Reviewing the a16z 2022 State of Crypto report

Transcript

what's up friends welcome to web3 academy a place for entrepreneurs creators and marketers to explore and learn how to use web 3 to transform business models and create thriving communities enjoy this next episode [Music] gmgm what's up friends welcome to web 3 academy it is the weekly roll up i'm your co-host jay hamilton coming at you from whistler canada and today my usual co-host kyle read head is away at the permissionless conference which i'm sure you many of our listeners are at as well so uh we got special guest j-dog filling in for kyle today what's up j-dog

how's it going um jer bear works as well i don't i don't like that i don't i don't know that one jer-bear is that uh that's a that's from my childhood okay i was wondering if that was the wife's nickname for you it sounds sounds brother dave the classic the classic nice well wow we got a we got a really exciting uh and almost a special episode i would say today um our initial plan we sort of threw out the window yesterday when anderson horowitz released uh their state of crypto report uh this is a 56 page report and what we're going to do

for you today is rather than our typical go through uh the news for the week which there was tons of news uh so come into our discord if you wanna see the regular news uh but this state of crypto report is badass hot fire so well written so much great stuff in it and it's 56 pages so if you're like many uh people in uh many of our listeners you probably don't have time to read a 56 page report so we're gonna break it down for you and give you the take our take the web to your academy take and tell you everything you do about this report so you can just listen to this podcast instead of reading the report um and we'll make sure you're on top of it but before we go into the report um

as always we're going to share some gratitude because taking a minute for appreciation is so important especially in these challenging market times so jer what are you what are you grateful for today um i'm grateful for my mom lately i've ever just been able to spend a lot more time with her than normal um and so it's just it's just nice to be able to to get that that family time and so yeah just very thankful for my mom that she lives close and that i can see her frequently now that's great man i am grateful for i'm gonna it's sort of same uh same wavelength i'm grateful for my fiance sam's parents so my my in-laws

[Music] i'm grateful for them because they have been staying with us at our new house the past week and they have been incredibly helpful we are renovating our home and so they've been painting and staining and spackling holes in walls and cutting wood to make a new trim and new frame around some of our windows and they've been uh just so so helpful and it's really nice uh when you're doing such a big project and you know we're working all day and then trying to do renaults in the evening and having them here and just chipping in has been very helpful so gord and jane thank you

you guys rock they're not going to listen to this podcast but i'll tell them i shouted you guys need your own like renovation tv show i got too much to do to make another piece of content okay well what is our web 3 word of the week jeremy i think that this week um we will go with build there's a there's a lot of building going on right now we'll see that today but um you know prices are not always going to go up and when they go down best thing that we can do is build and innovate and keep moving forward um so build hells yeah hell's yeah i love that yeah now is the time to build uh don't don't

be mr market be bob the builder this is this is when we when we build the future and there's so much opportunity right now i it makes me think about the the internet uh in the 90s and when i don't exactly remember it was i think it was the late 90s when the internet had a crash and there was a lot of people who left because they were like oh prices are going down i'm out of here this isn't a thing this is just a fad and if you left at that point you missed out on the biggest innovation cycle there's been in the last 30 years you know that's when social media was created that's when uh all the video um streaming platforms were created so much came out of that and here we are

again so uh yeah great word jeremy let's build yeah yeah okay uh jared let's let's jump into this uh state of crypto uh report okay um let's see let's let's start let's start at the beginning uh because i really like the the way that they start with what is web3 all right let's go here then what is web3 um i'm going to take this part yeah they they break this down into um the web one web two web three and i'm sure many of you guys have heard this before but i just think it like

it's something you can't hear enough because it helps us understand the whole space so here's their breakdown the first first era of the modern internet roughly 1990 to 2005 was about open protocols that were decentralized and community governed most of the value accrued to the edges of the network users and builders the second era of the internet roughly 2005 to 2020 so web 2 was about siloed centralized services most of the value accrued to a handful of large tech companies facebook google netflix etc now web 3

we are now beginning the third era of the internet but many call web3 which combines the decentralized community-governed ethos of the first era with the advanced modern functionality of the second era this will unlock a new wave of creativity and entrepreneurship i love that yeah and i bring that up because i think that it's important to understand you know where we're at and what we're doing and we don't spend enough we spend so much time talking about uh the the details and the a lot of people talk about price but like there's there's a movement happening here that's deeper uh than just the new business that come out or the funding that came out uh and so it's

important to understand really like why web3 matters which you know jr maybe you want to take it away here of that's their next section here next section yeah why why web3 matters um and then they have a breakdown here of the current internet as we know it and why it is flawed and they point out that we're currently in like a digital authoritarianism um where everything is owned by these big tech companies our data everything and that's one of the beauties of web 3 is that it's kind of breaking those change and giving ownership back to the the people the users yeah and you think about like you know digital authoritarians when you think

about china or north korea places in the world where you actually don't even have control of like digital access and control of your digital property it's all controlled by the government and so like that's what an awful situation to have like censorship in that way and what how that much how that impacts the culture and freedom of speech and so wow that's a terrible situation you know we're lucky jerry i know you know jared lives in texas and i'm in canada so we're lucky we're not part of that but we have so many people in the world have that scenario we have this our scenario is big tech oligopoly right like we're in this scenario where we're we're basically stuck with like five

massive companies facebook youtube google apple amazon controlling everything uh and that's that's not what we want right that's flawed yeah and the the amount of people that they're you know touching billions of people you know use facebook and all the platforms that they have underneath them now and it's it's a scary world to think that a handful of people can be making decisions that are affecting billions of people like that and really like what that did was um web 2 because web 2 became this way to it was all about like okay who can hold the most attention we created this attention economy and

because of this attention economy it led from like cooperation which was like the web one way of like open source let's build together to competition and that's what led to these massive companies because there was so much competition and so much focus on like extracting value in order to satisfy investors and satisfy shareholders as all these web 2 companies went public so the users and the creators got [ __ ] like ever all the users and creators got left behind and so web 2 sort of lost that friendly let's build together you know going back to our word of the day build um you know web 2 is not building together and

building a cooperative way it's now building behind silos walls and walled gardens and that's that's not how we create the future no and they've they've got this great infographic here and we've seen um a couple different iterations of this but it's uh it's awesome how they broke it down you've got web one where you are just reading you're digesting information and content from online web two you're reading but now you're able to write so you can actually start creating content and contributing um online and then web3 you've got you can read you can write create but now you own um so we move from web to where you know we are the the assets now we get to own assets and what we create um

we get to see the the benefits of it yeah and and holy [ __ ] what a what did what an unlock ownership is right like really that is you know the ability to own digital property what what that does for the future of the internet and the web is that's what that's really the baseline of all this innovation that's that's happening and so this sort of goes back to what this next slide shows is basically the value share between web 2 and web 3.

