Crypto Megan Podcast | The Future of Capital: How Web3 Makes Us All Investors | Yat Siu

My name is Megan Nielsen, a.k.a. Crypto Megan, coming to you from our studio in New York for season 3 on Draper TV. And I am so excited to have Yat Siu on again, the co-founder and chairman of Animoca Brands, one of our favorite guests. Just so happy to have you here in New York where all the magic is happening, right?

Thank you so much for having me again. It's always great talking to you. And yes, I mean, I would say that New York is definitely becoming the crypto capital of America, if not the world.

Oh yeah, at least that's what the mayor is saying. I know we were both at the Gracie Mansion Yesterday, and Mayor Adams was making some bold statements, which I absolutely love to see. It feels like this reinvigoration of innovation here in the U.S. It was very cool because you know it's like a new wave of people coming back and not being afraid to build here again, which we'll touch on later. Some certain articles about Animoca that have come up, but what is your sentiment right now? I mean, Bitcoin just hit a new all-time high today.

Yep.

Yeah, over $109,400 plus.

No, I mean, first of all, great for the industry. It sort of, a lot of people had hoped that this moment would happen a little sooner. You know, I think we had a rocky Q1, but it's great to see Bitcoin at all-time highs. But also it's good to see the energy. I mean, yesterday at the event, you could see it. To me, it felt a little bit like the sort of energy that we would see in things like Consensus or Token2049, but transplanted literally on sort of, you know, the mayor's home or something like that, right? So that's kind of, that was, that was kind of interesting. But the other thing is that America has always been typically a leader in disruptive innovation. If there's one thing that America has been good at, it's this whole cycle of innovation, creative destruction, recreation. It's one of the few places that can do that in a cyclical manner. And it was disallowed to do that in crypto for a long time. And in some ways, I would argue that because of it, the US has sort of fallen behind a little bit. But is now accelerating in a really big way. And I was just commenting about that to a few people, and they sort of agree with this, is that just think about it, right? In almost any, certainly in technology, but probably in any industry in the technological IP space, America is typically a leader or at least on par with global companies, whether they're in China or somewhere else, for instance. But when it comes to crypto, they're actually somewhat behind for the time being, which of course will change. Like, never bet against the US.

Oh, yeah, that's true.

Right. So we wouldn't bet against that. For example, when you look at a company, like, from an exchange standpoint, Coinbase is great, but the biggest exchanges are not American, right? I mean, just think about it for the night. It's like, whereas New York Stock Exchange and NASDAQ on the sort of TradFi side, or derivatives or ETFs, America is by far the biggest.

The biggest capital market in the world.

In the world. Exactly. And so why is it not for crypto? Obviously because of the previous regulatory framework. And then likewise, when you think about our space, which is like in blockchain gaming, NFTs, and culture and entertainment, because as a public company, we have to announce our results. And I think a lot of people, especially in the US, are surprised when they see our revenue size, which is like $300 million, close to $100 million EBIT, sitting on $4 billion of assets. They're like, what?

That's impressive.

How is that possible? Because they can't imagine that in the US. And as a result, we don't really have a peer in the US yet. Again, I expect it, but This is not normal in a normal context, right? If it's AI, social media, mapping technology, you name it, America is up there. So we think it's a unique situation, which is also one of the reasons that we want to spend so much time here, help build the ecosystem. We do have a lot of investments in the US. We just didn't want to talk about it before much. And I think it's our time to come here. And I think New York is the perfect place to do it, which is why I've been here already 5 or 6 times just this year alone.

Wow. And I know that that wasn't the case previously. In fact, I haven't seen you much in the US at all.

In fact, we stayed away from the US. It just didn't make sense. And we focused really, a lot of us about to focus on Asia. I mean, Asia is our core market, right? But when you think about it, Asia also advanced in crypto much, much more than the West. And I think it's almost inconceivable to think that America is a growth market in the technology area. Normally it's the other way around. If you're mature in the technology in America and you sell it to the world. And here it's almost basically the other way around.

