Virtual Fireside Chat: Whale & 6529 - TOKEN2049 Singapore 2022

So today we're going to be talking about the State of the Union of nfts and I have two amazing guests here are going to walk you guys through it so here we have two world famous nft collectors first we have uh on the right side we've got punk uh Punk 6529 is among the world's most foremost collectors and thought leaders in nfts he um he's founded the 6529 Museum 6529 capital and is involved with om which is a decentralized open metaverse platform uh then on the left a little more animated today we've got whale shark so whale shark is known as one of the largest collectors of nfts in the world more than 400 000 nfts collected since 2019 which he then tokenized into a community called whale which is one of the largest social token meet nft communities in the world with more than 25 000 members uh Punk whale I have a lot of questions for you guys I think the the feeling right now well look we're in a bear Market you guys have probably heard a lot of rah-rah cryptos grade panels but um you know we just got the news that nfts are down a lot pretty down bad right now A lot of people are hurting out there so let's address the elephant in the room were nfts a bubble and if they were not a bubble how do you explain what happened whale shark please once again thank you it's such a pleasure to be here with the audience at token 2049 today and that's a wonderful and pointing question I guess my response to that would be that all Industries really go through Bubbles and pops on their way to mass adoption it was the exact same that we saw with the internet and it was the exact same that we saw was cryptocurrencies and continued to see with cryptocurrencies it essentially is just the Darwinism in the financial system to make sure that the strongest and the most applicable projects survive right and this time around I think I would point out the nfts were actually in a bubble in tandem with the latest crypto bubble so you know when you have the predominant amount of capital entering the nft market that were crypto gains essentially when crypto started crashing so did the relevant gains from D5 resulting in less liquidity uh being able to enter into the NFC Market fair enough okay that's a very tight answer Punk what's your response I'd like to answer that two different ways I'll give you a narrow answer and a broader answer the narrow answer I think is you should think about nfts it being at the level of maturity of the crypto industry in 2012 2013. right total market cap never exceeded about 20 billion dollars all nfts together didn't make one Dogecoin market cap today is maybe around 10 something in that range and so this is an audience that I think I don't need to explain it in detail did it mean when we crashed from 2013 to 2015 both Bitcoin and thousands of altcoins all the altcoins that were on crypty that disappeared and never went to never to be seen again did it mean cryptocurrency was a bubble if it wasn't a bubble why did the prices go down I mean we have the single most mature tokens in crypto that are down 70 right so I would expect just like Eve has been more volatile than BTC and other coins have been more volatile than if these are the far bleeding edge of the crypto industry they will be more volatile than other l1s they'll be more volatile than if they'll be more volatile than Bitcoin and the coins that we say are are mature established competitors are are stalwarts are down 70 so of course nfts are going to be there it's it would be bizarre if the whole crypto industry went down 70 and nfts went up in US dollar returns what's interesting is if you see the higher end collections they've more or less traded with ether right and so one of the very unusual things that's happening with nfts is you're seen for the first time a cryptocurrency in this case ethereum ether being used as a unit of account I think most of the big collectors actually think of themselves as being long if and primarily think of their nfts in each terms under the theory that if we'll do well over time if he doesn't do well if the coin doesn't do well of course nfts aren't going to do well but let's let's say the narrow Financial answer the broader answer is none of this matters to me not even one percent what we have with nfts is a platform for the representation of arbitrary non-fungible digital options right arts collectibles Brands metaverse buildings metaverse land are we going to have more digitization of the world are we going to need to represent things that are more than fungible tokens this is obviously true right every single large tech company is pouring tens of billions of dollars to create this world we call it metaverse right but the metaverse is just the internet with better visualization right this is and we're going to end up with the same decision that was the Bitcoin decision for money and the each decision for smart contracts which is in 2 and 5 and 10 and 15 years if you want to buy a piece of digital art you can buy it as a token on a decentralized permissionless blockchain or you can buy it in someone's database there is zero chance you tell me the price of credenzas go down tomorrow with them as hell that's great I'm gonna go buy my next piece of digital art from Facebook digital art Services Limited and it's fine I'll be a user on the terms of service agreement there right so none of the price of any particular nft collection today is for me irrelevant the idea that this won't matter over a decade to be as absurd of course it's going to matter okay so I as I hear you that you know it's clear that the concept of nfts has been burned into our Collective Consciousness now like this idea is not going back in the Box the market for nfts has you know that might be uh heard for a little while you guys have now