Building a web3 onramp by tokenizing movement: Sweatcoin

Transcript

GN GM welcome to web3 Academy your one trusted source to capitalize on the next big phase of the internet don't get caught in the hype cycle I'm Jaybird joined by my co-host Kyle reedhead and we believe that the movement economy is going to change the world that's why we're carving a path for doers to confidently build and invest in web3 today we are talking about building the largest on-ramp in web 3 history by tokenizing movement AKA tokenizing sweat what the heck does that even mean well fun fact this app called sweatcoin has over a hundred and forty million users it's the biggest in web 3 by a long shot

and it has the large well the ninth widest held token in crypto something like over 10 million I believe holders and it's onboarding close to 10 000 new users into web3 every single day every single day it's unbreakable actually literally unbelievable and the weird thing is is no one seems to know about it I mean I so I met Oleg is the founder of this company and Jay will give a bit more on who he is in just a second but I met him at the Epic web 3 conference because I actually introduced him to speak I was the MC there and he had a presentation I didn't I was like I don't even know what this thing is but I sat there and watched it if you're introducing him and I was like wait what this is happening like how do they not know about this it's like if there's one

person I told him afterwards like this one person that should know about your company it's probably neat because I literally talk about it every day and I've never heard of it I was mind blown and I was like we got to get you on the podcast and learn a bit more because this is just wild and you know what I love he actually has a legit business model a legit token there's no hype like this is for real this is everything Jay and I always talk about yeah and this is a an example of a business leader who understands that you don't start with blockchain not always there is some times when you start a blockchain but in this case he said it so many times in the show Kai how many times did he say a business is all about finding a problem and then solving that problem and that

is exactly what he did with sweatcoin prior to finding founding sweatcoin in 2014 Oleg founded Bloom FM which is an Innovative award-winning music service that had over 1.2 million users and before that he's worked with Coca-Cola PepsiCo and Mars as an international consultant at BCG he's also worked with British Telecom so Olex experience is vast and deep he's a real gig of brain that understands what we are trying to do when you build a business and then understands how blockchain can amplify that I'm Adam and Lisbon and uh we had a couple beers and we kept talking and talking because he's just really really solid mind very interesting human and a

great guy so let's just get right in there and listen to it but before we do of course we got to take a second to hear from our sponsors the future of social media is here and that future lives in web 3 on top of lens protocol web 2 social platforms are broken and right for disruption you see the epicenter of social media is the creators and yet they are the most neglected web 2 platforms like Facebook Tick Tock and Instagram are all essentially robbing creators of their worth creators are a new type of entrepreneur forming new types of businesses yet with web 2 platforms creators don't own their content to their profiles and that's their product in business instead they are tied to the platforms they choose to create on well just like how crypto is freeing us from Banks web 3 is freeing us from these

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you're among the first 1000 users you'll get free access for Life Oleg welcome to web3 Academy great to see you great to have you today thank you very much for having me guys appreciate it all right I'm going to jump right in you've got an app with over 100 million users I think 140 million you can tell us the exact number there's a ninth largest crypto token buy holders and yet no one has heard of you or not enough people have heard of you that's for sure why is that well I mean you nailed it I mean that's why I'm so nearly bold that's what keeps me awake at night really we build well our token's amazing the story is absolutely

incredible and we're just not hitting buttons my biggest fear is where early my biggest hope is that we're early and being in there in Bear Market is actually a blessing for us because we can take all of the successes that we were able to build build on them and hopefully you know I'm going to show right now guys we needed an amazing marketing director if you wanna lead project that's going to be top 10 top 20 within the next two years you know kind of give me a holler but basically we have an amazing guys token app and

community and we are doing really really cheap job at the moment in kind of positioning ourselves and telling our story well and I guess this is probably one of the reasons why I'm here because if people listen and they give me time they go like wow this is incredible but because I don't tell it well and I'm not concise I guess everyone just kind of switch it up and go like whatever and yeah so we need somebody to help us and you know kind of package this package is better if I can clarify some of these numbers so we started in 2014 with web 2 business which conclusionally was called sweat Queen because we wanted to be on

blockchain but we couldn't build it on blockchain and that is the business that has more than 140 million registered users last year we expanded into web 3 and we're building on near where we have more than 10 million token holders you know kind of counts vary more than seven million people in our non-custodial wallet sweat wallet and this is the business that we're talking about right now that is built off the web 2 into web 3. for people who are crypto curious for people that wanted and really really Keen to join web 3 but had these two barriers you know and it's

interesting people talking always about how do we drive people's around to web3 the answer is very simple it's actually two things that stop people one is stop talking yield farming staking and you know build all people don't understand what the hell it is they don't engage they turn around and walk away so that also includes ux build ux that is not you know kind of technical not for engineers you know can just look at you know Mass Market apps and you will see what kind of new access people are expecting and the second thing is don't ask for credit card when the first blood is clean because these people read newspapers the first thing that newspaper prints about crypto right now

so you don't let me installer and full of his million brain they think that it's going to be them that's going to lose their money so you got to give them an explanation what are they doing here how they're doing it and don't ask for money first and this is where we come in in a very very good way because over the last nine years we'll learn how to build good ux and we literally allow you to look into crypto we don't ask for your money at all is it life-changing amounts no but that's not what these people are seeking they seeking knowledge they're seeking ability to understand and once they're comfortable all of a sudden you're starting to get that crypto

curious into kind of being really really keen and becoming crypto native and I guess to clarify too of course if there's a hundred and I think you said 40 million users people have heard of sweats they've heard of your business it's the web 3 community that hasn't necessarily heard about sweat coin which like as much as that sucks you're looking for a marketer to help you in the web three side of things I think the good thing is this is something Jay and I was talking about is like the way that Webster is going to go in the future is the tech is going to be in the background right we're not even going to really know we're using it and that's kind of what you've done you've got 140 million users X percent I don't know what that is I think you said 10 million

