Abstract’s Creator Flywheel | Luca Netz

Transcript

streamers are going to be able to make content pin abstract apps on those streams and ultimately make content to their user base around those products built on abstract it's very much the first time that crypto has ever you know automated the flywheel and really benefited and tried to point rewards specifically around content creators now this seems pretty ridiculous to me because if you look at you know how the biggest businesses in the world have been built you know five out of 10 of them have all been around rewarding and and and fostering the content creator yet nobody in crypto has ever done it before it's pretty strange and this is the part that I'm most excited about nothing said on zerox Research is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and any

views expressed by anyone on the show are solely our opinions not Financial advice Pacho Ryan and our guests May hold positions in the companies funds or projects discussed what's up guys welcome back to another episode of Z research tday I'm joined by lucet from iglo Inc um abstract chain and pudgy penguins thanks for coming on the show Luka hey happy to be here um I guess today's main focus will kind of be abstract chain I know you have um a lot of a lot of businesses out now but how how did you guys why did you guys decide to build that abstract chain what was the main purpose behind it I think from our perspective we kind of realize that all the blockchains are being commoditized and ultimately what pudy penguins in our community has is I think

the proprietary things that I think are ultimately going to be differentiated and differentiate chains moving forward which is community culture operational excellence every ingredient that I think is needed to make a successful blockchain ecosystem we already have via the the community and the culture that we've cultivated over the last couple of years so in a world where you know we have the moat why and go bring that moat to another ecosystem for pennies of the dollar uh didn't make any sense now that was the initial thesis and why we did it what ultimately has transpired since building abstract has been know the l2s you know are are doing I think everything wrong with the exception of bass now it's important to know I don't look at ZK sync or arbitrum and optimism

as true l2s cultural hubs as as vitalic would Define them I look at them as Tech stacks and nucleuses to these culture hubs that ultimately have their core differentiating Factor so remove optimism ZK sync and arbitrum from the equation and I think the only competitor and the only L2 doing anything worth anything uh is BAS and I think they're putting on an absolute master class but in world where I think l2s are a scaling solution for ethereum they are the future uh and and looking at the landscape I realize well this this race has yet to be won uh and to be frank it's an open ocean and I think a lot of how people are building them are in the wrong uh spirit and in the wrong mindset and I think there's a lot of room for disruption not only to bring you know a

bar none Community culture and ecosystem to the L2 landscape But ultimately to bring uh a new Fresh perspective on how I think l2s are going to be built moving forward and so you're going to see this by the time this launches you know abstract will be live you guys will see what I think is you know crypto's first ever true crypto consumer terminal uh an interface that I think ultimately is going to set the bar and set the tone for you know how people look at blockchain ecosystems moving forward fantastic I agree with everything you said but I wanted to ask a specific thing is consumer Centric which is something you you WR about and you actually wrote a pretty opinionated um article on it back in September 2024 why um I understand why you want go of consumer Centric but like can you kind

of run over your arguments on why you think it's necessary that this happens and you talked a bit about cultural hubs as well I think that would tie it all together yeah I think the I think the experiences are just kind of today so if I were to like compare or give you a good anecdote let's like just look at social networks and compare them to blockchains right like so blockchains today very much feel like forchain right where it's like if you know how to navigate and you know how to put the pieces together it can be super useful right however if you don't know how to navigate right you can it could also be super harmful in a 4chan's you know case you go somewhere where you shouldn't probably go that doesn't make you feel too good in blockchain's perspective you get fished and lose all your money right

and so I think from our perspective there's a huge room to kind of disrupt you know what feels like 4chan a day and to make Instagram and what I feel that that looks like ultimately comes down to the uxui and the interface and how people are participating on chain when you think about it every chain should have one domain one central place where you go to do everything on that platform right like there shouldn't have to be pieces of puzzles you put together whether it's an wallet extension right and then you know a certain app that you enjoy right now it's very much a free-for-all and ultimately if you understand the consumer experience the consumer experience to break through to True adoption we're talking tens of millions of Da you know really participating on chain actively outside of the current existing user base it

needs to be super simple and stupid I mean it has to be something like I I think I think abstracts going to be the first thing specifically on evm that you're ever going to feel where I think if you went to your local waiter in Barista and you told them to commit an action you know by going to This One Singular domain they could be able to do it pretty quickly versus right now if you tell your local Barista or waiter to go do an action on ethereum I think it's going to be very difficult for them to do and figure out and probably would take a couple hours right and so how do you remove that onboarding from a couple hours of of of you know figuring things out to you know five minutes you know as simple as a a monkey could do it uh and

