Gaming, Prediction Markets & AI: What’s Next for Blockchain at KBW2025

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All right, thanks for that great introduction. So we're going to have a panel which is talking about what's the next consumer meta. And I'm hoping that we're going to get some great predictions out of this. But before we get into what's in the future, I thought it might be handy just to do a bit of a recap in terms of the last few years cuz there's been a lot of different metas coming out. Let me know if you think I've missed anything.

I probably have. So 2020 to 2021, it was really like DeFi yield farming, I think. And then we had like 21 to 2022 was play to earn. NFTs, PFPs, and art NFTs, that was like all the rage at the time. 23, we had airdrop farming and I think sole meme coins were all the rage.

24, we had pumped up fun, fully on-chain games, and autonomous worlds. I think it became quite a big thing then. And social fi burst onto the scene. And 2025, so right now I think we're looking at things like on-chain perps, but also AI agents have have come up, stablecoins. So looking at those things over the last few years, just to kick us off, which ones wrecked you?

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All of them. I would say NFTs, that was our thing. And some meme coins, but that would be the two. I was on walls too, Same. What about you guys?

How'd you get wrecked? Yeah, went in really hard at the start Alice IEO. That was probably not a not a very good idea looking backwards. But just a lot of meme coin trading. I think overall probably still on top up, but you know, definitely a lot more that we round tripped.

Still up, well done. Interestingly, I think they are still very strong all of them. They they start to compound actually. So, there's this like iteration, experimentation, and then it's actually it's helping to push like from your thinking like NFTs was it was it was like culture on chain started just with profile picture, and then meme coin is still culture on chain, and now like like pump fun is like meme coin accelerated with DeFi. So, that's the compounding effect.

So, all of them are still here and strong for me. That's so true. You do start to see this convergence of different metas coming together. Um on that though, I wanted to ask you, who do you think actually defines and drives the meta? Like, do you think it comes from real retail adoption, consumer adoption, we actually see people getting involved in these markets, um using these new technologies, or is it kind of driven by VCs?

You know, do we see that investment go into certain metas, and that is almost like a self-fulfilling prophecy, or is it even the media? What do you guys think? Like, who actually defines and drives the meta? I think like a lot of the metas are driven by CT, so crypto Twitter originally. Like, that's where they come.

I actually think VCs most of the time come in last. At least like you always have a few core VCs that are early. So, for us it's prediction markets, right? So, 18 months ago was talking to VCs all around the world, and were telling me I'm crazy and this thing's never going to pick up. And 18 months later every one of them is hitting us back like, "Hey yo, by the way, about this prediction market you've built."

I'm like, "Well, you know, yesterday's price is not today's prices, right?" And all jokes aside like I so I don't think it's that. I think it's people within CT like ourselves, both of you guys, like what you've what you've built and what you're building. I think like power users within crypto define and create these metas, and then sure like sometimes there's an invisible hand that helps media, right? Some people launch campaigns, this and that.

So, sure like media picks up on metas. VCs just like media do pick up on metas, and then invest. A lot of most of the VCs invest at the later stage anyways, right? So, I think like the core meta really stems out of like the core group of like power users. If you forget that, that's what I think.

Well, very, very few people are true innovators in the space. And actually, like the meta comes as like you see after story of a success. And the success is essentially defined by few KPIs, but one of the top one is essentially just money. So, it's the money that drive the meta, and everyone follows the money. And so fast, with web three, especially with network effect, with the fact that token ownership provide participation into like sharing the value and the wealth that generated by those new economies, it's essentially that.

So, you were one of the first that pushed the play-to-earn meta, for example, but it didn't came randomly. It's become like some people were making money at the core of this. And so, even though we were pushing for the idea of like the benefit of ownership, and it's great to have those game with NFT, at the end of the day, the core adoption, specifically on the consumer side, is the money. Yeah, totally agree. And I think it's a self-reinforcing loop.

So, for example, like Plasma and World Liberty file like a year ago, when they started the vaults, the retail users were there. There were some that started kind of early adopting into these vaults where you're basically just generating yield. But the meta wasn't there yet, right? And it wasn't until recently, actually 2 days until Plasma's launch. So, I'm looking forward to that as well.