have a self-custodial wallet so a certain percentage of them are using crypto whether they even really understand what that is or not which is the whole point of this thing we love that but I think your thing is hey we also need the web 3 Community to understand because you'd like support you're one of the you're one of the apps that are onboarding the most people every single day in the web 3 and yeah web3's not talking about it which is just Wilds that's why we're so excited to have you on here for those listeners that have never heard of this and they're like what are you guys talking about give us a bit of a background what is sweatcoin sweat economy talk about the business a little bit maybe the origin story what is it you've built and then we're gonna dive into a lot of

things from there awesome okay well it started in 2014 my previous business Paris then really unfortunate circumstances and I had to let 30 people go and I had to go for a run to clear my head and to think sorry thoughts and I tried to really kind of kick myself far in the nuts and run very fast and I realized I couldn't even complete 5K and just three years before I was climbing some of the highest mountains in the world and that really kind of made me think oh what happened like in three years how come that I lost all of my fitness

and power and energy and you know agility and I started talking to my now co-founders and we very quickly realized that the reason why everybody wants to be more active than they are and it 100 of people are like that you know can you talk to somebody who is depressed sitting with the beer at 11 o'clock in the morning watching TV and somebody who is training for Marathon all the people want to be more active than they are right now and the reason why they can't and the reason why they never will be is because nature doesn't want you to Nature build us to survive nature didn't build us to burn calories and actually build us to preserve calories because that's how

survival happened and therefore unless there was a food on the horizon where you were about to become food to someone or something we didn't run we just sat around the fire and that's basically what nature wants us to do and we continue doing it and once you're realizing this is just Universal a very very simple explanation you realize that there is an answer to it and it's called instant gratification so if you start turning the relationship with steps as a sort of the lowest common denominator physical activity from wasteful from the nature perspective to gainful all of a sudden you are subtly starting to help people to change their habits

and we basically said you're looking we're going to let you turn your steps into currency and we call it sweatcoin and we put an MVP out and it flew and you know people absolutely loved it I'm not going to go into sort of blockchain details because at the beginning we had this really into that very interesting kind of technical way of doing it but we took you realize it wouldn't work but the concepts stuck and interestingly investors started coming out of woodwork people were really really excited and energized by the idea oh you're going to burn calories instead of kind of megawatts of energy to create crypto oh this is interesting so we launched and you know going to be flu LED Bible or

all things actually brought us like 30 or 40 000 first users they put crazy sort of headline app pays you to get off your ass and all of a sudden it just kind of went viral with her whatever and we got a lot of users and the feedback was so overwhelmingly process it as I mentioned we couldn't build on blockchain because it was on the Bitcoin it was too slow too expensive and we just decided we're going to go centralized and we're going to jump on blockchain a bit later this is 2014 so this is previous to like ethereum when he's fully uses right previous to icos you were way ahead thinking like oh I'm going to tokenize this that wasn't even a thing at the

time just to give context for those for the listeners I was at the first meet up that italic had in London there were like 15 people there you know you could you know he wasn't mobbed like he right now for security you know you could just come and talk to him we actually met with him in late 2015 to discuss our idea and people could build on ethereum we spent quite a bit of time talking to his team and we realized that you know can it was way early because it was a year before they did an Ico and close to two years before the actual launch so basically neither Bitcoin or ethereum were an option and despite our names Red

Queen We actually ended up being a web 2 centralized business but everyone loved the name it kind of made sense and we just started scaling and launching new geographies and it was you know kind of unbelievably fascinating to kind of watch the engagement and also the fact that you know because as a business we focused on solving a problem rather than coming up with idea the whole thing was extremely viral you know can the our growth was due to Word of Mouth especially in the US it was really quite interesting we would get into school the kid would talk to his friends kind of during the break would get quite a lot

of installations and then we would come home and they would talk to their moms and they would kind of say Mom you're fat you always want to lose weight why don't you get this uh app it will help you to do that don't worry about sweatcoins send them to me I'll figure out how to spend them and moms install it and then Mom started talking and then another moment stalls and then another school explodes so it was just really quite an interesting and bizarre Dynamic that we absolutely did not expect that really kind of keep us in a couple of years I think to polish and perfect it but it worked amazingly well even now if you look at you know there's 140 million users probably about

19 more than 90 of that have been organic you know that during the word mouth every year we were looking back at Bitcoin space and we're sort of evaluating projects and we were sort of at the beginning it was really dire especially during Ico boom we were just sitting there should we shouldn't win we even prepared white paper but then when the flood of groups and scammers and crap just sort of became you know overwhelming stuff like that you know what we don't want to go in there because it sort of became almost like a you do what so we basically took a course and we continued scaling our work to business until about 2019 when we

came across the predecessor of polka dots what was the name from the number and now the project was called something else and we actually took the research grade code and then she get 500 transactions per second 100 nodes from now okay this is starting to get better but because we were already processing 700 and 800 transactions per second that people kind of went you know what this is too far-fetched and we don't want to become all of a sudden blockchain development company we want to focus on making the world more physically active and build on blockchains that you know can Will have their own teams and in 2021 all of a sudden I don't know

if you guys know in London they always joke that buses either don't come in trains 2021 was this sort of you know 15 buses arrive at the same time you know all of a sudden each other and Epsilon and you have near amazing projects with a really really good technology it was just like that massive breakthrough and we got really excited build a team and look at more than a dozen different projects and selected near we can delve into it you know I can explain to you the logic and how we write to that decision but we are very very happy you know nine months from lunch we're very very happy with the partnership they you know the guys that totally amazing but

then when we made the decision basically what we've done we gave our users an opportunity we said look you or many of you were expecting that would be crypto now we can become crypto you take an option take a pic if you want you just opting you create your near address and then at the time of PGE you would be able to effectively match the amount of sweat coins that we had in your balance for sweat that is a crypto token this way because every sweatcoin has a history it's backed by what we call a walk chain so there is never sweat coin or sweat that came in the existence without a string of steps with

timestamps and corresponding telemetrics that you know can we collect that exist so if somebody wants to prove that the whole token mass that exists right now is backed by the physical activity we can send them into in the in Cloud servers and do the analysis oh so before we go on the blocks yeah why don't we take a step back I want to dive into all things blockchain in sweat and how you got how can I sweat which is the way you explain it to me when I met your Lisbon which was really cool let's just talk about the business for a second because we went from 2014 to you know now at 140 million years you're like okay now I want to get on a blockchain let's go back for a second just what is the business because this is I think I want people to understand

