comment where I said $10 billion a year on developing in the metaverse at Facebook is not enough money because in order for them to incentivize people to build on the meta they have to subsidize a far greater amount to be able to recreate the network effects that are currently available in the open framework. One of the things that people often complain about is, oh, the cost of gas even though it's come down, of course, a lot lately, but the cost of gas on something like Ethereum is expensive and it's prohibitive and so on. But it's not that bad when you consider the economic bad value you get. You're happy to spend one or $2 per transaction if you know you'll make five or $10 on top of it, right? Like you don't, it doesn't really matter how much you pay as long as the service you get for it. Meaning that this argument about sort of zero gas or no cost attached to the transaction is irrelevant if you don't get commensurate value for it back, right? If you're making one cent on a $0 fee then that's not as valuable as making $10 on a $2 fee, right? And part of that is because the network effects on chain are already present. You know, if I issue something on Ethereum, I can trade it in OpenSea, I can give it to NFTFI, I can sell it somewhere else, I can use it in five different games. Look, you have these network effects already embedded and because you have this open sort of system that is essentially banking grade that anyone can develop on top of, for Facebook to recreate all of that, they have to spend so much money that it already exists on chain even if it's so-called inefficient, it works better than anything that Facebook will put together outside of the pure UX experience. And I think the point I believe in is that UX is important, of course, right? How do you onboard billions of people when you have Metamask and you have this and all that kind of stuff? But I think the incentive as we've seen, for instance, like X Infinity, is that if there is a good purpose for it, you're more than happy to go through the ropes and transfer yourself into basically the web3 world even with something as so-called complicated as a wallet, which is not that hard compared to opening a bank account. You know, and what happened with Axie is that in the Philippines, millions of Filipinos that are unbanked, don't have a credit card, ended up having a crypto wallet, survived basically COVID because of it. And now Philippines has suddenly become somewhat of a crypto hub because of the fact that, you know, millions of people now have a wallet that they learned how to do. We're not talking about people that are university educated, have a finance background and so on, they just knew how to do this. The other thing I would say why we think gaming is so interesting in this area is in terms of onboarding forward three, is that gamers themselves always learn a new skill when they learn a new game. Just think about, you know, the last game you played. You probably went through tutorial that probably took you five, 10, 20, 30 minutes. And by the end of it, you learn something new and you learn a new skill. You learn how to navigate a certain way, how to play the game a certain way or learn some lore and fact about the game that you never knew before, which is really, if you think about it, just entirely fiction, right? But now you have that skill and you're able to do the rest of the thing. I actually think that that is what through gaming and with sort of gaming UX can help evolve. So I'm more hopeful that we move more people into decentralized ecosystems than trying to sort of centralize and make it too easy because once you make it too easy, then you end up creating that risk of centralization and the fight for UX is what we have today in web too because that's the only thing of value, how to bring you in as quickly as possible because I'm not paying you for it, right? But if I actually, you know, have a choice to enter a social network because it rewards me with some value or I have ownership of my data, which I can then maybe monetize or do something else with it, then I'm more thoughtful about where I would go because there is real, something real at stake. Isn't the risk though that what Facebook is going to say is something similar to, I guess what's happening with that Apple app store. It says, yeah, I'm gonna take 50% of whatever you're, take 40%, 30%, whatever, they're some price, right? But I'm gonna give you access to many more people that are gonna otherwise buy your on-chain NFT. Is there a risk for them? They're, well, they can give you more customers but they can't give you more revenues. We've seen this now with web three. 250,000 sort of customers on Sandbox generate more revenue than most web two games that have tens of millions of customers, right? You know, like, you know, look at Axie Infinity as well. So you have to, which means that you have to bring Facebook to a point where it's equivalent R pool has to be thousands of dollars per user in his lifetime, which is almost impossible in web two because the value ad can't be because there's no network effects, right? So if Facebook allowed for all these third party network effects to construct, it's like open source, right? Then there is so much value in there that, you know, you don't know where it's coming from almost because it's everywhere. But as a result, just building on top of it helps you sell or generate more. Take, for example, take, for example, why do people often mint on Ethereum as opposed to other chains? Because there's