seen this drawdown you know it's not the first major drawdown in nfts but um how is this fed into your mental model of how the nft market works like what what dictates the prices of nfts is it macro is it the prices of crypto is it something else going on in the broader culture what what have you learned from the cycle about how nfts are valued well uh I'd like to hear from you first well for the first uh the first thing I'd like to fully agree with what 6529 said about the immaturity of the market I mean we are really really early days back in 2019 and 2018 when we were actually buying nfts um you know we thought we were early then but you know when you look at the amount that the technology needs to grow the content needs to grow again because 6529's point we are very early in the market but similar to what he said as well you know regarding the metaverse you know we're also investing in inevitability right so I do think we are on the right track now given that um you know previous to the crypto you know the full cycle of of a crypto Bull Run and a bear run I think a lot of people said hey since non-fungible tokens are non-fungible then in that case they should be immune to the ups and downs of the larger market right I think what a lot of people fail to realize as we saw the pump in 2020 uh sorry in 2020 and 2021 is that people fail to realize that you know we weren't going mainstream you know what was happening with nfps is that a lot of the money from the larger crypto environment so whether that be cryptocurrencies or in D5 was actually flowing directly into the nft market you know in search of further gains now you know a lot of people you know a lot of people have realized this now but when you actually have a demographic of money that is predominantly looking for short-term short-term gains looking for pump naturally you know I would say that the leading indicator for nft prices today are actually uh are actually the prices of the crypto market now in the future is it possible that you know high-end nft art can debunk the Cycles uh of cryptocurrency you know of the overall macroeconomics situation and become a safe haven for Capital absolutely so however I do think that we are quite far away from that and you know again when you're looking at the market it's still relatively small when you look at some of the most prominent projects you know I would say they have anywhere between six thousand to ten thousand holders uh and in that case you know really the price action uh and the financial action is is actually limited to a very limited a very limited market got it a punk actually I wanna I Wanna Give You a different question um so you're obviously famous for your pfp which is a crypto Punk a pfp stands for profile picture um in this cycle we've seen that the dominant form of nft has really been the pfp um do you think that the pfp in five years is going to continue to be the dominant form of nft if not why not um but the pfp in a way is the starter nft for a lot of people right and it's the starter nft because it's easier to get your heads around right like if you think to yourself let's say you've never bought an nft and you want to invest that in twenty thousand dollars in nfts if you go to a pfp collection understanding which ones are theoretically rare more valuable more desired which ones aren't how rare they are how rare they're not is more straightforward than looking at thousands of generative art piece and understanding which artists are important and important even off chain and what distinguishes great gender DeBarge from good generative art and possibly that's still easier than going through the vast world of one of one artists where there's a huge spread of nfts to pick from and if you're not a specialist in these areas it's very very different right the most common question people have is I want to buy an nft but how do I know there's so many of them right right so what nfts how what pfps have done is onboard in effect it is easier safer more comprehensible more readable to someone to say I'm going to buy a punk a toad and ape whatever it is right now I believe most pfp collections are not going to have good financial performance but I also believe most nfts are not going to have good Financial just like I believe most altcoins aren't going to have good financial performance right there are three thousand altcoins how many of them do you believe in I don't believe in environment at all right the tech world has power law outcomes the art world has power law outcomes if there are millions of pieces of art created every year around the world but the average person if I ask them how many pieces can you name offhand unaided recall in the Louvre the most famous Museum in the world nine out of ten people can't name five nalu has 35 000 pieces on display 300 000 pieces of the galleries getting into the louvers of power loss success for an artist Beyond imagination and the reality is if you're not in the 5 10 15 top pieces nobody even knows you're there right unless you're an art historian so the fact that pfp collections are volatile in price the fact that a lot of them won't succeed I don't think is any different than other parts of the space that will be volatile in price and not succeed and pfps have something but is somehow looked down on underappreciated but I also think that's not exactly right my view is someday everyone's going to have a PhD now it might be a 3D avatar it might be something else gfps have product Market fit right look whale shark is not a believer in pfps but he's effectively wearing a pfp in the skull right maybe it's not an nft maybe it doesn't have value but he has an avatar I have an avatar in a decade when this conference is going to be an augmented reality my guess half of the audience is going to have an avatar