Fireside Chat I Denis Nazarov, Mirror, and Kartik Talwar, ETHGlobal | Pragma New York 2023

Hi Dennis, how are you? I'm fine. How are you? I'm great. We've known each other for about 5 years.

Yes. But I've only seen you since before COVID. That's how it is. Yes, we're still going out in the big venue, grand opening. Thank you for inviting me.

We're going to catch up on stage, basically live. Let 's start with something that's been on my mind. Are NFTs dead? I'm going to need a sip of water. Well, it seems there's a belief that NFTs are disappearing.

We don't think anyone cares about creating 10,000 profiles, looking good, or flipping JPEG files. What do you think NFTs are like now and what role do they play in our ecosystem? Yes, perhaps to begin to place it a little in a broader context, you know, what this conference is about know, what this conference is about . I think there's this typical media narrative that all technological waves come in cycles, and there's a kind of exaggeration, and you have booms, booms and busts. And I think the economic and financial nature of cryptocurrencies, because financial nature of cryptocurrencies, because , for us, scarcity and ownership underpin everything, I think it really magnifies those booms and busts.

But, you know, we all know the meme that, you know, starting with Bitcoin, there have been like a hundred proclamations, you know, Bitcoin is dead once again. Then we have, you know, smart contracts are dead, DeFi is dead, and of course, you know, NFTs are dead, you know, in the same narrative, the cycle will repeat itself. I think that, like all headlines, all stories over the years, unfortunately, focus primarily on price action, and I think many of the nuances of the most interesting things that are happening are not captured there. But I do believe that, obviously, markets are going down obviously, markets are going down , prices are going down, and many of the early use cases, and again, for better or for worse, I think the early use cases of cryptocurrencies that explode very quickly tend to be more speculative, and NFTs are no different. Therefore, my framework is that we've only just gone through the first chapter of NFTs, and it's been very much driven by trade.

I believe the canonical platform that this chapter represents is OpenSea, right? It's a marketplace, it's kind of an eBay trading paradigm, you know, Beanie Baby. And these cases we've seen are obviously the PFP P, you know, the CryptoPunks, the Bored Apes, all about high prices. The framework I have for this is that the first chapter was driven by trade, but there's another analogy I really like. There is an economist from the beginning of the century, from the 19th century, named Thorstein Veblen from the 19th century, named Thorstein Veblen .

Does anyone know Veblen? He wrote a treatise called The Theory of the Leisure Class. Has anyone read it? It talks about the idea of conspicuous consumption. In that world that emerged from the Industrial Revolution, another technological wave, people demonstrated their status in society by what they consumed.

You bought expensive things, luxury items, you had an expensive house, an expensive car. You demonstrated your role in society by buying expensive things and showing them off to others. And I think that's how cryptocurrencies start , in a very primitive way. We had the PFPs, which were very expensive. You bought them, you traded them, and you tried to profit from the trade that surrounded them.

And again, as if you changed your PFP, people knew you had a lot of money. It was about this status conveyed through the price that surrounded it. And I believe that, since then, economists have identified different forms of capital. That was, you know, financial capital, but we also have social capital and cultural capital. And I think NFTs are actually an amazing technology for the latter two, and we're seeing a lot of interesting use cases for them.

So, just to continue with that kind of economic arc, as the 20th century has commodified, you know, wealth, we have much more equality in access to goods in society. Today, if you want to own a nice house, you can get a mortgage. If you want to drive a luxury car, you can probably rent one, you know, and nowadays there are services like if you wanted to take a $20,000 handbag to a party, you can rent it for the night. Well, to show your status in society, it's not really about, you know, having very expensive things becomes something ostentatious. It is no longer a high status.

And the way you show off your values, your knowledge today is through investments, you know, in culture, in information. It's something like, " in information. It's something like, " What things do you value? Do you value organic food? Do you exercise?"

We're in New York City, you know, kind of the world's fashion capital. About 20 years ago, if you were in SoHo, people wore very expensive clothes. These days, you see a lot of sportswear. And what does that say about people? That health is important, you know, I exercise, I exercise, I value these things.