Until recently where that meta kind of slowly compounded because more and more people are chasing the wealth effects, and the prices are being set as of now. And I I think I agree with Seb and as well, where there's only a very, very few number of core users that understand how to drive the narrative, and it all compounds on the fact that they have early stake. So. Awesome. Thank you for helping us kind of just lay that foundation to understand who's actually driving this in the first place.

So, this talk had three different matters in the title, which was gaming, prediction markets, and social. Um, so let's just unpack each one of them and kind of figure out where they are at right now, starting with Web3 gaming. Okay. This This is a tough one. Uh, token prices are down.

Everyone's struggling with UA. VC money has vastly dried up. Um, I think a lot of people who are not in the Web3 gaming space would probably say that it's been dead for a long time. Um, but recently we've seen Web3 gaming kind of return to its degenerate roots. We've seen these degen games pop up.

Um, I don't know if you want to talk about it, Seb, but it was even reported that The Sandbox might be uh launching a meme coin launchpad. What do you guys think about this particular matter? Like with this um this new matter around degen games, is it enough to revive Web3 gaming? Or if not, like where do you see the trajectory of this matter? Okay.

I'll jump on this one first. Um, well, first of all, to put things and numbers straight, like there's never been even more gamer and transaction on chain in Web3 gaming than before. And so there is this problem of like where's the attention is, where is where's the actual usage is on chains. And uh you look at like what's Web3 gaming space at the moment and it's more fragmented than it ever was. Like there's so many different chains and large games on those chains now like from like Telegram Open Network that carried still hundreds of millions of users playing those Web3 mini games, collecting tokens, buying stickers, and so on.

Or you have like Avalanche and get like Godzilla which like 17 or 18 million players on there. And then you have like rising titles on like more, I would say, OG uh chains like if you're on Polygon, Ronin, and so on that still thrive and grow progressively. The key thing is like those games now, uh including Sandbox, we are more focused not just on the large number of users with very low engagement, very low LTV, lifetime value per user, and so on. We are more focused on like driving real engagement, real usage, people who are ready to spend their own time and money to play, and they could earn some rewards. And we try to measure it with a metric called return on reward spend.

Um, so fun games also translate in games that we are willing to pay for, to play, to buy NFTs, and to engage with. And that's, I think, probably one of the future meta, which is starting to see more convergence with what we call web two games, free-to-play game, traditional game. And then you have all, like you call like DJ, so real money gaming, um, things like Polymarket, prediction market on top of gaming. And I think it's another way to that blockchain has enabled to expand uh, through decentralization, the possibility of create new revenue stream, create new jobs, and create meta layers around like core games. Yeah, and I I totally agree where the way that I think about web three gaming, I start with assets.

And I think, you know, back uh, 2021 where there are a lot of metaverse assets, um, I feel like the games themselves are just a wrapper to amplify whatever asset is in fashion, almost. So, um, the recap we just talked about, 2020 to 2021 was DeFi based games, mining, right? There's Alien Worlds, uh, Metabox, such and so forth. And then 2021 to 2022, you had NFTs. So, the games became a production kind of facility of these underlying assets, and then amplified that loop.

Um, but there is going to be a a spiral effects up and down as well. Um, and then in this day and age, I think there's a lot of new assets being fragmented, the liquidities are all all over the place. Um, so the games themselves become faster as well, because you want to keep the production cost low so that your margin is still high and there's production cost for games that is much higher than for example meme coins. But but I think in terms of like what we see in next step there's the asset side of things but there's also the technical side of things where now the chains are getting faster transactions are getting faster. So more and more on chain transactions can be put on the chain and there can be faster money flow across all of these.

So for example CCP that we're just talking to Leo with you know their game I'm very much looking forward to because the entire economy can now be on chain and the velocity can be faster as well. So what we see next is going to be a divergence of super serious games with more and more transactions on chain all the economy is there and then DJ games where it's like you know mindlessly doing binary options. Well and if I can add to that like even not DJ games AI generated games with live coding that have token etc. Like like that's mind-blowing and it's still so early in the quite of quality you can see but it can only improve from there. By the way if you want to check out the game that Chris just mentioned it's E Frontier it's playable now it's awesome and uh yeah it's it's fantastic.