so there is product Market fit there pfps are going to be useful right I mean I am certainly a person who's going to believe this right I roll around us Punk six five tonight all day long now whether your specific pfp is going to be worth a thousand dollars ten thousand dollars a hundred thousand dollars for the purposes of this discussion who cares right nobody is certainly not me is saying if you buy any random token on the planet you're guaranteed super high investment returns why does this matter right but the flip case that billions of people are going to onboard into the metaverse everyone's going to have avatars but none of them will have them seems hard to imagine so difficult to judge which ones will have value and none of them will have value to me none of them will have value is just as incorrect a statement as all of them right a few of them will have value and then there'll be a long tail most of them will know and that's fine because that's how the rest of the world works right there's some very nice expensive watches right Ultra expensive ones and then Rolex what you think of as an elite watch right there's a million Rolexes sold every year let me jump off of that so as you were mentioning most pfp collections most nft collections don't really have a ton of product Market fit but pfps on the whole there's a small number of collections that really matter I've managed to kind of penetrate the the cultural Zeitgeist um you know there some of them obviously come to mind like crypto punks of course you you have a crypto Punk uh Board of yacht clubs Moon Birds azuki Doodles um what would you say I mean we've now developed these subcultures around them well I'd be curious to get your um kind of snapshot for each of these major collections what do they symbolize like when you see somebody that has a moon bird you see somebody who has a crypto pump what does it mean about them that they have each of those collections and again 65 29 pointed it out very aptly right uh not all of us are going to agree on the on the I guess on the on the future direction or you know how this nft Market is going to develop but you know similar to what 6529 said I do believe that you know profile picks do have a role to play uh in the nft market that we see today however is it a leading role you know in my opinion I do think that there are more important nft asset classes that leverage the technology rather than creating the most fungible of non-fungible tokens right um but you know tang in cheek haseeb I'm more than happy to give you an answer here right uh so the first one you brought up was crypto punks um I would say crypto punks represent at 6529 represents we are the nfts ogs unless we are just loaded enough to buy one right okay the punks are the ogs punks are the ogs uh I think we got Doodles coming uh we also had Doodles Doodles was actually pretty popular recently and sorry all of my answers guys are just tongue-in-cheek 6529 knows that again I love the entire space however again more focused than art with Doodles I would say you know we want to be Disney but all of our pfps look the same right um sorry sorry 65 39 and then after that I guess why don't we just uh why don't we just do two more all right so Moon Birds you know again uh I paid ten thousand dollars for Merch right and I would say the last one b-a-y-c you know again uh I I I I love the fact that it introduced a lot of people into the nft world but again I think there are more important asset classes that we can be looking at but for diyc I would say you know at bayc we think we're Counter Culture but we are actually just puppets of Hollywood so uh just a couple of tongue and cheek answers from my side got it okay uh Punk anything you disagree with there or anything you want to elaborate on my view is more structural horizontal something like that right something I mean this discussion is something like we've invented television and maybe the half hour show and the discussion is like well I don't like Seinfeld who cares someone like Seinfeld some other people aren't going to like Seinfeld Seinfeld will be popular then it'll be unpopular and then it'll get canceled right a question we should be asking here do sitcoms and TV shows how did they have a bright future ahead of them in the 1960s sure will every TV show be appropriate for every viewer no this is a nfts transport culture right they're not going to have the same network effects as Bitcoin where you're going to say oh well everyone should use the same money so one of the things that I think people struggle with from the functional world is they get too caught up of I don't like the particular Aesthetics of this particular nft collection and my answer to this is who cares why does this matter even one percent it's like me saying art is not a real thing because I went to a museum and I saw a piece of art and I didn't like that piece of work there's different types of nfts there's different types of pfps there's different types of 101 Journey right collections that match any aesthetic if your aesthetic is I don't know Thai hyper futuristic you can find a community who's into that right by the way if you can't because the network effects are too strong you can make your own it's very implausible I don't really like something about Bitcoin I'm going to make Bitcoin too I mean people try but it never works there is nothing implausible to say I don't like the Aesthetics or the hollywoodness or whatever in Fort Apes right make a better one I look at all of these pfp collections as being very very young very very early very very small the average number of holders is two to five two to five thousand people this is nothing right these are social Global communities you think about in social media is 5 000 people a big Community right it's a nothing community so