Hello everyone and welcome to another episode of Living on Blockchain. Today we are speaking to Rorke from Thea Finance. He’s the CTO there and Thea Finance is building a very very interesting permissionless protocol.
Basically, it’s think of it like a web3 ecosystem which is for creators and you know by creators vis-a-vis investments. This is a very interesting conversation in which he went into details about how Thea Finance is gonna disrupt this particular niche that we have in so I can’t wait for you guys to hear this. Let’s deep dive right in.
Hi Rorke, how are you today? Thank you so much for taking out the time to speak to me. Hi, yeah thank you, I’m doing well. Lovely, so you know just for our listeners just can you tell us a little about yourself and you know how you got into the web3 space? Yeah sure, so I think the place for me to start is you know obviously in high school and when I was a little bit younger I think my engagement with a lot of web3 elements was maybe like using bitcoin for some I wouldn’t say the nicest like above board purchases, right? But you know obviously regrettably I probably had a lot more stacked around that I spent as opposed to you know held on to so but you know that’s all part of the fun, but yeah yeah we’ve been there done that so you know yeah yeah exactly but I think really where things kicked off in a big way was in college so I studied computer science at Dartmouth College and it was a specialization in augmented and virtual reality design and development so it was really a computer graphics degree and during you know my time in the initial stages of that you know I really latched on to the tech and the concept of working at the knife’s edge or something and kind of you know school projects turned into personal projects and projects for friends and and soon enough you know projects for friends turned into discord groups and other discord groups and and I was kind of rubbing shoulders anonymously with some of the guys who were doing some of the heavier lifting of a lot of leveraged digital assets earlier on like I kind of I was a minted you know wanted to say I mean not sandbox to central and plots you know back sort of 2018 2017 territory and and then also you know after that I was kind of always in the loop and kind of got to take things for the VR angle and and as a result of kind of being in the loop I was very much there for much of the initial like big pfp mints like the you know sort of the apeman on the nft side of things and and then also like rolling that into like the defy summer and and the kind of wild part of that and and you know obviously that’s a lot of fun like you know you just get to be financially involved in something that just kind of goes a bit holistic but I think coming from where I come from I I really got to over think a lot of the use cases for the tech especially something like you know the nft standard and and I knew that there was going to be right at least kind of expected that okay I was with a lot of things and you know in in web three if it gets adopted in a big way at all there’ll be a big wave of speculation that kind of flows through and and things get a bit nutty and it’ll be it’ll be difficult to parse between what’s legit and what isn’t and that’ll kind of you know drive the adoption cycle in a positive way but then have some negative consequences and all of that and and so I kind of rolled with that for a while personally and then was actually able to roll my personal portfolio into starting a hedge fund with some traditional finance people out of New York which I kind of which I run now but really where I think you know what we’re what I’m kind of building with a couple of guys is that came to be was in it started the concept really started in July of of last year you know I was in New York and let’s see a friend of mine who’s actually become my co-founder you know I’d known him freshman year but he was at Columbia he had come to me and you know we were talking about what I’d been doing in the NFT space because obviously at that point it was it was quite you know if you were at all around it was still you know it was a pretty hot thing and you know apes were around like 50 at that point and and you know and and so and he in there and actually the more important thing is that there also been some notable rugs at that point as well and so he had come to me about this concepts that his friend from high school had come to him about you know basically this protocol and he just wanted me to give a look over about it you know he just wanted me to because I had a little bit of market experience you know he’s just like well and also been a technical experience so he was like first off as a feasible and then also you know how would the some how would it fit in in the market and and so I kind of had a look over about it and you know the initial bones of what it was was geared towards something different but then over time you know I kind of worked with the found the kind of brainchild originally his name’s Nikita and Lawrence uh just get an advisory role like suggesting oh here you could do this this this or this and soon enough the I we kind of figured out the the addressability for this protocol was much larger and could actually solve some pretty significant issues in that were kind of popping up in the web3 space you know many much of which to do with like accountability you know trust required in a trustless system and you know we kind of went from there and you know I think it it I think we started really building protocol out in full September and we kind of haven’t looked back since so it’s kind of it was a really weird way for me to walk almost through the back door into into web3 and kind of start in a really isolated area and then start as you know just somebody who all I did was computer graphics and then I sometimes I’d hand stuff off to people who were you know doing actually a lot of the technical heavy lifting and then I then came in as you know financially as an investor and then you know a collector and then you know I I kind of moved to the builder you know sort of stage and you know now ever since it’s it’s kind of been that’s been full force and and so I’ve been you know all in on the on the whole thing.
Wow that’s quite a journey as you mentioned that you know it’s it’s a roundabout way of getting into it but you know you got into web3 all right so you know here on your in the white paper I was going through it it says it’s basically here is like a decentralized investing and trading protocol right where you are aiming to create this by the creators and for the creators and builders of web3. Could you tell me a little more about this protocol like how can the creators be involved you know with this particular protocol and has the testnet been released? Yeah so our we actually have our v2 testnet just launched to our alpha testers on Friday. Okay wow congratulations.
