DeFi By Design EP#52: Discovering NFT Gems w Deeze

Transcript

[Music] d5 slate team [Music] it's your boy andy and welcome back to the defy slate youtube channel smash the like button on this video that really helps us out and sit back and enjoy the content thank you very much what's going on y'all welcome to episode 52 of the d5 by design podcast today we're going to learn a little something something about some nfts and i know that there's a lot of y'all who have been seeing a lot of these illiquid rich wealthy new upper-class jpeg traders flaunting on the timeline and i'll have you know you know we we don't put d's in that category but you know there are definitely quite a few of them out there on twitter and we're here

to find out what's all behind the story of these nfts and specifically fractionalizing nfcs and so how we can you know get a part of some of these blue chip nfts that are super expensive but kind of get some exposure and you know what that looks like so kind of i think in this episode we're going to dive into some nft basics just to get you guys up to speed and then we're going to go full tilt into investing into nfts what fractional art is doing how you can get involved with fractional and with using openc and other nft platforms yourself um yeah and kind of some pros and cons some risks and just anything that we can get into with nfts and d5 to help you guys make more educated choices um and just you know get after it out there in the wild

wild west so uh it's your boy andy as usual here today with rob and i'll let him introduce himself for the 50 second time yo yo yo what's going on y'all super stoked to be talking to these from uh fractional learning something about nfts here getting into the use case of why we want to fractionalize nfts to begin with um and kind of what is just on the on the horizon for the nft world um jpegs are obviously ripping and we want to be on the inside uh gaining an understanding of what is going on how we can gain an edge and uh yeah just kind of multi-chain world all over um with respect to d5 and jpeg so super stoked to be talking to deez it's another beautiful day today in colorado

so i'll pass it over him over to deez to let him introduce my introduce himself and uh kick it off uh yeah hi my name is deez i am a crypto trader turned nft trader turned community manager at fractional uh i've been around crypto since about 2017 and i got nfts in september of 2020 and basically went all in nfts last january and i've been in the nft rabbit hole pretty much ever since yes sir these nuts uh we out here my name is actually not a reference to these knots if you can believe it it's uh it predates these nuts i've had this nickname for like almost 20 years yeah that's pretty lit but there's been a lot of jokes passed

around all around this circle yeah nice man so so what originally got you into the rabbit hole like was there a specific collection or a specific like what was your aha moment a lot of us are still like uh you know even being a year almost into the craze are still like ah well it's just a jpeg or i can just screenshot it or there's no real community or it's all just kind of fluff you know what was your aha moment and kind of what really what collection brought you in uh so crypto punks brought me in and my aha moment was when i noticed that crypto bunks are basically the party hats of crypto so like to take that back one level i spent most of my childhood playing a game called runescape there's these items in runescape called party hats party hats were free for

people to get back in 2002. and i had played this game from like 2004 to 2018 so i had watched these assets go from being basically free or cheap to being the most expensive item in the game and knowing that they were this like supply walked asset that was really only to flex like the utility of owning it was just the flex there was no use in the game for the item other than to show that you had a lot of money so when i saw the punks i immediately said like in my head these are the party hats of the entire crypto arena and like anybody who is crypto native rich will probably want to flex the highest status script their native item which in my mind was the punk um so i went deep into the punk rabbit hole

last september and that's why i bought my first one it was like a thousand dollars or like twelve hundred dollars and uh just kind of started flipping punks like they were these party hats that i had flipped in the runescape game um and it was like a match made in heaven right like if you trade high-end items in a video game like this was all a video game to me and trading high-end items and [ __ ] jpeg land is the same as being in an mmo but you just have way more capital you give real money real capital in the system and not just the video game currency yeah essentially the same thing when you cross over into cryptocurrency it's it's almost magic internet money and it's like a video game currency but at the same time you have this illiquid stores of value um whether they have utility or

not they're going to be kind of that that flex um and it's almost like a liquid clout where you can just store it and it's a representative of your character um across you know this game or in the metaverse um so then you know after getting involved with punks kind of how that evolved uh you know we saw punks start to grow into like the the profile picture types of collections and then more branch out from there kind of could you kind of take us through like your your evolution in nfts um kind of you know like you said you started off with punks but then where did it go from there how did you trace through uh the the evolution of nfts and jpegs yeah so i wish i could tell you like i got into punks then i bought glyphs and

and i'm super comfy but like i didn't get the glyphs i basically bought punks and i started buying pepe memes on wearable from this polish artist who would his name is very rare pepe and he would just drop like every few days a pepe meme of pop culture and i just kept buying these and for the first like two or three months in nfts all i had bought were like pepe memes from this guy and a couple pumps um after that one of the guys in the punk's discord his name is snowfro he came around in 2017 and claimed like over 20 zombies but he had sold five of his zombies to start a new project called art blocks which now a lot of people know but at the time no one really knew and i just knew from being in the

discord with him all the time that like this dude is awesome he is genuine authentic honest uh i don't know much about art but the fact that he's going to make a new project like i'm going to go mint whatever he's making so i was really early in art walks i'm into maybe like 50 squiggles i don't know what the [ __ ] i was doing just uh having fun with it and then as new projects came out i kept minting them and getting into the art and it was very affordable like to mint something was point one eighth or so and then like you might pay like 0.03 and gas and there wasn't gas wars at the time and it was just really fun to like be a part of the venting process of like i have no idea what i'm gonna get until i

actually met this item and it's almost like ripping open a pack of pokemon cards as a kid but instead of knowing like you want a charizard from the deck that pack like you don't even know what you want you just get [ __ ] and it's like oh wow is this rare it looks cool like this looks good and i got kind of addicted to that like being a part of the process of the minting process so after art blocks um i would say i got into top shot because i saw john bales who is a very uh prolific person in the daily fantasy side of the industry tweet or about an article he wrote called like why i spent thirty five thousand dollars on a java rant moment or some [ __ ] and i didn't even think i