is like people heard of step in right that took storm back in was it 2021 2022 a bit different you have an actual business here with 140 million users non-block team related that is profitable in a good business and I think this is the thing I want the community in web 3 to understand is that it's not the token that is making you the money or that is making you the business this is a thing that can amplify the experience for the users so let's just talk about the business for a second what is the business and what is the model of that how do you guys make money like walk us through that so we understand just like the Dynamics of that first absolutely not many people in what three sort of want to delve into that but I agree with you that so we

like make people or it's a problem so as I mentioned and the main killer well our success is that that we focused on the problem and the problem is that people feel frustrated that they're not active enough and if you give them an opportunity to kind of solve that problem without sacrificing anything and that's where the magic is because now if you want to be more active you got to buy a gym membership where you got to buy a Peloton bike between the half Grand it's always spending and here it sort of becomes it flips its on its head and it says actually it makes you at the end and it pays you as opposed to you

paying people kind of go what what the hell how is that possible and quite a lot of people join us not because it's such an amazing proposition and they're excited they're joining because they're like this is up I don't believe that this is work it can't they pay me to walk how the is that possible and they're coming and they kind of look around yeah again it does make sense and the business is very simple to start with you come in and you walk and you get in paid for it in sweat coins which is of course the currency that we've created and you spend it with our partners who give you amazing deals that are not available anywhere else on under no circumstances

for the sweat coins why does that happen because there are thousands of businesses that are interested in Physically Active people or people who are trying to be Physically Active Health Fitness sport nutrition fashion vanity makeup dog accessories supplements healthy food yeah kind of countless businesses are actually the segment that they're going after are the aspiring athletes and this is exactly what we have and unlike Zuckerberg or you know Bryn we're not telling you that you know can these people expressed an interest in active we know they are so if you want to Target hardcore athletes you put a verified pricings with coins

and in order to achieve that balance you actually have to be really really active and walk around a lot if you're interested in millions of users but the ones that have right sort of psychographic and right attitude then you put low value in sweat coins and then you have huge huge huge addressable market so very quickly we ended up having three business models first one is Partnerships brand AES you get exposure to tens of millions of people second one is advertising a lot of Brands want to get in front of Physically Active who want it to be physically active audience and because the way we implemented ads when we restricted the number so unlike you know

can a lot of places where banners would be flashing you know can you're being interrupted from what you're doing with ads or actually hit them and we said if you don't interact with them don't interact with them but if you do just bloody watch the whole thing from beginning to the end and we have some of the highest levels of Engagement and because of that we have some of the latest highest levels of cpms in the industry as well and the third one is premium subscription so we have freemium model some people are on three apples some people pay premium if you combine the two for multiple years actually until we started working in web 3 we were profitable and the reason why we are burning a little bit right now is actually because we're over investing

including a lot of money in the building web free business the team the tech and the brand absolutely everything so it's not like you know we had a failing business and all of a sudden we went into web 3 and because of the results you exactly to prop up the you know something that wasn't working it turns to a solid business which is exactly what we need more of is solid businesses that are using web3 to amplify their business using blockchain so I understand I'm a user on sweatcoin iron sweat coins and then I can go spend them

with your partners to get discounts to get deals to get access to things that I wouldn't get access to otherwise I might also be a heavy user so I upgrade to the premium the paid subscription in order to get access to other features what did the shift to blockchain enable what did you look at and say okay now what can we do that we couldn't do before that we can do as a result of launch why blockchain because what we just said is you've got a business 100 plus million users you're making however much money I think you've got like 100 something employees so business is good Web Two these when we say currency the sort of thing it's not actually a crypto at this point it's just like a credit Point like it's like yeah like an air miles Point

kind of thing yeah so the best this is great you've got a phenomenal business idea here it's doing really well and you've been wanting to get blockchain this whole time why what does web3 do or what does that technology do to amplify what you currently have there is tooth question it opens the sort of next stage to achieve our vision and the mission is to make the world more physically active and app is a great tool and it will affect some people but our vision is to create what skull movement economy and think of attention economy right so about 200 years ago we started figuring out that attention is

valuable now we have this by some estimate 7 trillion dollar you know economy where basically we're buying and selling somebody's attention and what is the value of attention it is attracting someone's attention so that you can deliver them a message and hopefully there will be some value exchange right now what other things do humans do that is objectively valuable and somebody has you know a lot of money and a lot of will to pay for physical activity because if you're physically active you paying for it now with your gym membership with your sports kit with that Peloton bike etc etc your family is

extremely interested in that because you know that their fathers are you know kind of happier they are they're gonna live longer they're in a better mood your doctor or healthcare provider you know Canada is amazing saving because it's a preventative medicine as opposed to dealing with with the situation when you know you're already ill if you're thinking of insurers especially health insurance and life insurers this is an incredibly good business and they know that very well employers you know if you're physically active you're going to be more productive you're going to take few sick days countries if you are Physically Active you're going to live longer the total amount of tax collected from you is going to be greater so everyone

benefits so physical activity creates an incredible amount of wealth and yet we can only talk about it you know the doctor says oh you've got to be more physically active or you know can you have an ad that you know walking is really good for you why can't we turn this into a tradable liquid asset where all of a sudden everyone would know that physical activity has tangible value to achieve that with the centralized app and the token Wings in it is extremely difficult because it needs to have Financial expression it needs to be traded on exchanges and that's why we always wanted to be in crypto because if you want to create currency

physical activity turn into currency you can either have a country which is frowned upon these days I mean you know some people still try to you know do something rather but generally I think that this is in the past or you have to go into crypto right and Beyond blockchain and that's basically our vision and we have created sweat effectively as a tokenized physical activity and our vision is that in the future when people will be talking about why sweat valuable because I think that the question in web 3 is not going to be what is the utility of your token or what is the all of the scientific things that people throw around because if you

think about money why does dollar have value why does this have Bell why is that valuable so why sweat valuable because it is a representation of my physical activity it's not worthless it's not zero you will never give it for nothing if you were then if somebody kind of calls you and says can you bring us some beers you just jump up and deliver it to them no you wouldn't it's your time and your physical activity it's extremely valuable so we are trying to tokenize this and create this is an into an asset so that somebody in the future reads a newspaper article and it says physical activity pound 20 last week can I go far why don't they participate on this why

am I not on this treadmill and all of a sudden they start becoming a lot more active that creates a lot of value for them for their families so the healthcare provider for the insurer but they're employed and for their country and if we take a chunk of that it would be a very very sizable business if attention economy is seven trillion dollars which is what about 5x the whole crypto I think that physical activity or movement economy can be a lot bigger because Health Care productivity life expectancy you know Canada no I'm not macroeconomist but I think we're talking comparable size here and even if we get 10 of that