Well, basically that, and it's very much related to the objects we use to express those things; they're cultural artifacts, you know? What brands do we align ourselves with? What music do we listen to? What do we read? I think another example from New York is The New Yorker magazine, right?

It is a kind of cultural institution that does a great deal of cultural analysis. If you subscribe to The New Yorker, they send you a free handbag. And if you take a walk around the city, if you pay attention, you'll see people carrying a handbag from The New Yorker. And what does that represent about you? You probably have a certain level of education, certain political opinions, and are interested in certain topics.

So, going back to NFTs, I think a large part of our cultural identity is built around the objects we own. Well, if you work in technology, for example, if you work at a company, at Coinbase if you work at a company, at Coinbase , for example, you feel very proud to be part of Coinbase's mission . You carry that object with pride . You carry that object with pride . At conferences we have laptop stickers that represent the technologies we believe in and things like that.

You are probably very familiar with the Ethereum community culture, in contrast to the Solana community, which is very specific. Our thesis for chapter two of the NFT ecosystem is that it's going to be much more of a social artifact be much more of a social artifact , a community artifact. And when collecting things, it's not about price or scarcity of supplies; It's about participating in communities you believe in and whose values reflect your own, to show others that you're doing the same. We believe that NFTs are a new technology that basically provides us with native digital objects to connect people much more closely. And I think this adds up to a lot to the many subcultures that exist on social media platforms like Instagram or TikTok.

And our bet is that if NFTs really work, being online will be more meaningful and exciting. You will establish closer connections with the creators, with the communities we want to be a part of, if you can own these community artifacts. Well, that was a lot. I mean , it's been a great stage because I have like 40 questions about all of that. So let's delve deeper into all of this.

Okay, it's a very interesting context and I think that economic analogy works very well. So my most obvious question here is: is there a single test that works for all these cases where you know you're now in the second era of something or...? Or were you just implying that, well, where we are now is simply that the speculation is over? Because now it's not about how much money you spend to obtain a certain status, and that's always the first step towards that second transition. Where does that type of exchange occur?

Basically, there were those huge multi-million dollar NFT crashes, we don't see them anymore. You know, everything you see in OpenSea's commercial activity in terms of volume has dropped significantly. But in reality, in recent years this new technology has emerged , which is the open edition of NFTs, and in recent months there has also been an increase in free NFTs. I think it's a good parallel where, you know, it's not about the price. This is not an investment.

This is more of a community artifact. So I think what's interesting that we're seeing today are much more social use cases around free and abundant NFTs that serve more as a community artifact. Understood. So obviously, it's not about collecting the most expensive image, especially with free mintings and open editions; somehow you manage to effectively commoditize that price as a key factor. What changes in this definition about how people become?

Are we creating new, different subcultures because you're pointing out what matters to you? Completely. Is it simply that we now map what we do in person online, or is there something different about Web3? Yes, I think it is, I mean, I think in 2021, 2022, I think we've seen some of the first use cases and, uh, one big, one big application has been, uh, when you mint an NFT, what do you do with it? Like Discord bots, tools like Collab.

Land, for example, allowed you to create a space for the community, for members to come in and get to know each other, and the goal was really something unifying. You know, as an analogy, if you're a teenage skateboarder, you probably use, you know, there's a magazine called Thrasher know, there's a magazine called Thrasher , you probably use some product from some skate brand; You're wearing baggy pants; You're wearing, you know, skate shoes. You know, if your parents take you to Thanksgiving or whatever to visit grandma and you see another skater kid across the room, you get to know your people through those physical artifacts they bring to this. I think NFTs offer us something similar, you know, if there's some kind of movement event happening, like I think a lot of L2 developers have been leveraging NFTs in really interesting ways. For example, if you believe in the values ​​of optimism, if you believe in the retroactive funding of the open-source ecosystem, Optimism has a really cool brand and you can collect this item, you can display it in your wallet.

And I think what's interesting is that everything is on the chain, everything is public. The way marks and movements propagate through these objects, you know, by appearing in your on-chain activity, there's interesting activity on the blockchain, emerging NFT activity aggregators as interfaces, tools like mint.fun. So, what are interfaces? So that we can get...