and web 2 the value as i said before all goes towards the the investors right so you've they they show sort of four groups here you have users creators builders and investors and in web 2 the users get none of the value basically the creators unfortunately also get none of the value and we'll talk about that actually later in this report when we look at the take rate that these massive web 2 companies have and how little flows to the creators the artists the musicians uh the youtube creators like you know they're not getting they're not making a lot living because of this current structure everything all the

value flows to the investors the builders also get a lot of value in web too uh but the builders are working full-time for these large web 2 companies so they're also like they're building just for the investors not even able to innovate right whereas in web 3 we have this ability to have users creators builders and investors all share value and all have opportunity to have the same value and it's all connected through the token right through a token that connects their their ability to have value and then also have governance and build community i mean it's just it's so empowering so so empowering yeah i love the difference between these two

charts um this web three value share everyone is even you got the users creators builders and investors and i think that that's it's just a really cool visual representation of wag me like regardless of what category you fall into right there we're all gonna make it i love that man i love that it's so true and and and it makes sense right like what is the world do we want to build here do we want to build a world where the rich get richer and where our objectives as businesses or organizations is just to shareholder value because that's the world we live in right now and i'll guarantee you know if you're a listener

out there you know i'd love to hear from you tell us like what's the world do you want to build you know you want to build i'm i'm assuming we all want to build this world of shared value right like let's again jerry you said it best that's the wagner graph let's let's throw that up on twitter yeah then call that the wag me graph i love it yeah we need to coin that that's beautiful um and so this next section we've got uh web3 empowers a collective owned future over a corporate or government-owned future and that just uh kind of hits on what we were just talking about and they've got a couple of different charts here where you've got you know one point kind of more the centralized businesses or industries and then

everything stems out from that or comes back and then it's slowly you've got single points of failure um in control where you've got multiple points and different lines branching out out of that and then more this web three where everything is interconnected um yeah yeah yeah and it's it's it's this centralized to decentralize and you know here's the problem with centralized is single points of failure and control right centralized could if if if you're in a centralized system and there's a failure the whole system goes down right and then they also have this control where they can decide to do things like you know de-platform you right which is we've

seen effect affect people in huge ways we talked uh in our last podcast about how bankless got de-platformed by youtube now thankfully youtube recognized the mistake and got bankless back up on youtube uh but that's a major crypto media company that was affected their entire business and not their entire business but a good portion of their business is their youtube content and all of a sudden boom one algorithm says you're out we have control and you know you have nothing you can do and that's awful whereas the the web3 model it's resilient it's equitable and it's participatory right we're all in this

together yeah yeah what a difference i love that gotta next we have cycles of innovation this section is really cool um it shows how the crypto market develops in cycles and so the big driver is price people see the price go up and they get excited and want to be a part of it that stems into more interest around the different companies and protocols that are you know going up in value and then from there you've got new ideas so people are thinking about it more and you know what else can we create and then you've got um the final piece which is startups and projects and i think that's maybe where we're heading right now where it is this building

environment um and i think that probably is the the focus on the the current cycle that we're in yeah yeah let's build yeah skip down uh skip this next one um yeah i go yeah there we go so i think that what's what's important to see here and they they make this point through um several graphs of um they have the global crypto crypto market cap they have developer activity they have startup activity and they have social media activity and they're showing the growth of each of these things and i think what we find is when we're in the day-to-day you know humans have this incredible inability to zoom out and see the big picture we're so focused on

yesterday and today and so we feel like we're on this this crazy roller coaster right uh you know we feel like these these cycles are chaotic and oh my gosh there's huge swings and it's up and then it's down and then we get so much fear right and then the fear leads us to be like oh gosh we shouldn't be doing this right but here's the thing and this is just one of my favorite takeaways from this entire report is when you zoom out in this graph these graphs are showing from roughly like 2011 to 2022 so about the last decade the zoom out shows consistent long-term growth

right so we are actually consistently growing yes there are peaks and valleys along the way of growth and that's part of growth because you need a feedback loop and you need to garner interest and sometimes that interest peaks and then it values and you need innovation and sometimes innovations like tara luna unfortunately fail right but you need to be trying those things and you need to go through those failures in order to see what lands and what stays and what stays long-term uh and and this chart just shows that so well that consistent long-term growth like basically uh the global crypto market cap is up 270 since from 2011 to 2022. developer

activity is up 70 startup activity is up 60 social media activity is up 83 so it's consistent long-term growth and i think it's you know again like it's important to remember that let's not get caught up in like the bad days and the bad weeks you know take a deep breath we're on a long term path here to building something huge uh and a lot of the numbers throughout this report will will show the path that we're on yep i think what excites me most about these charts is this social media activity you see that in 2021 it just has the most massive spike that we've seen in any of the charts really compared to the the previous years

um and so if we go back up to this chart up here um interest rate i think way way way more people are now exposed to crypto and web3 and so they're searching for it they're sharing you know they're they're learning more about it and so i think this next cycle that we are a part of is going to be absolutely mind-blowing mm-hmm yeah this next section is all about layer one block chains and they sort of there's a few sections here about block chains i think we will we'll we won't dive deep into these sections we're actually going to do a deep dive into blockchains in our podcast um our spotlight podcast in uh not next