I don't think 700 billion dollars well like can you connect the dots from in this I get where like you explain there's countries there's Brands there's insurance companies Etc that all want to pay for sweats in their physical activity right because they want to get in front of these people they want to know how active these people are and the more active they are they might give them cheaper rates in their insurance so they might give them I don't know less taxes or whatever because they know they're going to live longer et cetera so I see the value and then I see where a user can basically tokenize or like get points for the activity that they're doing yeah connect that for me though how does that value like match is it you're getting all these Brands insurance and governments and then the money they're

giving you put into this token somehow so these people actually get the value like how does the monetary aspect actually make sense here that's what I'm trying to to help you know you can do that yeah it makes sense though you asked me kind of why blockchain and that giving you sort of the end goal the end goal is in order for us to create movement economy we need a token and a currency that will power all of those value exchanges why is this token valuable the way and where does this value come from the way to think about it is like a startup right so if the end goal is to have a token that is a tokenized physical activity by

everyone's sort of admission and valuation then this is not something that you can start with because people kind of performance is of course I'm no it's not zero but you know again it's very confusing It's A New Concept so we have to build it and this is like a startup you raise VC money and in our world this is going to be monetizing your potentially to start with so you know can you're physically active during crypto we are now effectively introducing you to this project that gives you exposure to either entities or this project that offers you an opportunity to participate in metaverse or this project that gives you a zero

percent tax trading right all of these introductions generate revenue for sweat wallet that we have committed 50 of our profit is going to go into buying tokens on an open market so in order to bootstrap the story and help it grow like a newborn baby with unexpected newborn baby to run and sing songs and solve algebra equations so this is the kind of future right now we're bootstrapping it through effectively raising money through different business models I described three to you they're perfectly reputable in web 3. in addition it's cheese when

you facilitate purchase of a token or when you facilitate swap of the token there are fees that are generated everyone knows that metamask is a very very big business you know basically with one single Revenue generator which is 0.85 charge on swapped amounts right so we have that additional revenue streams then you think about our game that we have just launched and I'm sure we're going to talk a little bit more which is sweat hero which is at three Innovations in one and that is a token sync as well so what ends up happening is that people use sweat to get utilities and to get entertainment and enjoyment from the whole ecosystem

that allows us to extract sweat out of the system in so-called token sense then Community votes what to do with it and so far they overwhelmingly been burning and therefore our actual token that everyone sort of complains it's inflationary because we don't have a cat Supply because if you're rewarding physical activity you don't want to say in 20 years time it's already we you know Federal valued movement then but right now we don't give a so you might go and sit and drink beer and don't move now that's not really kind of kind of long-term planning so we can't do that therefore we do have unkept Supply from mathematics perspective but

what we do have is an understanding that it doesn't matter if you have Cap Supply or on Cap Supply what matters is to be deflationary which means that the amount of tokens available at the end of the period is low than the number of tokens at the beginning of the period because the business is operating it's growing more users more revenues but the number of tokens is declining so if you divide one by another if denominator is reducing then the value of single unit simple maths is going Oscars that's exactly what we are doing and all the activities that we have right now all the functionalities are focused on two things

thing one is active users and we'll get into metrics this is being my Bonnet because I do think that the industry we're not focusing on right metrics right now and is really not taking us into the right place and the second thing is supply and demand or basically becoming deflationary and with all these different functionalities that we're launching we are going to become a deflationary token from the end of this month which is meant unbelievably hard to do even for you know for Bitcoin for example because Bitcoin is not deflationary our listeners understand this well because we talk a lot about

ethereum and the developments they've made over the last few years which has now made a deflation they have it in the supply there's no cap on on eth yet they are deflationary because of like you said token syncs things that are in the tokens let me give a quick summary of The Token here of like what you guys have created so basically you've tokenized sweats the more you are active the more these tokens you get more of these tokens you get the more you can buy things get discounts and things get access to things whatever that may be so there's your sort of economy that you've created now the issue you're saying is that well if this stuff gets too inflationary everyone just keeps working out there's an unlimited amount of tokens that's a problem the next thing you want is well we need to Value around

these so if we put it on crypto meaning an open Global Marketplace then people can buy and sell them so meaning you can get these tokens from exercising or you can just buy them and that can get you the access and the things but again and if there's just an unlimited amount and it's always inflating then this thing's never going to have value that's what happened with like step in axi Infinity we've talked a lot about these other games essentially that have over inflated and so there's a bunch of things that you've done where transactions using a wallet if you do all these things it actually Burns so that helps the other thing that we haven't mentioned yet that you explain to me that's quite important that's similar to the way that Bitcoin works is the more that someone exercises the harder it gets to earn the same amount

of tokens so meaning let's say you work out for I don't know the numbers here but let's say you work for five minutes you get two tokens the next time you got to work out for 10 minutes to get two tokens and then it's 20 minutes and so like the more you go the harder it gets to earn and so that sort of suppresses the amount of tokens that are being created and that's what kind of generates a bit of value around that because it's actually hard to get these tokens so the harder you're working the more you can start to sell these things and make or get access to things or whatever you want and so that's what sort of like creates this economy which is like gold it's like hard to create more gold there's some inflation but it's harder to do it that's like this is