Thank you yeah I appreciate it so far everything’s going okay so but the so the the whole ethos of the protocol it’s about realigning incentives between founders and investors basically so there’s two parts of FEA two main parts it’s I want you to think about it as like a two-tiered structure really there’s this novel investment protocol like the actual protocol layer and then built on top of that there’s a dapp layer that’s the actual social investment platform now we’ll talk about the protocol first so the protocol really it’s again yeah about aligning incentives between founders and investors and that means kind of aligning accountability as well and so how do we kind of achieve that you know the biggest problem that we always I found pretty much everybody found you know that interfaced with in web3 was the concept of you know money up front deliver later right so you know if it’s an nft drop if it’s an ico if it’s whatever basically every all these investors are giving a company a ton of money up front on the assumption that they’ll take that money and then give utility and build something for the asset that they get in return right so whether it’s a token or an nft you’re kind of giving that money on the assumption that what I get in return will appreciate significantly and that’s got a couple of problems right like one is obviously the accountability right like you can just yeah we’ve seen it right you can just run away with the money like you know and there are some pretty famous examples in the nft worlds you know whether it was evolved apes or pixelmon which was like 70 million and and and obviously icos it’s it’s just every other day um yep now then there’s also the problem of the fact that you know when you’re an investor you know projects and you launch an ico or even an nft drop as like an artist or a musician or something you’re kind of adopting the shortest term pressure to perform right out of the gate right you know like if you if you don’t sell out your entertainment you know if you don’t if your ico doesn’t have enough liquidity or some guy who’s just looking to make a five percent margin comes in and buys up your initial sale and then dumps it on the market later you basically your company or your project is in the ground there’s no recovery from that right and yeah and so it’s just not conducive to healthy healthy projects or company building and so what we did is we basically created a protocol that creates a degree of separation between the project’s native asset and the investor so we have this uh smart contract so when a person when a project comes to the platform what they do is they deposit a certain amount of their allocation of their native asset let’s say it’s a fungible token for simplicity’s sake yeah they’ll deposit let’s say 10 of that token into our smart contract and then at that point and then when an investor comes to invest in that project they invest into the smart contract that represents the project they are not buying the project’s native asset directly from the project and basically they can invest they can invest whatever cryptocurrency they want and so when they do invest the smart contract mints representative project tokens now the key intuition there is that they’re representative of the project you’re not buying the product like synthetics yeah like synthetics yeah think about it like that yeah and then because we have that degree of separation and we’re we’re minting these synthetic tokens we can set some rules for how those tokens behave and how the whole process behaves so as a result when somebody invests not all of the money that they invest with goes to the project up front it’s actually a small amount so a project sets what’s called the commission rate that could be no higher than 20 percent let’s say it’s five percent in this example and somebody invests a hundred dollars in this example five dollars would go to the project up front now that that is their money to do with whatever they want hmm the 95 gets locked in the smart contract and basically the protocol uses that 95 for is if an investor is you know what losing he doesn’t really feel what the project’s doing anymore he’s losing confidence in it he can sell his representative share this is representative synthetic tokens okay back to the protocol without the need for a counterparty and the protocol will buy back his tokens and in pure isolation it’ll throw it’ll give him back like basically the 95 dollars now the way that the project sees that 95 is that the investor after a certain criteria is met which i’ll go into a little bit later but an investor has to convert on his own time his representative tokens into the native asset so basically he will convert his representative tokens foregoing that that guaranteed liquidity and uh when he does that he gets the native tokens a proportional share of the native token allocation in return and then the bet 95 gets unlocked and sent to the project as a result that basically you know because not the project’s not receiving all the money up front if it wants to receive the rest of that money to continue it has to prove to investors that they’re both above board and they also can deliver and are building a project that’s worth you know staying involved with and so basically with that whole system these representative tokens um are also priced according to a predictable price algorithm so we price these each project on thea has its own customized bonding curve amm that’s basically built into the smart contract and so when any token is minted in the event of a sale the next token bought or sold back to the protocol is more expensive and then every any time a product those one of the synthetic tokens is taken out of the market by way of a sale and effectively burned the next token bought or sold is less expensive so actually these representative tokens trade you know they can kind of trade and result in kind of organic price discovery over the long term but the important intuition is that there’s always a symmetrical relationship between the liquidity available in the pool of the projects and the market cap of the project itself because investors are basically underwriting their own liquidity and so because we price this according to you know that mathematical bonding curve we can create a mathematical cover in which there’s always enough liquidity in that project to cover the sale of every single representative project token that represents that project so if all the investors decided to sell nobody will ever be left holding the bag you will always be able to sell for something and so as a result you know there’s always that symmetrical relationship between the total invested volume aka the market cap and the actual available liquidity and investors can always kind of they always have the option of the door so you know that’s kind of the intuition is that basically these projects you know you come to the platform you set three main parameters as a project one of which is your commission rate the other of which is what we call a minimum funding threshold which is basically the minimum amount of money that your project needs to raise up front before you can start entering basically approving stage how much money you need from that commission and then the third one is the length of what’s called your conversion period so i spoke about like how this kind of converting works but the conversion you know we don’t want to put that all into one event right because then that you know induces a lot of FOMO it it kind of constricts things and bet you know you basically as an investor