week but two weeks from now uh because blockchains is a very important thing to understand i mean that's the base level technology of all of this there's a few things that we should call out here jared so don't scroll quite through all of it maybe scroll back up a little bit um i just don't want to spend too long on the blockchain stuff because um it's getting a little bit into the weeds if we're going to do this we need to do it in the right ways for our so everyone understands but uh yeah this is the first one that i wanted to call out um web 3 is multi-chain you know you hear a lot of um you don't hear maxis so much anymore but you used to hear a lot of maxis you know talking about their chain is the only chain web 3 is definitely multi-chain right um

there's here on this chart they're showing six chains ethereum salon a polygon uh binance avalanche phantom uh and they show the size of all these chains and all these chains are they range from uh what like 300 000 active addresses up to 15 million active addresses um and daily transactions from uh 700 000 up to 15 million so all these chains are are big and they're getting big and it will web 3 will be multi-chain i think that's the main takeaway here there will be the opportunity to build on different chains which does bring up the question of like which change should i build on and how do i think about that uh and again don't

want to get into that conversation today but a conversation that is important to be had so if you guys are in our community in our discord uh let us know if you have questions around that would love to chat more about that yep and this uh this next chart shows that um basically while other smart contract platforms might rival ethereum and users and usage the demand for block space is unmatched on ethereum and it the chart uh yeah it's just it it trumps any like the closest one is binance um and it just is pales in comparison yeah yeah definitely ethereum is uh is the big big dog right now

um let's let's stop at the next one uh because this is really interesting this is another big takeaway i had uh the next one jer oh next one uh another big takeaway i had from this is um so this is a chart that shows that ethereum visit a chart of developers monthly active developers since launch and so we have ethereum with 4 000 monthly active developers and then we have solana next with about a thousand monthly active developers and then we have everyone else sort of floating between the um you know 500 to 1000 uh number um

and i think here's the big takeaway i had from this is holy [ __ ] this is so small like as if there's only 4 000 developers on ethereum globally globally that's a joke that's so tiny right and solano only has a thousand like the only uh the only comparison i could find to this was that roblox has 350 000 active developers on it uh so just to give you like a comparison and that's just that's that's just roblox right like not to mention

all the other developers there are in the world so uh wow we are so so early like we have created a trillion dollar industry uh off of these blockchains and there's only like i don't know in total maybe like uh like 6 thousand developers a six to eight thousand developers in the world building this stuff right now what when i saw that number i was like i bet you in downtown austin where where i'm at there's in a square mile there's more developers you know web 2 developers than there are the entirety of web3 developers right now yeah yeah and i mean we we say we said this

multiple times like the the most important resource when you're building a new industry a new technology the way we are is talent that's that's what you need to build you need human resources and the joke in the industry right now is everybody's hiring and you can't you can't hire because there's just not enough developers and like oh my gosh this this chart shows it perfectly so i don't know if you're out there and you're a student right now if you're in school still like get into coding and developing learn web 3d development and

you will be set for life i i i feel like i need to call my nieces and my nephews immediately and tell them to stop doing whatever they're doing and start coding okay um i think if you're a web 2 developer too and you've been on on the edge like you know wondering if you should jump into web 3 and learn the languages there now i think this is a there's a great chart so there's a lot of upside there's a lot of demand for it so if you if you make the jump i think you will you will find yourself working on some cool stuff being very busy and and that's really the goal of web3 academy you know we want to onboard you to web 3 and help you make that transition so

if you're here and you're listening and that's what you're looking to do to get a job in web 3 that is exactly what we want to help you do reach out to us personally happy to get on a call with you to talk about how you can make that transition we are available we are building this community around growing and onboarding more people to web3 so a quick little show for websphere academy but but we want to be part of that with you so straight up like if you're looking to get a job in web 3 and you're not sure what step to take please drop me a line drop me a dm on twitter or come into our discord i'm happy to help you in any way i can and just to add on to that we've got a developer channel only so it's a bunch

of web3 developers in there web 2 developers who are wanting to learn about it and there's just everyday people are sharing you know different resources and stuff it's uh it's really starting to become a really cool community in there anyway that's the last last plug for a second you want to hit on layers yeah let's do this i don't think there's a lot again this is okay so the next section of the report is all about layer two um let's just okay quickly layer one verse layer two um so layer two is a separate block chain that extends the base layer and inherits inherits its security guarantees so basically like

you're going to hear a lot about layer twos because when we built layer ones where we are building layer one block chains uh we didn't build them for scale right we built them for security and for safety so that we could create digital property right in order to make digital property we needed to ensure that it was you know trustless permissionless immutable all these characteristics which are really around security right um and so we built those layer ones so that they ensured that but now that we're on boarding millions and ideally billions of people to use the block chain we're realizing like oh [ __ ] like layer ones can't

handle that scale so that's where layer twos can't come in so their twos are separate they're they're extended they're built on top of layer ones and essentially they just bank the security of layer ones and ensure cheaper fees cheaper gas i mean that's probably the biggest one and i think there is a chart in here somewhere uh about that uh yeah here it is yeah so here's a chart of um layer two roll-ups are competing hard against each other to bring transaction fees down i think that's the biggest thing that we keep hearing about and so here's an example um jared what are we looking at here so first up we have um

the metis network where using their layer two it costs one penny to send eth and if you've ever sent anything using ethereum you know that it costs a lot more than that and then we've got loop ring and zk sync up at 22 cents polygon 25 cents um optimism we've been we've been talking more and more about that on the program but uh 88 cents there um and that's and and that's compared to four dollars and fifty cents to send on ethereum so you're talking like a significant fraction of what it currently costs on ethereum and i think