finished the article because i had just realized within like three seconds that the entire fantasy community of like degenerate gamblers is going to see this and probably get onboarded because this is more plus ev to them if bales is saying to do this over like compete on draftkings and fan ball so i just threw like eight ethereum in the top shot just bought a whole bunch of [ __ ] like there was it's crazy at the time like you could buy like over 100 packs like packs should just sit there they want to be like a pack drop so i bought like 100 packs and then like bought a bunch of cards and uh you know went down the top shot rabbit hole for a little bit i i didn't sell nearly enough at the top like [ __ ] went crazy i looked at my evaluation like how

the [ __ ] did eight ethereum turn in the you know well into six figures within two weeks uh like the withdrawals you can only withdraw a thousand dollars a day yeah it wasn't even that because it would say like oh you have a thousand dollar daily limit but they were only doing my withdrawals like twice a week so i could really only take out like two grand a week so [ __ ] yeah dude and moon overlord is just not having it with top i'm very good friends with noon yeah i'm in the one i'm not super active in there but like i talked to him in dms all the time and he was uh yesterday yeah he was really on one yesterday um so he was typing at me on all caps and dms like a [ __ ] dumb top shot like the withdrawal limit but dude

i think i think it's about to blow up again i mean as you said it kind of popped off and then the nba season started and there was just a bunch of bs with dapper labs and such and moon has had his own experience season's coming back right yeah they're growing more more so than ever i'm sure like i think i mean i don't know i'm not i'm not here to give nft advice but i think it's a good place to look for people who are really interested in sports as you're saying and a lot of my friends who are interested in sports do draftkings or just straight up sports betting and i'm like i get it like it's fun it's addicting truly you don't win a lot why not really why not invest in something that's you know a little bit more uh as you say positive ev a little bit less zero or one and there's a bit more

like a long-term kind of scope to it over the course of a season um yeah i mean i'm curious to hear like what your thoughts are going forward with top shots you know less so kind of um what's what's happened with you know in the past with dapper and the dump and all that i think if top shots were priced in ethereum and not us dollars they would be like three to five x more expensive than they are right now like when you go to the site and see that like oh i'm buying this legendary that there's only 50 of for like two grand um and i don't know the player like it feels bad but when you phrase that as like point uh six six or point seven eighth it's like out don't punt that on a garbage profile picture project and not think twice like why wouldn't you buy something that you know there's only

like 50 of that they might give future utility to and are building towards so i think right now it hurts to see the pricing in usd but it's best for onboarding people right like you just have prices in ethereum people aren't gonna [ __ ] and it's on flow this doesn't make any sense to have prices in ethereum but like when i think of risk in this ecosystem i try to change all the units in my mind to ethereum because it makes it a lot easier for me to take the risk like i'm the type of person who won't pay the money to get my like uh groceries delivered and i'll still drive to the grocery store and like out drive to the local chinese place to pick up food but like i'll pay you know hundreds of dollars in gas and not think twice like i have this

really weird mentality with ethereum versus like dollars um but yeah i think top shot is a very um overlooked play right now um there's some things in the pipe that i can't mention that i'm looking forward to um regarding what might happen over the next two months with topshop but uh yeah i think you know it's definitely an overlooked play in the current environment of like hey what profile picture can i admit or right um and nba season is coming up you know and i mean yeah it's definitely something to at least keep an eye on for any anybody who's not heard of it um it's pretty simple you just you can use a credit card or use crypto to deposit on top shot and yeah i mean there's there's a

bunch of youtube guys i mean there's not a bunch but there's some that will kind of lead the way for you and help you out um and yeah i think i think it's a decent thing to look at as well definitely sorry i was gonna say i think the onboarding is the the biggest thing so like if we rewind back to what i was saying about getting in in february and march um and seeing all the top shot people come in from that january time frame um a lot of these people moved into ethereum and different ecosystems it was like i relate crypto to like drug use and that's like the first hit of your first flip on top shot is like you know that first hit of a new drug and you're like chasing that high of like the gamble basically and i saw a lot of these

gamblers like go from being in top shot to like going into board apes going into zed run going into these other communities whether it was on ethereum layer one or matic or whatnot but they were like hey this crypto risk gambling ship is awesome this is a better place to park more of my money than you know dfs i'm in and that demographic is huge i think for like the growth that we've seen over the last nine months yeah and i mean andy you mentioned like the seasonality of top shots and for anyone that doesn't know right like the nba season is coming up in the next month um so it just kind of makes sense in terms of timing um these i wanted to get back to kind of like what you saw in runescape and the types of trends that started to play out with kind of the

party hats but the different assets that were involved with that game and just kind of the crossover that you see between those types of uh assets in runescape and and how they apply to kind of what we're seeing now with nfts yeah so the big items in rainscape like the party hats were the peak and then under the party hats you have these other rare items that came out between a year and two years later than the party has so there was like halloween masks uh green blue red versions of those there's like a santa hat a pumpkin dude the santa hat man if you ever saw somebody in runescape with the santa hat you know that they were experienced a f like they were like it was normally like when i saw someone with santa hat i'm like yeah they're a merchant like that

yeah like they're destroying you in the wilderness like you're wrecked uh so i kind of look at the pumps to the party hats but i can't draw similarities between like the later assets like the halloween mass and board apes because uh masks were always useless whereas like these new nfts like i think punks will always be useless outside of if larva labs does another [ __ ] meet its drop thing where like it's a mint pass of sorts but i think stuff like board apes and cool cats and these other you know profile pictures that aren't punks but building communities i think you can't really take the like runescape model and move it over because the utility and community that they're building around these specific projects like

there's a non-zero chance in my mind that like board apes overtakes pumps and like i say that as someone who owns three apes and eight pumps so like i'm definitely in the punk camp of like my money is on the punks but there is definitely a non-zero chance that the hype and community that the board apes build could overtake punks on like a five to ten year horizon um yeah so i try to like think of it in terms of like what probability is it five percent ten percent and then based on that probability like how much do i want to hedge my pumps bag by owning the other profile pictures got it yeah and it's almost like the the punks have just kind of stalled out in terms of development right where like all these other uh communities are