a better network effects already there. Even though it costs more because you know it can trade better, for instance, or there's third party networks or there's more liquidity as an example, right? Facebook has to recreate all of that, right? And, you know, you look at, for instance, NFT, just NFT trading volumes, I think in 2022, despite the bear and everything, I think we've reached probably close to $10 billion if not more this year, right? Oh, about $10 billion, effectively 90% of the value went straight to the owners of the NFTs, right? Because of the fact that it doesn't tax that much. How does Facebook compete with that? I mean, you know, they have to first argue that in order to make the same equivalent value, they must generate $50 billion of value in order to, or at least $30 billion of value in order to justify for them taking a 50% take rate, right? In an area where there's no natural network effects that can be constructed because it's all permission, meaning Facebook has to recreate and reproduce all of these network effects and benefits that an open network empirically already has. And I think this is, you know, a parallel to open source. So, you know, I guess, I'm not sure about yourself, but certainly for myself, I grew in a world where closed source was the norm. And when we're building an open source, you know, many of them were just saying, you know, basically literally just pooping on it because they're like, why would you build something that's open that anyone can copy, right? And just use, you know, what's the point in this, you know, you're giving up your intellectual property as it were, right? But now, you know, the network effect is that because I build on something, my code becomes public domain. Everyone else building on top of it, you know, the code then becomes a network in itself that has these powerful network effects where you get the benefit of thousands, but millions of coders involved in building a certain kind of code base, which even the biggest companies in the world can no longer compete against. Therefore, every big company in the world is now using open source as well and contributing back into the ecosystem as a result because they want to benefit from that. It's the same thing, right? But without the value construct, what Web3 now does is it encapsulates that, but in terms of value, therefore, it can share the network effects through the chain of ownership and origination, which again, I would say for Facebook to do that, it's just, I mean, you know, you never say never, you could say, but it's increasingly difficult to do that because of the fact that there's so much value already embedded and growing in Web3. So you're pretty optimistic, it strikes me. Well, I'm a kind of optimistic kind of guy, but yes, I am very optimistic. And, you know, if I wasn't optimistic, I wouldn't have entered the space probably four or five years ago because it was really bleak back then. So one of the ways to think about what you just said that I've thought of it times is the actual benefit of a business model perspective for publishers is that NFTs or crypto in general, in that NFT specifically have aggregated all of the world's people who are willing to pay for digital assets, right? Like, there's for sure there's a propensity, anyone who bought Bitcoin or then bought Ethereum and then bought a punk is the type of person that sees value in digital scarcity and digital assets. And then it's gonna have, you're saying it in ARP terms, but in a way it's an orientation that like, yeah, it makes sense to me that a ringer is $70,000 or the land and sandboxes, $15,000 and I'd be willing to pay for it. And you're saying the yes, Facebook has two billion users, but user number 632 million is not mentally there that they should pay anything for anything online. Is it something like that? It is, but it's also the fact that Facebook's ability to monetize because of its limited network effects because it needs to control everything around it. Doesn't allow for permissionless growth in the benefits of value to a group. So, meaning that you need something permissionless in order to have these network effects that make an asset valuable. Just think about sort of when we think of the origins of a creation, we think of utility first. Like if the Ford Model T was first mass produced car, I think, and it had one thing, it had one task. It was to drive from point A to point B fairly efficiently and they're all black. And that was great, right? However, today you don't buy a car because it just takes you from point A to point B. The reason you buy a car are mirrored. There's probably hundreds if not thousands of reasons why you choose one car over the other because it looks good, social status, let the seats, services, accessibility, is it electric, is it not, is it whatever, right? And these are all third party network effects that were constructed in a permissionless manner. If all of those guys had to go to the original creator of whatever car manufacturers say, am I allowed to make a baby seat? Am I allowed to hire a driver for this car? Am I allowed to do all this stuff? First of all, they wouldn't be able to handle it because it's just too many requests. And so it limited its growth. But also the innovation that would come from that whimsical as some of them may be would not build the utility of these assets as big as they are today, right? And today, we buy all sorts of things that we are not really for its utility per se. I mean, you don't buy your shoes just to