that is ultimately where this stuff has to go I think people just give don't don't I think they underestimate or overestimate um you know how smart I think the regular person is specifically when it comes to being technically Savvy you just have to understand the reality of it right like that's not a thing I say proudly like it's just ultimately understanding people right and understanding what a majority a majority of people know how to consume right majority of people today in the America are north of 35 years old if you're north of 35 years old you know you are not you know internet native you're not digitally native you still maybe type in text with one finger right like just because you know our group and our sphere of influence doesn't behave that way doesn't mean that a majority of the world doesn't right a majority of the

world still does that and um you know if you want to bring them on chain you got to make it easier that makes sense and what are you guys specific doing specifically to make that happen to make it easier yeah I think what you're going to see here and probably when this comes out and and people hold me accountable like I think you're going to see this this this Hub of fun this singular destination where somebody can log in Via email and a password get a smart wallet and then just participate in an ecosystem pretty seamlessly and know how to do things and where to go you know with a simple interface uh and I think this is how a majority of consumer blockchains moving forward are going to be built and ultimately anything anybody that I think is building a purpose-built blockchain is going to go in this

direction and so you know what you're going to see is you're going to see you know an ecosystem predicated around fun this is not a general purpose ecosystem you won't be able to do every single thing we're really focusing on discretionary spending specifically fun in layman's terms uh we're focusing on the best 0o to1 onboarding I think you will see and experience the best zero to1 onboarding I think from any ecosystem uh in abstract and I think you'll see something that is cohesive and curated uh and easily digestible right and something that I think you could show to a friend or a family member who's not crypto native that's going to make a lot of sense to them uh obviously there's some natural properties like getting money you know on the Chain things like that that are still like barriers that we we ultimately need to improve and make

better uh you know naturally you know putting money on an L2 has never been the easiest easiest process it's probably one of the pain points uh and things that we're going to work on the most you know post this launch but uh yeah I think I think I think interface brand Community is ultimately going to be the name of the game for people who are competing in the blockchain space yeah that makes sense and um it's kind of a meme now this ethereum align thing but um you guys are using Celestia while a bunch of other l2s chose to use ethereum is there any specific reason for this or is it um you don't think it matters too much I think I think it's just the experience right like I just have to optimize for the fastest transaction in the cheapest fee and using an ALT da

layer just ultimately gets me there that makes sense um incentivizing users making them come on chain and actually on board to the L2 how how are you guys thinking about this I know you have a pretty comprehensive XP program but um do you want to kind of talk about that yeah I I think uh I think the the the one that I'm most excited about and and I'll let like the users you know and our ecosystem holders figure out exactly how we're integrating there and we'll obviously communicate that but the part that I think is going to be the big biggest reinvention is the flywheel and and the incentives that we're giving to streamers and content creators essentially there's going to be a stream button on the platform right streamers are going to be able to make content pin abstract apps on those streams and ultimately make content to

their user base around those products built on abstract it's very much the first time that crypto has ever you know automated the flywheel and really benefited and tried to point rewards specific specifically around content creators now this seems pretty ridiculous to me because if you look at you know how the biggest businesses in the world have been built you know five out of 10 of them have all been around rewarding and and and fostering the content creator yet nobody in crypto has ever done it before it's pretty strange and this is a part that I'm most excited about right because it's like how do you take a concentrated group of content creators a, 1500 2,000 people give them an allocation of you know abstract Supply if and when that tges and goes to the world and how do you ultimately create some sort of flywheel where it's

like hey advertise and make content around the network and uh you know leverage that flywheel to ultimately find pmf for apps on the network you know that that system right then and there it's like the stake and uh and uh and kick model right you get kick you lost lead on kick on the stream and then you get all the pmf on on stake the difference is we don't have a stake our stake is all the apps that are building on our chain right and and we curate that really well and we try to make that experience a little bit you know you know as as much to best of our ability around fun which I think Taps the same nerve that kind of stake does so uh it's going to be an interesting reinvention but I think anyone who's streaming on the platform over the next couple of

