Bringing Commerce Objects into Web3 - John Lee

hello everyone my name is john lee and uh i'm here to talk to you about bringing commerce object into web3 um the shopify journey so my i am currently the head of blockchain ecosystem at shopify and i just wanted to give you a sample of what we've worked on what we're doing and how we're going to get there but before i get into that i just want to talk about a little bit of a story about what commerce is i'm sure you've all heard the the stories about the seashells being used as money to the grindstones and all of those like that's typically what people talk about when they talk about commerce but the thing i want to focus on is actually the relationships and the stories that commerce brings about commerce is really about the how you create relationship between two people that is the seller and the merchant and the buyer and what money or what cryptocurrency in this case is is the medium by which that story gets told and it's really really important to think about that there is effectively two people at either side of that story to kind of make that happen without the people commerce doesn't happen so we could think back in history and the history that i care about less so than seashells and grindstone is really the stories of civilizations that's kind of grown up and uh gone away so there was a romans with uh cistercies that you can still find all over the place and how the romans conducted their their commerce is still to this day things were discovering because of what they've been able to do same thing with the mongols and same thing with every major civilization in the world so this is just the reason why i want to have that conversation is as the head of blockchain for shopify my role is really to bring about web3 conversations into the commerce sphere shopify has been a platform around for about 16 years already we have millions of merchants on platform and we do hundreds of millions of transactions but the the web 3 conversation is such an important one that we've actually created an entire team to support and have those conversations so what do i mean by building better commerce through stories and through conversation through relationship so when you think about commerce objects and what they are they're really the primitive that you use to engage another person like let's be honest without a relationship commerce doesn't happen and one of the things that we've often thought about within the web 3 space was this really really hard focus on trying to make the financial side very easy but we've never really talked about how do we engage the counterparty in a transaction in a conversation how do we actually create communities within those commerce activities and that's really what i want to focus on because we very much believe that for commerce to succeed in web3 we need to take all the lessons learned from existing commerce platform through the millennials of what commerce is and bring all those forward into the web3 space and we actually would love to work with partners the entire shopify system is a platform that is meant to be engaging with partners to bring things forward and to make web3 features available for everyone so a good example is let's let's maybe take denver itself as a really good example um one of the things that is always interesting is when we talk about things like nft as a ticket if we were all able to get we all talk about it it hasn't happened yet there hasn't been any major conferences where the ticket has been an nft but imagine if that was the case if we all received an nft for attendance of this conference then you could leverage that nft to go in the swac store and actually gate experiences where certain merchandise is only available to those people with certain nfts and that becomes really powerful because you're taking what's happening in the west through space and defining what the constellation identities are in somebody's wallet but bringing it into the real world because shopify is an e-commerce platform we do things like fulfillment we do things like you know fiat payment for certain things and let's be honest not everyone wants to use a crypto that's just a reality crypto has not been used for commercial activity in a long time although we do there is some people who do that but the reality is a lot of people would ride a huddle then they they want to participate in in active liquid markets with those with the crypto they hold now imagine if beyond just what that means is that we're now able to have conversations about the conferences that we attend not this one in denver but future conferences we attend if we have that nft we can actually start having those conversations when we go somewhere where you know that you needed a gated access for a merchandise and when you see somebody wearing the merchandise first out that comes you know what they belong they're part of my community and i'm sure you run into this walking around with people wearing certain sweater certain t-shirt that you know it's providence you know that certain sweater was only available at a conference five years ago and that was the only time they ran it you have one you know that person belongs in a tribe and that is really what engaging in commerce means because that is what's going to drive adoption that's what's going to drive people having conversations about this so when we're talking about commerce objects i really refer to like what currently exists within the space so we as shopify already have a lot of definitions on a commerce object things like carts the ability to build a cart the ability to do a checkout the ability to control inventory the ability to do taxes the reality is we've solved for a lot of those issues already and we would invite a lot of the blockchain community to come and build on that by using web3 principles we already make access through our entire platform through a set of apis and signing up as a partner is that easy so it's a it's a really interesting conjunction of of what we have with the existing market and existing merchants that we have who want web3 features and a set of developers and and partners who can really provide some underlying function to them and there's some really interesting concept when you think about that a great example i want to bring up at this point is i did mention a little bit in a bit ago but nft gated commerce is really an interesting area we all talk about oh the nft space there's things that's been happening where we're dating environment gating parties gaining merge the reality is is that when you can start building ad-hoc communities leveraging the composition of your wallet addresses that's when it becomes really really powerful i just mentioned the concept of going back and thinking back of somebody who attended a previous event now imagine that you could actually look at that contract address know every single wallet address that has that nft and then but also look at what are the constellation of tokens in that particular wallet it is a blockchain all this information is already available and you can actually build ad-hoc communities that can interact with each other talking a commercial talking about commerce and interacting with each other and that's a really really compelling way of storytelling so maybe think of it another way think of all the wonderful sponsors and people with booth here a lot of them have tokens some of them are dao some of them have other kinds of tokens now imagine if the merch store that's that's running downstairs could be set up in a way that nobody really needs to all have t-shirts on their on their desk realistically it can go through a centralized you know merchandise repository and the way to do that is log it do do a wallet connect once you wallet connect and you have an e-commerce