Beyond NFTs: The Bull Case for Onchain IP | Baek Kim | Roham Gharegozlou | Jessica Salomon |

[Music] all right let's keep that energy up eth Denver thank you for hanging around the main stage today next up we have a great panel conversation it's going to be led by Robbie cayes co-founder of the rollup it's called Beyond nfts The Bull case for onchain IP please give our speakers a round of applause GMG M what's up guys last day of e Denver let's go yeah all right we're going to have some fun talking about IP uh I like to think of IP on chain almost as a natural progression of nfts um generally when you guys are thinking about this progression this Evolution from IP early on to IP nowadays do you guys see it the same way what is the right mental model for us to think about IP on chain yeah I think that's a really interesting question for one I'd like someone to come up with a new name for nfts because it's an extremely valuable thing but a lot of people a lot of important smart people they just have a bit of a sense of trauma around it especially in Worlds outside of crypto but I think nfts really just means that it's a moment on the blockchain and when it comes to actual AI models that are creating something in which the inference is verified on the blockchain it's a bit more powerful than what we saw within nfts before before in 2021 like you don't know if someone painted something you don't know someone could have made it in Photoshop and then they just went on openc and they clicked that button me I think now ai needs a bit more IP yeah you can see how that leads to some nft PTSD um and that's just one of the many forms of IP on chain and so we've got plenty of speakers on this panel here that are doing things not just nfts but many many forms of IP on chain maybe you guys can illuminate some some examples here to how we can bring IP on chain Beyond nfts I'll give a little Spiel on on vends and context on V friends I think vends is a really interesting example of how IP is evolving and evolving with our collectors the first version of VRI series 1 were actually Doodles by the Creator and founder and then vend Series 2 were animated colored fully personal designed versions of those characters if you minted a vend Series 2 on F you got a collectible trading card box that trading card box is now on the secondary Market on eBay it's on live shopping on whatnot and people are being introduced to V friends for the first time in trading card form which is then leading them back to onchain for me um you know I was born and raised in Japan with a lot of different IPS in Asia and the thing that I noticed was uh the past uh Decades of living there weren't that many new new IP that came out that went Global um and I think the reason has been that a lot of that publisher and distribution has been controlled by and powered by a lot of the huge multi you know International companies uh and you know when I saw IP start happening on crypto and on blockchain it's a lifetime opportunity to bring new IP to Consumer directly to the your own fans and community and I think that started happening with you know crypto kitties and you know Infinity you know when we were first invested in XC you know we thought oh this is an interesting game but then the behind the scene being on blockchain was that it was the first time that you could launch something with small budget and Go Global to have everyone know the new IP and characters and I think that you know inspired a lot of people on blockchain and also in different media industry and entertainment to think about maybe we can do something more in blockchain than traditional media yeah I totally agree I think sometimes we forget that the best real use cases of the blockchain is the fact that it is a Leisure technology you can see a history of all that is created there and also it's easier to transact you don't have to go through certain firms or certain Studios that take a large cut but I think it's specifically interesting when it comes to like we're saying things generated with AI because at this point like my Boomer parents they love making a mid journey and sending it to me and like in theory they're proud but they can't actually show it's them that made it whereas with the blockchain the ability to actually give royalties give provenance create a form of monetization not just for the person that's doing the text to prompt or the person that created the actual open- Source model but even the people that are contributing data to that and I think it's much bigger than just like the typical artistic nfts we've seen in the past it also will extend eventually to pharmaceutical companies architecture firms all Industries I think need a sense of Ip given that AI models just don't necessarily give us that confidence without what the blockchain does I think this will be a good segr I think one of uh I think the first time I ever heard nft was actually through top shot and Top Shot has such a big moment because uh it's a collectible and people love collecting cards and using the IP of the NBA uh had a real moment in time and I think for V friends and how we think about V friends is through collectibility and that collecting as a genre is only going to continue to grow like when you're sitting around a dinner table people talk about movies music Sports I think the question of what do you collect um will be a more and more common question as as we hang around the dinner tables yeah 100% I mean digital collecting is just collecting but it's easier it's on your phone you can carry a whole collection around everywhere show it off like your social media profile but the funny thing is with topshot initially there was no the word nft wasn't anywhere in the user experience anywhere on the website and even with crypto kitties the when we we wrote The non-fungible Token standard and and deer asked me hey do should we just call it an nft I didn't even think about it cuz we assumed you know it's like MP3 you just say music right you say you don't say MP4 you just say a video and so that's where that digital Collectibles thing comes in every