that is that's the big takeaway of layer two is like let's bring these transaction fees down so more people can use it and that's that's exactly what's happening now um there's some other details about alert ii as well yeah what they said here i think is cool it's l2 roll-ups pay for ethereum security so you're getting the you know the cost effectiveness of the layer two but still the security yes yes d5 you want to hit on some of this at all yeah yeah this i mean i think d5 is d5 was really the the first boom that we saw in in crypto so i think d5 is so important to hit on uh because it is what is so

far brought in the most assets and the onboarded the most people to uh to crypto in d5 summer really which was uh last summer um and this is a really jerry you want to talk about this uh this this page is really interesting yeah um so it says a huge part of the world is understanding by existing financial institutions underserved oh excuse me underserved um what what stands out here is just a wild number to think about but there are 1.7 billion people who do not have access to a bank account and that's crazy right in the the time that we live right now with all the

technology and all the resources it's that's crazy that's what a quarter of the population almost does not have access to bank accounts completely unacceptable like that is completely unacceptable our system has failed us yeah um and then you've also got uh remittance payments um and there it says that 650 billion in global remittances annually um are paid with an average cost of six percent okay so quick quick pause here um to just to be perfectly honest and and show my ignorance sometimes you know uh i'm not this far from the smartest person in the room i had to look up

remittance because i was like what is a remittance payment like what does that even mean uh so a remittance payment is essentially any time you send money right so um we are sending money to each other around the world all the time right so 650 billion globally was like transferred around the world between all the humans last year right and the average cost of transferring all that money is six percent so and i'll guarantee most like that's the average so that means that there's a lot of people paying higher than six percent and i'll bet you it's the ones that don't have

bank accounts or don't have access to funds right they're the ones that are hit the worst by this because if you don't have a bank account then you rely on um like what a quick cash or um uh all those uh what do you call those all those like uh those places that charge you big interest you know cash day loans like all those places so like you know your your family is in um you know in in ukraine or in eastern europe or in a part of asia and you've left your family and now you're in um north america and you need to send money back to them right but they don't have a bank account so you can't send the money easily so you have

to use one of these like kind of sketchy real scammy money wire transfer so that's what we call wire transfer services right and they'll take like like 10 20 right so you know it's it's it's really affecting the the underserved the emerging economies and those people the most which are the people that need the money the most right so yeah crazy this uh this blew my mind right here so of the 1.7 billion people who do not have access to a bank account it says that um of those 1 billion have access to a mobile phone and about half a billion have the internet so there really is no

reason at this point if people have access to you know mobile device and they can connect to the internet that half a billion people still um are unbanked no no it's it's time to get these people onto the the payment rails in some way and clearly the current banking system isn't capable of it they can't do it so here comes crypto and web3 yes like save the day for us like holy geez and it shows it too so this next one um shows that d5 has grown from nearly zero to over a hundred billion in less than two years um there's obviously you know a big demand for it people want to use it and i think

as more people begin to get onboarded to web 3 this is just going to grow significantly yeah it's wild uh so let's let's skip through a couple more here uh skip through the defy um there's there's a slide all about proof of stake is coming to ethereum uh i i think we should skip that because again we're gonna chat about this in our podcast in uh just under two weeks uh when we have sam andrew on the podcast who's uh been doing a ton of research on this stuff um this one's interesting though this one shows that um yeah d5 would represent the 31st largest u.s bank by

total assets under management um and it looks like oh man yeah there's just so much room for growth this is crazy yeah yeah wild i mean you got the biggest jp morgan chase is the largest u.s bank with over three trillion under management uh but then you have defy with uh currently somewhere between 100 billion to 200 billion uh the tara luna pulled out the target crash pulled out what like 20 or 40 billion out so we had a big drop recently um had this report been released before that we would have had uh um probably over 200 billion but it's a little bit smaller but needless

to say yeah like d5 is growing and it's here to stay speaking of luna yeah yeah so let's talk about stable coins because they do a section in this report about stable coins um and i think it's just it's worth taking a minute to chat about uh the learning about stable coins is so important because digital money is clearly something that we need that was proved by the fact that you know 1.7 billion people don't have access to bank accounts so we need digital money uh and stable coins are really the the base layer of that and i think it's important to understand

stable coins and it is there are different types of stable coins so let's talk first about the primary categories for the different types of stable coins so you have mainly of three different types you have fiat backed stable coins so those are stable coins that are backed by um usd so they have the cash equivalent or other assets that back that stable coin so usdc would be an example of that and usdt tether is an example of that then you have crypto backed so those are

backed by crypto assets held in smart contracts and then you have algorithmic and those are algorithmically balanced supply and demand now algorithmic those are the type of stable coins that we are unsure if they're gonna work because that's what terra luna was right tara luna was an algorithmic stable coin it didn't it crashed in a way that nobody for so well some people might have claimed that they foresaw it but um awful situation and but i i want people to understand that that is not the only type of stablecoin and i'm not convinced that algorithmic stablecoins will work but stable coins there is other types fiat back or crypto

back those will work um an example crypto backlit die is an example of crypto backed um so i'd want i just want to make sure that people aren't like jumping ship on stable coins and not in total fear state because of terra luna um be careful if you are investing in stable coins if you're putting money at stable coins uh be careful which one you use but don't don't think that they're all bad because there are stable coins that are very stable and will work in the long term it's really interesting we actually our team had a uh a session yesterday about stable coins specifically and one of our team members

uh is from russia and she's left russia now as a result of the war and um just the challenges with living in russia and now she's living in turkey and she cannot accept money any other way right now she cannot she when she left russia she took as many much money out of her bank account as she could um but if we want when we pay her we pay her in stable coins uh and she doesn't yet have a bank account outside of russia so she can only her her means of of spending is she takes money stable coins and then she uses um some guy in turkey i guess that like will pay her cash for her stable coins um but it's uh you know stable coins have are a big part of bringing