Yes, interfaces is an application that you connect to your wallet and you can basically see the actions you take on the chain visualized and, you know, focused on NFTs. So, if I follow Kardia and he's collecting NFTs, I can see what he's collecting. I think what's really interesting is that this kind of minting action becomes a kind of act of creation. Well, I say, "Oh, Kardia is great. What's this weird thing he's collected today?

I'd better check it out, you know, maybe this, you know, I like the things he likes. Maybe he'd like to write a coffee shop too. Something for everyone." Well, for me, the most interesting thing about what you just said is that, from your perspective, you 're analyzing what's happening, and I'm curious to know if you think everyone already knows this and we just haven't verbalized it, or if we also need to point it out. So, the question I have is: So, the question I have is: how much do you think this is, like, a conscious decision by people who collect these things because they genuinely care that others know what they're known for and can, in a way, publicly look at, uh, the cultures they're a part of or the values ​​they represent?

Or do you think this is simply that we have to actively point out that this is the reason why it's happening, uh, and how happening, uh, and how much of it is like synthesis versus prediction? Yes, I think it is, I mean, a lot of it is observation of emergent behaviors. I think a common pattern we keep seeing is if you collect an NFT and tweet about it. So, again, it's like, do it. So, again, it's like, do you know what Twitter is all about?

We say things, we share things, and we try to get people interested in the same ideas as us to participate. We try to be influential. We try to build a following. And I think NFTs are against us, a really interesting phenomenon where you combine the web and social distribution of Twitter with this aspect of ownership, community participation, and trading of NFTs. And this specific case keeps coming up where you coin something and share that you coined it and mention the creator.

And that's where a really interesting inertia wheel opens up in which the creator receives a notification. Reply. Maybe it's following you back. So, it feels like this kind of sponsorship relationship where you connect with the creator. Perhaps the creator retweets it and you become one of the many retweets of the creator that the collector shares.

And then the collector, as he follows the creator, sees that the other collectors say: Did you also mint this? You're one of mine. So again, they're like social connections, but not through, you know, social graphs, or through interest groups, but through this artifact of ownership and commerce. And we believe that's innovation. Oh, that's a really interesting point.

So, in this case, does this change or adjust the definition of storytelling? Because this is still a more direct way to follow someone or something you care about. But someone or something you care about. But how do you reconcile this with the way you tell stories now that you have access to this wider audience that cares about these subcultures? Completely.

Yes, I think it's, you know Completely. Yes, I think it's, you know , obviously the brands and, you know, the companies, uh, you know, to differentiate yourself from all the competition, how do they make you look different in the market? I think the story, the backstory, is really important. When we were preparing for this, we were talking about the white papers, right? Like the Bitcoin white paper, the Ethereum white paper, these kinds of foundational documents of these technological movements were written before the technology was developed, but they painted a future in which things were going to be different.

We want things to change. And that was a document that united the community. So, I think Mirror fits into that because we're a publishing tool that I think is very much inspired by this, by the idea that you can share your story with the world. Many creators in the sector use it, you know, developers, companies and also creators. But that story can also be a collectible.

So imagine... collectible. So imagine... Sorry, just imagine if the Bitcoin white paper were an NFT. Imagine what that would mean for the people there.

They could connect with each other by being pioneers. adopters. But then by being pioneers. adopters. But then , you know, 15 years later, 10 years later, it becomes a kind of declaration of independence, a kind of founding document.

A kind of manifesto, yes. I want to talk a lot about Mirror, but I want to check one more thing. You made a very interesting observation about the Optimism ecosystem around RetroPGF and the people who care about a specific cause. We saw this whole summer campaign on Base chain, and a lot of that was also driven by different releases of various NFTs and simply signaling and, in general, just free coins becoming more and more accessible. Does becoming more and more accessible.

Does that fit into the same narrative you 're talking about? How would you analyze what happened with Base last month? Yes, I think Base has been truly amazing. We have had the privilege of them being a sort of mere advanced user. Their entire philosophy is that they want everything they do in the world to be in a chain.