Sports conference now has a digital Collectibles panel and they just assume hey digital collecting is going to become part of a sports fan life life cycle just like physical collecting was um and eventually just like e-commerce is just Commerce digital collecting is just collecting um and and but in fact you know e-commerce became bigger than Commerce and and same thing with this so the word nft you know maybe next e themer we still talk about it but two three e Den Denver from now you know hopefully we're just talking about the forms of Ip and the forms of content and the user experiences that people are engaging in not kind of is it an nft or not which I agree for consumers it's a little bit of uh association with you know price movement and and this this this kind of thing yeah it's just an issue of branding and rhetoric I totally agree with both of you guys that collectibles is really important for extremely loyal dedicated communities that find some something to be a part of their identity but I think in some ways paying for a collectible of just an experience you partake in like in the case of music nfts I'm bullish on music nfts now super bearish back in the day because like I listen to Kendrick sometime but like I pay $12 to Spotify a month like why the do I need to buy an nft so that I can like just show some people like yeah I do like Kendrick just so you know well the most popular nfts in like the most highest quantity number of nfts by a single project is probably Ticket Master about 100 million almost 100 million have been uh issued a lot of them to music fans some sports fans but they don't think of it as an nft it's just a digital Ticket Stop and most of them have no value but the next Justin Bieber his first Justin Bieber concert if he's got that digital ticket stuff that thing's going to have value which is how you know Collectibles and collecting kind of works so it's just stuff but then it turns into Collectibles yeah I got you I think like in terms of loyal communities crypto does a great job of that as well because Financial interests and ideologies are align but same as like the really successful communities that offer Collectibles when you put IP on chain you also have the Collectibles but then it's on chain so you can do reward rewards loyalty programs vriends we've thrown a conference for the last three years vcon and those tickets are actually collectible tickets on chain 2 and it's just a really fun way to engage your fans and your community I I think something interesting is um you know a lot of us here has been mentioning about like collection and how exclusive Community it can create but I think what's interesting about blockchain you know IP on blockchain is that it also creates infinite derivatives to happen in a safer and manageable way and uh Jessica was mentioning bit about AI earlier about you know with AI coming you know a lot of the graphics and the design even the narratives are created by Ai and sometimes these are maybe starting from you know IP initial inspiration from you know crypto Kitty topshot or be friends and that could go on and go on and be really infinite variation where are you going to you know put it you know how are you going to control that how are you going to control the incentives of who contributed what inspiration and I think that really created an interesting opening moment for the IP industry to think about not just mon monetizing with all the crypto Bros investing in it but actually we can create something new for whole media and IP space as well yeah so that's actually what I'm working on now a project called 707 so it's an extension to ERC 721 which is an nft we recently got our proposal passed by the ethereum foundation that when using an AI generated content model on chain you receive an asset that looks like an ERC 721 but is denoted as Ai and like you pointed out the incentives are somewhat misaligned with AI at this point when it comes to artists and creators because not all of them are actually developing the AI models but that's I think the one problem that blockchain solves quite well is being able to Showcase who the contributors are and having a kind of immediate payout to some of those contributors upon sale yeah 100% I I like to think about this as an idea economy um and AI is great to weave in here we had social media that lowered the cost of distribution essentially commoditized it AI is now doing the same thing to Creation then we have blockchain that is doing the same thing to the coordination of these ideas so we can now measure and graph this idea economy by putting it on a Leisure so the the question is where's the moat where is the real value if all of these other adjacents are being commoditized what do you guys think provides the real value when it comes to an IP brand yeah absolutely so I would say a lot of the moat comes from the data that's actually training the AI model not everyone want to wants to give that up for example with 707 we're currently working on a deal with the bosot foundation in which we could use an AI model trained with bosot art however that then like requires royalties to the people running that Foundation which I think is actually a good thing but I'd say that's the mo just a legality of to what extent St is something that a person created really able to be fed into a model to make something similar if that person isn't getting any additional value out of it we uh talk a lot about at V friends that life is an and game it's not just digital Collectibles it's physical Collectibles if you're not doing web 2 and blockchain and AI uh and digital and physical Collectibles you're not setting yourself up to be a contemporary modern IP but I think the mode is what the Mode's always been which is engaged users if you have a community that is uh going come into your product and you have those eyeballs the fact that everything else is commoditized actually means more and more utility and usefulness for your community a big Focus for us now that so flow is now fully evm equivalent which means anybody can build on top of the IP that we build um and that we