you want to make sure that when you expose yourself to a project you can do it at your own time and when you’re fully confident and so what happens is that a project sets what’s called a conversion period of which it’s advantageous for them to set it you know over a long period so let’s say it’s over a year okay basically what that means is over that year the allocation that they put into the smart contract let’s say it’s that 10 of their token distribution gets split up into 52 week chunks so basically it’s split up into 52 chunks one per week okay and so every week investors have the opportunity to convert a proportional amount of their representative tokens so again 52 chunks of the of the representative tokens to for a potential share of the real thing and if they don’t then their allocation gets rolled into the next week and the next week and the next week the idea there is that this whole period is like a vesting period but instead of you know the tokens being paid out like automatically they’re basically paid out when an investor decides to commit to the project fully and so that during that whole period it’s on the project to basically you know constantly be proving themselves whether it’s like you know if it’s a protocol it’s you know it’s maybe a like beta test or a you know a code on it or the protocol you know being built or if it’s a play-to-earn game it’s like a demo or a you know a trailer or something or whatever if it’s an album it can be a single but the point the point is is that you know it’s at that point you’re proving to investors that okay you know like there’s here and you know and then investors can you know convert their tokens and then that’s when the project starts really receiving the majority of the money that they would raise and then you kind of go from there and so yeah so that’s that’s kind of the protocol layer i know i threw a lot at you there but yeah no so let me let me break this down for our listeners like if you don’t people who are like sort of timing in so this is you know your protocol is basically think of it like an on-chain lock-in sort of a system except that you know it’s based on milestones it’s pretty much like if i’m getting this like correct me if i’m wrong but in traditional funding on or you know at times when people are doing like equity funding then there are milestone based trenches right like there is a whole amount of money that you raise and it’s based on milestones and once you achieve those or you hit those goals only then the rest of the money follows so you are doing this on chain correct yeah yeah yes but the the that’s a good way to think about it but the the important thing to note is that there aren’t specific milestones the milestones are really for every each individual direct investor can choose when they decide to give them the rest of the money and so so it’s really a personal decision it’s like it’s just like you know what like i feel like i you know i like what this project is doing i’m ready to commit and that can be a totally personal decision that decision is never made for you and and if you don’t or you can say you know what i don’t like what this project is doing let me get out and then the protocol guarantees liquidity for everybody so you can liquidate your investment sometimes for always for less of a loss than you would have otherwise if you were taking if you’re just holding the bag you could even leave flat on your investment you know like you never you know even made a loss to begin with or you could even potentially make a gain depending on where you invested initially and in the market and all that and so uh you know that that kind of idea of always having the door just creates a healthier you know situation for investors and right and yeah but basically it’s like it’s good for the investors as well as the protocol you know the platforms themselves that are coming in to raise the monies because they always have that push to actually go ahead and build rather than you know sort of it can be a good motivating factor would you agree right yeah yeah that’s a good point yeah the i think for the our pitch to a lot of projects is is is kind of threefold one of them is really the idea of like you guys don’t have to worry about like nailing a 24-hour event anymore like this is our real it’s a real big pitch to like musicians or artists or we’re trying to maybe onboard onto web3 in some way but you know like if you’re trying to do like an nft mint especially if it’s a pfp or something if you don’t sell out your mint in 24 hours or like yeah 48 hours right you’re d.a you’re dead in the water right yep yeah and and that’s just you know it’s it’s unnecessary and so for us we allow your project to organically accrue value over the long term with no there’s no rush you know right there’s no because you know your project only starts converting when you’ve raised you know when enough money has basically been locked in the project to begin with anyway so you know it’s all about value accrual and organic price discovery and the kind of these elements of communities coming together around the project but that can all happen in an organic way over the long term and so it’s a much healthier dialogue and also a more important thing too is because we have we kind of shelter early stage projects from the the greater speculation of the market right we kind of have this little cove where we have you know a little bit more consistent of a system you know if it’s an NFT project you know you don’t have to worry about these aspects of post mint where if your floor price starts to fall you know five percent it it almost looks like the end of the world right you gotta you know suddenly it’s red alert and and if you don’t act now and if you don’t somehow do something your project’s dead again or something it’s if you’re if you make a mistake if you you know if you make one mistake your project’s dead you know on our platform you know you can you can take that dialogue within with your community almost subconsciously like in the way in which investors come in and come out over this whole period is a really good way of showing like okay you know this is the direction I need to go this is what I need to avoid this is you know good and bad and we’ve really so that’s why we really love the concept of social investing you know we we have it everywhere in a white paper we have it everywhere on a website and we think it’s a phrase that’s been thrown around a lot especially in web three but it hasn’t really been defined and we really think it’s that element of network-based investing or communities coming together around a project where it’s you know you you take an active participatory role in the in the project and community success along with your investment is really an important aspect and and so we really gear the platform for that and but that platform you know in that environment can only exist if you have the necessary like you know parameters for it to do so and that’s really what the protocol is all about. Interesting, very interesting. So then you know we can think of this like a republic but perhaps you know on chain and with a certain community element to it that you’re kind of easing it out for the projects themselves and kind of opening a few doors for them right because even though web three is it’s a small niche and you know it’s a global community but then again people who are coming in from web two they don’t know what other kind of elements that go into web three because they’re so drastically different as against you know what was happening in web two.