you get good at it but then it just keeps getting more and more challenging that's how Bitcoin works really that very eloquently delivered what probably took me like flowers over the year I think the other way you could compare it is like carbon credits right sweat credits are similar to carbon credits if the listeners are familiar with those which is basically there's only a certain amount of carbon that you can use if you happen to use less you can sell that to others and then that amount goes down and down and so carbon credits has been tokenized it's on normal exchanges not necessarily crypto but some of it is on crypto as well and that's become this massive economy this new financial asset and you're basically creating the same thing but out of sweat which I think is super super cool so hopefully that was a good summary and

listeners hopefully that helped you guys wrap your head around this because I know it's gonna add this small waste I think the the way we arrive to it we call it what value sorry step value of sweat the way we arrived to that was actually not through the economics we were actually it's remission because our mission is to make the world more physically active and if I make next sweat harder to Mint I am creating motivation for you to walk earlier and more which means that there is more physical activity produced at any given point in time because it basically punishes procrastination that was the first degree and the second sort of degree was and that also ensures

that no matter how far we scale in terms of users and their physical activity there is always going to be diminishing inflation in the monetary Mass so if you look in perpetuity that inflation is approaching zero if you exclude all the burns Etc so if we were not burning anything nothing was going on you would still have nearly asymptotic line nearly horizontal line in the future like hundred hundred years but because we have those token synced and because we're spending 50 of our profit on buying tokens on the open market the actual number of tokens is as I mentioned is going to start declining

from the end of this month already see here's where I left we have a business that's profitable we have a ton of users we have a token that is sustainable these are all the things you want in a in a tokenized economy right in a tokenized business we don't have many of these in web Siri at all um so it's kind of funny that you're like not only the biggest one of the only ones to be sustainable like other than eth there's not much other ones that actually have sustainable economy and so you've got all these things and that again and people still don't know about you so much in the web 3 world and so maybe we should dive into that unless Jay I'm not sure you have any other questions or maybe what we want to do is just kind of get the understanding of

why you chose near and what that Journey was like I'm not sure which route we want to take what do you guys think let's go down the near path because we had uh Aurora Cloud on recently and we talked to them we talked about near as well so you're the second in a month to come on and be on the near protocol so it also doesn't have the marketing either that eth has or the reputation that eth has but here we are with another Amazing Project and yeah exactly not yet so we'll walk us through that decision yeah walk us through White shows near yeah I mean it's a very astute observation and in many ways this is also the reason why we've chosen them because as you know we've started nearly nine years ago and one thing that we

know in order to have a solid business you really have to think about the problem and the product and once you figured out these two then you can start building business model and marketing on top of it and this is missing in a lot of projects that we've encountered even in layer ones you know can it's absolutely incredible how many layer ones that you know and are successful if you actually start looking under the hood and you do the hard testing and digging into code and testing of the throughput on 100 nodes 2000 nodes you realize you know can that actually don't have a velocity they have

a drained velocity but you know can in production it is not going to materialize so as I said in 2021 we build all teams here to look at all the different Tech and after about three months we were so bloody confused because everyone was throwing at us things that mattered to them but if you try to reconcile all of these things across multiple projects that would be kind of no crossover so there is no way to compare and then you took a pause and we basically looked at so what do we actually need and we realize that there are several things that matter to us one

is strategic alignment where is this project going not only from kind of website the declared goals but from the conversations with the founding team so you know can are we aligned on that and we'll get into details in a second the second thing was chemistry with the team because I mean we'll know that you know can people that you work with chemistry team and you know the vibe that you're getting from the team matters tremendously and the third but not least is Tech throughput robustness etc etc so the last bit is reasonably straightforward we kind of tested a bunch of different texts and you know can we realize that we possibly could

build a near we possibly could build on Solana but actually if you start pushing Solana for the actual transactions not those four hundred thousand transactions that they call transactions you realize that throughput is actually not beating nears and then they have periodically this you know kind of outages that you never know how long they're gonna last so that was the sort of thing with Solana that you know kind of basically made us go you know we're not doing it on site it's Mission critical we cannot go with the chain that so periodically dies for 17 hours or 48 Hours our support is going to be absolutely mobbed and killed so we can't

afford this then coming up to the team chemistry is extremely important I really enjoyed my first meeting with ilyapolis the founder he's a kind of true Builder and you know he's thinking immediately in Tech and code and throughput and answers to specific questions and if he says he'll do something he does it it's absolutely incredible there are so many people in web 3 that you know would sort of paint a you know massive cloud and if you look behind it and you know there is there is no substance so I really enjoyed that meeting and then I started meeting why the team that he has assembled and it's absolutely incredible so you would have

a fantastic relationship it's not the easiest because you know sometimes you have to solve sort of complicated things and we for example have some dependency and some questions on their technology and when we were launching we were nervous they were nervous everyone was nervous because who has done PGE with 13 million addresses and tokens to be allocated nobody it was biggest tge Factor 10. so it went absolutely smoothly and near has slowed down a little bit but it carried us through and it works unbelievably well you know now and we have fantastic relationship now probably to the most important thing

that a lot of people when I talk to people especially in web3 that don't pay enough attention to the strategical island let me give you an example so we are a b2c business we have more than 100 million users our specialty is kind of dealing with huge number of users consumers right we are not an institution we're not you know kind of big entity and if you start talking to chains all of them jump on oh you have so many users yeah definitely that's all but if you start talking to them you realize that their business development team is focusing on Banks and large Enterprises and their solution is geared towards sort of selling massive you know

kind of chunks of bandwidth and throughput to you know kind of to tradside for example even if they are Keen to work with you and even if they're Keen to give you money that's not going to work because the heads on a completely different place they're thinking about one two three four deals per year this is the size of the deal they are not measuring their success by number number of active wallets or active users they are using completely different metrics and therefore no matter how hard you drive or however much money you receive that is going to sour because you're working in different directions so everyone who listens and everyone who is interested I'm always

saying think about that and make sure that you use that as the first Criterion because even if everything else matches that is something that is going to turn into a conflict or an issue and not terribly sort of far down the line you know kind of six months to a year and you'll be already seeing cracks in the relationship so because near is about bringing next billion people into web 3 and it's not just the player strategy but the chain is about high throughput we tested it and we were able to get more than thousand transactions per second at Peak and because the