walk. But the reason you chose that shoe isn't because it is the most efficient way to walk from point A to point B. You chose it because of its colors, because of its brand, because of what your friends say, or all that kind of stuff, right? And so these are the kind of effects that human innovation and invention and creativity creates that when it becomes permissioned is limited because someone else, like an app store, says you're allowed and you're not allowed, right? I mean, imagine what open source would have looked like if the code that was an open source was permissioned by its original creator. I like this. I mean, you can endorse one, but if he had the, if he was the one who always was the gatekeeper of the service that this code could evolve, we would probably be 20 years behind in terms of the evolution of where we are with technology and innovation as a result of that, right? These network effects compound. And that is basically what you need to, you can only achieve in an open and permissionless manner. You simply can't do that in anything that's permission, which Facebook and all these platforms are still trying to do because they're trying to protect their business model, which is around ownership and control of the data. It's very existentially risky for them to open up, as it was, it's a classic innovators dilemma. Okay, I have many more questions I want to ask you, but I want to give, you're going to ask some questions. I'm going to ask you one more now. Please. Or does your view on the currently very complicated royalties debate? Yeah. Well, okay. So first off, we think royalties absolutely have to be, have to be paid. I think there's a little bit of a war going on between the platforms and in some ways, the marketplaces that are many of them which are our own portfolio and we're having conversations with them as well, around trying to use this somewhat in the narrative to sort of, obviously, gain competitive advantage of some sort or the other, right? So this conversation around, black is staying, use our contract if you don't use it, you don't share royalties. That's one perspective, right? We have taken an approach and put it out as public domain, basically a licensing structure. That licensing structure is one where we say that, you know, when you own this NFT, you know, you have to buy it by a certain legal perspective. And let me explain sort of the thinking behind that because, again, it goes to our first core principle, which is true digital ownership. If you can revoke ownership, if you can revoke access, if you can black-est, then there is, for us, a intrinsically sort of philosophical and perhaps even active sort of conflict between do you truly own it? Do you truly own an asset that someone can revoke access to because you violate the terms of service? Our perspective is that, you know, you can revoke terms of service, you can revoke access yourself as a game company. For instance, if you violate the terms of service, then Sandbox can revoke access to you using the asset in the Sandbox until you make it whole. But I can't, or we shouldn't, be able to remove the ownership of it because at the end of the day, you know, you still own it. You just not allow it to perhaps use it because you, you know, violated the terms of service, but it's still yours, right? There's a distinct difference between, but a very big difference between the two, right? And the legal arrangement that we think of is that, you know, let's say if a marketplace was in violation of allowing the trade of NFTs at over royalty, then the liability accrues to the marketplace and unless it takes down the connection whole, whatever value it generates, because on chain, the beautiful thing about on chain is, you can measure how much it was traded, right? You can easily measure the damages that you can claim for. They become liable, very similar to what happened to Napster and sort of, you know, DMCA type, sort of, type of rules. Roralties is critical because to us, the royalties giving value to the creators creates a distribution and decentralization of money, which is a decentralization of power, right? So if all of the money gets centralized in one ecosystem, as we have seen with things like the App Store or Spotify or, you know, ASCAP for music rights, right? They start out with a noble mission, but then, you know, as the saying goes, you know, absolute power curves absolutely. Suddenly you have all this money, all you centralize all this power because money effectively is a proxy for power. And then they do things that become anti-competitive because it's in their interest to do so. And to prevent that, we have to enable a distribution of that value as widely as possible. And royalties is one way to do it. If, you know, hundreds of thousands, if there are millions of artists in the world, are, you know, earning royalties directly themselves, then you're effectively also ensuring a decentralized and distributed future. So royalties is absolutely critical, I think, for the decentralization, he fails to stay alive and well. Great, okay, let's, it was very interesting topic. And again, this is another one where I could do 20 follow-ups but we'll never get to questions if I don't be quiet. So I am switching to these student questions. And, okay, well, if there's one that's relevant to this topic, so I'll ask this one first. What I'm curious about is why projects are creating block lists and not white lists or analysts. You list allowed marketplaces, not the ones you want to block. Well, okay, so