Yeah, that's really interesting to kind of flip that around. And so then let's go back because I haven't talked to you since the shift in the administration, right? The last time we talked. And it's funny that you say that because actually Anthony Scaramucci, who was on the podcast last April, he said that too. He said, like, the US is at heart, like, innovative and a risk-taking culture, right? And it always goes there sooner or later. And I like what you said about it being cyclical because it is, and it always comes back sooner or later.

It does.

So he said, never bet against the US just like you. And it felt like at that time, just dire circumstances. We had Gary Gensler raining down on everybody from the SEC, and it just was not pretty. Everyone was going offshore. And now Trump won, right? And I remember you saying on a previous podcast that your hypothesis was that Kamala would win because it was a Swiftie world we were living in.

Yeah, we, I thought she had the youth vote.

Yeah, right. Yeah. So, so you thought that maybe that would influence things and that they would go with her. So what was your takeaway after you saw that that was that Trump ended up winning?

So first, I mean, for our industry and broadly speaking, I think for capitalism at least, and as many people know, I am a pro-capitalist being in Web3. Obviously, Trump winning is definitely better in that regard. And just to be clear, it wasn't that I was taking sides. I was just observing on the fact that I think young people were more likely to vote for basically who Taylor Swift would endorse and generally celebrities.

It made sense to me when you said it.

I thought that's really a logical approach.

It made sense.

But what actually happened, though, was that Kamala didn't win the youth vote. She won the female youth vote. And specifically, she did win the votes of a lot of women, particularly in coastal cities, but she did not win the young male vote.

Right.

And that's actually interesting. And it occurred to me that we are dealing with a different macrodemographic issue, which I didn't really think about that before, which is the fact that young men are feeling disenfranchised as well. In some ways, you could say the Trump vote is a vote on hope and opportunity. But hope and opportunity means different things to different people. Like, from our perspective, it's like hoping that the crypto industry will do better and that it will be more pro-capitalist and entrepreneurs. And many investors and VCs, particularly in California, who are very, very blue typically, decided to vote red specifically because they were afraid of the fact that another administration would be very anti-capitalist and anti-growth and anti-entrepreneurship. So that made a lot of sense. But what I did not expect was that the young male vote was expecting for a different type of hope. And their hope was the fact that they wanted to feel more heard and they wanted to have maybe more classical relationships. They were disenfranchised as well. And it comes from some of the data points. For instance, young women are more likely to graduate from universities than young men. starting to make more money than men, for example. Right. And so you have this situation where, and then you hear these other stories where, and again, I'm not going to comment on the veracity of it all, but then you have people like Elon Musk that apparently have children with 15 different women and growing. And there's a general sort of thing about people with wealth and power basically having all sorts of relationships if they wanted to.

Right.

And then you have a lot of men, particularly young men, who have none at all. And it's not because of a population issue. It's a fact that women are looking for men that have, I guess, certain type of profiles that they no longer fit. And you can see this, by the way, even on TikTok and other shows as well, where sort of people go like— and again, I don't think it's entirely true, but it's like women want someone who's very wealthy, good looking, six packs. I mean, all that type of stuff.

Right.

Again, some of it's embellished, just to be clear. But it's this sort of impression. And the reason why it catches fire is that men feel like they're being excluded. And so who was the president that represented some kind of traditional values, that presented sort of this idea that we're going to set back things the way a little bit as it was?

Right.

While women felt that women's rights were being trampled on in a way, many of them, for men, it was sort of— young men, it was like their hope and opportunity of, we'll set things right. to benefit sort of our environment and our structure. And I think Scott Galloway speaks about that a lot, right? He sort of made this comment around how young men were disenfranchised and Trump represented that hope vote for them. So if they were able to appeal to them, maybe, but it wasn't, right?

Was not the case.

It wasn't the case. And Taylor Swift is very much female empowerment as well, which probably sort of was not really appealing to that particular vote. And 4 to 8 years ago, that would've been entirely different, right?

Oh, wait, we're in a different time then.

We're in a different time, right? And I think probably the woke culture as well, the whole DEI thing. And again, I'm all for diversity, but I think if you go extreme, that's when it becomes really, really problematic. It just swings the other way. Yeah, it just went too far the other way. I remember having a, and no judgment per se, but just the fact that maybe because I also wasn't American, I got away with it in a way. We're talking about design interfaces with someone who was handling UX/UI in the US with someone at Apple.