architecture is built in a way that if we need more than the adding shards and it scales up so we don't have a ceiling in the technology all of a sudden in them they also have some of the cheapest transactions you know among any chains out there which means that if you go in for the next billion people they're not going to be whales they're not going to be people coming in with either 10 grand over balance they'll have three dollars five dollars if your transaction maximum theorem is eight dollars how can you do anything for these people that's it's a non-starter it's like an alien world for them or near when you're talking about fraction of a fraction of a Cent and all

of a sudden these people can actually they come in with the you know one two three dollars they can stake they can win rewards they can transfer they can receive they can send their money into centralized exchanges and all of that with the balances that they have and it's a single dollar balances so if you think about bringing people into webstery giving them confidence in their first steps so that they understand what they're doing how it all works and all of a sudden you have an audience that then you can start convincing if they have another five dollars put it into crypto to go into another chain and that's what we're doing that's where we're calling ourselves the biggest on-round in web history a lot of people

are talking about it but when you actually look at the product say oh we have 900 apy yield you know what they mean if you ask three bucks you don't know what you and even if you give me 900 of three bucks I have to lock it away but it's parallel universes and it really is fascinating and I'm gonna have a another torch tomorrow which is going to be called you know whales versus Minos and who should be focused on because I think as an industry we are really focusing on whales for way too long there are so many projects that you talk to and again what they're interested in is bringing more liquidity because everyone is

focusing on TDL total value law and why is total value lock matter because their business models typically is not linked to tvl because the charges if you're for example layer one that the money you make or the tokens that you sync are based on transactions doesn't matter if it was a one billion dollar transaction or one dollar transaction the cost of this transaction is absolutely the same so if you start thinking what matters is millions tens of millions hundreds of millions of people using this system because that will generate an incredible amount of value for everybody it is not 10 people

who've got 1 billion liquidity who tout around the liquidity from one project to another who gives them the highest level of apis because you have it today tomorrow somebody gives 10 more and that billion is gone there and it's a zero-sum gain while attracting hundreds of millions of me notes is the growing of the ecosystem and bringing more people that will be the future of web 3 businesses and that's why I'm excited about being on near because we can do that which you're building on EDM and your transaction cost right now it's 50 cents one dollar you still can't cater to this audience you know it's too

expensive for them there is no product that you can offer them that they would be able to consume at least at this stage that's why there is very very little sort of actually if you look at all the different chains out there there aren't that many chains that can play this role of on-ramping people into web 3 and near is definitely one of them and that's the reason why I'm so pollution here and so how many minnows are you onboarding per day right now so about ten thousand then three thousand per day attaining their meaning and by when you say onward they're creating a new wallet or activating wallet so here's what I'd love to just discuss here so first great explanation

thank you so much for that and I love I think a lot of people just try to create these like consumer apps that are going to be the next billion people and they put it on this like blockchain this is never going to do it and it's like trying to put a square peg in a circle hole you know what I mean it's like that was never gonna work and that's all so many that I've seen web3 where whereas you just said we're just gonna wait let's build the app let's build the business let's get the users but let's not try to put a square peg in a circle hole and let's just keep building what we can here and when the tech is ready then we can start to do it and that's kind of where near came in and so great story there the one thing that's

interesting is that it's still not that easy for you to do this you actually have two apps so there's the sweat app and then there's a sweat wallet they're actually two different things and okay I'll just go in and yeah right so coin and sweat wallet what I really like about what you've done though is so everyone uses swept coin it's actually funny that that's called sweatcoin I feel like you need to change that as a marketer and I know you don't have a markets that this thing why it's a great brand sweat economy I like I like that a lot but so anyway so you have this app that is there's no mention of like crypto or any of this kind of stuff it's just you use this thing you earn these credits and you can get all these like great bonuses and things like that so it's

great no Financial talk but then you have this other app which is sweat wallet which is hey if you do this and you like all this stuff and all that but you also care about the financial world and maybe you want to not just use this for a person but if it's maybe you want to sell some maybe you want to go and use other things in D5 and you want to financialize these things you're earning then you can do that too and so you download this app that app is just a custodial wallet and boom you're in the system sorry not going to the wall and zoom now you're in the system and you can basically convert those tokens into like a crypto one and now you can go play around in the financial world world and so it's like but you don't have to

do that you're not forcing people to get this wallet to load it up with some ether in this instance I don't know what the token is that you need for transaction fees and near but like you don't have to go through all those hurdles to use the sweat App instead you just get to use the app and then if you care about the financial stuff which is not the bulk of people in this world then you can go do it and that's what I really like about this you're not forcing people to do Financial things first you're letting them just use the app and then if they want Financial stuff they can go do that next I think that's a really good experience is that why you have two apps or is that because Apple store or like what was the reason you you separated them

so two reasons the main reason was when we started you know kind of in 2021 when we started looking into blockchain we realized it's happening we had two work streams one was looking what chain we're building on another one was doing consumer research and the research showed that you know when we went into research we had the questions that you people still think about drugs uh when they hear crypto no and we have a lot of 55 year old moms and they interested in crypto we're like wow that's cool and then the next thing that was sort of bothering us is like you know are they interested do they really want to get in the Crypt and everyone

wants and I describe to you already two issues they didn't understand what the hell was going on and how to get in and some of them have been tried to get wallets but once they saw 24 words that they needed to record somewhere and they were told don't take a screenshot don't copy but if you lose everything's gone they kind of just too complicated I didn't understand you know and it's just not something that they even complete and what we realized is that they just need a good ux I mean this is like you know can you remember early days of graphical interface I want to show you my age here you know I

remember command line and Ms Doss and all of that and all of a sudden oh my God there's you know there's a button and there's a mouse and you click and oh my god it works that's the same thing you know and right now you should go into a lot of web 3 products they would be developed for you know kind of extremely Savvy people we discussed for example trading functionality in our app when we started looking at the trading functionality we of course looked at all the best examples and the example that it still fascinates me the swap functionality you go in and you choose the token that you want to sell and then the SDK or whatever the text gives you information how much of the