Right yeah exactly like we actually really we’re building this platform and the protocol as well to to help on board the next you know you know 10, 20, 30 percent of the world that onto this space right and and you know we know that there are a lot of prohibitive elements like one if you’re trying to invest in something in web three there’s so many things you have to juggle if it’s like you know if you’re investing you know by buying something on a dex you have to think about like the project but then also the economics the decks how much is in the liquidity pool like who’s is a third party liquidity who’s offering the liquidity like who owns what like what’s the tokenomics like you know there’s so much that could go into your investment that’s that’s kind of white noise almost and we’re trying to eliminate a lot of that at least the very earliest stage all you have to worry about really is just well do I like what this project’s doing do I like the vision do I like the team do I like you know the product yeah and that you know there are so many things to actually check yeah exactly there’s so much due diligence that a user needs to do so you kind of like doing it for them and they would also come with that kind of confidence right yeah so a really important thing you said there about due diligence so I’m going to speak a little bit on the platform side of things now so there as I mentioned there’s kind of a two-tiered structure now think of the the platform as having a two-tiered structure in and of itself there’s projects and then above that we have something that they have things that we call collectives now what we’ve done okay is we’re effectively decentralizing the due diligence process so as we’ve seen with a lot of you know like launch pads for example launch pads we think are a really antiquated solution to like web-free fundraising because if you launch pads are a lot like accelerators they’re kind of reskins of that they’re a lot like incubators in a kind of a similar way and how they function in that what ends up happening is that you have you know a a launch pad let’s say something like uh like avalanche on avalanche or like finance launch pad or something you have thousands of projects like thousands that all apply to this launch pad right and this launch pad is this totally centralized form of due diligence and they got a team you know it could be like five or twenty people that do the due diligence on projects yeah and as a result they can only really address so many projects they’re probably chain specific and then also like sector specific like they’re like you know they can only because there’s they can only really worry about crypto projects and then really only certain kinds of like d5 protocols maybe you know they can’t they can’t like worry about you know they can’t think about play to earn games they can’t think about you know these musicians or they you know that that’s just out of their possible range and like don’t get me started on a lot of like the micro investments that have started in crypto um yeah and so as a result we wanted to create a system in which we could have a platform that addresses all the verticals individually so as a result we created these things called collectives and so what collectives are is they are dows that do due diligence and actually onboard projects onto the platform so basically when i create a project initially my project is unlisted and in order for my project to become investable i basically apply to what is called a collective and the collective can you know look at my project look at what i’m doing or whatever do whatever due diligence that it wants to do and then basically if it gives me a thumbs up and then i give a thumbs up that i want to be on that collective i then get onboarded onto that collective and i become in that collective becomes the sole destination on the platform for me to invest in for anybody to invest in that project and the intuition here is that collectives act as like sponsors they’re basically you know putting their sign of approval behind this project like hey we think this project is worthwhile you can invest in it and as a result of doing that collectives set a commission rate a flat commission rate for every project that they onboard so let’s say a commit again they set five percent so any single time you know a dollar goes into any project underneath you know that collective they take five percent and so it’s revenue basically uh so they’re rewarded for onboarding high quality projects that receive consistent investment volume and they’re punished if they don’t you know because um and so the the but the point there is that they can be these collectives anybody can create one they can be around the tightest verticals as you want you know let’s say i’m just an expert i’m the i’m so passionate in you know play to earn games but more specifically like play to earn idle rpgs like a really specific genre and that’s all that’s like that’s my bread and butter i’m i know all about it and i know the market i know everything i know what’s a good project the bad project know what’s a good game and so and a project can come to me you know let’s say i’m somewhat influential in the space and instead of just showing their project on twitter you know i on they can onboard it onto my collective and you kind of get that combined element of here’s the seal of approval i put my name behind this but then also you know i give it an immediate destination to invest into that project and i stand to earn from doing a good job as a curator basically um and onboarding you know legitimate good projects and yeah so like you know if i want to just butt in and ask you for the other side of things like okay you know you have these collectives and you have these investors which are like end users uh right now uh are you actively onboarding either like users as well as like perhaps jobs or creators on yeah i’m really glad you asked that yeah so so we a big part of our go-to-market strategy is you know we have three things we have to address we have the collectives where our curators we have the projects you know themselves and then we have you know investor the investor community obviously in the in the full state of the project it’s a fully permissionless platform anybody can create a project anybody can create a collective anybody can invest in anything as long as you have a wallet however okay we want to and we have a solid incentive structure to make sure that quality rises to the top however we want to come out of the gate you know with a with a when we hit the permissionless launch you know with leading the way with quality basically and that means from every stage and so as a result you know we’ve spoken to a lot of dows crypto communities like dev teams also platforms in and of themselves about potentially being part of our basic beta launch um and so uh we’re launched to put them to make a long story short how we’re moving to our permissionless stages we’re decentralizing and stages so we start you know our alpha launch when we push domain net is basically the platform becoming the principal collective so we we onboard a pre-curated list of about 10 to 15 projects of which we’re really happy with the short list and and then about a month and a half later we’ll do our beta launch in which we onboard a curated selection of collectives basically we’ve gone out and we’ve made some partnerships with some big organizations of dows in which you know they can become some of the earlier curators and they they already have a short list of projects that they want on board and then we’ll hit the permissionless launch in which anybody can now create a project anybody can now create a collective but we’ve grown the investor base to meet those that state those stages kind of throughout that whole process um so kind of to give some examples some of the one of the big addressable markets that we’re trying to address is the you know art and music uh industry because you know we love the idea like fractionalized music nfts being leveraged for royalty rights like we like that idea of you know okay you can fractionalize an nft that represents a song or an album and then you know with some a little bit of infrastructure down the road created by like spotify or you know youtube