The Promise of Metaverse and Digital Property: A New Era of Innovation | KBW2023

hi everybody thank you very much for coming down thank you very much for staying to the very end of the Korea blockchain week um it's our pleasure to have you here and it's my pleasure to be seated alongside some of the three biggest ogs in the whole metaverse digital ownership field um my name is Edward I'm part of hash and I'm growing the southeast Asia team and I'm based in Singapore so thank you very much I know I'm the only one stopping you guys between dinner and your side events and your drinks uh I'll like kick things off with an introduction from the panelist over here Brian hey guys yeah just to Echo Ed like we really appreciate you guys staying and uh we'll try to keep this fun in light my name is Brian I'm the co-founder at Republic uh we run an advisory firm as well as an investment platform I'm based in Los Angeles really stoked to be sharing the stage with uh Alan and Seb so uh yeah hopefully we make this thing fun and interesting for you guys hello everyone every everyone I'm Alan CBO at anima um so I run our investment and partnership team and also the ecosystem support that we provide to the 400 companies we have a portfolio uh before Anya I was uh running fintech at 10 cent uh running the insurance that provide service to 100 million users I had a different head uh and that's why being in so this week is very exciting uh I'm on a board of a couple of museums so free uh so is happening right now so for those of you that's done with the blockchain side of things go check it out as well hello everyone thank you for making through the day and keeping the energy we're still the middle of the week there's a lot going on in CR blockchain week I'm glad to be back on stage one more year I'm the CEO and co-founder of the sandbox uh as well as the president of the blockchain game Alliance it's the sandbox it's a decentralized virtual world where anyone can become a Creator start making their own asset and experiences truly own them monetize them the way they want yeah you know sbox animoca Republic have been around for nor of five 5 years now you know these guys have been building in the space and I don't think I mean especially during a bare Market you see everybody waning away you see projects dropping off these guys have been around for a long time maybe I'll post this question to the panelists over here what have kept you guys motivated um throughout this bare Market what's kept you guys going and what kept you started in the first place all right I start so I think like we share the same uh passion and vision that we had from the very beginning and not the beginning of crypto and blockchain but the beginning of sun box back in 2011 our vision has always been like how do we Empower anyone to become a Creator using new technologies so it started with smartphones back then just touchcreen allowing people to create content without any programming any specific skills share that content online with others and enjoy um after quite a success 40 million downloads um over 8 years 60 product update and 70 million player mate creation shared we also found along the way way that uh living out of passion and sharing your creation to other wasn't enough to keep creating creators engaged retain them over years and somehow like if creators dedicated their time their energy and contributed to grow a game grow a platform uh to become bigger and to earn more revenue and they couldn't receive a portion of that Revenue forsel it was unfair and they would be moving out to the next platform that give them more value for their time and due to various limitation on the stores uh back then it was not possible to share a revenue back to those creators so we were really confronted to that issue and we we we hadn't found a solution until 2017 that we discovered blockchain and actually nfts back then it was just simple virtual cats that you were breeding if those of you anyone of you knows crypto kitties in the audience like you've been a long time in the industry and we thought like nft could be used for like bigger things than just virtual cats anyone could make their nfts and from there that's really how uh setbox kept on for five years uh we had always this vision of like developing product developing exciting content with those product like our 3D editor our no code game maker and growing an ecosystem around the world of agencies creators Studios that will leverage those product uh to develop new experiences a new format of entertainment that will engage and bring in more more Creator in the space yeah absolutely anybody doesn't know crypto KES here right so everyone's very OG here as well alen how about you what kept you guys motivated across this period so I came from a web two background so I think tensent is as centralized as it gets when it comes to um data and and and the way we work in the ecosystem so therefore you know when I start hearing about web 3 and the technology and what it enables around digital property right I think it just makes a lot of sense for me but but I think the the the stimulus was really you know I I mentioned I was I'm quite involved with that I collect myself I'm on a couple of Museum boards is really understanding what web three can do to creators and I think s mentioned it a little bit right the idea that you know creators can cut out the middleman and can go straight and they can really own what what what they've created but also earn a royalty continuously going forward you know I think that really was you know a eure moment for me and I think you know I can be doing a lot of fun things combining the two communities that have always been you know one is technology and the other is culture right and it's not just restricted to when I say art and and Creator it's not just restricted to sort of Visual Arts right actually one of the uh thing that I'm really looking for forward to um tomorrow is uh together with sandbox we're doing an event called Dance fight so it is a company that we've invested in together and they we've done one addition of it in New York which is we bring street dancer and basically capturing the moves and turning that into a an nft basically an aler that you can play