months would make more money if they streamed on abstract versus if they streamed anywhere else that's whether twitch or kick with maybe the exception of the top top guys in those respective networks who obviously have nine figure deals very cool maybe we'll put the Xerox research show on it and try and make some money as well um curation is something you've brought up a few times can you what do what do you mean by curation as in the ecosystem you guys are handpicking what apps to work with how to help them out or is it something different I mean anyone can deploy an abstract but but to be on that portal has to meet a certain bar it has to fit the thesis right so like I'm not stopping anyone from making deployments uh you know that's everyone's prerogative but you know it's kind of

like the app store right you got you got to hit a certain threshold of something to be on the App Store got to make sure it's you know to the best of your ability make sure it's safe make sure you know the people docs to make sure you know they have the right intentions obviously you can't filter every single person that way but it is important that there's some sort of bar of quality so it's not a complete Cesspool of of whatever yeah I agree with you I don't think you can allow people especially if you want to make it a consumer Centric blockchain you can't have um allow everybody to just deploy apps and then for that to be on the front page how much support are you offering those that you are going to put on the front page are you very active in that development

well I I think I let the builders speak for themselves but you know I think we have the best ecosystem team the best devil team in in on the evm hands down uh I think that you you just look look at our ecosystem and I think you believe that uh by just like paying attention to to what who who's building on abstract who's a part of this uh I think it's relatively self-explanatory in that respect so from our perspective uh we are very much um you know we are very much harnessing the power of Builders and nurturing builders in a way that I think is unparalleled speaking of that I have a mentorship program with 100 Builders starting from 700 p.m. Eastern all the way to 8 8:30 so you know and that's happening in in a couple hours so I I think there's very few founding

teams that are actually doing that maybe they delegate that to a person or two but you know we're going to have the whole executive team on there you know answering questions helping people and trying to steer them in the right direction that makes sense and one thing you mentioned previously was that Bas is the only L2 that is doing well are you guys taking anything from Bas um and what do you think the other L2 have messed up so badly because I agree with you but I just want to hear why you I I think a majority of the other l2s just wanted to tap into a narrative or Focus to much on Tech and didn't really figure out their identity I think Bas is putting on a clinic of operational excellence I me it just speaks to the entrepreneur that Jesse is and the rest

of the team there they are quite literally putting on an operational Clinic that's just not just predicated around succeeding in the L2 land I think there's very few chains if any with the exception of salana that are putting on the clinic that Bas is putting on I mean it's really just truly uh if you pay attention very few people in the entire space are shipping anything of that magnitude uh and so it's not going to be an easy race I think for the first time building in crypto I actually have a North star someone that I'm stri striving to be uh you know typically in nft land and meme land you know I feel like we're just kind of innovating and setting the Playbook and everyone's following us uh so it's nice to have a North star for once uh but I do think Bas has ailles heels I think there's

things that they just won't be able to succeed at and I ultimately believe you know targeting fun and discretionary spending and not spreading myself fin trying to accomplish a general purpose thesis is ultimately going to be the reason why we win that makes sense um fun and discretionary spending does this tie into how many gaming projects I'm seeing on abstract it feels like it's the first time I've seen uh a chain have this much gaming apart from Ronin yeah we know we we love gaming I obviously believe in the future of gaming as a as a huge way to ultimately penetrate the mainstream I think gaming has been underserved uh and so gaming is huge for us AI is huge for us nfts and memes and those teams are huge for us betting is huge for us right now I think there's a lot of different

facets in which we have the best ecosystem gaming being one of them and on day one how many of these do you expect to be live I think 45 apps will be live day one is our goal uh but we have 120 in the pipeline 130 so I think within the first month you'll see 60 or 70 deployments probably within the second month I think all 120 will be deployed and hopefully there's a whole new cohort that's coming in shortly after launch very good and are you going to be doing um we've seen a lot of accelerated programs I think I think a lot of chains have realized what you've clearly realized a while ago which is that you need applications um and they they're bringing in a lot of cohort programs and a lot of accelerator programs are you guys going to be doing this throughout

or is this um yeah we have a little building Builder and residence program but ultimately what Builders want is they want pmf they want marketing and so the beauty about having one Central destination in which the ecosystem lives it also makes me as a internet marketer allows me to have one thing that I point all the traffic to right so it's really easy to run advertisements right if I'm selling if I'm selling you know abstract portal as the Hub of fun right fun is universal and so I can Market that to web two I can Market that to web three I don't need to point them to 19 different directions and 19 different applications I point them to one right one domain one website where they can onboard transact and participate within five minutes right and so that that G to give me an edge uh