even you can divert the streaming revenue into that fractionalized nft and then partition it correctly right we we really like that we think that’s like a really really cool um yeah for for musicians to kind of again avoid the middleman to not have to like be yeah to kind of screwed from a like a record label or something and right but for so for our platform you know the intuition there is that like the musician wants to create an album but they need a little bit of money for some studio time and so they come to our platform they create a project they’re allocate a fractionalized nft to our to the smart contracts and then you know they hit their minimum funding threshold they release a couple of songs and everybody converts the album is created and then the ownership of that album from in terms of revenue rights is distributed as well and so as you know that’s like a really nice way in which again that’s a wonderful use case yeah that’s a wonderful yeah yeah you know completely leaves out the middleman and they would because this is so like you know we are in tech so we understand all this right but you know for people who are perhaps these creators and they are already doing so much heavy lifting right they’re creating something beautiful this is not their domain expertise so you know for you to come in and give them that kind of simplifying it for them that that is a beautiful use case yeah exactly it’s just you know it’s and it’s more important about for them like if they wanted anybody to own something that they’ve created it’s the community that supported them right you know that’s the that’s a big thing and and so that’s kind of what we want to allow now there are platforms that you know do this that support musicians or support artists in onboarding onto web3 they’ll help them like hi-fi labs is a good example soundman’s a good example both of which we’ve spoken to and you know they are open as a good example they they basically on board you know they they help a musician with like an nft drop or nft utility or building out that whole ecosystem but the problem is is that they can only they have to address each artist or musician one at a time because it takes so much resources so much effort to fulfill a successful nft launch because it’s a one-day event it’s like if you don’t get it right and you don’t fulfill it then it’s all been a waste of time and the investors who did commit feel a little cheated out and the absolutely and the project doesn’t go anywhere and that and that’s a really you know that’s that really constricts these platforms and these communities from the amount of people that they can support so they look they see something like us as okay we can still support prod like these artists with a lot of the technical elements a lot of the you know how what do you got how do you want to build your utility advice all this kind of stuff promotion and but we can onboard more artists at a time because they can accrue the value of their user base and their project over time basically and and and so it’s not like uh you know it’s a and it’s a much healthier way and investors you know because again yeah yeah yeah exactly right yeah yeah it’s sustainable and it’s and you know they don’t have yeah exactly it’s not this high stress thing where they’re constantly moving from person to person to person they can take it in a much more organic way and so we you know sound hi-fi labs is really an example of what may become one of our principal collectives along with sound mint and we love sound mint because they’ve been doing a lot of the heavy lifting on like fractionalized nfts for royalty rights and mixing that with the legal elements and all that and also art and visual music nfts coming together and and and so then but then beyond that we have some other ones like a good example of another industry vertical that we’re trying to target is are basically metaverse developers so you know we love micro and we love micro investments you know we think that’s a big part of web3 where not everything’s a company right like not everything’s a company not everything’s like a you know a project that’ll be this huge long-staying thing for the end of the of the end of times there’s so many situations as an investor where it’s just it’s a quick in and out thing right it’s or it’s a it’s a one-time thing it’s like we’re you know i’m buying a plot in the sandbox with like 10 other guys or whatever and we’re you know we’re fractionalizing it or you know we’re building you know a like a you know we’re building a mansion for for a Snoop Dogg and sandbox or something and it’s it’s just a quick it’s a quick thing it’s like just a one-off in many ways and you know of course you can hold that asset for the long term but it’s not like a company that’s basically what i’m saying it comes to comes to completion and so you know metaverse developers you know guys who come into things like nft worlds or sandbox or decentraland basically build or architectural firms for them you know really cool teams so there’s stuff like like meta labs or webverse or guys we’ve spoken to and you know they have so many projects for like hey you know we’re a team that is you know we want to build on this plot we have a we want to put in a bid to build for this person but you know we need a bit of money to hire you know two more architects or whatever and then the intuition there is that you then distribute the rights the either the payment or the ownership of the final project or whatever to the investors and but again the people who know that industry best are the developers themselves and so they would create the collective around that and so that’s where it’s kind of like by the creators for the creators and then also absolutely i’m not you know another industry is like the you know or that we love is dow tooling so you know obviously it’s all the rage to create dow’s of around millions of different things and we love that and we and we especially love dow’s as a solution for non-profits you know making sure that their their financials are more transparent than they currently are in the world but and so there are platforms like xdow is a really good example that are dow tooling systems you know they basically help dow’s and give them the tools to manage their aum like manage their treasuries manage governance you know in a nice and easy interface but again there’s the one problem that they can’t really address with every single dow that that comes to the platform which is raising the actual money you know like if you want to have a dow that has a treasury whether it’s an investment dow or or a you know even a non-profit or even like a dow that’s trying to purchase something or whatever there’s that aspect of pulling the money and then distributing distributing the dow tokens accordingly they they look at a system like us as another way for those dow’s to perpetually come together and then for the money to be brought together and then the dow tokens that represent the governance and everything to be distributed accordingly so that’s a really exciting thing for us too because you know you can look at a dow that’s you know whether it’s something that was like constitution dow or you know a lot of dow’s that were like nba dow’s or whatever and but you can you know that community can come together over time it’s not again like a one-shot only thing and then when when the community’s ready and the money’s there and everybody’s ready to go they can convert to commit to it basically and then the dow goes off to do whatever it wants to do and it’s a really efficient and healthy way for these dows to assemble and so but again you know who are the guys that know what some of the best dows are going to be from a functional standpoint governance standpoint like an objective standpoint all of that it’s something like a dow tooling platform like xdow you know that’s their bread and butter that’s what they know and so they can start the principal collective around you know dows or dow formation and then on board dows that they’re passionate about and or that they feel should get support and deserve support and then earn as a result of doing so wow that’s very interesting actually you know post this particular recording i’m going to connect with you to up your line there’s