in sandbox and in that way basically we we capture the art form uh in in an asset that they can actually own and sell so you know think about during Co a lot of these dancers you know they don't have an opportunity to perform but now with this technology it allows them to actually own and monetize their craft and I think that really is a very touching story for me and that's when art and so I should say culture and Technology comes together and I think that for me really motivates me right so if you're a street dancer amongst the crowd this is who you're looking for you want to get tokenized you want to be on Sandbox quick note on that like you're all invited tomorrow we'll have uh in the afternoon with sandbox organizing a demo day you can meet 14 of like the Korean Creator Studios have been building they'll showcase what they do in sunbox and we'll have this performance with dance fight which is just one example among the 100 of like how it's actually making a real impact for Creator changing People life and creating new jobs awesome awesome how about you Brian what what what got you started in this whole field building in a metaverse yeah I think uh really to to Echo uh Alan and Sebastian's sentiments it is really the uh ability for people especially creators to find a more democratized way to show off their Creations be properly monetized for it and also have mass distribution I think for me I I actually want to take it one step a little bit higher which means the true democratize ation of like Financial access to things um that's really meaningful for me and that keeps me going uh in web 3 because uh you know I don't come from a lot of money growing up and when I first got exposed to web 3 and blockchain I saw the potential of people being able to disrupt entire Financial systems and create brand new um Primitives create brand new businesses that can create uh the next generation of wealth and uh the biggest thing that I noticed at that time was there wasn't really a framework nor a technical architecture for these to really scale so we made it our mission at Republic to create not only a compliant framework for web3 technology but also to help work with the strongest projects to guide them through how to properly build in the metaverse or to just generally build web 3 infrastructure and uh being able to see that the purpose of doing this is to create this demarti of Finance uh keeps me driven and the last thing I want to add that keeps me driven is actually all these conferences and all these people uh I think anybody here you'll probably be able to say this uh the people that you see these conferences are are like basically your friends like you hang out with these people we're we're we're going to go to some After parties tonight uh it's always a really great reunion catching up with everybody in web 3 I used to come from a traditional tech company and the conferences that I went there were like super not the same they were very transactional pretty boring there's never like you know cool booth and swag music none of that stuff so it's quite a unique working experience so not only am I driven by the technology and what it can become I'm also driven by being surrounded by really interesting people and I'm being driven by how fun the experience is just like existing and building in web 3 right and I think all of us can fully agree with that uh you know I came from my private Equity background a couple years back ago uh working in traditional Finance back in Singapore when I attended events when I attended meetings there was nothing like this and I think Ellen can agree with that as well right I mean coming from the tensent background it might be very different like big Tech background maybe Switching gears a little bit um you know alen you mentioned earlier about uh Street Dancers and like trying to give them a lot forms of Engagement how do you see the metaverse um creating different forms of Engagement apart from this event that you're doing and I think it goes to you know nft and what it enables which is digital property ownership right so one one of the example where we spend spending a lot of time on is in education so you know of course uh people would know blockchain has been in entertainment in sports in music in games but education we really think there's a lot of potential and a project we've launched recently is called open campus so what we do is basically we take existing courses that are selling on web two platforms so it's got a revenue and cash flow behind it and we're tokenizing that to your point about financialization tokenizing that into nft for people to buy so you know that inject liquidity into education which we all think you know I think we all agree is a very important sector but it does a lot more than that so I think to answer your question on how it changed the relationship with ownership so one of the example is you know we've got someone in Japan that bought one of these cost nft and instead of just owning it and you know basically claiming the dividend and the cash flow from it every month she said hey you know what I I think this is now in English but there's a real potential for this in the Japanese market so she is going to localize it and start Distributing it co-publishing it in Japanese so I think that's the kind of um impact that we're going to see which is once you own something you have an incentive to make it better to find more ways to monetize it to sell it to publish it so you know I think that you know we we're seeing it in in other areas as well in games uh one of the thing that we've launched um a couple of weeks ago is a game that we did together with Yuga called R leak and you know it's also transforming the way that people would own game assets so in web 3 you buying game asset you hope that value would go up right but in this one you own the game asset and you would Lee it to people that will be playing it in the future on the web to mobile platform right so again to create a very different incentive for people to not just hold it and you know expect capital appreciation but everyone who owns the NFD will have an incentive to Market to go tell everyone about this because they owners they're going to profit from this right so I