and what Builders want is they want pmf they don't want grants they don't want everything else everybody does all those other things because they don't know how to get their Builders pmf ultimately a change responsibility in my mind you know it kind of starts and stops with being like a publisher right like what what like the No No chain provides any reasonable Edge again with probably the exception of salana right who just like mastered the fast transactions and things like that uh but you know on evm specifically like no L2 is giving you any Technical Edge in my opinion uh right it just they all do relatively the same thing and so how you're going to win there specifically uh is pmf and marketing and and because of how we thought of it I think we're just uh in a league of our own here that makes sense and in terms of ux

this idea of having a single portal and abstracting Away quite a bit of stuff how did you guys come up with that what was your main inspiration well I actually came down to the marketing so the the the the thought process was was like okay you know I'm a builder I've been offered eight figure grants to go build on chains right like what did I what do I want from these chains more than the money I want marketing I want them to help me see my products come to life and so then I thought to myself I was like well I can build up like a marketing agency I think I'm one of the best marketers in the world people who know me would probably say the same right and so I was like that's our Edge like our Edge in crypto is that we have

the best branding team the best community team and the best marketing team that's how why we've succeeded so how do we lean into those edges which I think are very much the proprietary edges that any can have in the space figuring that I think with AI all the tech will be commoditized way quicker than people anticipate right so how do I go bring that to them right well I launched penu to Galvanize the pudgy Community the pudy community has never been more excited for abstract so I got the best community in crypto you know rallying behind all of these apps so that's one right the second one was okay how do I actually go bring people outside of web 3 from Web Two into these applications and the the the part that I got really overwhelmed by was this idea that you know making running a

successful marketing campaign or campaigns for one project is incredibly difficult doing it for 10 is nearly impossible I mean you know some of our executive team comes from the agency business having huge agencies prior to this uh but that's just not a business we want to get into again nor a lift that we really wanted to incur and so it came down to like well what if I sold the idea of digital Disneyland or a hub of fun and everything that you know within the ecosystem that we thought met that criteria lived in one destination and based on the you based on the experience and the products that they build the users will basically find the pmf right the the runoff will come come accordingly you know based on who actually has the best application and then we tie it in the streaming and so

now people are going to come to abstract not to go and participate in the ecosystem but to watch their favorite streamer and then their favorite streamer is incentivized bigly to go and pin the apps and and Market the apps on the stream right which if the app is good then brings their entire audience to go use the apps that are on the platform and so all of a sudden you have a flywheel that I think crypto's never seen before uh and I'm really excited to to I think set the tone here in a way that I think is going to surprise a lot of people I I assume you guys have a um interesting mobile strategy as well it sounds like you're going to be focused on mobile yeah we will have a a really nice pwa to launch and then ultimately we'd love for this to live in a in a in

a mobile like true mobile app uh but right now will'll be Dex it's it's probably super performing on desk top with a really performant pwa that will be adjacent to launch uh and the hope is you know within a couple of months we have a full-fledged you know app ecosystem uh you know within the Apple App Store in which all this stuff lives that makes sense um what do you think about consumer devices like a gaming console or something do you think it's unnecessary friction or do you think it's relevant I think sometimes people in crypto love to overthink things and it's like hey can we get something that it's like trip it's like crypto gaming everyone in crypto gaming is trying to build a AAA metaverse when it's like hey you know web we One gaming Web Two gaming all of all of the iterations of

gaming the the things that broke out were fun simple stupid right so like even consumer adoption like we don't need to be like I do like Solana's mobile approach from a phone perspective that's really smart right and and but like I think you have to have salana level success to go and go pursue the next iteration too many people are starting from square one and thinking like trying to go so Grand and so big when you're kind of putting the cart ahead of the horse it's like look let's just let's just get something that truly breaks through and then let's just move forward right salana being the ecosystem and a phone is smart right a gaming console things like that there's this new gaming console my friend made it I forget the name of it it's like backbone or something but that was pretty cool

but like I I think the software is just getting there yet so like let's let's have a breakthrough software moment before like we go in in and the final iterations Hardware obviously like we're we're not quite there yet I think for for startup teams to be pursuing Hardware I think there's still uh you know huge huge you know market value to capture on the the software side and on the digital side that makes sense um you're clearly very opinionated and very successful in understanding how normies or consumers should think um and how they should approach a CH what's your mental framework for that you mentioned the Barista example which I thought was pretty cool as well how how do you um how do you think other apps and specifically abstract and apps building