continuing to build community some are building utility around their nfts but punks for example just kind of are are still um just growing based off that historical um like character that they have since since they're pretty pretty og but they like you're saying they might get surpassed by some of these communities that are continuing to develop yeah i think too with pumps like the fact that they have no utility and that you are just buying the jpeg in a way is like one of my favorite things about them because it's we're already in the worst case scenario of there not being anything added on top it's like we don't know what communities could come up in the future that say like hey this project is only exclusive to punk owners or like that type of stuff so like we're already at the worst case scenario where there's

no future utility being added and we're already at the place we are off historical relevance plus like you know we like the art or whatever uh yeah so there's like hidden or unlockable upside there that is hard to put into like the uh investing equation yeah we definitely like the art um also i love the pixels dude like i people think i'm like full of [ __ ] when i literally say like i like the art but when i got into punks i was the type where i had a spreadsheet i had highlights of like my favorite punks on the list i knew like what combinations of traits i wanted like i went pretty deep into it right like it wasn't just like i showed up uh bought a few and i never looked at it it was like all right i'm gonna dig into like what's every

combination of a smile plus a pipe because like to me that's like a nice stoner degenerate combo of like you know your weed pipe and your character's big-ass smile and i'm like okay what's my favorite of these seven and then i have like a hierarchy of like combination of traits and it was uh yeah i think there's literally a a misconception in the nfc world of rarity versus like just what looks good like aesthetics it doesn't even matter if there's only 16 hats if all those hats don't look as good as the alien well i'm sorry boys like you're probably not gonna do as well because i mean [ __ ] if people don't agree that it doesn't look good and that's kind of what this is all about is what the community feels and agrees and yeah i think like the biggest like the biggest way that and i think

this is kind of what you're saying is like the like some of the punks that i'm sure you've gotten have risen way above floor in in comparison to some that are more rare but just because they look good and and people agree with you then they're at a high like a higher value um the hoodie attribute in punks is by far the best representation of like aesthetic being more important than rarity uh hoodie isn't even i think like a top 25 rarity trait there's uh 259 hoodies but the floor on a hoodie is like 3x the four on a pump and there's no other trait that is 3x over the floor until you get up to like the top five traits of like tiara pilot choker bean

so yeah and there's you know 20 or less of those traits than there are hoodies but everyone wants hoodies i my favorite punk i own is my hoodie punk and like i mean all the time that like hoodie equals comfy and like aesthetically you just want to be [ __ ] comfy we have all these tech bros and we have all these degenerate poker gamblers dude you're not even a whale dude no no like it's just um yeah my my story is kind of wild but like i i don't feel like a whale i feel like i have this like small bat like it's it's better what are you talking about the nft ecosystem spews your perception of like us dollar value so horribly that like you look at the pumps and like you're

always comparing yourself to what's relative and you're never taking a chance to look at the big picture like i say i have eight pumps and i'm like wow that like feels like a lot when you think of the us dollar amount all that [ __ ] and then you like look at the leaderboards i'm like the 152nd most punk owners there's like 152 people ahead of me that own eight or more pumps and then it's like a lot of those people are people i know they're my contemporaries they're my friends and then i'm like [ __ ] like they own like 40 pounds i can't catch up to that there's no way yeah unless they sell and some of those dudes are never selling and they're [ __ ] i mean that's what they've sold yeah they're just psycho they're just like yeah no never sell them sorry

yeah the craziest guy i know is the guy who claimed 703 pumps and then he took a nap basically from when he claimed them until january of this year and we had thought in the punks discord that like this guy might be gone like all 703 of these punks are burnt and then like he came back and accepted a lowball offer and it was like all the sharks or piranhas smelling blood and it was just like everyone's just bidding on his [ __ ] like please accept this loyal please accept this low ball and i think he only accepted like one or two other more offers and then he like joined the discord and people started talking to him and they're like yo yo yo yo you're sitting on like the biggest bag of punks of any

punk owner like you have as much as the devs do now and you have a lot of gems in here so like be smart about this and that person is now down to like 180 pumps so if you think of like the profit taking on 703 down to 180 like he doesn't need to sell those ever there's 180 ever again and his life is perfectly taken care of and there's a lot of pump donors like that where they've sold a big chunk and they're just so comfy with like 50 or 100 of them now that they don't even list stuff because it's like what else are they gonna do with more money at this point it's kind of what are your thoughts on on that that kind of concept so you you know obviously if you sell a lot of punks you get a lot of e it's two dollars like

it's great you know you you can you know you can live and survive based on you know on just that but um you know what are kind of your thoughts on these price changes with regards to the floor so you know say eve goes let's do two scenarios pretty extreme ones eath goes to a thousand and there's a lot of despair and negative sentiment and people calling it over um and heath goes to ten thousand and everyone is you know euphoric off their rocker you know how do you see the nft floors of blue chips you know playing out in those two scenarios so yeah i'll go the first scenario first um if ethereum goes to a thousand dollars i think nfts will outperform aetherium pretty decently versus the us dollar like um i think my my high-end art blocks and punks would

do way better usr wise than eve in that sense of a downturn but inversely like if eth goes to 10k and nft market remains where it is now like i don't think the punk four will still be uh a hundred and like ten eighth because that's gonna be 1.1 million now for a punk um so it's more this like bet on uh increasing your floor or like lowering your downside risk but i think it also caps your upside in a sense of like if you just hold liquidity verse nfts and then the liquid eats just pumps versus the dollar um that being said like we know of multiple billionaires now who are coming in and buying up art blocks

like uh i'm not going to dox the guy but the person who's buying keyboard but the person who bought keyboard monkeys deaf bee set is also a massive like traditional art collector and they've come in on the same account and bought like i i don't know over 10 million dollars worth of art box at this point but like just yesterday i think they spent 1200 on three ringers or some [ __ ] they pay like 700 300 300 for three ringers and that type of money is buying it from like the art perspective not the ethereum appreciation perspective right and that's the type of like buyer i could see really creating like a higher usd floor for these things than uh the ethereum like going down yeah

yeah so that's kind of how i look at it so it's like a i mean it's almost like a hedge in a sense if that's how you know your thesis is around but you know for nft collectors maybe having you know a good amount of eth just stored so perhaps ether means we could see some deals on some nfts if you're looking to hold for you know longer than just one moon cycle if if you want to call it that um yeah it'd be interesting to kind of see how that works i'd like to touch on a bit of a more of a normie collection um that i have not seen this corner twitter talk about at all um you know and i think it's because of the guy behind it and i'll let you take a stab at which one i'm talking about um your famous guy floors up there