we will see different versions roll out we will see changes we will see much bigger collections and all of that is fine oh we've um leave a statistic for the audience to consider in early mid-20 years one of the things that we used to say was follow the addressable Market is money supply and people say has a m zero is it M1 someone else would say it's gold right and depending on how you measure these things we're going to say well look there's an addressable Market of 10 trillion dollars and we're going to try and move it to cryptocurrency and then people get all worked up and particularly system people there's no way we're going to lose our Sovereign currency and lose control of the state and all these things and this is where you have this continuous clash with the state the estimates of intangible assets that are measurable that are on balance sheets now there's yeah intangible assets that are not miserable the US flag is an intangible asset but you're not going to find it in someone's balance sheet but it's real it has value right it drives the value of the United States is somewhere in the range of 77 trillion dollars nfts are generic carriers for intangible assets now some of that 77 trillion dollars is the Nike brand cultural objects some of them are Louis Vuitton some of them are Casio some of them are the Ohio State University Buckeyes right all of these cultural objects these brands have value air today not directly ownable not directly transportable but with nfts they are so from my perspective we have an asset class that today has plus or minus 10 billion dollars transported on it and a bunch of collections some of them wonderful but most of them junk right most stuff is junk um but it is a technology that can onboard on chain 80 trillion dollars and across that 80 trillion dollars there is different styles different Aesthetics different communities different philosophical principles and as I've heard in the prior session about paper nfts are also a generic neutral technology right and so my general guidance to people coming from the fungible world to think about the non-functional world they've spent too much time getting stuck on the Aesthetics of any particular piece of art they like to do like and not enough time thinking about what can you generically move on shame non-fungible because most of the world market cap off chain is a non-fungible options not in fungible objects so so we're running short on time I want to wrap with a very brief question maybe one minute from each of you um so we we've been through this boom and bust we've been here before whether in Bitcoin whether and you know icos and ethereum land and and now in nfts um what do you think you have seen over this last cycle as being the best critiques of the nft space or the nft ethos um punk why don't you go first one minute um I think we have a ton of work to do on usability right it's very easy to lose your nfts it's unclear what people think that they're buying and so on it's not actually unclear and substance but usability still is terrible it's a general crypto issue but here we're taking people on chain in self-sovereign wallets as opposed to vegan exchanges and so we have a massive amount of work a on education but also the industry providers do not take user safety seriously right we're like automobile manufacturers before we put seat belts and anti-lock brakes and what have you you can still be permissionless you can still be self-sovereign but you can use software tools to help people from making mistakes and to me this is the major issue I do not yet feel comfortable sending a crypto naive person to transact in size on scale I think the chances they're going to mess something up are significant and if we don't fix that we can't onboard large numbers of people yeah the usability security whale shark what's your answer so firstly I just want to say again uh being on stage 6529 was truly an honor and I really do applaud his uh inclusivity approach uh to the answers that he provided today but the best critiques for me are number one nft technology is just that it's a technology like the TCP and IP protocols that are required for us to use the internet and it's not an industry so when we approach nft it's as an industry I think it's values and really art was an industry gaming is an industry VR in the metaverse are an industry nfts are not they are just a technological enabler the second critique I'd have is that nfts are for the rich and you know again this is sadly true because you know as I've pointed out and as as 6529 has pointed out for a lot of these collections you only have six to ten thousand people collecting this and we need to find a way to move beyond the crypto Bros and the crypto broads and really allow you know as 65.9 have an onboarding process to be able to allow every single body including your grandmother to be be able to hold an nft easily in safety you know the last thing I'll add you know contrary to you know a lot of the hype and the moon and the fomo that we used to see is that watch trading and financial hijinks are rampant at all levels byor do your own research I refuse to be a part of anything other than investing in transparent long-term value but I think it's been very interesting and a very good piece to think about the fact that a term like rug which is usually used for something like fungible tokens have now been applied to non-fungible tokens as well so I would just advise the audience to keep safe out there this is a booming and a growing industry and it's going to be a lot of fun as we see its development well what I've heard loud and clear from you guys is that we're still in the early Innings we have a lot of work to do gentlemen thank you for joining us from across the metaverse can we get a round of applause for these guys [Applause]