first there is a commercial incentive for marketplaces to create essentially black lists of block lists. And the reason why is because it's, you know, you could say a form of, you know, I know if you want to call it anti-competition but it's a way to ensure that you have to sort of come to our marketplace instead, right? So, so, you know, now, so it's, again, it's a different type of approach where if you're on that, you can sort of isolate and say, look, I don't like this competitor. I think this person's a bad person. So I'm going to sort of block this particular site. As opposed to, so the whitelist approach is actually however arguably more onerous, right? Because it means that you have less freedom because you, a whitelist means you have to literally sort of open up, you start from the assumption of guilt where you basically say everyone's bad, only these guys are good versus the black list of block lists is more of a sort of, you have to make an assumption that, you know, everyone is okay and only these guys are bad. So we're going to sort of isolate them because they're the bad actors. So it comes from a slightly different place or with actually very different outcomes. Okay. Next question. Do you believe that eventually the big players, i.e. Meta, will use existing technologies or will they keep trying to reinvent the wheel? So I guess it'll come down to a point where they will be financially, I think they will be financially compelled to move on something open and Facebook or Meta in this case, does struggle with a bunch of things. Because remember, you know, when Mark actually tried to do stuff early on, he tried to do liberal. So this is a guy who understands blockchain and crypto and the potential on this one because, you know, he tried to actually push very early on this, there's sort of a, I guess a kind of decentralized cryptocurrency in his perspective. And he had a big blockchain lab, which basically morphed, you know, two very well established sort of a blockchain technology, a layer, layer ones, you know, app tots and this and that's right. So within Facebook, you know, there's obviously been a lot of resources spent on this, but failed for a number of reasons. Many of them that were outside of his control because of the fact that Facebook was viewed in a suspicious manner, perhaps rightly so given the history. So I think however, they won't be able to compete by building their own system because they've got too many incumbent issues. And so I think they will ultimately adopt something and framework that's out there or multiple frameworks and become a platform for that, for survival or basically go under, right? Which is a classic innovation cycle, right? You either sort of, you know, reinvent yourself or you, you know, you go out of business, right? So I think this is the path for someone like that because for all the reasons that I had mentioned earlier. Okay. I have two questions about, I think your investment side and I'm gonna combine them. I think I'm gonna ask them together. Of course. First is, are you seeing the flow of capital from these investments back into the, or into the NMOCA ecosystem? I think it means back into the NMOCA ecosystem or is it still in the lag stage? And then at one point, does NMOCA say, okay, we've done enough of these strategic investments and we'll start to look at returns? I think they might be the same question. Yeah, I think they're kind of related. So first of all, the way what we like to measure things, which is in all the case, is we think of it in terms of the economic output that the investment will create. That's actually the priority. The fact that it has an equity return is a construct of the fact that the business grows because of the benefit of the ecosystem. So for instance, it's more valuable to us. For better or for worse, we still have all of our OpenSea shares for instance. And if we're a peer investor, we should have sold them. But our benefit on this one was the fact that we wanted to make sure that we were close to OpenSea and building with them because we are thinking that not just our products, but also products in our portfolio, have a line of gateway to say, trade their assets freely. And if there's a problem with OpenSea and all that kind of stuff, that's part of the value added benefit. So the billions of dollars of economic activity that OpenSea generates is more valuable to us than the billions of dollars of potential return that it can give to us in a one shot in the near term. Now, to the point of what happens in the mid to long term, if these network effects start to become very embedded and natural as they're beginning to evolve, then it's sensible for an organization like ours to start taking some profit on the equity side. But what we would then naturally do is redeploy it because it accrues into our equity, because our investment in things like OpenSea or Axie or so on, it's on balance sheet. So we don't have an obligation to, we don't have to, like a fund, takes investor capital and then pays out investor capital as a return. Here it's operating capital into the business, which you could then choose to use to build something else or maybe invest in other things and so on. In terms of when will we stop investing? No, I don't think so. We may invest differently when the market changes. So for instance, right now, we are at the early, super early adopter stage, which means that we need to invest, I think more aggressively, but more distributed, meaning that there's going to be a lot more