15 16 anytime friends be friends what do you think about v friends i think defense are great um i'm personally a little salty that i didn't buy a gift goat at the beginning they went for round five ethereum and i told myself i would pay three and since they didn't go to three i stuck to my plan and then watch them rip from five to a hundred uh i think gary vee is like one of the highest energy people from the traditional area to like come into the space and i think he's laid out a good starting road map for influencers or creators who don't know how to approach this space like the way gary came in the way i remember gary coming in is way back in january he started buying punk's otc he bought like

50 sum pumps and then he started buying punks publicly and then he was like in the punk's discord engaging with the community he was talking to all of the different punk oh geez about their perspectives on nfts uh and then he started partnering with some of those ogs in nft 42 with nate alex and jimmy to build out defense and like to me he really couldn't have entered the space in like a more genuine authentic engaging way like he didn't just come in and try to drop a product but he came in like bought og grails uh converse with those communities before he even talked about his own project he got

yeah like puts his money where his mouth is and i really really respect him uh even though i don't own me friends i always point out to the people i'm talking to who are from the traditional side of things i'm not crypto native as literally using the friends is like a case study on how to approach the space because i think like you know you don't want to do the same playbook it can't be a playbook where like influencer comes in buys popular nft drops their own nft within like two or four weeks like that playbook can't happen like the way that gary was literally like you could go search his messages in the punk's discord and he was just picking people's brains [ __ ] and like being a part of the community without trying to extract value from the community and i think that was really

really important so like the art on v friends is goofy like i don't yeah it's not you don't buy it for the yard it's for the no yeah you're not buying friends it's for the exclusivity it's for the events it's for the culture you know yeah and um i had matt shadows from avenged sevenfold on a twitter space a couple weeks ago and event sevenfold is kind of looking at what gary did with v friends and how to make something in their own mold with that utility for their fans and stuff and uh they're dropping that in like around halloween so i'm super excited to see that and then that hopefully gives you know another playbook for people to look at so they can say like okay v friends did xyz and was successful okay then sevenfold did abc and that was successful i think mike tyson had some

success like the way he came in the community bought the cool cat started buying one-on-one artwork from people i know on twitter like it was crazy to see like one of my friends with like couple thousand followers mike tyson buys her work and she's just like losing her [ __ ] getting to talk to mike tyson over art um and like i think we want to see more like genuine win community connections like that and not like the nifty gateway style of like influencer slash creator churn we saw from you know say last january to last june where it was just like dead mouse ships out a thing on instagram that says here's how to make a low effort nft and then he follows his own playbook and then dumps it on nifty gateway or like eminem has a [ __ ] like action figure that

you can go by on nifty gateway but then like he did nothing in the scene uh you know i haven't heard much from grimes since her nifty gateway drops either i know she's turning on or breaking up and maybe there's some drama there but like it hasn't been involved with the community at all is what i'm trying to say so anything that people pull from gary like as long as they realize like the community is the most important part of what they're doing i think it's a win for everybody i really respect what he's done with defense yeah a lot a lot of these you can kind of tell like when a celebrity or an influencer is uh dropping an nft because their manager or some advisor told them to and they're like yeah these nfts are blowing up you should probably you know engage your fan base or they're

genuinely interested they they you know like the art or they like the community and are getting involved yeah i mean we just got dumped on by little uzi well lizzie just dropped the nfc collection and it wasn't even his and then he deleted it off of it so his twitter yeah i was talking about a couple of people who know lil uzi and like i i can't vouch for this being true or not like apparently what happens with a lot of these accounts is just like they don't even manage it and they don't approve or sign off on anything they just get revenue from the tweets and the people who tweeted it like lil uzi wasn't even involved with they just got paid to tweet it um it's kind of a shame that like there would be no

oversight or like uh like kramer like little uzi is not exactly yeah like [ __ ] exclamation point ad exclamation point he will be deleting his his nft profile picture after they also like it was so weird but these people i was talking to people i respect who like were really to get on a cross and you know die for a little reputation so i was like all right i'll push back on creating more uh twitter drawing over this so what are your thoughts on on solana nfts with regards to saturation compared to ethereum um i think since the barrett entry is lower there's just gonna be a higher probability of like scams and rugs and [ __ ] but like that being said um

you know a salon nft in general is lower floor but like higher ceiling than ethereum nfts uh we've recently seen some impressive [ __ ] out of like the monkey business team and i guess dj apes and galactic geckos and like i hit a 60 x on frax which i never [ __ ] expected and i was only able to sell like six of them for a 60x but it was enough to seed my solana wallet with a few hundred soul from like 10 soul that i meant to tracks with so that was cool to see um in general i find myself actually going more to tezos than solana right now and um i kind of look at tezos and solana as being on two opposite ends of the spectrum of

when it comes in terms of like community and capital i think solana has a [ __ ] load of capital but they have very little like heart and good art and like community around that capital whereas i think tezos has a lot of good community and good art but not a lot of capital in the ecosystem so we're at a stage in the world where like capital is cheap and i think community is more important um so my bags are slightly skewed toward tezos over solana but i do maintain a little bit of exposure to both because like i don't think it's good to be a maxi in this space i think you need to try all the different l ones rather than just like listen to thought leaders on twitter who try to force their opinion on you um and i think like dabbling with

solana and tezos is both like a really high upside over the next six to 12 months because most of the attention is on like ethereum profile pictures and ethereum communities yeah that method that you that you describe is parallel almost to to the gary vee approach where you kind of tap into all these different chains all these different communities really get a sense of what's going on and what works to learn as much as you can and then build from there um and we haven't even touched on fractional and what what you're doing there from a building perspective but um you know what you're talking about going into tesla's going into solana these different chains um you know how are you able to kind of gather all that information and then funnel it into kind of what you decided to end up building and deploying