been a dow idea that we’ve been doing with like an investment dow but for basically underrepresented founders and perhaps you know yours is the platform we can look at because you know you can take over the basically the part that will cause us headaches and we can build on the network and you know you can you can help us with the nitty-gritty yeah yeah of course love to you know throw some things around yeah and you know one more thing about you know i think like that was a big that was a you kind of said something there that’s that’s really important is as a founder all you want to like building something is hard enough like building something that’s worthwhile is hard enough you know for us as a company you know in a platform we’re in the middle of you know raising a seed round right and it’s been an extraordinarily frustrating process you know it’s you know you’re speaking it seems like you’re all your chances of whether or not you continue on as a project to get to where you want to be or you you fail or because it’s a Tuesday and the the VC partner you’re talking to had a fight with his wife or something and and he’s just not feeling it that day it doesn’t want to or something or whatever yeah obviously there are you know these people try and treat things to be objective but they have you know they’re they’re they’re good at what they do but it can seem like there’s so many things that are just unnecessarily complicated and also detract from you as a builder like you know we’ve had to put so much focus into our raise that we were you know that we’re you know we have to check ourselves to make sure that we’re not neglecting the development of the actual products and no that I think almost always happens right like if you’re raising money that’s like a full-time job right yeah exactly and that’s something you shouldn’t have to consider as much like sure you want to make sure that you’re you know if you’re if you do have investors that you give them confidence and all that but that should come from your product and so we really want to make sure that creators can can all they really have to worry about is just continuing to create something great and because that’s hard enough and and and it’s great that just sort of you know what you you said that you know what raising money is so no building something is hard enough and then you know when you’re going out and doing this entire race thing and I’ve done like several raises and I know how bloody hard it is right what you said that you know at times the other person is having a bad day and you better run for no reason right and then it kind of derails your motivation so what you’re building here is like facilitating right for these companies and these platforms sounds a little easier helping hand and I think we have three years so much about just that you know sort of leveraging the collective intelligence as well as the community to make sure that we are able to build you know good things and beautiful solutions faster yeah exactly exactly and that that was a much we thought was a lot of the original vision behind these kind of decentralized systems and and you know the initial ICOs really spoke to that right you know they were great I think everybody because everybody involved was passionate about what was going on and it was a you know kind of a tighter community but you know there were some great companies that just came out of ICOs you know and right but obviously over time you know the because there were misaligned incentives and missile and inefficient capital systems you know that dialogue started to get polluted a little bit and so we wanted to make sure that you know still through a trustless system not through a centralized means we brought investors and founders back to eye level you know we really think that that’s what web3 is all about and you know we want to make sure we can enforce that in a trustless way and allow for that kind of healthy dialogue to occur and and another kind of aspect to to note is that you know when I speak about collectives collectives are also an investable asset on the platform so basically we duplicated the pricing system for these representative synthetic product tokens for collectives but when you invest into a collective you receive what are called collective tokens shocker and these collective tokens can be bought sold back to the to the protocol in the same way however they have an extra layer of utility to them so collective tokens can be staked back into the collective that they represent and when you do that you get two things you get proportional governance rights in the basically in the thumbs up thumbs down decision so you get your voting power for yes I like this project let’s onboard it or no this project shouldn’t be on our collective is proportionally weighted to how many tokens each states in in proportion to the whole and then also you get a proportional share of the revenue that the collective earns so these collectives are really they’re designed to grow into communities you know they’re they may start around like by one person or a community of people around a vertical but then the idea is that they accrue all the people that are passionate around that vertical and they all can be a little like a syndicate perhaps well yeah kind of yeah in a sense yeah but you know they because the these collective tokens the supply can be infinite even though the price get will get more and more expensive so they can be prohibitively priced eventually in theory these collectives can grow you know they can grow and we really want them to grow around the identity that they were initially formed by and because they grow and they accumulate you know more members the accountability of the collective becomes more robust because not only as a person staked into a collective do you potentially stand to earn from the revenue that the collective earns from onboarding good projects but also you’re the holder of an asset that can appreciate or depreciate based on that performance as well and so we’ve designed the the platform from an interface wise to be both extremely easy to use we want it to be really clear really transparent really easy you know only relevant information user-friendly you know human-centered design all that but also transparent is a really big part of what we’re doing so anytime you go to a project you know the project’s page you can see how the project’s tokens performed in terms of price you can see how many investors are in the in the project who’s invested into the project for how much each individual investor is invested like in you know like i own 20 of the project tokens this guy was five percent how many of the tokens that x investor is converted once you get to that stage and it’s the same really for collectives you can see who owns how much of the collector tokens who who is staked how much what their voting power is you know what their rev share is and and then as a result you can see like every the performance of every single project that the collectives onboarded as well because collectives as a financial vehicle they actually act very similarly it albeit in an analogous way to an etf they’re kind of a de facto etf because what they do is because they set that flat commission rate for all the projects underneath them and that that commission is from basically determined by investment volume the collective if you were to invest into it there’s a lot like investing in you know into the smp you’re basically betting on the performance of like 20 projects you know can see or however many projects that are underneath that collective and if any one of those projects starts to you know is basically cut off because maybe the project is starting to look like a rug and investors just get out or they don’t like the project anymore and they sell and then nobody starts buying it anymore that project basically becomes like a dead sell but it’s still on the collective and it’s for everybody to see it’s you know so if a collective decides you know onboard something that’s bad you know whether it’s malicious or just of poor quality they are negatively impacted by that because you know they they earn less revenue and as a result fewer investors want to basically potentially get a cut of that revenue because there isn’t