early stage investments, even though some of them become quite large. Whereas, later on as the market evolves, there's probably going to be more late stage investment, but also more concentrated type of investments because the market is mature. And we haven't even properly reached the consolidation stage of what's happening to work through, which is probably still a few years out. So I think there is going to be an evolution, but we will never stop investing. Because if we stop investing, that means that we think there's an end to it, which we don't believe. There's going to be evolutions and durations and twists in this market as we have seen. I mean, just look at this year, right? These last 12 months has probably been 10 lifetimes for most industries. I think that's a good answer. Let's go to the next question. So can you elaborate on the unit economics? And then I don't know if these are different for a sandbox versus a more gaming oriented. So I'll let you answer that the way you think you should be answering. OK, so let me first translate gaming value. I think this is really important for people who are not a gaming studio understand. So I had, because a lot of people sometimes also wonder, where does the value come from when you're creating a token and you have rewarding people in something like Play to Earn to Play the game for free, so to speak? Why is that even valuable? Isn't that just some kind of punsy or something? Because where does the money come from? So in the gaming world, which is over $200 billion this year in terms of revenue, there are a few areas where the cost goes out. Outside of game development and production, which we all know. And the first one, obviously, is the fact that there's only a small percentage of people, as I said, who convert. So most of the revenue comes from a single digit percentage of the gaming world, which are basically, I mean, I don't know if you can translate them as NFT whales. They're not really that, but similar type of behavior. So that's the first point. But those guys don't pay unless they have someone to play with. Imagine if you go into Fortnite and you're the only guy there, nobody else to play with you. You're not going to pay. So all the people who are there playing for you, effectively, you could argue are targets to shoot at. In a challenging way, as it were, having fun, of course. In induce people to pay because it's fun to continue and to evolve in that environment. So the other way to look at it is that every person who plays these games for free is maybe getting enjoyment for free, but actually, they're being paid. They're free labor, I mean. Because they're the reason why people actually pay money. Because if you're not there, then you're not going to pay money. So the first part of tokenization creates a way in which you can value that ecosystem. So in other words, in one person in the system starts paying thousands of dollars because he's having so much fun, basically battling or playing with these other people. The other people in the environment have a way of measuring that now through tokenization. Whether it's worth $1.75, $20, that really depends entirely on the game. And in this case, of course, the fun, and the game, and the design of it. But there is a value that you can now finally measure. And the second part, which is probably the bigger part in the costs of the platform, is 1%. 30% platform fees, whether it's Steam, Apple, Google Play, the consoles, they charge that first as a platform fee. So that's a lot of money. That's billions of dollars. And then this year alone, for app installs, over $110 billion will be spent just on app installs. Every game developer will tell you their biggest cost is user acquisition. Basically, UI and CPI is what they drive for. Meaning, how can I get the lowest kind of cost per install so I can get the highest kind of return? So become very technical that way. But when you add that all up in the $200 billion industry, close to 2-thirds of that actually goes to Apple, Google, Facebook, and advertisers. So actually, you could argue that the biggest game studies in the world are actually also working for Apple and Google and Facebook. Because all that value, both in forms of advertising and marketing and platform fees goes to them. Now, how much of that value goes back to the gaming economies that they're expecting from? Close to zero. Apple doesn't invest in games. Facebook doesn't invest in games. They just park their money in Ireland. They just completely accumulate. Now, what happens in web3 gaming, and why the unit economics becomes so interesting, is that you actually share that value to the users. For instance, when you do an NFT ad drop, that is free, for instance, for gamers, the way to think of it is like, well, I just did a $5 million marketing campaign. Instead of paying $5 million to Facebook to promote a game, I just paid $5 million in marketing, so to speak, to attract a certain audience to come play the game. I didn't give it to them in free tokens. I gave it to them in NFTs. If they don't like it, they can sell the NFTs and they can cash out. Or if I like it, actually, I can reinvest or play the game or promote it or do other things. And what we've seen, the propensity of a gamer being rewarded to put back in the game, is infinitely higher than anything of the platforms, which is why the unit economics accumulate. Because value that is going out instantly comes back in, because of the fact that players are willing to re-engage much more likely than any