And, obviously, they're trying to bring an L2 into the world from scratch and build some kind of brand identity around it, etc. And their genesis announcement began with the Base logo. And this is a complete manual that we're looking at, you know, if you put yourself out there, you can make your brand collectible. And the first point of contact with your audience isn't just, you know, in Web2 audience isn't just, you know, in Web2 , it's not just getting likes or followers on Twitter. In fact, you can be an owner from day one, yes.

Exactly. Give something and put it in your wallet. I think it's very interesting. Yes, this is the active property. But then Base is building a connection with its audience on a chain.

They see their users as, you know, ENS names like wallets. Everyone who owns that NFT is connected to each other by being one of the collectors there. And I think the meme spreads because, again, if I follow Karthik on one of these social NFT platforms, I could see, oh wait, what the hell, what, what is that? You know, let me check it. Let me, let me delve deeper.

So I think it's, again, I think it's like putting on your favorite band's t-shirt and, you know, pointing out what you think is kind of, you know, inside a group, outside of a group. And we see it in technology in general And we see it in technology in general . If you're in the Bay Area, you'll see people wearing company t-shirts, and that's a point for them to say, "Hey, what does this company do, or why are you there? Why are you so proud?" So it's the same behavior now chained together and also traceable in a good way.

Obviously, I'm sure many people here know what Mirror is. If you have any questions and have heard about any of the updates they've made to their protocol, company, or products, you should check out the blog post that was published in Mirror. So, my kind question here is: Is Mirror a blogging platform? And if it isn't, what's the best definition that people should know? Yes, absolutely.

I think Mirror started as a kind of experiment, you know, can we build? We always believe that the next big thing will start as a story. And I think there are many examples of cryptocurrencies. I think, you know, like Tesla, for example, Tesla had a secret master plan, I think from 2007 or something like that, a kind of 10-year canonical plan, a kind of technical document for the future, and, you know, all the fans rallied around that document. And we believe that, you know, the next big thing, storytelling is very important.

So, Mirror's initial goal was to create a tool for that that was completely chained. Then, you log in with an Ethereum wallet, use ENS names, all data stored on-chain in Arweave. But this was in late 2020, before NFTs took off. And then, when NFTs took off, we thought, "Wow, stories really, you know, catalyze people. They really excite them.

They bring people together and allow them to share an idea." But now that we have NFTs, there's a way to make that idea appropriable, to make ownership a way to, you know, interact with it and, in a way, plant a stake in it. You know, I believe in this. I follow him. So, basically, from the beginning we've created all the content on Mirror collectively.

And Mirror has evolved towards a deeper integration of NFTs. So, today, you can embed any NFT in the Ethereum space. So, the good thing is that, although Base uses Mirror to publish, they also experiment with many other NFT tools. Mirror allows you to add all your NFT creations. Everything can be minted online.

I think that's another beautiful thing about the opening. Can we talk about some examples of what tools and how that workflow works tools and how that workflow works ? Yes of course. Yes, they want to, again, have this first-in-the-chain strategy. So they're trying to spread the love for using all the tools.

So they use Zora NFT. You know, they collaborate with mint.fun. And you know, because what is an NFT? It is a smart contract on the blockchain with publicly accessible interfaces.

We make them interactive using the Mirror tool. So, just as you can embed a YouTube video on any website, you can embed any NFT on Mirror. And, you know, use storytelling tools in Mirror to provide context and explain what's going on here. But then it embeds, you know, this collectible item that anyone can mint online. We also offer subscription tools.

So I think we've also realized that, you know, I think the creators of Web3 are building on a blockchain. And I think they miss some of the classic re-engagement mechanisms that Web2 is really good at. Is it an open mailing list or an obvious post? I think it's like a kind of newsletter functionality. Mirror lets you subscribe with your wallet, but also with your email.

So if you want to receive the next update, the next announcement, uh uh if there's a new release of a project that I love, Mirror integrates with email functionality and has been very successful in giving our users more distributions and ways to re- engage. So, we know that if an NFT launch is like a moment in time, we want Mirror to be more like a timeline, so that your journey as a project can be recorded in Mirror. All your collectibles can live here, and again, it's a much better way to retain your audience and keep interacting with them. But this is still largely a kind of storytelling through text and a kind of NFT, or collecting those stories is something different from creating a specific NFT for an event. Is that a fair assessment of...?