platform in the background the e-commerce platform can decide we will present you this set of merchandise because we know what the composition of wallet is but not this set when you order and you check out it provides you the ability to really hone in on those really really granular communities that make really interesting things so this is like a really important thing to talk about because these communities and these stories that pervade throughout is not just a conversation about us as the wet three community and i say yes i've been in the space since about 2014 so i've seen the up and downs i know what's going on but i say us because it really is that conversation about making ourselves more accessible to bring on board the next 100 million new users there's been several speakers like between this stage downstairs everywhere else adoption adoption adoption we always talk about adoption now imagine within the shopify platform where we make it available for all of our merchants to to offer blockchain products and for people to be able to purchase it without really having to purchase cryptocurrency because that's kind of what we've done with nfts the way that we've kind of set up our nft to address the issue of the option is a merchant and a buyer can actually transact in an nft where the buyer can purchase an entity for the merchant without either the merchant or the buyer ever having to purchase cryptocurrency we are using our existing um credit rails to do that but it is a sometimes a very scary thing for people to figure out how do i buy crypto granted there's a lot of great things out there that makes it very easy but when you when you care about a brand and your relationship is with that brand you don't want to then have to go off and figure out what else you need to do you want to stay with that brand and part of doing that is relaxing all of the complexities that exist and trying to onboard into the blockchain ecosystem so i realize my decks are very very meme heavy and that's on purpose part of it is because i like to talk so i'm just here i'm just going to talk a lot and i do want to bring up some use cases around this because like whiteboarding use cases around this is extremely important and that's part of the conversation we want to have with the community about there's a lot of commerce based use cases that blockchain projects have built out but they've never really had an outlet where they can either acquire merchants or really put it into practice and we want to invite all those projects to come to us to have the conversation with us to see if we can actually make make it an offer for all of our merchants but i do want to go specify into very particular use cases which i think would have some amazing effect consider perhaps a creator a music creator somebody who actually creates music the concept of creating music and dropping in as an nft is known people have been doing that but there's some really cool mechanics you can do when it comes to web3 good examples of that are locking up an entire set of nft within a smart contract and only when the sale of this nft reaches certain threshold to release the entire album for that for that creator to be able to um engage with it with their um with their fans what that creates you you've created a commerce gamification within the smart contract itself and there's nobody that's required to determine hey should we actually release this should we not relate this all of this can be controlled strictly by the smart contract that actually overrides all of those uh music content and that becomes really powerful because we all know that code can really extend and this is a really good way to extend out what you can do in commerce another interesting concept is is creator attributions like attribution is something that pretty much everybody has to deal with but when you consider social media content creators right now they are spread out over so many channels but all they can tell you is the analytics that either that channel gives them or aggregate social media channels that can tell them things it doesn't compile vandos to a single metric that they can compare apples to apples a audience member on a tick tock to an audience member on instagram however if you were able to to drop nft to your to your um to your audience and then track what is the commercial relationship they have with you there's a lifetime value of that particular engagement that can really come out through the metrics of that of that analysis finally an interesting concept is like really building out those communities because we've been selling we've been allowing people to sell nfts on platform for about seven months now and we've already seen a massive engagement on how people do commerce in wac3 which is significantly different than how brands do it in in the regular world and part of that are leveraging a lot of e-commerce mechanics things like um leveraging our flash shell techniques so most of the nfc drops we've seen have operated in a flashlight environment where as soon as it drops the number of transaction just shoots through the roof the reality is blockchain is not the most scalable particular architecture to handle that that's where we as an e-commerce platform can handle a lot of that oversight and auto-scale where needed while allowing for the blockchain to catch up when things are happening and these are kind of the collaborations we're asking about and asking the question of how can we work together that's that's the site where you can go and you can become a partner and the blockchain email is actually my team who actually has been created specifically to support web3 developers to engage and to come on board to shopify to help a merchant so i am i have time to answer a few questions i believe so i'm going to open the floor to see if there's any questions how do you how do you make a decision between developing things in-house versus bringing partners on board so the way that shopify operates especially in the blockchain space is we want to collaborate we want partners so there is very few things that we're building in-house a lot of our activity is through partnerships and quite frankly we've taken a stance to be blanchard agnostic so we want to operate at every single blockchain that wants to work with us and that means there's no way that we as shopify can build everything let's be honest like just look at this conference of everybody here we know this and having been in this space for a while i also very much believe that harmonization across our blockchain is extremely important so we will always make the room for somebody to come in and to work with us through partnership and that's what we do so we we prioritize our partnership within the blockchain space any other questions how do you envision the nft's unlocking physical and digital content within shopify's ecosystem so we've already done that in fact we we already had about five drops that happened of physical merch like sweaters things that required an nft in order to purchase so that's already been implemented we have partners who enable that within our platform and really easy way to do that is just do a wallet connect check against the contract that the merchant has defined does that wallet address um is that listed against the ownership list for that nft if it is allow them presentation of that and go through checkout it's a very easy way to gate gating is a simple thing to do but communicating and actually interacting and having the storytelling to your community so that they appreciate what it means that's the difficult part and that's what merchants are great at doing right awesome um any other questions i think we're running out of time i'm really looking forward to actually having more conversations with you and thank you very much