as much to go around and it costs too much because the project that collective token is now priced too high and so some people would start offloading their collective tokens because it’s not a worthwhile investment anymore and as a result they start to depreciate and so on and so forth so it’s basically you incentivize twofold as a collective to onboard high quality projects that receive consistent investment volume and that one of that is in the form of the revenue that you earn as a member of that collective but then the second part is the tokens that you hold you know it’s like holding stock in a company but that stock price isn’t driven off of pure speculation there’s a clear and precise pricing mechanism that you know is basically you know conducive of who’s present and who isn’t present in that community so it’s in your best interest to both want to entice more and more people to want to come to your community but also entice investors to invest in your projects but you have to act in investors interest so the the the important thing there is that for both collectives and projects they are acting in investors interests always right you know they’re not their priorities aren’t just let me raise as much money as I can for one reason they’re always making sure that they’re giving investors the most amount of confidence in them and so as results you know because anybody can create a collective and anybody can create a project we envision like a competitive atmosphere on the platform being created right like you know obviously a guy will create a collective around you know play to earn games but I’m sure another person will do the same and then it’s about well which collective is better it’s like okay well the right the collective that’s better is the collective that onboards the better projects then it’s like absolutely okay so now as collectives I’m competing for better projects okay but then also as a project I want to get onboarded onto the hottest collective because you know that I know what that means from a social standpoint you know if there’s a really influential people in that collective you know if they all basically give their sign of approval to my project it’s like the ultimate like thumbs up but also I know that that collective gets a lot of investment volume so if I want my project to you know to get a lot of investors I want to be on a good collective and so basically collectives are competing against each other to get the best projects and projects are competing against each other to get onto the best collectives but the important thing is that they’re competing for investors they’re competing for investors interest and so everything has to be tooled for both giving investors the conviction to invest and then more importantly giving them the further conviction to stay invested and then more importantly convert their investment. Wow okay so you know like because I’ll be kind of running out of time but I’m just going to summarize this which is what’s my ability we you know what you’re creating with there is basically a web three ecosystem for creators investors and as well as perhaps syndicates at some point to ensure that you know the fundraising process does not take away from beauty and you know the enjoyment or the journey associated creation. Yeah that’s perfect I mean that’s really we’re we want to help fuel the next stage of web3 adoption and a lot of that has to you know in order to do that we have to break down a lot of barriers to entry whether it’s a as a builder creator or an investor or a community member or whatever curator you know there’s so much of this kind of community discourse or community-centric global scope that we love about you know web3 and we want to take all the best elements that it has to offer and make sure that that can help kind of drive forward you know the next you know 100 million people to come you know and participate basically.
Wow yeah this is brilliant absolutely so you know so quickly I would love to get your thoughts on what is like the best use case that you have seen for NFT so far like you know the one project or you know a use case that you know you’re really rooting for. So my yeah so I’ve overthought a lot of this obviously I spoke about that and yeah you know I think there’s if I were to kind of answer the cop-out a little bit you know how I think NFT implementation will be going forward is you look it’s fun to talk about these crazy valued NFTs like you know they’re up in the clouds but really it’ll be at the you know the ground level like price points of like zero to fifty dollars where they have like isolated really leveraged utility you know like you know in examples like you know if you want to talk about you know ticketing for a concert like it’s just more intuitive to put that into the form of an NFT than you know a traditional like ticket because you know you can then leverage that ticket post attendance like whether it’s the PO app or it can be perpetual it could be whatever like a season’s past and then that can be then you know because you own it outright you can then transfer it to somebody else efficiently and you can give it to somebody else and there’s much more kind of community integration with that but you know I think my favorite brick and mortar example like I like to think of the most brick and mortar thing like physical traditional thing that NFTs could be you know utilized for because you know I love gaming I love a lot of these other things like high leverage digital industries but I like something really traditional and physical and I think that an industry with just a little bit of infrastructure that could totally use NFTs in a huge way something like the wine industry when you have a let’s say a vintage right you know vintages are they’re barreled and bottled for you know each year for the growth right so you have good years bad years famous years so like 85 is a really good year and like the pinnacle of wine for a lot of people’s like the 80 you know it’s like an 87 or 85 like Rothschild you know those bottles are insanely expensive but they’re also just apparently amazing or whatever but the problem is is that nobody knows in the market how many bottles in the world are left they can assume they can assume that you know like there are a thousand bottles or five hundred bottles or whatever but each bottle that’s sold in an auction or peer-to-peer is kind of traded off of that imperfect information but if you had a with again a little bit of physical infrastructure the idea that with each bottle each bottle was assigned a unique you know NFT basically and then when that bottle was uncorked that NFT is then burned the that the idea of then that basically that being a signal that that bottle has been consumed to the world that like one bottle being open will always have an effect on the market because you’re solving that information failure basically and I can think of like whether it’s vineyards or auction houses or like even individual collectors loving that concept of knowing the global like scope of something like wine because it’s so like each individual like year or for a for a vineyard like almost operates as its own like sub collection of like an NFT basically and so if you know that there’s only a thousand bottles left of you know 85 yeah then that’s like that means a lot you know that creates the scarcity and those that those bottles are valued in a much different way now the challenge is is that you know there’s only so much the blockchain can do there like it can it can do a lot of the it can assign the you know the unique addresses and everything but in order for it to function fully and this goes for a lot of NFT implementation like it it’s not a software problem it’s a hardware problem there needs to be some hardware like hurdle in terms of like physical infrastructure that needs to work to validate the then blockchain to basically function with the blockchain side but yeah I know if we clear that hurdle there’s so much like fascinating implementation use cases you can use you know NFTs for and so yeah I mean you know obviously I I’m like like my hedge fund we we deal our primary assets in NFTs so we deal in all leverage kinds like whether it’s PFPs or play to earn NFTs or like versus like high leverage you know