banking to the people that don't have access to it and thank god for you know for these so that people like that can actually access um their their money it's it's so sad to think that if that was not the case that they would you know be in a much worse off place yeah and this next slide inch it shows the increasing use of stable coins uh which really demonstrates the demand for a digital dollar right so this this slide shows that in total we're about 150 billion uh dollars in stable coins currently but it is it is going up and since you know that's from since like early 2021 we were at so

just over a year ago we were at 50 billion and now we're over 150 billion uh so this is increasing uh at a rapid pace absolutely um let's see so yeah we've touched you skip skip skip this one unless you understand that one i didn't get that one no not a lot i was just gonna highlight those three yeah i think this is this is the one that that is that is interesting to me is stable coins represent just a tiny fraction of the world's money supply so right now we've got about uh 171 trillion in stable coins whereas in the us

we have 20 quadrillion in stable coin sorry in in us dollars uh in in their money i think that might even be billion 171 billion no that's a trillion uh is that right oh no you're right it's billion it's billions so that's massive difference there 20 quadrillion oh maybe it's 20 trillion actually maybe it's not 20 quadrillion we yeah counting our commas wrong yeah yeah i am counting the comments wrong it's 20 trillion not quadrillion sorry quadrillion that's my mistake i was excited to use the word quadrillion to be perfectly honest because i googled this morning what comes after

trillion uh one thing's really funny is it goes quadrillion then quintillion and then sextillion uh and i i can't wait until the day that somebody refers to themselves like a sextillionaire there's there's memes behind that will be on he'll love it yeah this next category maybe one of my favorites i think yours too nfts yeah um and so yeah this kind of just breaks down says uh we've seen several categories of nfts emerge uh but still very early days um and so kind of the the big main

main category of nfts that we saw right off the bat is profile pictures and these are used in you know social media as your your avatar and kind of like your online identity um we're now seeing art and music and that's a more efficient and transparent way for artists to monetize their work and real excited about gaming and how that's going to play out and then yeah just more of a focus on utility and uh and then owning land and property within the the virtual metaverse world yes so much so much application for nfts and

and it is so early so early and this this next graph really shows that is you know since uh since the middle of 2021 we basically had nothing happening with nfts early 2021 like there was yeah middle middle 21 is kind of like there was a little bit happening but not a lot and then it was more like august last year 2021 is really when things started to happen um and we saw a big spike in nfts and it's just continued to rise to the point that now we're at roughly

uh like one we're between we're we're over a billion dollars in uh weekly sales volumes of nfts like that is wild yeah and it's still so early exactly i was about to say i think we have was it still just a million and a half um wallets that hold an nft yeah yeah i've seen i've seen i'm not i'm not exactly sure of this i've seen anywhere from 500 000 to a million and a half so it's super super low um this is this is one of the biggest takeaways i think from this report um that gets us excited that i know will get our

audience excited is web fleet platforms have drastically lower take rates than the internet giants of today so you hear a lot about take rates as a mental model for the difference between web 2 and web 3 and the take rate is what percentage of revenue the platform takes so apple the apple store if you have an app on the apple store the apple apple takes up to 30 of revenue for sales on the app store if you have videos on youtube your creator on youtube youtube takes up to 45 if you're a creator on facebook on twitter on instagram which is where most creators are

they take one hundred percent uh it's not exactly 100 like there's a very tiny little bit that flows back but it's so minute it's it's almost negligible so whereas open c which is the largest nft platform currently and there's many other ones popping up always openc takes 2.5 like which makes way more sense that's what the you know i'm not saying that marketplaces shouldn't take or these platforms shouldn't take a percentage of revenue because yeah they're providing a great service and we need them especially on the ux product side but should they be taking 30 to 100 percent um definitely not i think the the quote

that they have on here is hilarious um it's from a us congressman but it says you know there there's something profoundly wrong with our economy when big tech has a higher take rate than the mafia just to just illustrate that a little bit richie torres comparing big tech to the mafia savage this is one of my favorite um slides in their their report um and it shows you know you've got the creator economy and it shows how nfts are offering creators a whole new way to monetize directly with their face um and it points out four different uh

let's see platforms um so on facebook you've got 300 million um dollars and that's divided throughout what 2.9 billion users so an average of 10 cents per user um youtube ten cents that's wild yeah um 15 billion dollars uh 37 million channels average of two dollars and 47 cents per channel um spotify this one's crazy too seven billion dollars um got 11 million artists and only 636 dollars uh per artist oh my god which is yeah i don't know that was my mind for some reason um but then you got nfts um

and with 20 just a little over 22 000 creators average uh you know take-home rate for them is 174 000 dollars per creator and huge difference huge yeah like this is i i agree this is the biggest one for me one of the biggest takeaways of this entire report is that nfts offer creators a way to monetize and actually create a living with with well creating their their art their content whatever you are creating you know so if you're a creator oh my gosh you need to be getting into web3 you need to be using

it you need to be learning it again um another big part of what web3 academy is all about is onboarding creators to use web3 in order to create um a consistent stream of revenue because it's totally possible right you know if you're on spotify youtube or facebook as a creator you're making somewhere an average user is making somewhere between 10 cents to 600 a year that's not what it's a [ __ ] joke like whereas if you made an if you the average nft last year 174 000 per creator now obviously when you talk about entities there's some massive nft projects that will pull that average up

right but i think that the writing is on the wall here these old platforms are not not doing it for the creators and the creators need the value because as jeremy said earlier today if we're gonna wag me if we're gonna all make it we gotta take care of our creators we have to have value and money flowing to them yeah and it's about time too because you've always heard the like the starving artist you know they're doing something they love they're providing a ton of value to the world but there's there haven't been a lot of ways for them to to monetize that and so it's it's hard for some people to make sense of doing that but now that this is available uh i'm excited because i think it will just allow people to follow their passions a

little bit more and be more creative and spend the time you know that is required to create something amazing and just spend that time creating yeah yeah and i think there's so much talk when we talk about nfts again it's the same thing with crypto like so much talk around price and um investment right like should i buy an nft what does that look like right but more so what i think we need to focus on is nfts is like using nfts as a business model and as a way to change how we interact with our fans and how money flows between fans to creators and that's the focus