Oh, that's interesting.

Right. And we talked about interfaces, and then this is fine and helping. They gave some comments around how we should think about some of the UX designs. And then I made this faux pas where I said, well, we have a white and we have a black interface. And that was a mistake. I should have said dark. Right. And the context of that was that I can't say that. Now, coming from Asia, we just don't think about it.

It's just not a thing that you think about.

It's just a color, right?

I would say in a lot of cultures, it's not a thing that you think about.

It's not a thing, right? But it was definitely a thing here in America. And I wasn't offended or anything. I was just like, oh, okay, fine.

It is what it is.

I just took it as a cultural context, kind of like how in Japan, maybe you bow instead of shaking your hand, right? I didn't think of it as anything beyond that. But later on when I shared the story, particularly to people here in the US, they were like, oh, this is ridiculous. What's going on here? Can't we even just talk about colors in a— 'cause obviously I wasn't talking about race.

Well, yeah.

I was making a context of—

The pendulum thing, it swung so far out.

It flung so far the other way. So I think that's also part of that.

Oh yeah.

But anyway, I think at least for the crypto industry and for business, it mostly turned out positively for the time being. But let's see, because the one thing that Trump is for sure, he's unpredictable. Right. And I think a lot of people felt when the Trump coin came out and Melania afterwards, I think a lot of people in our industry felt somewhat disheartened as a result as well. Right.

In our industry. Yet I talked to a lot of, well, normie people. I don't know how normies who said, oh, that's cool, Trump is in crypto. And so it was kind of like everyone within crypto is like, it depends which side you're talking to. But yes, just as like, oh, a meme coin. repercussions for us in the space because of that, not necessarily because of who he is. And then outside, they were like, oh, cool, Trump's in crypto.

But I would say the one thing that I do worry about, and by the way, you see this in other places around the world, it's not just an American phenomenon, is that I think, what was the statistic? Something like the probability of, I think it was only 3% of Democrat women would date a Republican man, something like that, right? It was a really radical percentage. isn't very good either because it does mean that politics actually fracture society, which before you could have a happy debate about it, you could disagree. And then afterwards, in a way, the election in the past, how it works with presidencies in the past in America is you disagree and then you commit. You're like, okay, fine, you're the president.

You become friends because he's your president.

Exactly. We're all rallying around the president. We may disagree, but we're committing to America.

Right.

And now it doesn't feel that way, right? You're like, I don't, you know, you're not my president, even though you're American, right?

Right, which seems strange.

It seems strange, right? And likewise, the other way around too, right? And so I think that, I think to me is more dangerous because at heart, right, you know, there is sort of this element of—

It's polarization.

Yeah, and it's polarization. And there is a sense of, I think it's important to, you know, be a patriot to your whatever country you wanna be a patriot to. And that means you set aside your differences and come together because at the end of the day, you do all want the same thing.

100%. And that's why actually we got stopped in Times Square today by CNN. And I'm like, you probably got the wrong people because we're super into crypto and therefore we're happy about what's happening here. You know what I mean? I'm thinking this in my head. Um, and then we'll touch on what this means for, you know, the nation and stuff. You did say Trump is unpredictable, which is, I mean, absolutely true. There's been a lot of rattling shakeups with the tariffs and that, which I essentially think Will just become noise as a negotiation tool. Yeah.

I mean, Trump understands whether he does it as a strategy or he's intuitive around it, he understands attention. And so he draws attention and he wields attention as a form of power. And his administration and the team around him understand that very well. So when you create this type of sort of shock therapy with tariffs, You draw attention and you wield power. The outcome, however, when you wield power isn't always predictable. It's kind of like when you throw a hammer at something, but in a somewhat sort of uncontrollable way, you're trying to, you know, there's a nail, but you just slam it.

Right.

You might break a few things alongside that you might not intend to break. And that's exactly what happened. But you certainly shocked the system.

Okay.

And that's exactly what he did. Which also means that, tariffs the second time around won't work anymore, meaning that from an unpredictability standpoint, there's going to be the notion of, okay, I need to make an impact or I need to be heard. What is he going to do? It probably won't be more tariffs because if—

It doesn't have the same shock.