creator you know coins basically and you know we love all that implementation but you know I like looking weirdly at you know if I were to take an industry that’s as old as something as the wine industry and give it a legitimate use case for blockchain I think that’s like that’s something that I feel like they would jump for and over first absolutely something like what we know is doing I believe you know they are putting in investments in wine etc I think on chain yeah I’m not sure yeah yeah that is like an interesting use case absolutely okay so you know as I said earlier that you know I’m running short on time but I will this is like my last question about this particular episode and this is something I ask almost everyone who comes on this show so you know because this podcast is all about kind of making sure that the jargon gets out of the way and you know people who are getting intimidated about web3 blockchain and crypto they feel like okay this is like probably a devil that they could tame as well what would be your advice for people who are like transitioning from web2 to web3 or people who you know how can they perhaps start living on blockchain right you know so it it may sound a little bit strange because for me I I think I I don’t know if I did it in a typical way especially for a lot of quote-unquote earlier guys I wasn’t nearly as early as some other people so my advice always especially when it comes to anything investment wise is start with the tech and then work back to the asset now that sounds really scary right that’s like crap I need to start with the the most complicated thing and then I can think about the product no I don’t want you to think about it like that necessarily I want abstract the tech as much as you possibly can there are a lot of ways you can learn about blockchain just in terms of what it offers you as a consumer like or what it offers you that doesn’t currently exist in the world like nfts for example like there’s a million things that nfts can do but a really easy way to look at one use case for nft is just I want you to imagine you can at if you had the ability at any point in the world to know exactly where the ownership of a thing is you know if I sold 100 paintings or 100 apples let’s say even whatever I want to know who owns all of them and where they are in and nft allows you to do that at any time right now then it’s like then okay then it’s like okay if I had that information what can I do with it and then that is where an element of utility comes into play that’s like okay that’s how you can see something like board api club you know leveraging their nfts for like token gated events or token gated sales for the other side metaverse you know or you know whatever like you know you can that is you can then start thinking about okay how is this project or this company using that like opportunity and leveraging that opportunity and that’s where you can get really creative and fun like as new tech or whatever as it is I really like to think about it as from an economic standpoint and from a consumer standpoint it’s super old school it’s really still web free is going back to the basics yeah it’s more about the people the projects and the communities than anything else and so but if you want a good way to feel confident about what you’re doing is just try and start with what the technology whether it’s blockchain like fungible tokens you know like bitcoin or ethereum or or non-fungible tokens or whatever has to offer you or for your particular passion like if I’m a gamer I can follow like his video games okay you know that is uh you know like I can like play to own is a great concept like I can now own the skin that I you know had it’s not like I’m paying for it it’s not some crazy vehicle to earn money it’s just I have this thing now and I can do what I want with it like if I play world of warcraft or you know the concept of what it means to like own something in an rpg and what it feels like and all like something like an nft allows you to do is to solidify that even more and so then it’s like okay well what kind of game would I want to see if I could do that for real like and and it can almost work in between games or something and and you know so if you have a you know how they can appeal to something like you know what you’re passionate about and then if you’re looking to invest or get involved go look out for the communities or projects or people that feel the same way and are in our kind of building something to fill that vision or to fill that you know that that utility in that way and then you’ll find like the community for you you know for me I again I started in vr you know design and so one of the first things I used to do in college was I would repurpose video game models for something like vr chat so I’d like rip a model from a video game and then re-rig it reskin it you know customize it slightly and then I go into something like vr chat in like a chat room and just hang out with my model and it was kind of fun or I do it for friends or whatever and that was a roundabout way for me seeing like a utility for something like an nft it’s like oh if I you know created a model like a rigged model and then you know stored it you know in an nft and then basically transferred its utility to whoever owned it then it’s like you know that’s like an element of ownership but then also identity you know it’s like okay this is my identity and in some ways and and that’s a really small use case but that was something that I was passionate about and that got me involved with people at you know the central end and then that moved into the next thing into the next thing and then before I knew it I was involved in the whole. You’re right so you know like this is a very good piece of advice I’m going to find what your where your interests align and go back to look at the tech and then perhaps go back to the token itself as well as the utility this is good advice for people who are looking into investing and it doesn’t have to be intimidating like you said you know you need to sort of align your values with the platforms or their investments and then it kind of all falls in place.
So that is like really wonderful piece of advice. Before we wrap this up any parting thoughts? No, I mean I’m just really thank you again for having me on you know I always appreciate having an opportunity to talk about you know what we’re building here and what we’re trying to do but then also just you know everything that we like about the space you know there’s you know we’re not trying to be a be all and end all solution like part of what we love about you know web3 is that you can just be a node in the same way that like you have validated nodes and mining nodes like on the actual blockchain you can just be kind of a node a component in the greater ecosystem like we want to help people out with a part of their lives you know we don’t feel like we’re the solution we know we know we’re not the solution to everything we know that there’ll be projects that can do fine on their own that we know that there are people that can that’ll do a different thing we know that people that’ll use our platform that go somewhere else and the people that’ll come from somewhere else use our platform and go somewhere else as well and we’re okay with that we actually that’s what we really we want to be that you know we don’t want to be something that pushes you know themselves on on users or tries to be like this one-stop shop for everything like yeah okay we can be a one-stop shop for a lot of founders to to do at a point in their lives but you know we just want to be another part of the next stage of you know web3 or the internet or the digital worlds and you know we can occupy our little space and help some people out along the way then that’s all we can really ask for yeah that’s true that’s very true lovely thank you so much George this has been a very insightful conversation i’m very excited for you guys and what you’re building and say i think this can be very revolutionary in terms of creating a very cohesive ecosystem for investors as well as platforms that are looking to raise thank you once again and you know really all the best for all your endeavors thank you very much i really appreciate it thanks for having me on