token that you want to buy you can get an exchange for that token then press about me and smart contract does some magic and you receive your new token it really is quite weird because this is not the type of shopping that we do in any other environment under any circumstance this would be like walking to 7-Eleven and kind of screaming I've got seven dollars and 11 cents what can I get for it who shops like that I mean nobody does that right I mean it's insane you're laughing when I mention this so it needs to go from the completely opposite direction so what do you want to buy right okay milk and two you know whatever breads okay that's going to be this and then you need to figure out how can you allow people

potentially pay sound with this token and some with another token or top up with a card you know then just think about basics of how humans especially not very well verse in crypto native would be thinking about these types of transactions and this is basically the functionality we're building right now we'll call it trading and you will choose what you want to buy and then you will choose the multitude of different tokens or methods of alien that this is what humans attack from interfaces so sorry very long-winded but you know can we really need to think about the users and these new users are not trying to force our kind of perceived way of how

things work down the throat of next 100 million because that is not how our industry is is going to evolve and how it is going to develop very interesting Jay do you have another question you were just supposed to ask yeah I got a few things I want to touch on I want to touch on the governance votes that you've had because you've had some record-setting governance votes I want to touch on that I also want to touch on sweat hero the nft game that yeah launching I don't think you've launched it yet or you've just launched it so we rolled it out it is available but it's open Beta you know it's a beta accessible to 100 of users because we need in complex projects like this

it is not possible to iron out some functionality without quite a lot of users using it for example matchmaking you know can you can design it in isolation but until you have at least tens of thousands of people playing you don't have enough information in data to really start trialing matchmaking and start offering it to people so to tell us about the game how does it work why I mean the starting point is our you already battle you mentioned step in and when stepan launched there were sort of two emotions that I felt one was wow this is really cool these guys have

done a tremendous job in terms of kind of marketing and creating hype around the whole segment and you know kind of a lot of people understand what sort of move to parent is the other was he would have they just spent just a few months longer to iron out their token economics and not make it in bonzing scheme that would have been heck of a lot better and a lot of people did not share with me that second sentiment and they said from the very beginning this thing is going to join the death spiral and then we're going to be spending shitloads of time explaining to people how are we different from stepan and why we wouldn't end up in that same situation

that they are basically when we started thinking about our game and nft game there were so three things that we postulated thing one it got to be a cool game it's all going to be a cheap game that promises that you will become rich because there are so many of them and it is such a lame excuse when you hear web3 game you know can you almost expect that it's going to be a real real shape but there will be token in it and there will be people playing it in whole that it would change their financial lives forever it's got to be a good game first and then token and everything else should come in second because unless it's an engaging game it's not a game you can't

use the working game and that was the thing that we spent a lot of time on the second was it's got to be sustainable token economic so none of that stuff that if it all goes well everyone is laughing and it's fantastic and you know and token values are great and Community is happy if all of a sudden the number of new users starts to dwindle everything goes into that spiral and everyone's in tears and the community is in pieces so we basically kill the whole idea of making our game into pay-to-play mechanics because let's face it the stepan and many other is not move to earn it's basic way you first have to buy an nft and spend a lot of

money on it and then you start earning and because you paid for the ticket you really need to have a return greater than you paid you know and it's that important because you got praying for money right you charge me I got to get that back and we don't do that our nfts are free millions of people can get in and a team mechanic is to have really engaging game where you can win sweat from your opponent but we take a battle sheet so it's a casino model it's a percentage that goes out and the more people engage and the more people play the better the overall to economics become because it basically becomes a token sync and then

Community votes and if they vote to burn that's tokens that are gone and the third thing is we really thought about nfts and I do not believe in the current model of nfts that it's scarcity and artwork that you know is going to kind of make the difference for the future the utility is almost unlimited and you know kind of ticketing Etc is an obvious one but in our case is dynamic entities so our nfts are going to be evolving and changing with your level of physical activity and time of the day and you know velocity your engagement with the app and your own chain activity

to give you an example if you are as fit as you do then you're gonna have really muscle legs have you seen our our nft they're called legs they are literally both Jay and I have tiny legs really it's all good legs well then we're gonna make you look good guys yeah okay yeah this is a try and I sell out every day night that's a nice booty thick legs this is mine so they have spaghetto lights if you're very sporty and immobile a lot you have that much legs uh you know like proper so they become Dynamic and they evolving change on the

basis of your activity so they become your representation so they collect their value is not coming from the fact that you sort of came in early and you paid a lot of money for them but Collective value comes from the sum of all the different actions that you took that made that nft into a unique thing that nobody else has because nobody has showed the combination of all of these different behavior that influence the character of this entity and because they're transferable I would imagine that they're going to become a you know can some of them really become collectors items I'm sure that nobody would want to have mine because once I get to legs and I don't know purple

tights you know but there are some community members that have some really really cool ones I'm like you know team why do they yeah the cool thing about this I think is that the more of these games or different things you add on it just creates more burn mechanisms but at the same time it also creates more reasons for people to be active which just furthers your mission so your mission and the further that people go along with that mission the more that it makes this token more scarce and so it's like it's a win-win and I absolutely love that and that's what we need more of is he sort of win wins like this aligned incentives which you've really created here in this economy and I say it's economy because it really is an economy right I mean that needs a good currency for it to be a legit economy and that's

really what you're on the way to to creating I think you said by this month it starts to go deflationary you mentioned that there's I mean one you want to see about to help you on the web three side obviously you're doing well on the marketing for the web 2 side you get 100 40 million years that's very impressive he said there's more to some issues on the web 3 set the web Community maybe doesn't get it I'm not quite sure exactly what those issues are so as we wrap up here I'd love to give you a couple moments to our audience is the web 3 Community it's a bunch of people on web3 that they get tokenomics at least if they're not very new they've learned it from jni and from others that we've had in the show and many of them are studying it learning it through our