on abstract can should approach normies and regular people I know it's like little things like denominating US Dollars you probably won't see this day one right but like I think everyone should denominate in dollars like why denominate in ethereum doesn't make any sense right like the no one like no one understands that right like you just it's like little tweaks you'd be surprised crypto Builders are 80% of the way there right they really are they they're missing really the 20% which is like the the finals touch the chef's touch right and you're seeing this like dude a lot of guys from web two are starting to come into web 3 builders that you know even guys that saw me what I did right like what is the eida on paju Penguins really 150 200 million right the premium that crypto gives you right from a ecosystem perspective is is

exponentially more valuable than if you were to build something in web two pudgy Penguins is a web two company is a $200 million company pudgy Penguins is a web 3 company is a five billion dollar you know ecosystem you know and like Web Two Builders are starting to realize that and they're not going to let you know Schmucks capture that value so they even friends who have seen what I've did they're like oh yeah I'm I'm doing stopping everything and I'm coming in and you're starting to see some crazy right you're starting to see guys really build so the the competition is start it's not going to be as easy as it once was I mean the last 10 years of crypto I mean guys literally said they invented Bitcoin and just m a coin called Bitcoin cash and slapped it on and became billionaires I mean talk

about the talk about the talk about the Finesse right like you really understand what's transpired these last couple of years dudes were leaving the ethereum foundation and everything they did was 10 billion bucks right I mean this this era is over now I still think the premium will be there right because it's a growing industry but this idea of just like popping things left and right I I I think is over and you're going to actually have going to have to Wi win by the quality of your build um and I think you're going to see that here here over the coming coming months and I think a lot of people ourselves included are going to help set the tone as to how these things are are made moving forward what's up guys um welcome back to ZX research today I'm joined by Antonio from dydx thanks for coming on

Antonio hey thanks so much for having me with regard to the mega Vault how uh obviously the is good feedback because a capital has um deployed into it how would you say is anecdotal feedback or qualitative feedback from users do they enjoy the process do they enjoy the way that it works I'd say so yeah and it's really opened dydx up to a new class of users as well because dydx has always been a fairly sophisticated product as D5 products go it's targeted at derivatives targeted at more professional Traders and if you go open up the websites and the trade page is fairly complicated but again with the mega Vault it's a really easy simpl to use product um anyone who's used defi should be familiar with this kind of product where you just deposit into a

vault earns some amount of APR there's a lot of transparency with how those funds are used so yeah feedback has generally been good um and it has been able to provide a lot of liquidity especially as I mentioned in the longtail of markets there are software upgrades that we have planned to increase the capital efficiency of you know that 70 million or so that's in the vault to even more liquidity but that's soon to come perfect and uh one more question about the Mega Ball what are some of the trade-offs that it has compared to an order book yeah so like I said amm are really good at providing liquidity on the longtail of markets and again that's a really big thing that we're focused on now at dydx there's currently about 160

markets that are listed on dydx and we're aiming to scale that to multiple hundreds if not thousands in the next year or two and if you start getting into that you know length of the tale of markets it's not something that more traditional market makers are quoting right now at least in crypto so you really need something like an amm and if you look at all of the evolution of spot decentralized exchanges so far they have obviously been really centered around amm with things like Unis Swap and pump fun radium Etc and now we're really bringing that for the first time in a high quality way to derivatives in defi as well so we're pretty excited about that with order books as you mentioned that's something that dydx still has and

has specialized in for quite a long time and the exciting thing I think is having both of those on the same platform and the way I think about it is the the me megga Vol with the amm are really good for the longtail really good for launching markets but then there's this natural progression of a market where it'll start primarily being quoted by an amm but eventually more sophisticated market makers will come in will quote will provide even more liquidity and to be able to do that they require more sophisticated products like an order book so with idx you can have it all in one place perfect and for the instant listings how many markets have been created and what has demand looked like on that side um I think since we launched

unlimited it's been around 60 or so um but there's about 500 that are available to be listed with many more plan to come so part of the the thing that we're looking at for success is the number of markets but another really important thing is how quickly can users add markets and that's something that's really important to Traders obviously especially in this day and age in crypto when something's getting hot you want to trade it right away with instant Market listings you can so you guys bought out frame back in the day and then you rebranded it to abstract and then there was also a bit there where it was uh something related to ZK sync I kind of just want to understand the journey and where you realize like this is what everything needs to end up at I need to