that we should be talking more about yeah and i'm not sure i think it might be further down in the report but i've just written it down earlier um so just based off of royalties on openc alone i think the about almost 4 billion dollars have been paid out to creators just from secondary sales on openc wow that's unheard of right like that's going to continually make money off of yes something that you create that's so cool very good point yeah very good point uh let's skip this um let's get into web3 gaming uh if if you if you haven't i mean if you haven't listened to our podcast which we actually just released a few days ago uh where we interviewed alex cooper from

footprint analytics and talked all about web3 gaming web 3 gaming is the next big thing in crypto and web3 for sure like this is going to absolutely explode in the next i don't know a year or few years and it's going to onboard i believe it's going to onboard the most people to crypto and web 3 more than anything else because there's 3 billion gamers in the world and there's only 7 million web 3 gamers right now so we got a long way to go um but yeah it's uh yeah i just get so excited and so fired up talking about web through gaming or game fight it's often referred to yes

and i think gaming's always been huge but i feel like it's really blown up the past couple years with uh you know e-gaming you got the whole you know sports leagues and twitch where people are streaming and they're they're yeah it's a it's a really cool community and this this page is really interesting because um this this is a page that compares the video game industry to the music industry and how the video game industry saw massive growth as a result of tech and tech innovation and internet growth over the last 30 years whereas the music industry actually decreased so the the video game

industry went from this is uh what's the date here this was like uh in 1980 so went from about 20 billion in 1980 to 110 billion that's the video game industry over the last uh since 1980s the last 40 years whereas the music industry in 1980 was let's say 35 billion it grew through the 90s to about 40 billion and then it dropped to now in 2020 it's about 20 billion so like that's kind of that doesn't really make any sense to me right like music is is just as big as as video gaming i

think you might actually argue it's bigger you know three billion people play video games but i would say every single human on earth listens to music right so dna yeah so what happened here is and this is just really interesting to look at like how technology impacts an industry right video games when the internet came along they embraced the technology and as a result of that new business models were created uh virtual goods were created it led to complementary behaviors like streaming right like twitch what that did for video gaming youtube you know there's a huge i think the largest

creator or the largest channel on youtube is a gamer it's a kid who plays games and publishes himself playing games and other people watch him play games um which is bonkers to probably meet jeremy because we would never do that but a huge part of a lot of uh a lot of people's lives they love gaming and the best way to learn about gaming i mean i love sports so i watch live sports if i loved gaming in the same way that i love sports why wouldn't i watch gaming right um so so video gaming embraced technology they braced the internet boom huge growth right um 20 billion to 120 billion uh music didn't embrace they spent the last 40 40 years responding with

lawsuits and pushing back against innovation and what did that do it led to a decrease in the size of their industry so i think video gaming and web3 is going to be the first thing or the biggest thing i think now because it's already got that culture it's youthful it's young and it's going to bring on the next billion people to web3 but music clearly has an opportunity if music embraces web 3 to and i think they are and i think it's happening to also have huge growth this this next slide is awesome i didn't realize these numbers were as big as they are but uh

so it shows that 20 of nft sales volume in 2021 came from gaming related assets um then you've got 49 of crypto wallet activity comes from games so half um yeah and then 50 plus percent um or no 50 was to say live web games with more than so there's 50 live web 3 games with more than a thousand unique on-chain users and that's still just so small yeah the thing that the stat that blows my mind here is that 50 of crypto wallet activity comes from games right now like today and and gaming is so the game by uh web 3 gaming is so small and it's already 50

percent right so um yeah wow that's insane yeah because you right now you just hear nfts all over the place but 50 of it is coming from from games yeah yeah yeah this next slide talks about uh the metaverse and how interest in the metaverse has exploded with land sales totaling nearly two billion dollars um in total like total volume uh over the course of of all history um since metaverse lands were sold uh which again i think just shows i'm a little bit skeptical on whether we should be buying and selling land in the metaverse i'm still not sold

that that makes sense when um there's a reason we buy land in the real world because land is scarce in the real world right there's a scarcity to it so um property ownership makes sense uh but in the metaverse there's no you can it's it's in indefinite right there can be unlimited land so i'm still not sure about buying and selling land but i think that the point that this makes is like really when we talk about the metaverse we're talking a lot about these games about video games and this idea of rather than it being a web 2 video game it being a web 3 video game just kind of

the metaverse is the word used to describe that often and so if there's already two billion sales in land it just shows there's a lot of interest in the metaverse and in the creation of video games which allow ownership right and land is one of the things you could own in a game what's crazy is the top seller is other side and that just recently came out in the past what month month or so but it has already done double um what the next one is the sandbox and the central and we got there three quarters of a billion dollars um in just a couple of months or a month wild

dows dows dows that's exciting this is so exciting because i think that uh to me this is one of the big unlocks of web 3 is the ability to coordinate human effort in a new way right like there's there's a big issue when our current way to coordinate human effort is through um the current company structures that we have like the llc uh department partnerships um that's the only way to con to currently create human effort and so and what this slide talks about is how what does that do it means that um you have a hierarchy hierarchical

organization it's usually not transparent it's invite only and it's not global you can't take advantage of global resources whereas in comparison to a dow a dao is grassroots it's fully transparent it's open and it's fully global now we're we actually have quite a few podcasts coming up spotlight podcasts with uh different uh people who have spent a lot of times in dows and we're going to talk a lot about um the uh the positives of taos and the struggles that they are having at uh building these decentralized organizations and teams because as you can imagine there's a lot of challenges around creating a decentralized team right how

do you make decisions uh how do you create pace who is who's the visionary right but these this concept of dows makes so much sense to me um the best uh the best example i heard recently of what is a dao was using alcoholics anonymous a a as an example of a dao because basically alcohol synonymous is a completely decentralized organization there is no centralized company that runs it it's a essentially what alcoholics anonymous is is a protocol that somebody created it's a 12-step

system it's actually the protocol that it is and that system is used by community groups all around the world to help people overcome addiction addiction alcohol uh and what that has led to is really one of the largest decentralized organizations in the world that impacts has huge impacts and creates change and so um that's you know the current world use of dow's but i think that you can think about how that could grow and you know really become have a huge impact on the world yeah

i i love that example of um alcoholics anonymous and that's just a great great great example um this next slide uh shows that taos have accumulated more than 10 billion dollars in treasury assets under management and it looks like most of that growth happened in august of last year and it's just been kind of slightly going up since then um but yeah july july of 2021 um we were at was that probably maybe maybe a billion and then by the end of the year hopped up to probably 212 billion there um and now i was kind of sitting at around 10.