yeah at fractional right now we're trying to be like completely open-minded like we don't have a l1 bias we're just kind of trying to get where the market takes us we have a couple partner i i can't dispose like with who but we're working with other l1 to see like what does fractional look like on that l1 uh and also with player two in regards to what's up yeah i i won't disclose any protocols uh in particular but i think we'll have an announcement up within by the end of october on uh next i didn't mean to interrupt no you're good you're good uh but yeah we definitely need to scale to like another

l2 or l1 because like the gas fuse on each are really prohibitive to a lot of our users like if you look at the wallet data of our users you know most people their wallet is worth like one ethereum ish um and then whatever nfts they have and it's like to have to spend 50 to 100 on a uni-swap transaction the killer thing is like liquidity pulls to to create a unisoft v3 liquidity pool like a hundred way at three thousand dollars per each is like fifteen hundred dollars uh and that's a pretty big cost for some of these people when you know they have one eight in their wallet um so we're also looking at not only like going to different l1s and l2s but um what's a better way to fractionalize an nft for

our users so one thing we're gonna be rolling out in the next month or so we're testing it right now is fractionalized erc 1155s so like say i took a punk um rather than breaking it into 100 fractional erc20 tokens and i'm providing liquidity on uniswap i could take the 1155s and put them on openc um and list them and where it's like you know very clear that hey this is 1 100th of a punk and then that kind of gets rid of the whole educational aspect of how does xenoswap work how does a dex work how does the gas for this work and it gives them something they're completely used to on openc anyway which is just buying and selling nfps and they also can see it in

their wallet on openc which is something that right now if you buy a fractional erc20 you only really see it in like uh portfolio managers like you'll see it in metamask you might see it in xerion you might see it in a different portfolio manager like but if you're scrolling on etherscan you know it just shows as a token that's worthless uh with no picture like a question mark over it and people are like they don't feel like they're collecting it right it doesn't i don't know i think as a collector like you want to be able to put this thing in your gallery you want to be able to see it with all your other nfts so by having your c20s right now it's kind of counter-intuitive like we get a lot of questions of just like where are my tokens like where where where does this stuff

live if i don't see an open scene it's like okay like maybe we weren't we maybe we're too focused on like composability and the defy side of things and not as focused on like the user experience of collecting fractional ownership of nfts so we're gonna have both options available once 1155s roll out because we don't want to tell people like oh you need to use 1155s because i still think for like higher value more liquid vaults like there's a vault that's 104 um punk floors and like a vault like that shouldn't be 1155 like what's the point of buying 1 1000 of an rc 1155 of like a pump formally that's almost more like a uh i don't call it an index fund because

it isn't but it's more like a giant aggregated vault of illiquid capital rather than like fractionally owning a piece of one punk or one x copy so yeah we have a lot of different ideas between like l1 and l2 and then also just like other ways to fractionalize nfts to just make it like what's the best collecting experience we can offer our users like we want like a really low barrier to entry and we want a lot of interesting nfts available for them to collect it's like what's the best way to provide that while also maintaining all the standardization and interoperability and composability of like the theorem ecosystem and letting d5 build on top of our platform as well sorry that was kind of a long-winded answer there yeah yeah that was awesome

i i definitely have a few questions um i i guess i'll start with the first one i i know rob wants to ask him as well it's just kind of quick like is the main goal fractional to kind of allow um uh people who have less eath than um you know a punk owner or something to be able to get allocation to these blue chip nfts or you know i guess like what's the vision like what's the main goal because that's kind of how i see it it's like all right allowing you know anybody kind of like how layer two chains allow anybody to do d5 you know fractional kind of allows anybody to get exposure to these nfcs these bluetooth exactly so it's opening up like the ability for any collector to have a piece of a blue chip nft that like

they can't just afford by themselves like most people at this point can't get into a floor punk and if they come in with like one ethereum into the ecosystem their options are like punt a profile picture mint or punt some type of mint and hope for a higher multiple um they don't have access to something like i don't want to call a blue chip like it's safe right like you know if you buy a punk it's not going to go down like 80 percent and of the illiquid but you know you're not going to get the upside of like a fresh mint right but there are people in the ecosystem who want to collect the blue chips but can't afford them that don't want to take the risky positions that are available to them on that lower end of the capital allocation

spectrum um because like i get this question a lot on clear spaces and i'd be curious like hear your opinion like if someone came to you and they're like i have two thousand dollars i have one eve that i want to put the nft space how do i allocate it like i get that question all the time i don't even know how to answer at this point because everything i want to allocate toward safely is at a price point that's way higher than one eighth and there's not a lot under one eighth that i'm like super super bullish on like i might have told someone two weeks ago like buy one roboto and one dead fella and pray that one of these take off but now both of those are over one each so they're priced out already uh and it's tough to really like

yeah i would go with the official moon cats that's like the only thing left that's like there but even those are still just kind of like yeah is that gonna get the person excited about collecting nfts or like their only nft things are ugly man cat and they're like they're ugly it's like a worse looking crypto kitty which i didn't think was possible but they made it like i don't know it's tough question like we get it all the time and i think like telling someone like hey here's a safer fractionalized nft that you can collect and you know the upside might only be like 5x but the downside is not zero like a lot of the [ __ ] that is available under one eighth yeah like you mentioned whether east

goes to one thousand or eth goes to ten thousand it's relatively more stable and there's less volatility in these blue chip nfts so someone that isn't looking for just a moon shot um you know and has a relatively low risk tolerance is still looking to get that stability yeah i i think it's a big deal that a lot of people in this space overlook because we've been here for a while and we may have bought ethereum when it was two hundred dollars or a hundred dollars and i bought these assets like my my squiggles to mint i think were like 35 to 50 dollars depending on gas uh and i you know at this point someone comes in they're like oh i gotta spend ten eve on a swig like what the what is this like it's a squiggle like that's like the