think that's what you know I see web3 can do with nfts yeah I mean creating different forms of Engagement comes in many forms it can be a create you can just be a teacher you can be a dancer and this is where all these platforms whether it's sandbox whether it's animal Brands whether it's Republic they're putting things together and building an infrastructure for you to grow and I think that's a beauty of where we are in the in the blockchain field right now uh SE what do you think of that well I would Echo a lot what Alan said like I think it really open up new opportunities um through first like the type of experience that you can find in sandbox they are quite different that what you would find on other platform they are Avatar Centric they are more social they are not really your traditional game if you were expecting something as a gamer it's really a mixture around like Discovery exploration socialization and uh sometimes like completing quest uh touch also education and it can touch of course like music gaming sports and other um I think there's also really that very specific culture of uh being more inclusive bring more diversity the diversity of creator that you can find in sunbox is quite unique and why is that is because of the accessibility of our game maker which is really no code that means like suddenly you have a platform where different type of Creator people who have not evolved in the game industry for 10 years like us so they can like bring new IDs they can bring new type of content with their own Heritage their own culture uh it helps other countries that were kind of left behind because of the web 2 model or freet toplay model to rise on the scene on the global scene in web 3 that's really why we're seeing sandbox so much developing for example 40% of our business now is in Asia with our credor ecosystem there and um behind like have um also a very different culture in term of like how we're not competing with each other at the end of the day we're really collaborating like every new project we want them to be successful because like through a successful project new users will come in they will own their identity their wallet and they can move between application in a seamless manner bringing with them their digital asset utilizing them building other application on top of it so there is really this culture of like collaboration supporting each other in the space and developing a network effect which is very often seen for example with what we call inability like if you own an asset in this game or if you own a profile picture collection or you're part of a community let me uh utilize it in sandbox as well to play as your avatar and start like expanding your Universe uh de developing new skills for your community like making them more Creative Learning uh new things and engaging them in different ways so this is just an example but I think like it should be really for me that's one of the main characteristic that we're seeing in web free and how like this parading shift is going to impact profoundly uh like that new generation of user and hopefully also users from web too yeah thank you so much uh Brian anything you want to add to that yeah so the question was like how the the how does ownership transform right from physical physical to digital um I think I want to add a different perspective to this which is that I believe that web 3 is actually coming at a very uh good inflection point where the next generation of people uh are U very used to a digitally native world and their concept of ownership of digital items think of uh you know currency and Roblox or skins and Counter-Strike whatever in web 2 is what they grew up doing right especially people that are like in middle school and high school today this is what their world is and blockchain is now creating a way to actually represent ownership in this world for real so I think that the Advent of metaverse and nfts uh which should be um just new ways to think about true digital verifiable ownership is coming at a time where a digitally native generation is also coming online so I believe that it's just going to be a natural way for people to think about what they own and uh blockchain is just a way to enable that uh I also want to touch on one point that you made Alan that I thought was really great which is once you own these things you can you like truly own the IP you know depending on what the legal rights are but when you own a digital asset uh on on chain then you can actually like you said Market it sell it and you're incentivized to make that piece of Ip uh awesome which is different from maybe owning a uh Mickey Mouse figurine and like you don't really have an incentive to publicize it more because you're not benefiting fting from it but if you own a nft of a cartoon that was generated by someone's collection but by owning that you actually own the IP you are now incentivized to like plaster that cartoon on water bottles uh put it on t-shirts even create a a restaurant that sells things with that face on it because you will actually benefit and you're actually allowed to do it which didn't exist before so I think that concept of uh digital ownership and physical ownership is really changing and it'll be really cool to see how it evolves uh moving forward yeah and I see a lot of that sort of going into the social fear as well I think the most recent kind of talk about digital ownership comes in the form of FR Tech which I think we're all very familiar with uh you're tokenizing social networks which I think is something that hasn't really been explored yet but you see them breaking in a lot of fees as a protocol and whatnot um you talked a little bit about digital ownership and physical ownership I want to post this question maybe to se um you guys are selling L on Sandbox right if I have got x amount amount of money why maybe why should I think about buying a digital piece of land on Sandbox over something that's physical out there in the real world well I I I believe like like we described before like more and more people are going to spend time interacting and having jobs and participating into this virtual and digital world economy in this space like you have an avatar you interact with ERS you spend time