Anyway back to the usual programming. Brook question for you prediction markets keep coming up and you're co-founder of myriad markets. So I was reading about this and you just mentioned it like in terms of the VCs like not really getting the meta. I read the block reported that this year has been the best year for crypto prediction markets in terms of VC raising. I think it was like something like 216 million raised over 11 deals.

What is driving this change now? I mean prediction markets have been around for a really long time. So what's different for crypto prediction markets right now in 2025? I think Polymarket's zero to one moment is what changed everything. I think it's pretty that's the main driver.

I mean we owe us pretty market prediction market founders a lot to Polymarket, right? Like they literally like the biggest winner of the United States election 2024 after Donald Trump was Shane Copeland and Polymarket, right? The whole of the media around the world Kamala Harris winning, but the prediction markets had Donald Trump winning and we saw that was a landslide win, right? And and then Kalshi becoming, right, during that time legal in the United States. So, once that became legal, which by the way, prediction markets should never be illegal.

Like, that's insane, right? Thankfully, the new administration, the CFTC, the SEC now working together on, you know, helping that and pushing that adoption forward. So, super cool to be in the space, but I think the answer to your question is very straightforward. It's like, this is what's driving it, right? Polymarket taking 0 to 1, Kalshi making them legal, uh you know, and now, you know, other companies such as ourselves working on DCM licenses, etc.

Uh for prediction markets so we can, you know, uh offer these contracts in in the United States of America, which is huge. So, there's that. And then, there's the other thing is for me, a prediction market is not even a meta, right? Like, it's an asset class. Like, cuz a meta comes and goes.

We've all seen it. You You named a few at the beginning of the panel saying, "Hey, which ones get wrecked on?" It's not a meta. Like, I I actually it's an it's a multi-trillion-dollar asset class in the making, right? Um you're talking about something like exchanges such as the Nasdaq, for example.

Like, you're going to be like trading at that level of volume daily very soon when it comes to prediction markets. And that may sound crazy when I say it now, but it doesn't feel crazy to me at all. Someone who's like building within that industry every single day, and which is why we went down that route because it's it's just makes perfect sense, right? We talk about the hyper gamblification of that gaming, for example. This and that.

I mean, you could argue that like people just want to be able to have a stake in everything, whether it's when GTA 6 comes out, right, in gaming, or what who's going to win the French election, or who's going to, I don't know, like something about like, "Hey, how long is Fro going to speak during this panel like KBW?" Right? So, it's just like the little things like that that people were participating that you can then build on top of gaming. You can build on top of AI. You can build on top of this, on top of that, on top of every industry.

So, for me, like this is just like the most obvious asset class and it doesn't surprise me to see like VC investments and, you know, capital pouring into this industry now. All right. Uh the last one on our list, Social Fi. Uh Farcaster in early 2024, they raised a boatload of money, like 150 million. Um we had FriendTech.

We had BitClout. Uh a lot of them seem to be kind of fading out, or at least we're not seeing great take-up there. What's your take on the state of Social Fi? Like uh is it dying out or does it still have a future? I think trading is inherently social.

Uh not sure about like everyone's trading behaviors, but most of the alphas are in group settings, right? And you trade with your friends. You share your uh upside and you share your downside as well. And I was I was talking to my friends, we used to play League of Legends together a lot. Like single single game takes 40 minutes.

Uh and then I would just trade on perp dexes together. Uh the win and the losses are so much faster. Uh you get the dopamine hits with your boys and then you lose out on the trade, you know, with your boys as well. And I think that loop amplifies your social connections and also amplifies your trust cuz you've, you know, gone through a lot even just on on an online setting. Um and I think that's what FriendTech was ultimately about where like, you know, you had a alpha group where your boys are sharing uh alpha with the keys, but they just didn't monetize that very, very well.