No, it doesn't have the same. Everyone expects it. Okay, we made peace with China. If they suddenly come and say, oh, back to 140% taxes and tariffs on China, I think the whole world would just go like, okay, fine, again, right? Like, there's going to be sort of this sense of—

It's not going to impact the market in any which way.

And this is, by the way, how we cope as humans, right? It's very interesting to see from an attention standpoint, where if there's, you know, like, if you live, like, for instance, if you live in Israel, or, you know, and you're used to this idea that there could be a bomb or something happening, people adjust to it. Like, it's kind of normal, right? Or for instance, like, when you live in Japan, people live very normally in Japan. But they also live with the fact that there could be an earthquake anytime, and there could be a tsunami. And you know all these predictions about what's going on in Japan, which will happen between now and the next 150 years. In other places around the world, you might go, oh my goodness, I could die tomorrow. I shouldn't do this. It's shocking. But for people living in those areas, it's like, it's normal. Or apparently, I mean, there's all sorts of people living in Ukraine. They're not leaving Kyiv. They're just like, yeah, life goes on.

I always find that fascinating as well. Like, wow, you're not Shaken up about this.

Exactly. And maybe they were shaken up in the beginning. And again, the shock of the missile or the potential death or the rockets is no longer shocking.

Which seems— wow.

Yeah. And I think this just says something about human resilience in history. As humans, we have always been resilient. There's something that happens, we get shocked, and then we adjust, and then it becomes the new normal. And I think that's why we should always expect something new from Trump, because he tries to shock us, get attention, yield and wield power, and then that old stuff doesn't work anymore. So let's try something new.

Wow. I like these analogies that are happening here, and I like that you always have incredible outlooks on things and takeaways from them. So, like, what do you think will be Trump's next thing? Now that we're on the topic.

The fact that he will try to shock us is a given. How he shocks us, I don't know.

The only thing I think about that is that at the heart, the thing that he cares about are the markets, right? Like, really the state of the economy.

Yes. I think, again, I'm not a psychoanalyst here. I don't really know Trump, but I do think that Trump cares about his legacy. And I do think that Trump does want people to love him. And I think regardless of that, there's one thing that as humans we all want is love and attention of some sort, maybe not from the masses, but from the right people. Introverts might just desire the love of a small group of people, but very sort of intimate.

Their group.

Extroverts might desire the love of a large group of people, for instance. It all depends what character you are. But we are social creatures for a reason. So our sense of belonging comes from that. The biggest penalties that we have in life is when we go to jail, which means we're excluded from society, right? So we are social creatures by definition.

Right.

And so I would say that the actions that he wants to do, like, to me, making the markets good, is a reflection of 2 things for Trump. One is obviously he wants to be remembered to having this incredible legacy of success. The outcome and result of it is that he's loved for it. And I think that's why a lot of people were hopeful with Trump because they think of him as a peacetime, sort of a peace-loving president, because he wouldn't want to be remembered for someone who created war and destruction, for example. And certainly that's a narrative I've heard. Again, I don't know him.

I would agree with that.

Yeah. And I certainly hope for that. But I think that's what he seeks for. So improving the markets is not just about improving the markets because he's a businessman and understands it, but I think it's also how he thinks and believes that he will be remembered and loved for.

Very cool. I really like that. And I hope that that's true, right? Because that would be a good outcome for everybody.

Sure.

Speaking of it being a better atmosphere here now and going back to it, for the first time in this industry, we have tailwinds, right? We have momentum behind us and we have incredible momentum, a light-touch regulation, like it says in the article. And so that's really exciting. So when CNN approached us, it was like they really wanted to get an answer out of us because they— he said he was from Sweden, my husband, and stuff. So like, oh, so I guess you'll see that New York is kind of empty. Tourism is going down. Like, did people judge you for coming over here to the US? Like, are they kind of like not wanting to, you know, like back in the day when you, when you were an American, you go to Europe and say like, I think it was Bush times or polemic time. And I was like, no, I don't. And I don't want to stay here and speak badly about, you know, my country and the way things are going now. You know, I'm like, actually. We're in the crypto industry, and for the first time, we feel like we have a home here. And so actually, overseas people are coming back.