creating and you we want to have an ownership in the world or the platform that you contribute to building so that's what essentially a virtual land represents on a platform like sandbox it's part of a map and that map all together in the case of sandbox is a 166 164 land represent that ownership of that virtual that you contribute to build you uh owning land is the key to access monetization and it's much easier specifically when you already spending like genz today like 12 hours a week in a virtual world you prefer to own a piece of place where you understand the mechanics you understand how to grow an audience you understand how to engage and potentially monetize it versus owning a piece into a physical world erting from thousand of years of history and on a a concept where like the price of the market doesn't really reflect your own effort and you have literally no control over it and Frankly Speaking for that next generation that gen Z and Next Generation like it's getting is going to be harder and harder for them to actually have uh physical property specifically on physical real estate market I'm thinking of cities like New York Hong Kong Paris Etc like the average age to become a owner is becoming above 40 years old and even though they are like working hard Etc virtual world they have access to be the pioneers of building those world that will last we've seen Second Life we've seen even online those world will last 20 30 years maybe more and because they are intrinsically in it they understand it I think it's just logical to to go into it fully gotcha gotcha and you know Ellen from your time investing and being the cbdo for anima have you seen any advantages of digital ownership over physical ownership any bottlenecks any drawbacks um you know I think I think one of the most interesting aspect is the permissionless aspect of it so you can own something and you know as we've talked Al about you know people once they own they have a different incentive to Market it to make it more valuable but also you know there's also this very interesting permissionless aspect right so for example like the the Yuga and I think everyone knows that case very well um of course you know Yuga themselves would provide a lot of utility to Bard Apes but because of the brand and and what they've built there's a lot of people that's offering uh benefits and utility to Bap holders in a permissionless fashion right and I think that doesn't happen all all that easily in in the web too well and you know we seen a lot of that happening in our own nft collection called moers right so you know obviously we've created a lot of you know games and events and benefit that we're delivering from from us from the project but also there's a lot of people that are just reaching out and you know they are just reaching out directly to the Moochers community and said you know this is for you and you're on the white list right so these are all things that I think was much harder in the web two well and I think now is very different and interesting in the web 3 world gotcha thank you very much and you know I think a lot of them have mentioned a lot about nfts and using nfts in their ecosystems in the metaverses um how do you see nft sort of being interoperable between different metaverses will there be one metaverse that you see that dominates the field or will there be multiple metaverses and therefore multiple nfts in each metaverse that exist in there maybe I'll kick this off with Brian yeah that's a good question I think this actually comes down to a web 3 infrastructure discussion and uh currently there's a lot of projects that are trying to bridge different layer one layer two ecosystems together uh there's even projects that are called like a layer zero which is kind of like a common denominator across multiple layer one and Layer Two protocols that are on different languages that don't typically will talk to each other I think that once we solve something like that where there is true cross chain interoperability with different uh blockchain ecosystems then you can have a seamless flow of digital assets across uh different universes um so once that infrastructure is solved which I think there are many projects working on it today then we can have a world where I get like a super cool skin for my gun on a salana game but then I can also transfer that to a different game that's built on polygon or something like that uh currently you can't do that today uh for for many reasons but I think that future should exist because I you know as a gamer myself really like the idea that nfts and web 3 allow you to uh showcase the amount of work you put into a certain game and then have that be present with you as you go from game to game uh and I think that's a really cool um feature that should really be explored and can really um add to the player experience um and doing that across not only different games within the same ecosystem like you could do that within blizzard today sure but doing that across games in different universes and worlds and even companies uh would be really really cool to see so these are all suggestions feedbacks and ideas for the builders in the room developers in the room if you guys are thinking of something buil you're hearing from the top Minds uh in the metaverse space in the digital ownership space uh so do take a note um Ellen anything you want to add on that front NFD inability yeah I I think maybe this is where the virtual world is behind the real world because imagine this right I mean I like this jacket I'm wearing in Hong Kong I want to bring it to Soul to wear you know of course I like it I want to bring it to so to wear but it's not possible right now in the metaverse right because you know of you know cross chain issue and you the fact that there's everyone had a different commercial interest right so I think this is where actually the virtual behind the real world right I can I can wear this in New York and and and and in Tokyo right so but but people are solving it right so layer zero is sing it you know I think we're seeing a lot of cross chain solution right now technically and I think commercially we're also seeing companies doing that another company that you know is part of uh the