yeah and i think the the real takeaway here for our listeners is get involved in the dow that would be my my takeaway uh if you don't know how to get involved in a dow if you're not sure what the steps are uh it is like anything can be confusing and intimidating uh shoot us a message hop into our discord happy to help you figure out what dows are available how to get involved with them because that's the best way to learn right is to start joining these dows because you'll learn so much by being involved with them and this is really i think one of the big areas where there's big opportunity now there is some struggles and some challenges um one thing that daos struggle with is

figuring out how to compensate their team members because right now compensation and a doubt often happens through their native token and if you get compensated in a native token then you rely then you have to be able to go to a market and sell that native token into your fiat currency in order to pay yourself and live your life and that is a little bit of a challenging step that happens right now um and your the native toki these tokens often fluctuate greatly or maybe there isn't enough liquidity in the market uh so there's some challenges there but i think the great thing about a dow is this doesn't need to be a full-time job for you right like you could get involved in a dow spend a few

hours a week even just get involved in the down and give them a few hours and just see and learn that would be my my recommendation love that um so is this slide right here showing the decisions made um within daos yeah isn't this interesting i i was i was like where did they get this data from i know so it looks like um within daos uh yes there's a new bottom way bottom-up way for groups to make decisions and it shows 56 000 decisions have been made i guess within a dao 3.4 million total votes have taken place and 657 000 active voters um and proposal makers are um within these dow

so those are those are really cool numbers i didn't realize there were there were that many yeah yeah fascinating this all comes from i see the source here is deep dow dot io uh which is a i guess a data company that pulls dow data and the reason you can do this because a lot of this data is on the blockchain right so but yeah i mean you nailed it like wow isn't this isn't this so cool to see like imagine being part of an organization um where you can vote on the decisions as opposed to just oh my company well my bosses make all the decisions so i have no ability to impact anything right um that's you know what what a flip in hierarchy in in

governance and an opportunity and really it's going to lead to better products in my mind oh for sure yeah um so that is that's the that's the report yeah yes we got some closing thoughts here let's uh let's pick out a couple of these that are worth sharing um they got a slide about crypto making real world impact uh and they have five examples of five different um web3 companies uh it's really interesting to me that they use the word crypto um versus web3 and jeremy are talking and i were talking about this before the podcast is just how crypto is still the uh um the most well-known

label for this industry and this technology and this innovation um whereas web3 is still not so well known yet so it's funny to me that they called this the state of crypto report as opposed to the state of web 3 report because really this is more the state of web3 but crypto's still the branded term anyways um real world impact uh i just wanted to call out they listed helium on here um so uh helium is a telecom industry the reason i wanna call those we had helium on the podcast uh about a month ago and basically the telecom industry currently controls um it's controlled by monopolies right there's these monopolies they control the telecom

industry now telecom is really not something that should be controlled by monopolies this is communication right this is how we communicate around the world um and so helium wants to change that so helium is building towards a future where network coverage becomes a commodity fueled by competition available anywhere in the world at a fraction of current costs so basically what you can do with helium is anybody can become a member of helium and you basically you buy a unit that you put in your house that connects to your um your sorry that you put in your house and that gives out uh a signal for um others to connect to so what they're doing is

in big cities if enough people have these units then they can create um wi-fi networks for you to connect to now they're not focused right now on wi-fi and i don't really need to get into these weeds anyways point is um telecom will be decentralized in the future because of somebody like helium very cool and you know interested to see what other industries get you know just massively transformed by yeah by this this uh this is a cool chart right here it shows the number of internet users versus ethereum addresses um and so right now in the end of 2021 2022 says that we've got an estimated 7

to 50 million um ethereum users where what does this internet say internet had probably about the same after after it's like this is we're looking at about six years in right so internet was created in in the early 90s after six years of the internet it was about the same size as web 3 is after six years of web three right uh and if you look at this if we follow the same trajectory as the internet which it is very likely we will in every all you know smart people experts believe it will follow the same trajectory

that means we would be at 1 billion users by 2030. crazy so what's the takeaway here it is so freaking early maybe that's what you know what maybe the one word of the day really been early that's what it should have been but build but like it's early it is so early there's so many so many times that i've heard people say like i'm late to the party no oh like i didn't get into crypto early enough yo we are a victim of that like all the time i i'll get fomo for different things i'm like oh i should have done you know put more into this or more into this or i wish i got in earlier but then

i'll look at something like this and be like wow we're we are extremely early there's still so much time before you know it's going to kind of really take off and onboard the billion users mm-hmm yeah yeah yeah it's it's a really good reminder it's really like we are so early so if you're here you're in the right place and you are early to the party and the the truth of the matter is if you're early to something especially something about like web 3 where value flows towards the users you don't even necessarily need to like i think a lot of people come into web 3 and they're like oh my gosh i have to like know exactly you know which which dows i should join or where

i should put my money or what i should invest in uh or um you know which d5 protocols i should look into or like which nft projects i should buy but if you're early it doesn't matter what you do you'll ride the wave the whole way no matter what just by being here you will reap a lot of benefit yeah just participating and engaging with all the different communities and yeah okay so some some closing thoughts they give what's next um i think there's never five main thoughts