build out out what was that process like in your mind yeah so I met Saar at dinner who I think is one of the best developers in crypto he was talking about his frustrations around community and marketing you know I was I was talking about how like I wanted to do something bigger for our ecosystem outside of you know simply you know putting um you know putting something together that like you know we honestly are just not technical Builder so like I have no business putting something together like that right and uh the elephant in the room was like I'm super super strong where they were weak and they're super strong where I was weak uh so we decided to merge forces uh obviously the beginning stages we understood the thesis and why we should do this and then we started to really

just debate like how are we going to compete and win and how are we going to differentiate ourselves from everyone else uh and as we started to do that competitive process and as we started to kind of do that analysis and just do like nights and nights of hair pulling and back and forth and workshopping we kind of came to the vision that it is today which is like okay let's be the consumer chain clearly cryptos and it's consumer era whoever owns The Narrative of the of the consumer chain is going to be wildly successful and what does that necessarily mean what does it mean to be consumer Centric what does it mean to put the consumer first right like what what like how how do these all correlations come together how are you going to compete how are you going to beat base right why is everyone building

general purpose when that contradicts entrepreneurship 101 right like doing 10 things at once leads to failure right it takes just like unbelievable lift to do that why why don't people more people are more purpose-built what is the purpose built that has the pmf you come down to fun right what are users lacking why aren't people onboarding the zero to one sucks right like why does the 0o to one suck because it's an ecosystem in which you have to put pieces together right to use ethereum you got to get metamask you got to go on a Unis you got to put so many pieces together to to make your first transaction to participate right that shouldn't feel like that it should just be in one place right but the problem with one place is one place in layman's terms is centralization Right a lot of and then

the ethereum Maxis have convinced or had convinced everyone right I think this narrative is slowly dwindling that like everything needs to be decentralized and if it's not it's contradicting the properties of blockchain when in reality the properties of blockchain are Global liquidity Global composability you know being censorship resistance being able to deploy and tap into this this world through these rails that are not censored by you know Stripes weird terms of service right like that's the properties of blockchain like the properties that make ethereum great is that it's a decentralized network State and that's so important but just because ethereum is a decentralized network State doesn't mean everyone should be building a decentralized network State when ultimately like decentralization and consumer adoption are not synonymous to be frank they're paradoxical they

actually mean the opposite thing look at anything in the real world again that's why I use 4chan as the example like look at social networks that's de centralized forchan and then look at you know social networks that are centralized Instagram one clearly I mean they both have their pros and cons we won't get into that argument one has a billion users one has a couple right so like if you're going to break through you've got to get rid of that taboo you've got to get rid of that stigma and you've got to say like this is how we're going to push the boundary and succeed and you're either going to be a part of it or you're not yeah I completely agree with you I always think of herbit when I think of um etherium versus Instagram when something is more centralized I kind of want to take a

step back and talk about IP on chain and more specifically something that you mentioned which is um web free we have a tendency to not overvalue but I guess like add a bit more of a specul of Premium um compared to web two where it would be 200 300 mil web free is five bill um and I want to kind of understand how you because Walmart your Walmart initiative was very interesting and I would say Pudgies is the only nft that has ever been able to do both web two and web three right um how do you think what was your approach to that why do you think it worked out and why do you think others were just not able to make it work yeah everything I do when you see me do initiative

is really to create demand and conviction right for the pangu token for the pudgy nfts for the ecosystem so like a lot of people on its face look at Walmart and be like okay that's cool right but what we really did at Walmart is a couple things we put 2,000 pallets of pudgy penguin toys in 2,000 Walmarts dead center in the middle of the store during quarter 4 which is the most prized real estate in basically all of consumer product the second part is toy that was on those shelves was a toy that was licensed from the holders they got a royalty and perpetuity the symbolism there was epic the third part was every toy that we sold came with a QR code where somebody scanned and they were actually able to redeem their nfts

through a gas's experience and were put on chain right those were the three facets that basically you know were predicated around the Walmart moment it wasn't just simply putting toys in Walmart which I think would have been impressive enough now what we do when we do things like that right or when we make content right we're really creating demand I'm not in the I'm not in the toy business you know a lot of venture investors early on in our fundraise thought I was in the toy business or the IP business turned out to be a terrible misjudgment for them right but nonetheless like we are in the demand creation business so when I go put W toys in Walmart right what I'm really doing is I'm creating more Demand right more people are learning about py penguins more people are falling in love