license and we bring from you know NBA NFL Disney Etc and I think that that we have the users but others can build different utilties before them and at the end of the day Rising tide lifts all the boats so despite they not being kind of this and in fact like Moes as a concept if you didn't have Moes that means that consumer and producer Surplus is uh is is being fully sort of allocated to the creators and the consumers rather than these like large middlemen platforms that are kind of uh uh you know uh essentially using the Creator content using the IP to get those Network effects and then charging all parties abusing the data dis disintermediating the Creator from their own community and you know that movie's been happening on the internet for two decades now and so so I think crypto can fix that as well yeah um I I think the mo here um before the panel I was asking Andy about what's the demographic of a vs and I think key thing that blockchain does really well is storing data and it's not just storing IP but actually the behavior of those IPS which is something that a lot of the IP Publishers could not really have raw data of their you could do a lot of different research to get idea of that but then in blockchain you have absolute behavioral data of a lot of different nfts transactions which is uh something new that's happening and that will Circle back to bringing it back as a value or experience uh to the fans and community in a different way that wasn't possible before yeah so so the blockchain is great at storing that data um also now once it's on chain it's also programmable there's a big push in programmable IP is as well um I I want to zoom out a little bit and switch gears because you know last month or so we we've got a new regime that's come in in the US and these guys are really referring to things onchain tokens nfts as truly what what they seem to be which is Collectibles right so how friendly do you guys think this this regime is going to be if you were in their seat what kind of laws and regulations would you put in place to carve out the right alley for this for this particular sector I mean I think of it as a green light on almost every product idea we've ever had so as a builder it's very very exciting and I think for our community it's going to be exciting because it just means you know we can at the end of the day it means more individual responsibility I've always been as we talked a little bit backstage a little bit of a you know I believe in individual responsibility I believe we have total there's so much data out there and each of you guys has multiple AI agents that you can use to sort of interpret and and filter through that data so why do you need somebody else or or rather five six layers of you know representatives and unelected and elected officials and all this stuff determining what you can and cannot do is is basically My Philosophy last few years have have sucked you know we don't know what we can or can't do and I think everyone's optimistic that hopefully we'll get some uh some rules of the road and we can pave forward and really innovate yeah and I think the best thing about IP is a cultural movement so when it happens you can't really stop it um so I think regardless it's going to be happening and accelerating yeah absolutely and I I want to kind of pick your guys brains on kind of like a market survey type of type of question where you know you're you're going out and you're talking to these traditional conglomerates that have massive IPS and massive Brands what are some of the questions that they have when you talk to them about the Val value proposition of bringing their IP on chain what are some of the questions that they ask you to to fully understand the value proposition of of blockchain yeah that's a great question and by the way besides 707 I also advise the UFC project that the festive gentleman uh before was up here on um I think it's a bit interesting because it's not as if they're necessarily aggressive in terms of their questioning they're just like learning together with us they want to expand their Community too and they real they realize like all of y'all are saying that collectibles genuinely have been a good way to raise community so I would say that brands are just still learning they're not necessarily antagonistic yet uh I mean from my perspective the main thing they want is just to be where their customers are and from a brand perspective they don't necessarily think of it as putting the IP on chain but they think of it as hey our IP is what happens on the court or what happens on the field um and we want it to be everywhere if people want to watch it on traditional setop media they can do that if they want to collect it in cardboard cards if they want to uh collect it in in a digital format um but then one what gets them really excited I mean we uh in our product have the video rights and we're selling them as kind of these permanent Collectibles to to the community and they would our partners would have never been bought in on it had it not been on blockchain and decentralized because if we were a large gaming company like EA or a social platform like meta sure we can license the video but we can't sell it to the customer as some a permanent Market marker of of hey you own this thing um because that asset actually lives inside the servers of that one company and so forever the NBA or NFL whoever it is would be basically tied at the hips to that company so from their perspective hey we can rent out our assets you can rent our assets all these places but if you want to own something that's branded of our product you're either buying it physically or buying it on um sort of secured by the blockchain very early on we kind of almost talked to them about it as a as an advanced form of digital right management DRM those of you that are old enough who remember early days of like hey figuring out how to uh stream music on the internet it was you know before um these s streaming services um was was about hey I'm a Creator I'm putting out a piece of content but that content has controls on it and