Yes, and that's what we're working on now, and in recent months we've been leaning more towards making NFTs first-class objects. So first-class objects. So , the stories provide important context, but we believe NFTs are the kind of community artifacts that tie things together and basically augment that tie things together and basically augment ... you know, if you have multiple NFTs, ... you know, if you have multiple NFTs, how can you tell who the biggest fan in your community is?

Who are the top collectors who keep coming back? I think there's a very gamified element to everything related to cryptocurrencies. You know, we're exploring the leaderboards exploring the leaderboards . How would you highlight your top collectors? Who collects everything?

Who collected everything first? Who was the first member of the community? We believe this is a great way for the community to not only feel like they are collecting privately, but also to have a presence in the community and for everyone to see their position. And it also adds ways to participate more deeply, you know, comments, discussions. Again, I think we see that minting should feel like the beginning of a journey.

It's the beginning of participating in, you know, interactions, of being part of a community. As a starting point for them to now delve into their subculture. I think nowadays, minting coins has felt like, you know, you mint a JPEG and it's like the end, what do you do now? You can't really connect with other collectors, you know, I mean the experience still seems, you know, it's like Etherscan, you know, we're seeing a sort of transaction list, a list of wallets. You can't interact with people, you can't communicate.

I think that will really open up this social use case, as for all these cultural effects to emerge , I think you need ways to connect socially. I think, you know, like many of the things I 've talked about, you know, like the beauty of New York, you know, as a kind of subculture capital, it's, you know, the density of people. Everyone's here, you know, conferences like this, you know, you're all close to each other. It's about the conversations we have here, connecting with other people, and I think, like blockchain transactions , as an analogy I use, it's as if we all had a phone number, but there are no phones. As if we couldn't communicate.

You know, we all have IDs, we all have wallets, and people talk about wallets as social identifiers, but we still ca n't communicate with each other. And I think that once that opens up, NFTs will be much more than just these social community assets. Do they believe that, in a way, those lines being installed to communicate between those two addresses are something Mirror should take on, or is it just to help speed things up, or where does Mirror come in ? We are excited to play an important role there because we believe that, really, the big question we've been asked is, why would you collect something? You know, especially if it's not like a financial use case.

And I think that's set up my next question. It has configured social interactions. And I think you need to incorporate them into the act of coining, that is, can you coin with a comment to give your opinion on the...? Can it be about...? I think a long format is a great conversation starter.

Can the people who are coining something also participate through a conversation, like what they think about it? If they mint a work of art, it? If they mint a work of art, can they say how they felt about it can they say how they felt about it ? And, you know, give the collector more presence, you know, so it's not just a list of buyers, but that they are actually people with reactions. They care that the artwork moves and makes them feel a certain way, and again, to create a space for people to connect.

Does for people to connect. Does this change the definition of Mirror from a kind of publishing platform to a social network, or do you not want to cross that line? How do you see the social aspects here becoming more prominent in the future? Yes, I believe our goal is to expand to become more of a community-based NFT tool where stories are at the core. I think stories are at the core.

I think , you know, there are many ways to do NFTs, there are many additional tools, and I think what makes Mirror different is that there is a much richer context. So I think they are NFTs with context, with a presence in the community. Okay, I have a couple more questions about how to make the most of all these things and use them to tell better stories or create a better culture for what matters to you. How do you think that improves storytelling for collectors or community builders? And what unique things do you think are now possible?

Yes, I think we have this framework of... Yes, I think we have this framework of... I think a previous title for the stock was something like, "What is a chain brand?" And I think it's... a chain brand?"

And I think it's... You know, the great thing about this is that I think this strategy works for big creators, you know, big public companies like Coinbase can leverage the on-chain branding strategy by introducing branded assets that are digital collectibles, but also for small creators, small artists, whether it's a musician playing with musical NFTs, or someone playing with collectible artwork. I think we'll see more and more creators adopt this strategy, and I think it's a new business model, but again, it's a way to create a deeper engagement with the community. And if it wins and is successful, I think people will discover that this way of interacting, of participating, of spending time online, is becoming more interesting, more exciting. And it helps you earn money.