I mean, the other thing is that if maybe, maybe, I mean, they say in the office statistics that a lot of Europeans aren't coming to America, and that may be true, but New York is as congested as ever. I was late from the time I thought I got here because there's tons of cars out there. So if there's no tourists and no people here, I certainly ain't seeing it. No, me neither.

The hotels were all fully booked.

I mean, even the hotels. Exactly.

So when you said that, I was like, didn't want to get into it, but I'm like, man, I'm not going there.

I'm not going there. Exactly. And again, just because one thing is true doesn't mean that it's a causal thing. And it's a typical thing where people often, outside of sort of wanting to sort of prove a certain point true or not, that people often think of themselves as more important than things really are. So in other words, if If a certain nation of people say, I'm not going to go there, good for you. But is that really— does it really have an impact? Well, you believe so, because in your circle, that matters.

That's the only input.

Yeah, exactly. But for the rest of the world, that's not true. And it's the attitude that a lot of people had, for instance, in China as well, when people were demonizing China, right? And saying, oh, you know, people aren't visiting, tourism is down, whatever. But, you know, like, the actual export economy for China, for instance, is single-digit percentage of the GDP. Tourism and travel within China is massive. The domestic economy is booming, for instance. It doesn't really need— I mean, of course, export is good, but it doesn't really need the export business as much as other people like to say, because it comes from a perspective of, you need us, when that's not really that true anymore. Of course you want global trade, and it comes from a perspective of, because I'm important and my world is more important than yours. without actually sort of reflecting on the fact that maybe the world has changed, right?

Right. But then reflecting on the macro factors, it made me think about the fact that they're out there in Times Square sort of cherry-picking people to try to like continue that narrative. And I guess that's just how politics are. And, you know, but it just seemed like the fractionalization, like you said, like we should try to come together as a society and build it up again, right? That's just like what my hope is, at least now with our industry being able to thrive again and innovation for the time being.

I think if there's one thing that is unifying, ideally, is that if you can have an area where prosperity is more shared, then I think you can create more happiness out of that, which is typically rising middle class generally means a more happier society. And I think definitely if you look at the last 20, 30 years, that hasn't been the case. The middle class has been squeezed out in most countries.

Right.

Wealth inequality is rising over time. And this is certainly true in some places in Asia as well. And that breeds unhappiness and that breeds polarization. And then you're looking for things to demonize as a result as well. And it's very easy to demonize people that appear to be successful or have money because it seems unfair. And I think one of the big strengths of America is that you've made money, you've achieved something, and That's commendable, and I want to do the same thing. And among certain circles, that is beginning to die. But that has a lot to do with the way that America has been unnecessarily extractive in the way they do business as well, particularly with the big tech giants and big tech companies.

Right.

And I think crypto and blockchain and Web3 will change, is already changing that. Because just think about how wealth and money is broadly shared across the ecosystem. One of the things that I really do love about our space, sure, there's funny stuff with meme coins and so on, but at the end of the day, we're more than willing to put the money that we made in crypto back into crypto.

Yeah.

Right. Everyone in the industry plows it back in, makes investments, supports companies, builds projects, buys shitcoins, like all sorts of stuff. Right. But they're back in the ecosystem, which is not actually what happens in Web2. So we ourselves are prolific investors. We have over 573 portfolio companies, but we're not alone. Right. So many other companies are redeploying back into the ecosystem. And then you look at the giants of Web2, the biggest companies in the world, Apple, Microsoft, Facebook, even Google. What seed early stage investments do they do?

Right.

Almost none.

Yeah, that's true.

And yet those are the guys that are depending on them to build on them, and yet they're not putting any money back into it. The top 10 companies in the world have roughly $1 trillion of cash.

Wow.

$1 trillion. That's basically not productive capital, except getting interest in these kind of rates. Now, imagine if you took like a single-digit percentage and you created a seed ecosystem fund. We're talking about tens of billions of dollars. That's like a rounding error for those countries, really. I mean, that's insane to think about it, but it's a rounding error. But it would do so much for those ecosystems. When the judgment came against Apple because of the Epic case, where Epic basically had to force open the payment rails, which is great for crypto, by the way, because we launched a game on the Apple Store, one of our existing games, and basically made it possible to use Tower tokens, which is a crypto token for the game. It was an experiment and it was approved, which is great news, right?