so you can't you know send it here and there and you know blockchain is basically making that so Plug and Play like yeah you can sell it if you want we're taking our royalty we're taking our um our piece of it and so kind of aligned incentives um so from our persp perspective it's kind of like a it's a it's a given that they're going to have this in their kind of portfolio and it's a question of how do you make it good for the customer but the point of Beyond nfts you know now you're seeing you know the the a lot of different kinds of individuals and entities putting out non- nft tokens or fungible tokens memec coins Etc um that's also getting everybody to ask well how do I do this in a way that's good for my community because if I'm an artist or a Big Brand there's actually no way to launch a mem coin in a way that's actually good for my community I can launch it on you know pump uh pump fun Etc but then we all know what what it's going to do and so that kind of mechanism of how do you just use this technology to engage my your community is I think the most important thing and you know blending fungible non fungible all this different pieces of technology to kind of make people happy make people have fun yeah I mean um I've been running a crypto Venture fund for last 8 years and uh most of our investor in our fund are public companies in Asia and us where they run entertainment gaming and you know consumer services and in the early days a lot of the question on NF and blockchain was I think bit narrow on monetization and I think the idea were more narrowed in terms of a more of a project than a new business you know it was more event that they wanted to do because blockchain is kind of hot or it seems Innovative so it was more of a marketing uh but now I think they're starting to think more long term as a kind of a continuation thinking more about how do we make sustainable Community or you know nft uh within their brand and I think not many people in crypto realize that we are probably one of the most attractive consumer base being very active International on internet all the time and probably high you know buying power and you know ready to try all different weird stuff you know it's one of the most attractive consumer segment that you can Target as a international company or even startup um so I think companies are also realizing that this can actually lead to you know accessing new type of demographic new consumer base or even going to new country as a expansion plan through blockchain or nft as a asset totally but just to take a bit of a controversial stance I agree with you a lot of what happens on pump. fun or the current AI agent platforms today even they're us like they go up they go down but what are the tokens that those people use that like they bought for that a I AI agent what does it do for them nothing it just like lines their pocket with money or they lose the money whereas I think now that agents are becoming more sophisticated web 3 is a little bit behind on like how good the agents are that don't have shitcoins attached to them I think that it's very possible that web 3 could start to launch actual agents that have genuine utility and the token is a way to actually access that form of utility better trading agents Community management agents Etc I agree with your controversial take I think verifiable AI programmable Ai and generally Ai and IP on chain will open up this new set of use cases that are not possible on traditional centralized AI um and and I'm very very excited to see all of those new use cases um one consistency that I hear between kind of everyone on this panel is is the idea of a onchain IP company basically being a traditional Collectibles business right so how or gaming yeah or gaming yeah so so like a lot of times people in crypto and I think you you kind of hit on this is that we get so dug deep into our Echo chamber that we forget about all of the existing work and history in these businesses that we're built on top of so what are some lessons from the traditional Collectibles businesses that we can apply in on IP and collectibles businesses that's a good question I mean just like ironically speaking all this stuff is so new so I'd say just get the stuff shipped immediately before there's a law that you've now broken but I don't think they that's actually what is going to happen I think everyone recognizes the Innovation that AI is creating for us and the fact that there's more than one Creator within an AI model essentially the person that does the text prom people that built the AI model people that trained it with data uh I just feel that like the actual regulation around it is going to evolve in a way that does stimulate Innovation I would just say if you're going to build a Collectibles company whether digital or physical you have to think long term you know longterm is maybe not always the best or most favorite word in crypto but that's how you have to think about it from my perspective yeah absolutely we were talking about what not you know in the back just makes total sense sense that collectibles businesses are using that onchain collectibles ought to use that as well guys we got 30 seconds left we'll just keep it lighthearted want to hear what is your favorite nft collection and uh why do you think it's going to survive or not uh be friends is my favorite nft collection go figure shout out be friends uh it's going to it's going to survive cuz we got a passionate Community character Maxis that love this uh Collectibles IP and we have quite the founder and Gary vanderchuck and we have a really good team around us and for me it's the UFC strike collection the UFC fans are actually very very into the UFC and those nfds are still selling right now there we go yeah I got to say crypto kitties uh but we got to get Gary back into Top Shot too yeah oh I have my own that oil painted and then made it into NFD that private uh never sold it but that's my favorite that I that's cool all right shout out pudgy Penguins cheers guys thanks to everyone on our panel give them a big round of applause and thanks you guys