reaction i get because i have to describe like what art box is how i think it's like yeah like people look at they don't know they're animated they don't know you could do anything with it they're like it's just a rainbow line on a screen and yeah i feel just so stupid for passing on them out of 2e4 so stupid i just couldn't get my head around buying a squiggle like that i was like i sold half of my squiggles at 0.5 aetherium a piece because in my uh portfolio plan or my thesis i was able to sell half of my squiggles at half in a theorem a piece and get my entire art blocks cost basis out so my plan was when squiggles got the half an eighth i was still in half no one could stop me

and now i just look at myself like hey it let me hold everything else and that's great but like [ __ ] i did not think that the upside on these would be what they were in a year um but yeah going back to fractional it's more about unlocking that ability for anyone to collect and by unlocking the ability for anyone to collect that unlocks the um upside for every collector in the ecosystem because if you can buy a fraction of a punk like there's so many people who can willingly just buy like 100 worth of 500 worth of pump and that adds a lot of capital yeah to me it makes it more valuable too because if you have more people that own any given nfc that's bigger community it's more it's less so i mean it is about allowing um you know people to get to get in and buy and be able to you

know have access to the upside but it's it's even more so like this cap social capital contribution that comes to the existing punk holders who now have not only just um the the pump holders themselves do own one but there's a bunch of people who own fractions and so that just it amplifies the community you know in my opinion like tenfold just like just blows it up that's what we've seen too like um i was gonna look up the numbers real quick on how many people own hoodie i think it's over 600 i fractionalized a hoodie punk with a pipe and a handlebar mustache but the thing i love to see about it is like how many people i know who use that as their avatar now uh there's 665 holders and we have like a channel and a discord where it's private to only

people who own hoodie tokens it's called hoodie gang we like instead of saying gm we say hm like hood morning we don't say the word good ever we only say hood so like what's hood like instead of what's good like stuff like that uh but it's just fun to like have like a whole memeing community around this punk and what we've seen too is like the people who buy the hoodie token they vote to raise the reserve on the hoodie because they don't want to sell it it's like i put it up on fractional i think i started it off at 100 implied valuation for the study and i had the reserve at like 2008 and now it trades at like uh 400 and no that's wrong sorry yeah like what the [ __ ] yeah

it's trading at a 250 ethereum and 5 valuation which is actually like 50 ethereum under the hood e4 right now so if you went on like the punk's website and looked at the hoodie 4 and you looked at the hoodie punk we have on fractional like it's a steal it's a steal like because the one on the uh the one all in if i have all the fractional pieces can i redeem it for the original yes uh so the two ways to buy out or like redeem a vault are you own a hundred percent of the tokens and you redeem it and that way is actually like super unlikely because if you ever create a liquidity pool on uniswap and then you pull liquidity from it like point zero zero zero zero zero zero one of that token

will be stuck in the liquidity pool and then you'll never own about 100 of the tokens again so what normally happens is uh all the hoodie owners set a buyout price and it takes a weighted average based off of your percent of the supply you own so like the super basic example is uh two people like alice and bob fractionalized something and they each own fifty percent of the tokens alice thinks it should be auctioned at 108th bob thinks it should be auctioned at 50 since they each own 50 of the vote it meets in the middle and says hey the reserve price is 75 and that's how the auctions works like anybody could come down and throw down that 75 each and there would be between three and a 14

day auction on the buyout and when the buyout is done anyone who owns the fractional tokens can go on the page and claim the ethereum based off of the percent of tokens they own so like okay so technically that hoodie that you own is always for sale if it's on fractional yes it's at a 627 reserve so like if you wanted to buy out that hoodie you'd have to put down 627 ethereum right now which is like way higher than like right now the the hood e4 is 300 each okay so buying out buying that would be amazing for the holders but wouldn't make a lot of sense for anybody else right now yeah so like they could decide they want to vote it down that vote isn't locked in it's uh one vote per wallet but you can change the state of

your vote at any time so like if you thought it was worth 700 and then the next day you wanted to vote like 410 you could just change it it would update the related vote but uh [ __ ] yeah it's just how much people didn't want to sell it like they bought the tokens so like right now i only own 11 of the hoodie and it's all in a liquidity pool so i have no voting rights because i'm not holding any of the tokens they're just in the liquidity pool so yeah my vote doesn't even matter for what the reserve is it's all up to the people who are holding it and i think it's cool because it allows them to say like hey we're not trying to flip this quickly like we're content on holding it for the longer term and being a part of this

community um whereas we've seen other things like a zombie got bought out on party bid which party bid is a way to group together people trustlessly to bid on auctions and then after the auction is won by party bid it's automatically fractionalized and people can claim the fractional tokens but uh we saw a zombie that people got really upset about because they bought into it and then it got bought out like two weeks after and they're like what the hell i wanted to hold this like can i keep my tokens or my tokens give me like a one percent of the new zombie and the answer is like no your tokens are always going to be one percent of the 1900 ethereum the guy paid out to buy the zombie yeah sorry man

so it was one of those things where like the community had anticipated they're gonna hold it longer but they actually didn't and i think like i like like for me it's exciting to see buyouts you want buyouts to happen um it was one of the big negatives i thought existed with the other fractional platforms like niftex and uniquely um it's how hard it is to actually get a buyout to happen like you need a quorum and a certain amount of the community to vote and like it's it's such a hassle and so complex where like the fractional way of just everyone gets a weighted vote 50 of the tokens or more have a vote than the auctions live anyone can buy it out and it'll start the auction like

it's just so much more simple because then you could view it as a buyer and be like oh hey these are distressed or underpriced i'm gonna buy them out so yeah that's kind of of what i was i don't even know what i was gonna say to wrap that up but yeah no i'm not i mean that without the bios it doesn't you know like the bios validate the the platform you know you know without that ability obviously the platform is kind of like what's the point of even doing this because there's no like there's no exit um you know that's kind of the whole goal for i mean people are investing they want to hold as you say in that example but you know they can't be upset about the profits that they've made and you can come and reinvest into different nfcs and uh real quick there's one