Right.

And that's fantastic. But when that judgment happened, who came to Apple's defense? Crickets, right? Nobody said, oh, Apple, Epic, pay your 30%, or no, like nobody, nobody came to Apple's defense. Now imagine, because we think of it as like a tax rate.

Right.

Imagine, right, your husband's Swedish, right? Imagine if someone got away from paying his taxes in Sweden. What do you think the people in Sweden would say? But they'd be like up in arms and say, that's not fair, whatever. Like, you need to all pay your taxes because you know that at least the taxes go back into contributing into society, whether it's building schools, creating infrastructure, opportunity. And for Apple, because they only take, right?

It's extractive.

It's extractive. They sell you iPhone, they don't give you anything back for it.

And you are the product.

And you're the product. Exactly. I'm an app developer. You take 30% from me. You're not investing in me. You're not helping me grow. I don't get distribution anymore.

It's like a mafia.

Yeah, pretty much. It's a cartel. What happens is that people just don't like that. And so there's no support, there's no love. If Apple had an ecosystem fund, they would actually get a lot more support because people realize that, okay, I pay my 30%, but a portion of that money goes into building a better ecosystem, new apps, new products that others are building, new opportunities for young people. You would accept that as a form of I guess, social tax that comes with it because you want to build a good community. The point being is that that's not in the DNA of those companies, and that needs to change. And I think it's one of the reasons why society in the West in particular is becoming, in certain circles, sort of more anti-capitalist, because the capitalists are being extractive and not contributing back. Whereas in Web3, we're ultimately reinvesting back in the ecosystem. And also everyone is a stakeholder, right? Everyone owns a share in the network. If Bitcoin goes up, everyone wins in this space, right? It's not just a select few.

Oh, I love that. I know we've delved a little bit deeper into that topic on other podcasts, and that's just like the North Star, one of the North Stars of Web3, that true ownership, but that everybody can rise together and have access and really can access those tools in a way that you never could before.

It democratizes access to the type of sort of capital assets that you never could before.

Yeah. And so like, it's not that capitalism is bad at all. It's what we've talked about before as well, the financial literacy, which is now being drawn into the equation and also data literacy. Because Brittany Kaiser is going to be on earlier. And, you know, she was like the whistleblower for Cambridge Analytica.

That's right. That's right. Yeah.

Yeah. And she was, she gave a great analogy on one of her interviews and it was something like, you know, the Disney princesses, what type of Disney princess are you? But people were going crazy and doing it, but they really didn't know what was happening to the data on the backend. And so it's this whole new new way of understanding how data should be processed and things like that.

Data is very valuable. And the problem is that people don't understand it. And also data and the users and the social networks around them create these network effects that are really valuable and powerful, and they have no benefit in that.

Right, exactly. And so that's time to change. And I see that being implemented in— I'm on the board for Secret Network, and we're kind of like trying to help people process the data in the correct way. And also in our own RWA play with I've talked about it before with you, but our ATH vodka, now All Time High vodka, we have the rewards app. And so we want to integrate some sort of privacy. And, you know, privacy doesn't equal secrecy.

That's right.

Right. And transparency doesn't have to equal exposure. So there's so many different shifts in the way things are being done that I think are absolutely brilliant. It's fun to see, and we will go back into that. But on that note, I have to get into back to the tailwinds.

Sure.

Here in the US, I saw this mega article about Animoca, about you in particular. It was a, it was an article on you in the Financial Times, okay? And this created shockwaves. I know people were talking about it yesterday at the event. So it says here, Hong Kong crypto investor Animoca plans US listing as Trump lures more groups. And due to his light-touch approach to regulation, offers a unique moment to enter the world's biggest capital market. Wow, I saw that and I was like, that is massive. What's going on here?