animal portfolio that you know I think sap knows very well because they work with sandbox as well is a b&v right so they do digital wearables and you know they would create something that is wearable in sandbox but you know wearable in different metaverses as well but you know that requires quite a lot of commercial negotiation and you know I I I hope that you know as we move move forward with the cross chain solution then you know there's less friction in that and you know hopefully it'll catch up to the real world sooner got it how about you ZB well back to the question like first of all like I absolutely don't wish there only one metaverse one virtual platform takes it all like we don't want to fall back into web to Worlds like what's the point of dation if there's only one place to go we want to see Myriad of world different Niche different I don't know Aesthetics different ways to interact platform and hopefully all supported by this idea of like uh being part of the open metaverse and blockchain so at set can be transferable um there is a few working groups and Association that are actually working on some of the channel that you describe on the technical standpoint uh the two name that comes is a metaverse standard uh Alliance or no the metaverse standard Forum that was msf that was the first one that launched and counts already over a thousand members including AP Adobe Microsoft Roblox Etc very concentrated on technical topic of like file format special interaction Etc there is also the open metaverse Alliance which animoca brands sandbox U and many other companies like a plan alien world the central are part of and it's been already over a year so they've started a certain number of working groups they have regular we we have regular board meeting and we discuss on topics like portaling how do we move between different application on different platform in a seamless manner uh different interoperability and also the the rights associated with assets and so on there's some progress some paper are being published already so if you're interested on the topic it's quite uh interesting still at the end of the day I all those challenge exist and they will need to be solved but I'm also very practical as an entrepreneur I think like what people care about is like so what so what can I do concretely with that so we try to also attack like concrete example like you own an nft and hopefully this is one of the top 70 most popular NF collection on ifum or polygon you can already play with it in sandbox as a 3D avatar and you literally had nothing else to do then just connect your wallet it comes straight off the box and that's it you can start exploring World connecting with others uh exploring a bit new possibilities and we also regularly Engage The users who own those nfts by offering special rewards so in a way we on board them toward like all the different possibilities that exist in the space thanks to inability and show them like uh like one asset can have multiple use case can have multiple representation and it overall benefits to the value of their asset and to the communi that where those asset were originally created from in this atos of like collaboration and generating Network effect among like communities yeah awesome thank you very much and again for all those metaverse enthusiasts in the field uh don't give up hope there's going to be multiple universes I think on on chain and so keep building create a new narrative keep trying and these are the brains you want to tap on these are the guys that you want to pitch your ideas to when the time comes um just a last question to the panelists over here uh we really thank them for their time and how far off do you think we are uh to mass adoption like on a scale of let's say 0 to 10 uh and you can rank that in terms of number of years Mass adoption of the metaverse uh how far off do you think we are at that point uh Brian yeah I guess I I'll keep it a little bit short and I think it depends on how you define metaverse because is it a web 3 metaverse or the you know the the Facebook metaverse or something like that right I I would argue that a lot of people are already living in a digitally native World by playing in video games that's the first step to being in the metaverse now if you're talking about a web three enabl metaverse with like permissionless access and true ownership I do do think we're a little bit far uh call it 3 to 5 years away I don't know actually these guys might know better than I do um but and I'm coming from it from a more technology standpoint I think that the infrastructure the interoperability still has a long way to go yeah I I think similar so I would Define it a little bit more broadly so I would say when is Mass adoption for web 3 is going to happen and I think it's taking two steps right in fact you know I I I think just in the previous session I hear that there's 100 million wallets right now only right so you know I think there's still a lot more people that need to get on board and I I think there's going to be a lot of islands actually so if you think about all the custodial wallet that's being opened especially by the big Web Two Brands I think we're going to see that phase coming and you know there's going to be a lot more people in web 3 and then there's going to be another step where these things are actually connected so you know 5e plus is my guess okay cool if you ask me like I think like within 10 years everyone will have an nft will have a wallet Etc but does that mean that we'll have 1 billion user already into a metaverse that's still to be built like the technology the product to support that uh we've seen that it can take decades to achieve like platform like Roblox like fortnite like Minecraft Let's we just five years into building sandbox so I would give us at least five or 10 more years to reach that level and let's see how things go awesome so I think the rough idea is that's about five 5 to 10 years from now Brian's bit optimistic three years for him uh but you know everyone has different definitions of mass adoption uh really want to thank you guys all for your time I want to thank the panelist a lot for their time as well and thank you all for staying uh thank you thank you thank