newsletter Etc so they have an idea and this is really the web3 Community Builders investors Etc and so you said you have an issue or the Webster Community might have an issue or maybe just a misunderstanding so is there more that you want to say is there anything missing here that we haven't touched on yet like anything that you want to announce or say to the web3 community then feel free to take the floor before we wrap up yeah awesome question I mean my brain jumps I think that the biggest Point probably would be around metrics and assessment of success and as I mentioned I think that tvl is a red herring I understand how we ended up there but I think that active uses and engaged users is going to become more

and more and more dominant because you know it does remind me of sort of 96 97 internet nobody was talking about active users back then but right now if you look at the internet even threads launch you know 100 million installs and everyone was like it gives a about installs we have these active users that matter so you know can people understand that in web 2 I think that as I mentioned the economics of web 3 are even more prone to dependency on active users than in web 2 because in Financial in trade fi a lot of fees and charges are actually based on the amount that you transferred because that would be a

percentage of the amount if you look at blockchain it is a lot more democratized and it is dependent of the amount that you transfer so in few years time are going to be a lot more focused on active users than even thread Phi and web 2. that's what's going to make or break this industry being able to attract next 100 million users next billion uses and I think that I've been to Africa last Christmas God I mean Maasai they don't have electricity they have only the solar panels each and single one of them has an Android device these guys don't have banking relationships and if they will ever get into Financial world and I

think that when doing something for them having a D5 product that will be able to cater not to somebody with hundred thousand but somebody with three dollars that is a kind of mass-market adoption that's what the world needs the other thing is some of the very curious things that come from the community like you know for example Cap Supply there is a myth that cap Supply is the linchpin of success while actually it's being deflationary that matters it doesn't matter what you know kind of what Supply is Bitcoin has kept Supply but it is still an inflationary token every month and look at how it's doing right now it's some sort of basic economic stuff

that hasn't actually been journalized and to be fair nobody was really educating and explaining how does this stuff work and it's spontaneously spontaneously happen and the last thing I would say is short-term versus long term as a business that's already been going for eight nine years we're definitely think in in these types of terms when I talked about you know can ask some of the investors they think like you know kind of in and out of a position within 24 hours and they want to have I don't know 20 apps so it's really quite sort of different attitude and I would say that yes there is a room for this and there is probably an opportunity to continue making money

but as the industry is cleaning up its acts and you know kind of I've Just Seen report that you know kind of scamming and you know kind of initial crime is finally you know kind of starting to decline and no matter how we look at it there will be more regulation and you know kind of we need to kind of look at it as actually an opportunity because for next billion people they would want to know that this is not a wild west and there are some actions for them and it is going to make it easier for them to come in and bring their money and play in this environment and therefore we need to start thinking a bit a bit more longer term so active users instead of TDL and let's start thinking about you know

kind of about this world in uh longer term and building for Minos rather than whales whales are I you know they've got plenty of stuff I guess so if we don't need adult things for them yeah I love it there's a real message there and what we all should focus on which is what we're trying to push here every every day every week at Webster Academy is there's unfortunately been a focus on the wrong things for a lot of the market and a lot of people in web 3 so far but it seems to be shifting as you said and I think after this episode a lot of big people are going to be checking out sweat for sure and maybe you'll even get a couple CMO applications you never know for the CMO position is in the show

notes thank you check that out if you want to apply that's gonna be an amazing job and they're in Lisbon with the sweetest office ever so right by the water I was there it's sick so check that out we're open to any location I mean we're remote first but we do have an office in Richmond and we do have an office in London and you know some people go every day some people work from home yeah I can wear really quite flexible on on that run okay let's do this quick speed round before we wrap here just a couple of fun questions for you Owen first question one prediction for 2023 will launch in the US and it's going to be amazing success wait you're not gonna go to us at all no

you seriously you're not in the US wow wow that's impressive okay bullish one thing you've bought recently for under 100 does not have to be a digital product that brings you Joy can I talk drugs yeah however you know you had you had a mushroom Adventure if they opened up your mind it's a good question I'm totally unprepared either you know when I think of Joy I always think about social situation and recognization like we had with Kyle outside though but those were three beers you didn't you didn't pay for any of those yeah exactly those were free I think that you know can be honest I think the best and most joyous things

in the world are great and going into nature I do have an incredible uh an Atlantic Ocean Coast here and going for a swim that makes you think not needing any coffees and going out and having a beer with with somebody more intelligent than you and learning from them while having drink is well you're the first person to ever answer by saying it was free I can't that's good this is ever yeah wow my mind is blown right now last question you could take up a second to think about this one because I know you're not prepared if you had a billboard that one billion people were going to see what would you write on it

your movement has value ah nice okay I like that it's a good quote and is marketing form I like that yeah it's interesting when you say everyone nods but we need to say it more times because this is I'm not a marketer but I will understand that if it took 200 years to build attention economy it's all going to take one month to build movement economy but it is really encouraging and Incredibly kind of joyous for me to see how the evolution of this conversation happened and I recently went to judge GPT and I went does physical human physical ability has tangible Financial value and

the Oracle of scope and it's just spoken and it's given me you know can pretty much our pitch which I doubt that it straight from anywhere so kind of seriously encourage that this is becoming a you know commonly accepted thing well nine years ago when we've said that your movement has value people would kind of shake their head and kind of go what do you mean can in what sense so right now it's completely different discourse and yes the more people can go and realize your movement has value and the more you move the more value you generate you know the better with the world will be and yeah

but it was chill but yes and Hiking as well but if you're a token holder then it'll increase for you too so it's she's sharing it with the community that's the idea on that note if you weren't moving while you're listening to this podcast get out there go move go get into nature thanks so much for listening in everybody oh like thanks so much for joining us wonderful wonderful episode have a great day all right guys guys I had a lot of fun really appreciate this thank you for listening to web3 Academy your one trusted source to capitalize on the next big phase of the internet if you enjoyed this episode please share it and subscribe or follow so that you don't miss the next one while you're at it there's a link in the description for a

free newsletter where we provide timely and relevant web3 insights so you can confidently build and invest in web 3. make sure to subscribe today one final note this podcast is for educational purposes only and nothing we say is financial advice crypto and Webster are risky and you should never invest more than you're willing lose thank you friends and see you in the next one