platform whose sole purpose is to extract and make as much profit as possible. So then down to the question of ARPU. The ARPU, then, therefore, has more value already initially, because there's more capital flowing in the system, because it's going to the right parties. It's like giving money to your citizens as opposed to giving it to a corporation. If you give money to your citizens, they're going to spend it. Giving money to a corporation, they're going to save it and do something else and try to build some monopoly somewhere else. So that's the macro. Now, in terms of how value can be measured, it comes down to the ideal of property rights. If a gaming asset is worth $5 or $10 in a web2 narrative, it's probably worth $100 or $300 in a web3 one, because of the ability to construct network effects and property rights and, therefore, the benefits of ownership attached to it. Kind of like if you rent a piece of property and then you were going to buy it, you wouldn't buy it for one or two times rent. You would buy it for what you think its long-term value is because now you have ownership and you can invest in it and you can accrue it. Now, of course, it's not exactly the same ratios because it also depends on whether you think the game has a longevity, whether the game is fun, whether the players are there, all that kind of stuff. But you can make that calculation. And so that's one way in which you can value it. But it really depends on the game economy. It's not a straightforward answer as in everything is $100, $200. It doesn't work this way. The design of the game is equally important to ensure that you can drive value. But it will have a higher likelihood of return because even casual games that are worth sense are not going to be worth tens of cents, shall we say. You just have more earning potential on a game in which you have true ownership. Thank you, that was a very detailed answer. I think we have two more to try and squeeze in two more questions. The first is about metadata. It's actually a pretty good question. It says some games, they say they use the NFT, but the metadata is on a private centralized server. Can you see an outcome where the metadata is de-centralized through the NFT itself? I think eventually we'll get to a point where everything has to be on-chain. But we're not there yet for many practical reasons, including transaction speed, technology evolution, and so on. I draw back parallels from the early days of when we're building online games or online systems back in the 90s or already 2000s. And it was much slower, not just because of compute power, but just the software and everything. It was just less memory, best network speeds. And so there are many things we couldn't do that we can do today. And I think of chain technologies in exactly the same way. And it has to, because in order to have more data on chain, and in this case, the metadata, including the transactional elements, like right now, for instance, when you play a web3 game, much of the gameplay, like in Sandbox, is off-chain, because you can't build this kind of real-time gaming on-chain yet. But that means that you can't then build from the benefit of what happens on-chain to create new services on top of it. When it's on-chain, someone else can compose a new experience on top of it, because it's transparently visible for someone to construct on top of it. So we have to get to that point. So we're at phase one, if you want, or maybe 1.5. When we get to a point where everything is on-chain, including metadata, as well as actual transactions that happen inside games, including outcomes that we do inside a game, then again, you have intermediaries enter and say, OK, I can create an analysis tool based on what happens in this gameplay. Or I can maybe do some system work with this person plays against another, and it's on-chain. I can verify a reward if I want to do this. And the same goes with metadata. Metadata is on-chain. Then I can also, again, sort of openly compose and build experiences on top of it with a certainty as opposed to something that's centralized, that could take it away or could alter it. And then I can sort of build and experience utilizing that metadata with a certainty that I wouldn't have with something that could be altered. OK. I see a question online, actually, from a pretty well-known open-source advocate who said, must be watching the sessions. I was really happy to see your commitment to open-source and believe in it. But also, the repository for Animal Care was fairly limited and contributions back. Is that accurate? How do you really think about that? How should we all be contributing to open-source? So I think one of the things why I think you should look at the repository is not a animoka itself, but of all of our subsidiaries, whether it's sandbox or darewise or blowfish. So we have a whole collection of companies that is contributing to open-source. An animoka itself doesn't basically say, and just by design, doesn't say that we are the owners or creators of this repository. We do have stuff in open-source as well, but Animoka itself actually is a sum of parts. So the organization can live in its own identity. So Animoka is a big contributor. When you also look at the history of the private sector of things like Animoka, like Alplay's, you'll see lots of open-source contributions. But they will come from basically all of the group companies as well, which are owned by us, rather than necessarily one company. For instance, we don't have a perspective. And