I didn't fully understand why it was a new business model. I would love to delve deeper into this. Yes, I think it's a big gamble. Ours is like what I mentioned before, what is an NFT? It is a program on the blockchain with public interfaces that anyone can interact with.

In fact, I believe that what will revolutionize a market like OpenSea will not be another market. I think the players have done some interesting things, but I think it's really a social experience where you connect through communities, follow collectors you're interested in, and discover projects through this kind of social graph surrounding NFTs. That platform will have very strong network effects, just as Instagram has strong network effects, but because they are NFTs, commerce will be native to those experiences. So, every time you see a nice JPEG, there will be a coin button in the corner. I believe that the platform that is able to build the social graph around NFTs will dominate trading because trading will simply be a real-time experience.

Correct. And indeed, going back to what you said earlier about how culture is a kind of economic progression, you are effectively saying that at the end of the day, curation is kind of key. And as people get better at that, whether by following someone they respect or simply by bringing forth someone who is better than any professional curator or critic, a new era can be unlocked. Was that a good example? Completely.

I think one way to put it is that we think the collection is a form of creation if you make it public. So, if Kartik is really interested in interesting subcultures, he has very good taste. Every time he collects something, he shares what interests him with the world. And if you're one of the first to embrace a strange subculture, you're worth following. And you have influence because you connect all these different projects, and now you've become a trendsetter and are worth following.

I think what's also interesting about all value streams being programmable is that you can be in the value stream. Therefore, I believe there is a possibility that revenue sharing and rewards flow to the creator, but I think that in the eyes of the creator whose work you are collecting, you become a kind of valuable distributor. Do you know what I mean? Okay, I know what it is, you probably have access. But one observation we made was that there are many more collectors than creators.

And who can help the creator spread the message and achieve distribution? I think it's the collectors. I think if you can create networks of collectors who follow each other, again, these kinds of taste groups, networks of interests based on the activity of collecting. It increases the reason to collect, because collecting brings you back to the point, you know, all the analogies, you know, are our social capital, cultural capital. For example, what you collect gives you status, you know?

And I think it's simply based on 20th-century behavior. Do you know what you're reading? What clothes are you wearing? Are they Allbirds or are they Nike? All of this is conveyed through, you know, the physical object you're wearing, you know?

physical object you're wearing, you know? What does driving a Prius say about your values? You know? Are you buying or installing solar panels on your house to save money on energy, or are you trying to make a statement about your values, your politics, etc.? And again, digital objects allow us to do this in a much deeper way on an internet scale.

I do n't know, this is an excellent setting. My last question would be: elaborate a little more on this comment, which is like returning the question to you. What practical advice can you give, whether you're a collector or a creator, to make the most of this new model and improve your chain brand? Yes of course. I think what's exciting about this era in the market is the price; The price is much more accessible, so, you know, the free coins, you know, normally there's a one dollar fee on this platform, so just try it and participate is much more accessible, and I think, you know, explore some of the interesting platforms.

We've just launched a new exploration and discovery experience in Mirror. If you go to our homepage, you can discover interesting projects. There are interesting projects like Zora, Manifold, and Mint Dow Fund, where you can discover a lot of interesting NFTs to mint. But I think I would say that, as a collector, try to mint, try to join some of these communities. And I think that, as a creator, as a brand, as a company, think about how your brand, your project, can live in the wallet of your community, right?

We are all trying to get the users of our protocol platforms in chain. I think the best way to raise awareness is, you know, like, you know, what are you going to need know, what are you going to need ? Lots of laptop stickers at this conference today. How can you get a digitally native laptop sticker? How do you get your brand into the wallets of your potential users?

And I think free NFTs are a really good way to engage your audience, increase brand awareness, and spread the word, and I think Mirror is a great way to do that. You know you can publish your "Hello World publish your "Hello World " post, but also mint your first NFT, build your subscriber base, and we've seen tremendous success with much more engagement when there's something to collect from the audience. Brilliant. Well, thank you very much for being here, and that was an excellent discussion. I hope we can think about building our own chain brand.

Thank you for inviting me. Thank you for inviting me. Thank you all.