of what's next so just run through them really quickly first web3 infrastructure will continue to improve so there will be a growth of layer ones and layer twos and really a focus on um improving the environmental impact because a lot of people talk about the environmental impact of the current blockchain technology to be a focus on that and there'll be a focus on reducing transaction costs while keeping security high so that's one thing that's going to be happening i think another big thing in general you and i both believe is huge is there's going to be more creators embracing nfts i mean if you just listen to this podcast and you're a creator and you're not embracing nfts you're probably seeing there being like whoa what uh

spotify artists made 600 600 on average whereas an nft creator made a hundred and fifty thousand like see you later spotify there'd be a lot of creators embracing nfts um third thing is uh game fi web 3 gaming is going to explode um i heard recently that there is 1 000 games currently web 3 games currently in production that aim to launch within the next like year i think but even some of them are launching rather soon uh and the big thing here is these are like these aren't like little a lot of the web three games right now are low quality uh because games take so much time to produce and they just haven't

had the time um so there's high quality games so just watch like um alex cooper who had on the podcast the other day predicted the game by summer he didn't predict if it's going to be this summer so we'll see if it's this summer or if it's next summer but it's uh it's coming number four the fourth thing that they talk about is that there will be a interesting flow of web3 users uh earning tokens and nfts through games and then what they're gonna look to do is okay what do you do with those tokens and nfts that you earn through games well they're going to look to use d5 protocols to [Music]

to to invest those tokens to get lending around those tokens and what does that mean that means a lot less money in the traditional finance system so you're going to see a lot of growth in d5 users as more people just have tokens and they're like oh man i made these tokens from this game what do i do with it right so d5 is really going to explode and then the last thing that they predict is that um we can expect many more experiments with dows social tokens decentralized social networks web3 media and other emerging categories so they're sort of like um bucketing it all together here you know we've seen the breakouts with d5 nft with defy we've seen the breakouts with nfts and now i

think the next big one we're all predicting is game five web 3 gaming but beyond that dao social tokens decentralized networks um you know decentralized social media um all of those things are going to be others that will break out in the coming years as well that's exciting because i was a huge gamer growing up and i would always get yelled at for spending too much time playing games and it's like now you know you'll be able to um i don't know profit from it it's going to be a it's going to be a cool time it's a the younger me would be loving to be um young right now during during this no doubt no doubt but we are young jer come on we already mine that's true bear you just got a little cup reframe um okay so

as we always do uh on our weekly roll up we highlight a um either a web 3 protocol a dow an nft or a web 3 person of the month this week it is our web 3 personal month and it probably comes as no surprise that our web 3 person of the month is not one person but it is a team it is the team of anderson horowitz uh a16 zed huge shout out for this report that you made um really gave a overview that i think we all needed uh of you know stepping back and not getting caught in the weeds and

seeing the bigger picture so thank you so much um to the whole team at anderson horowitz uh jairus got the um the team uh up up here on the website you listeners can't see this but he's scrolling through and there's just it's a big team there's a lot of people there i had no idea is this large like you know chris dixon is the name that comes to mind because he's uh such a big face and he's got a big uh following on twitter he does a lot of podcasts i know he is speaking at permissionless conference which is happening right now um so he's he's the name to come to mind but the whole team and anderson horace for putting this state of crypto report together uh and for being leaders and one thing i think we wanted to mention as well is

um if you want to learn more uh anderson horowitz also has a entire resources and content um uh production uh system or they have a page basically um they call it future uh we'll put the link in the show notes uh and basically this is incredible top quality research and content that they produce um not just around crypto uh they have a specific crypto web 3 section but they actually produce a lot of other stuff but their stuff around crypto is amazing so highly recommend you check that out yeah i think if you want to take a deeper dive into some of the stuff we talked about we'll link the the report that that they just put out and then um

yeah they've just got a ton of great content on here that i think you could get lost and go down a ton of rabbit holes and really just learn a lot they do a do a great job of researching and producing good work there man i am feeling bullish on web3 after today this is awesome i'm fired up uh let's let's build let's let's recognize that we're early man there's so much happening um a couple of of shills for web3 academy uh if you are not in our discord uh please please come join our discord um we have now token gator discord uh it's free to join we

just ask that you apply because we're focused on quality over quantity we want to make a discord that is a bunch of web 3 doers that are actually doing and actually building in a place where you can meet and connect with other doers and learn how to onboard onto web three um if you are a developer trying to find a job in web3 if you are a non-tech trying to find a job one three and you don't know how uh please reach out we'd love to help you figure out how to take steps to onboard onto web3 and to feel comfortable applying for a web 3 job i know that there's a lot to learn and so we want to be part of that process so there's anything we can do to help you if there's a resource you want made if there's a podcast you want us to

to shoot and to film and it's something specific you want us to talk about we will do that for you i'm also available to get on a one-on-one call um so really do not hesitate to reach out also i just want to ask um this was a bit of a unique show today we've never done this where we focused on one report this was unique because this report was just so fresh just came out yesterday and uh it also is so uh so such a great overview of the space and really lays it out in a way that we got excited about but did you like it let us know what you think about this show today if you liked it and you think that we should do more shows like this maybe in the future we'll

find more reports and do shows where we just highlight a report and do a walkthrough of the report uh we'd love to hear from you guys feedback is so helpful for us absolutely i thought it was cool to kind of dive deeper into some of this stuff yeah yeah let's uh let's get some chats going on the discord as well um have a wonderful weekend everybody hug a loved one practice gratitude uh and uh keep smiling out there we love you guys love you thank you for listening to web3 academy we hope this helps you along your web3 journey if it does please share this episode and subscribe so you don't miss the next one by the way if

you have yet to join the discord community you are missing out this is where all the magic happens this is where we learn where we ask questions where we network uh you want to be in there the link to join is in the description below and finally a quick disclaimer nothing in this podcast was financial advice crypto and web3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility and implementation anyway so you should not take any of this as financial advice thank you friends and see you in the next one