with puny penguins and I'm creating more conviction with our existing holder base our existing holder base is really proud right and convicted to be a part of this ecosystem and they don't want to sell because their kids their nieces their nephews their friends their family members are now you know participating with pudy penguin toys and now it's entrenched in their everyday life and it's omnipresent right if I do a movie or a TV show this thing will remain the same right if I do you know major collaborations and more Partnerships all of that will be the same so a lot of people kind of misinterpret really what I'm doing when I do these initiatives right I'm really creating more demand either for the nft or for the token and I'm creating more conviction for all of those holders because eventually as as I do those things right one becomes

critically obvious versus the other your other Holdings become less obvious meaning you know if you hold nfts and you hold you know a couple little Pudgies and a couple of everything else or if you hold meme coins and you hold some penon you hold a couple of everything else right eventually the more times I'm omnipresent in your life the more times I show up you're either fiscally irresponsible or you're going to make the decision to say hey like I don't know why I'm holding all these other things right because one is clearly transcending right one is clearly omnipresent one is clearly going outside of our Echo chamber and impacting me in a positive way which ultimately translates them into buying and holding our assets right this is this is not like a theory this is quite literally why we beat everyone else over

the last couple of years with a hundred times less money and resources than they did right was because we simply followed this line of thought and we never pivot and we never steered away no matter what the meta or the trend was at the time right because this is very simple for all tokens the advice to Founders who are listening you are in the supply and demand business as long as your token's not inflationary that is the business that you are in it is a very simple thing to understand right so when you see me go and do another big partnership when you see another headline around pudgy Penguins I want you to look a little deeper than the headline I want you to think wow he's creating demand and he's creating conviction right and you do that enough times then ultimately you have what everyone in crypto wants

and it holds a financial asset is something that goes up and to the right perfect um how do you think about brand dilu this isn't related to the toys but it's mostly related to the fact that you guys are doing a lot um which I think is really good and I can see how you're connecting all of them together but is that something that you're concerned about at all yeah it was like for example we were too small to do that Walmart administrative and if that Walmart thing would have went bad we could have screwed the whole brand right we're three reorders in and now with Walmart so it's deemed a complete success actually at the end of 2025 because I know we'll be in Walmart till the end of 2025 my business partner Peter who's the I've he's kind of the Walt Disney behind pudgy and I kind of

told him like you have the range you decide what you want to do because we did what we needed to do to get on the radar and to push boundaries and break barriers for the space but he has a little bit of a more you know you know there is such thing as selling out too quickly right and so he really wants to re in the brand and the culture and focus on a couple other things so I don't know where we end up you know in 2026 in terms of some of our Mass Market channels I think we've proven that we've succeeded there you know we're going to be basically two and a half years in Walmart you know if if we decide to leave in 2026 you know we obviously could stay if we'd like um you know but but it is important and we are conscious

of it and I've given the keys of that castle to our chief creative officer Peter to figure that out what do you how do you think the pengu launch went um is there anything you not just related to the pengu launch but over the past two years is there anything that you would have done differently um both the pengu launch and with pugy penguins is there anything that you were like you know what we should have done this instead I would have done anything differently okay fantastic um last two questions um how do you think the L2 landscape evolves do you think people start copying the consumer or like I guess the app um focused L2 I think we're going to set the tone I think I think whatever we do here I think every new L2 is going to follow in

our Footsteps in some shape way or form uh that's just been the history of how we build for the last couple of years it's kind of historic around you know the nft stuff soon the meme stuff and I think this will be no different um and I think there's going to be more top tier serious talent I think there's way way less Talent true talent and grit than I think people think I mean I shouldn't be able at 26 with a group of 25 and 26 year olds shouldn't come in and outperform everyone the way that we're doing at least like maybe maybe we're just incredibly talented maybe I'm shooting ourselves too short but the bar is too low when you D when you unpack some of these things you know things that are worth billions of dollars you

know actively worth billions of dollars and you unpack them you kind of are shocked and you only can truly unpack them if you build and if you're competing and to compete you have to dissect right and so you know my driving force is comp competition and So based on this competition I dissect everything I I know what everyone else is doing to the best of my knowledge and not impressed do you think we'll get um better talent coming in now that people know that they can make a lot of money totally I I think the floodgates have been open now for like two months and I think Trump was the nail in the coffin no one's afraid anymore that makes sense um the last question is kind of a cope question do you think NFD is apart from Pudgies well how do you think the NFD space shapes