specifically on fractional um that you mentioned for for our audience that's kind of an arbitrage play that is kind of a steal which one exactly was that yeah and i don't want to call it an arbitrage player and investment yeah very strictly like the the implied valuation of this hoodie punk is like 50 ethereum under the hoodie pump floor on larva labs um i'll throw it in the chat here but uh if you go to our site just search hoodie in the uh chat or the search bar it comes up but i threw it in the caller and if you want to like link it but yeah that that's the hoodie punk i put up uh right when we launched really and you see i'm the owner i call him

uncle hood or um hood i don't know i had fun with them um and yeah like it's one of those things where we have a little community and the fractional discord people get excited about it um there's a good amount of people on twitter who have this punk as their profile picture so if you ever see them then you're like oh hey they own a piece of that fraction um well that's super cool that's too much you can like flex like you're rich as hell but you just own a fraction right yeah legit because you do own it yeah um some other cool things like the dog meme or the dog name is like our biggest nft i don't know if you heard about that but pleaser dal had bought the doge meme for

like under 2000 ethereum last year or sorry not last year like four months ago um and then they fractionalized it and they used sushi's miso platform to like auction off um i think it was like 20 or maybe it was five percent i forget the exact number they auctioned off a small amount of the supply but this dog meme is trading at a implied valuation now of like 47.5 000 ethereum or 143 million dollars defy ted is licking his britches right now that's pretty sure insane like i i saw the auction for this blow up but i just sat here like they just bought that for like not that much ethereum at all

compared to what people are willing to eat into this at and like i like what they're doing they have like community grants and a lot of it's going back to the community in some way but it's still like a crazy leap to show like how powerful fractionalization can be on the right nfts where like it went from being worth a couple thousand youth to being worth nine figures um just because the fractionalization component opened up the ability for so many more people to get involved yeah and then it just proliferates into the community more and more grows community and grows the holders um and like you said in a realm where where capital is cheap um the community is expensive and and they were able to harness that yeah it's crazy how cheap capital is and

how much capital is floating around this ecosystem and like it's uh something i didn't really realize until last year myself um being kind of an avid crypto trader but not being like on the business or enterprise or protocol side of things uh it's really been eye opening and cool to see but like it also makes me realize like the ceiling was way higher than i thought it was before yes especially if comparing in u.s dollar value yeah i mean it's um it's such a meme to say like oh we're still early but it still feels like incredibly early yeah so what do you think about these new creatures that just came out we got shaq posting a profile picture do you own any do you like them what do you think 10 floors kenny

florson what we got so creatures um i didn't like the art i'm still not sure if i like the art we don't like the art but i had someone i really respect super good vibes super zen-like dude someone i talk to in tourist cases all the time he went on like a 30-minute monologue about like how much he [ __ ] with the creatures and likes them and this was like two weeks ago and i remember listening to him being like yeah i should buy one of these this is good [ __ ] and i never bought one and then i saw the shack tweet two minutes after he tweeted it and i just went to open scene and just like failed three transactions but ended up getting two of them um

and now i'm like holding my two creatures just to see what the [ __ ] happens because like i i got that impassioned monologue from a friend who i respect his opinion and i didn't find myself liking the arts that's normally like why i don't buy things but then like hearing all the [ __ ] danny has in store and like how he's kind of this like 21 year old visionary with uh big plans made me realize like on top of seeing shaq who has like 15 million twitter followers one of the most loved personalities in america like a bim uh i was like okay i need a couple right like i need one to hold for my membership [ __ ] to do stuff and then i need one to like sell if this hits like a 5x

uh so for me if they get the 1084 like i'm fine selling that second one i bought and then holding the one that is my forever creature just to see like what the [ __ ] danny does because so much of this stuff is such a long-term bet like these creators can't realize these visions in like three months or six months and people are like oh what's your roadmap oh what's your plan and it's like i just want to see what these creators do and like being able to back them almost in like a vc way but be a part of the community in the process is a really fun experiment so like the bet i take is just like i'm gonna hold one of these trevor and see how this [ __ ] works out just because like this creator has good energy and i

think they could do something really cool that like i can't even fathom right now like i'm not the most imaginative or creative person but when i'm around that energy i know it when i see it and i like taking like small shots on them vibes bro it's all about the vibes oh it's all about the vibes like my pen tweet is like i'm a 60 iq it just goes off the vibes because that's how i've done everything in the nft space like vibes of the pumps we're like oh [ __ ] it's a lindy flex piece like i need this this is gonna be like a party hat vibe of art box was like oh [ __ ] man like snowfall's such a good dude like whatever he makes is gonna be sick let's get in on that like top shot vibe didn't really pass and then i like kind

of got annoyed and frustrated and burned out but like seeing the people that came from it was good um the redemption arc is interesting and then like all the other little projects i've had that have been like bigger wins like cool cats buying cool cat like point one ease now they're like pennies like that was all vibes like we had klon and another person from the team in a twitter space within like the first week and klon is like yeah i've been like drawing the cool cats since like 2012. like what like you said like 2012 like not 2021 i think you'd go on his instagram and go back and there's old pictures of the cat that he's been working on and it's like this dude's been obsessed with cats specifically the blue cat for so long

and now for the first time he has the opportunity to like build his vision and get capital from his community around it like that's not going to be uh coming totally worth it in like six months or a year like it's gonna take if he's been working on a cat for years it's gonna take more years for this to play out but like i got to be a part of it because if someone is willing to dedicate that much time to something with no other uh reason other than just passion before they found the space like what can they do when they get in the space they get capital they get community they get help and they still have that underlying passion like a lot of them will probably still fail but it only takes one project or two projects to be the next 100 x or a thousand x with uh eight for