Um and the the loop, obviously, with a progressive web app was a little bit shorter as well. Um So, so again, like I think Social Fi itself is just, you know, trading um being socialized, which is already an a behavior. Well, I think it's kind of expected, right? Like when you see these amazing new innovations coming out, people trying to create something Web3 native that has never been done before, a lot of people get upset when it doesn't actually work out, but you kind of need to have that iteration to be able to figure new things out. I mean, what do you guys What's your take on that?

I mean, play-to-earn certainly was scrutinized in the same way, right? About social fight stuff, I believe as well like it's Yeah, just in terms of these these new models that come out and people get really upset when it doesn't work out, but Again, back to this idea that experimentation has been essential and we've we've seen like how we launch things and how they evolve and like NFTs were never thought necessarily to become like large collection of content. They were meant to be one one on chain and then we saw that oh, we need to create collection of 10,000 to distribute to a community and we say like oh, it's not liquid enough. So, let's launch more fractional token and and so on and at the end like for me the culmination of that has become like launch pads meme whether that pump fund, bong, etc. And the idea that it can be applied to a meme or it can be applied to an actual person, celebrity, content creator and and it it's actually just it's very powerful and it's going to become more and more liquid in a way.

Like everything will become tokenized liquid, will be launched through launch pads and it will be inherently social. And what was maybe missing with the previous example is like the value flowing into those tokens that they were not really yield bearing. It was more like this vanity game to try to value each individual or celebrity or creator token. That was missing. But once like now like we'll have a more connected flow and utilities for those token, benefits for the holders and possibly revenue stream coming out, that will become just the the new way of thinking everything.

And sometimes you need to test, experiment, learn to be able to figure out what works and what doesn't. Okay, we've only got like 3 minutes left, so I've got a two-part question for you and I'm hoping for some predictions. Um, what do you think will be the meta to define the 2026 cycle? And what do you think we're sleeping on right now? Because I'm thinking they may not necessarily be the same things.

Um, I mean, it's not a meta, but I do think prediction markets are going to just become an inherent big part of crypto and then perp dexes are like obviously the next not next big thing, but it's going to become a I think they're going to like almost like become one as well, right? Like you're going to be able to like trade predictions on these perp dexes cuz they're going to become more liquid as like ERC-20s etc. Um, so I think this is what most people are going to um, start focusing on in the next in the next year, especially like if we go into more of a lull of a market, which I never know if that happens or when. I don't like timing that and I'm not really good at it either. But like I do think like people just want to have more skin in the game, right?

You talked about social fi just now, like social fi is still an inherent part of our entire industry. It's like the backbone of it all, like crypto Twitter is social fi in a way. I just think these platforms die the second they focus more on the fi than the social and they try to take you out of what we know, right? You got to meet the people where they are and people want to be on X, right? So, I think like this big mix of perp dexes and prediction markets is going to keep ruling over the next year.

Yeah, I think we've seen a new trend towards AI-based or AI-native exchanges. So, instead of like placing your limit orders, actually think about the strategy yourself. Now with the code generation, they can the AI can actually just generate the strategy for you, place the orders, automate all of the trades and then when you, you know, send your kid to school, they're still executing the trades for you. And I think on the other side, you know, that's a very sophisticated type of users, kind of like a cursor for trading. On the other side, you have users who just want to degen it up.

So, hyper-casual dexes I think will be a new form of meta that people will start to notice in the next year as well. I think like loyalty like can definitely be coming on chain and like will be able to uh drive more engagement, more distribution, more monetization from there. Like, those are still core challenges that's not being solved today through blockchain. Like, being on the blockchain, having a token, does it really mean distribution for people who are building on those? Uh partially for some currencies, but not for everything.

When you build on a chain, that's not necessarily like the distribution that comes together at through the chain working for you to bring user. You actually work hard to bring the users to the chain, and that's a broken model. Um and I think like the creator economy, which is nowadays like $300 billion worth, is totally inefficient, fragmented, and still very web two using like like PayPal, wire transfer, creators being paid at 30-60 days, lack of transparency. There must be something better we can do, and that might be the next meta. Well, thank you, Sebastian, Chris, and Farokh for that glimpse into the future.

That's all we have time for, sadly. Uh but this has been a great discussion. Thanks, guys. Thank you. Thank you, everyone.

Thank you, guys. What a wonderful panel session.