out over the next year two years I think if marketplaces don't enforce some minimum royalty of at least 1% or more it's going to be a hard time for nfts to come back raging like they did in 2021 nfts are the best form of tribalism they're the best form of community building they're the best form of you know culture and V blin status in the digital age they're the best form of distribution right meme coins can be bundled into Smither and you still might not even be able to see it on Bubble Maps right nfts are really hard to fake the distribution of um and so they're really good identifying how big your army is on an individual

basis I think um and and so the the problem is is with nfts not having royalties and meme coins basically being Shameless and no one's trying to report you to the prison if you rug a meme coin uh right but God forbid you raise 500 ran on an nft Min and you you fail after eight months you're a criminal right you're a rug puller it's fascinating actually to delineation because people will praise right like like if you're a builder I mean Jesus like I don't know why you would build an nft right now you're either crazy you're either a beast you're either a CRA you're crazy you're a beast or you're stupid right and the

problem is with no royalties is too much of a long-term liability right to be frank if I didn't spend $2 and A5 million on pudgy penguins and put my whole reputation and everything on the line when the Black Swan events occurred and royalties went to zero and I basically had to fund this business with another 500 Grand right I would have probably quit yeah you know I'm a guy who's been making millions of dollars a year since I was 18 right like that hell that we went through oh my God there's no reason to sign up for that um there's no re there was no reason to and so the but it starts with the royal this idea that that nft shouldn't have royalties is insane I mean photon is charging you 1% on sells and 1% on buys a 2% total rake and you

do it with a smile on your face and not a single person has said anything to Photon right why because the meme coins go up right but the problem is is for nfts to take off you need mints to take off mints are the most exciting and most fun mechanism in all of crypto because of that idea of pulling a rare right and something more that's better than the others and that that that reveal process the dopamine is too incedible right so to n for nfts to come back you need mints to come back mints are not coming back until you have some sort of minimum viable royalty that makes some sort of financial sense because if not the long-term liability is too great now there still be outliers I think we will be an outlier I still think py penguin nfts and our ecosystem will continue to

perform because I've cracked that code and I've developed that trust with the community and the people outside of the community right so when I say something people really Galvanize around it there's maybe one or two teams who will probably be in the same bucket in the same boat right specifically for our team uh I think we're we're in in a league of our own but you know pudy Penguins is not single-handedly going to bring an nft bull market if the cons are still the cons that I had mentioned but the first way to alleviate those cons is some sort of minimum viable royalty and I do not think that royalty is 5 to 10 Perc I think that was egregious that is completely extractive and that's not beneficial right I think 1% is the minimum viable number and I that should be available across the board and I

think that's fair and I know the math and if you're a small creator it can make sense or at least it can give you a future potential for it to make sense but nobody was crying when they were getting 5% on their friend Tex when everyone was getting the 5% royalty no one gave a right FR Tech was hot right and so royalties were never the problem uh they're actually now the problem now that they don't exist so it's up to openc and Magic Eden and blur to listen to this hopefully you clip it and post it and tag them you know it it I've been I've been right on everything for the last couple of years I've been saying this for the last couple of years I mean it's so clear as day that's why our whole incentive program around abstract is really focus on content

creators and streamers because I know what it is to benefit that right nfts were amazing because all the content creators and all the artists were coming and bringing their people into the space it was only until that stopped happening that the that the flywheel and did the excitement around nft stop right I think ethereum and if ethereum wants to come back the way that it was don't underestimate the nft top and the ethereum price top truly right like don't underestimate what that what the that correlation put the two charts together I think you'll tell an interesting story also look at when nfts took off in ethereum's Price look look at the correlation between the two it's evidently clear look at sana's Price versus The mcoin Craze it's it's so it's so paralleled and so obvious I mean it take a first

grader could understand it yeah for some reason all these amazing teams with you know multi-billion dollar valuations and nine figures in cash don't really understand the business that they're in which is the content creator business it's fascinating to say the least I hope of these days I could be at the leadership Helm of one of these nft marketplaces so I could show them all how it's done that was a very good um honestly almost brought a tear to my eye because I really miss nfts like nfts it was just so much more fun than mem coins and I agree with you it's if you're paying it's not even one% because you're also paying priority fees everything it doesn't make any sense to um yeah I'm hoping so as well um okay I think that's it Luka thank you so much for coming on man I really

appreciate it I appreciate you having me before actually we um go off do you want to tell people where they should head to find out more about abstract chain and about you and about the follow abstract chain on X just spell it out lucanet on X pudy Penguins on X stay tuned [Music]