a cool cat like 99 of your bags can fail and you'll still make money yeah i mean you've dropped i mean immense amounts of alpha here on this call these you know we greatly appreciate it but um there's never enough for our alpha hungry community so what they're what they're wondering here today is our boy jeebus has been tweeting a lot about this upcoming nft bull run and you know how you know that like you said nfts might not survive the youth run to 10k but there's something happening right now and you know on on openc a lot of floors have been trending up the last few days and weeks really so you know how do we play this next month two months of this nft bull run that's happening what's your what are some of like the flipping strategies what are

some of the things that you're looking at each day when you wake up in the morning and look at things you know you know what's a general strategy and framework for like waking up getting into it you know getting after it and participating and what we think to be like this next uh this next wave coming yeah that's a good question i i wish i had a more scheduled and refined approach my day normally starts between 8 and 9 30 a.m eastern time um i roll out of bed i check my phone i start replying to dms and i get like coffee ready and i just get ready for the day um by then you know it's like 9 30 or so i'll sit down my computer go through some work [ __ ] and then i look at nansen like first thing every morning i look at their market overview for the nft market and just see like

what's the highest volume stuff today i kind of can gauge it and tell like if the market's doing well or poorly just off the volume numbers alone uh and like a day like today you see like 3150 ethereum volume for kryptos 3 000 volume for pumps 3 000 volumes for art blocks like you just know it's a good day right off the bat like when we had slow days back in the beginning of september there would be days where like no project had over a thousand ethereum a volume and it was just like a really anemic like we watched art blocks go from like 10k ethereum volume a day to like under 1k ethereum volume a day within like two weeks and for me i use september i didn't make enough big bets in september so i have a couple

things in life that i need to be planning for right now so i need to have more liquidity on hand than uh i would like to but i use september as a time to kind of go through all the projects that had came out in august that i wasn't privy to and i was trying to really i'm really privileged to be able to like host twitter spaces and get founders of the team on a space where i can directly question them and like just ask questions about their project and then bring up my friends and community to also ask questions so like i talked to pablo stanley from robotos when the four was like 0.15 and we talked about like three hours i just remember the whole time talking to him like holy [ __ ] like this guy gets it

he's established he's been community building like he's doing things just by what his community wants him to do and he's just vibing like okay i need to buy like five robots and like if i was in a normal risk managing position like i would have bought like 25 right like ideally my position size would be um 5 8 or so per project and like if you're buying them for 0.15 or 0.2 you can get a lot for five years um but yeah so get a manson subscription get in these fives twitter spaces and um yeah just keep your eyes open for the bots yeah and then i would say too like going forward um it's hard to say that like at current prices it feels good to buy into stuff like toads and creatures

and um i'll just take it off thought by head here but like i bought some habbo hotel [ __ ] yesterday like i didn't know anything about it my wife was like oh hey i played that game when i was a kid and i was like in the pumps discord okay how much it cost to meant this okay it was like 0.25 to 0.3 after gas it's trading for 0.4 like okay i'm just gonna buy some immediately like good enough like this could go to one eighth like it was super low due diligence like super low dart throw just like i don't know two minutes of research like that's some of the positions i take where it's just like gut feel of oh hey this is old and has a crowd that cares and like maybe this will be worth something um with new stuff coming out in particular like i just really try to vibe check the team

ask about the history of the team like you don't want the team to be anonymous to the point that you can't look at anything they've done ever um to me at least like you want to see like a history of creating before the nft space so that you know the people behind this project are like creating because they love to create and not creating because this is the best capitalistic opportunity for them to take at this point in time um but yeah in terms of like current projects i don't have a lot of recommendations on where to go um but for sussing out new projects like yeah talk to the team like i i almost like force myself on the teams at this point and i can turn it as a marketing opportunity for them i'm

like hey come up on his face and like we'll talk about your project and honestly there's been very few teams that like i get horrible vibes from and don't buy it's most of the time like really good vibes people who have been doing stuff for a while and are taking the leap in and trying to figure out like how can they build in the space and create their own niche um and i'm willing to take a shot on like a lot of these projects so i probably have like 30 or 40 different profile projects in my wallet if you're gonna go look so like it only takes one or two of those to become the next cool cats or the next board eighth that the others can all go to zero and you're still you know significantly happy with cruising yeah so spray and pray you know kind of works

if you're willing to hold yeah i i think it's hard right now to have like high convection high conviction and one new project and like just go all in on it like it could definitely work out um you could definitely hit like 100 x right off the bat and be sitting pretty but you could also be sitting over allocated in a bag and the opportunity cost of not being able to enter other new stuff you see might outweigh the conviction you have and that one specific bag the pump yeah amazing these well thank you so much for coming on uh it's been an absolute pleasure to hear about kind of your journey and fractional and everything to come i mean i know i've i've learned quite a bit and i've got some few a few action items of those to be to invest in a fractional nft on there somewhere

probably that hoodie that's uh uh the quote unquote undervalued and um yeah man yeah not to speak my own bag right like go on the fractional site uh sort it by implied valuation and then just look at like some of the stuff on top and see if there's anything you like um or maybe sort by popular you might get better results than implied valuation because there's kind of a bug in a way where people can provide like a really small amount of liquidity at a high price and then it skews the implied valuation ridiculously because it's like no one's going to buy that implied valuation 100 million dollars even though there's one token for sale there but yeah i would say like there's

definitely good things to be found on fractional i think uh the discovery aspect is hard and it's something we're working on but it's like how can we integrate our stuff on fractional to like show up on open c show up on the punk's marketplace show up in other places people are at so that they can discover that hey there is a market and efficiency here that they can take advantage of rather than just like they need to go to our site and search through stuff to find it so um yeah i'm really bullish on where we'll be in like three six months and everything that's in the pipe and uh yeah it's a work in progress that we're aware of that we need to keep iterating on and keep making better and that's what we're committed to doing and i'm looking forward to see where we're at amazing

again thanks for having me on too i appreciate you guys reaching out talking to me for a bit um [ __ ] about fts if anyone ever wants to come talk to me in [ __ ] i'm normally hosting a twitter space like six to 12 hours a day i'm in some type of twitter space and uh you just come up on stage pick my brain or pick the people's stage on brain or pick the brains of the people on stage and survive yes sir thanks man what's in the box thank you dudes no problems