this, again, has a little bit to do with our philosophical perspective, which is that maybe if you were part of Facebook or meta, then even if you're a subsidiary, when you post something open-source, you make the contribution and give it credit to, say, meta on Facebook. But at Animoka, we would give the credit to the team that was involved in it, which would be, for instance, sandbox, or maybe blowfish, or whatever entity that's involved in creating those contributions. Because we think of ourselves almost more of a federated model than, I guess, as a, I guess, like a corporate model, if you'd like, as it were. OK. Well, let me ask the last non-question question. What is the question we should have asked you, or I should have asked you, but we didn't ask you? The question you should have asked me. Interesting. So I think maybe the one area that I am spending time thinking on, which I am not entirely sure I have an answer to per se, but I'm spending a lot more time is on DAOs. And what digital ownership means for that. Like, I'm excited. One of the things that excites me of a digital ownership, so I'm reminded by a sort of this George Washington quote, about how he says that, I think it's freedom and property rights are intertwined. You can have one without the other. And I think of the same way for digital property rights, meaning that you can't actually have digital freedom if you don't have digital property rights. So how do we get there? And digital property rights isn't just a technical term. Blockchain allows, obviously, for that to have the validation and ownership layer, so you can actually say, OK, now you really own it. But then there's a legal layer, which is contract law today. It's not treated the same way as owning a house for the time being, which I think, again, the UK and South Korea and some markets are looking at now, finally. Hong Kong's also started to do a working body that's thinking about digital property rights in the same vein as physical property rights. So I think that's an interesting evolution, because as we move towards everything towards decentralization, that means many of the things that become community governed, I actually think it will shift the world into an environment which will have problems with the shareholder capitalism into a form of stakeholder capitalism. And we're all already moving towards an environment where we're no longer just a customer consumer. We're a customer owner, which to me has incredible implications, right? Because the relationships that you have with a customer is deeper than just a consumer, someone who uses something and leaves. He becomes, it's not like a shareholder, but he's a stakeholder. He's part of the ecosystem. He shares arguably in the network effects and therefore in its joint success, but also suffers in the same way, right? Which is a different, let's call it, sort of a customer paradigm here as well. And maybe the other thing I would add is that there is maybe this is another one which I think is relevant. I'm not sure how many of your audience is based in Asia, but there's a very clear, I think, bifurcation right now, thanks to what happened with FTX between perspectives on crypto, between, let's call it, Asia and America in particular. Like I think in America, it's become more to more negative. I mean, I think it's short term, but still it's more negative. People are concerned. Whereas in Asia, it's full steam ahead. And we see the same thing, by the way, with Web3 games as well. Major Asian game companies, big ones as well, are embracing Web3. They're trying to figure it out, but they're embracing it. Whereas, again, major American game companies struggle with it. Not because they don't want to do it in some cases. They've said they're interested in this, but their customers are against it because of the fact that many Americans have become, I guess, more anti-capitalist or in leaning versus in Asia. The thing I sometimes say is that the American dream is more alive and well in Asia than it is in America. And people are more optimistic about the future of digital property rights. And generally, the opportunities in this space and building. Hong Kong, for instance, just released their first Bitcoin ETF and Ethereum ETF just last week. And that's a big, big thing that the fifth or sixth largest stock exchange in the world is now trading retail crypto on a stock exchange. Well, the US is still trying to figure it out as an example. Japan, the prime minister, has made a web3 in the metaverse part of its national agenda and actually released an NFT white paper from the government. These are things that people don't know about that's happening in Asia, that is pushing the industry forward, that is often not spoken about in the West, which I think is probably worth learning about, and maybe also pushing. Because maybe people just feel comfortable that all innovation happens there. But actually, some really exciting things are happening in Asia that I think will help push forward the narrative of web3 in the open metaverse. Awesome. This was a great session. I think we could have gone like another hour and a half, and we'd still have things to talk about. Thank you. Thank you so much for joining the session. We'll release the video in the next day or two, and the transcript, and it will also be an NFT. So it will also be decentralized. And thank you all once again. And if we don't speak before now and then to the year, have a great rest of the year. Happy holidays, too. Thank you so much. OK. Bye-bye. Bye.