So first, Animoca Brands has already stated earlier that we do plan to be a public company again. We were once a listed company in Australia, so that's certainly true. The fact that we're looking at the US is an option, that's also true, but it's not certain, right? And just to be clear, this interview that I did with the FT before wasn't so much talking about the capital markets, it was talking about US entry, right? And the commentary I made was that it would be a shame if we wouldn't enter the US market, given the fact that we think most of the growth and potential in crypto is going to come in the US in the near to midterm future. And I would say the one thing that is true is that Trump, or certainly Trump policies and perspectives on crypto, is luring a lot of companies, including ourselves, back into America. Right. So that's true. But they wordsmithed it, shall we say, in a way that suited them, where we really didn't have much to say about this. And the FT didn't come back to us and wanted to fact-check something. They didn't check on stuff. They just wrote the article. But I suppose at the end of the day, it was a broadly positive article, and it was one of the rare—

I would say so.

And it was one of the rare articles that didn't sort of put a negative light on crypto.

That's what I thought. I thought this is something positive about our space.

Exactly. So I said, we'll just take it. Whereas in, I remember, and actually I didn't contrast this, but I should. In '23, the FT wrote a feature article on us as well, and it was quite negative about the space broadly because that was the sentiment, right? Because it was post-FTX, and I think they were just looking to profile all sorts of crypto companies that must be doing bad things.

And negative news gets more attention, apparently. So it's unfortunately that way in the news.

But anyway, I'm not upset about it at all. And I've also come to accept that media will sort of represent things in the way that they may or may not have heard them. And I'll leave it at that.

Okay. No, that's interesting. I mean, it does. It's also the sign of the times, how different the different media sources are, like podcasting and X versus mainstream media.

Yeah.

Right.

But I think it's one thing to say, I mean, given everything, the fact that it was a broadly positive article from the FT.

It's huge.

I think it's a win for our industry.

Oh, I think it's a big win. I'd definitely take that. So that being said, are you considering a US listing?

As I said, we're considering all territories, and the US is certainly one that we— it would be foolish for us not to consider it seriously.

I would agree. I mean, given the conditions that we're in, it seems like it would be a massive opportunity for any company that had been offshore.

And you can see this already today. Right. But you've got a lot of companies that have announced intentions or have actually done RTOs, or I think even de-SPACs, and also listings. A lot of it's happening. And every day I think there's news around one company. I mean, Galaxy just recently sort of moved their listing. And of course, eToro as well was a very successful IPO. So all those are very positive signals. By the way, that doesn't just mean that the capital markets in the US are sort of positive. That's obviously good. It's actually a signal to the rest of the world. Right. And you can see how digital assets and crypto companies around the world, whether it's Japan or Hong Kong or even France and in Europe, when they start uttering the word crypto, their stock price pops. So there's a little bit of, it's fashionable right now, but there is something fundamental there. And I think that's good news.

Yeah, I think you're right in that it's fashionable, but there's also a fundamental shift to back it.

That's right.

Whereas before it might have just been fashionable, but there was no really big fundamental change.

Correct.

So that being said, it's a huge impact on our space in the market. And as we're getting toward the end, then I want to know, what is next for Animoca? What are you focusing on? What are some of the big projects in the works?

So for Animoca Brands, we care about mass adoption. We care about making sure that more people sort of go into Web3 and growing digital property rights. And so we always look for ways in which we can best do that. So I would want to highlight 2 things and then some final thoughts on this one. One, Mocaverse is a huge area that we're focused on, digital identity, and particularly the reputation stack. When you think about how do we create a safer space and still preserve anonymity, it's reputation. I don't need to know your name, but I do need to know whether I can trust you somehow. Right.

What you've done.

Exactly what you've done, or that someone can attest that reputation. And we do this in real life, right? And the fact that we can trust each other, we can conduct business in a certain way without having to worry that you run away with the money, all that kind of stuff, because you've got laws that sort of ensure that kind of setup.

Right.

And in Web3, because of the anonymity, or at least implied anonymity with setting up a new wallet, it's hard to do that. But if I have a way in which I would know your reputation and there's a reputation I want to protect, then it's worthy for me to sort of maybe do business with you or give you credit. And we've experienced this with things like airdrops. When you do an airdrop, we think of it as actually giving credit to the user, right? Because we hope that the user will do something positive with it, or they could just sell it, of course, right?

Right.

And what's happening, especially with airdrop farming and bots, you realize that 70% or 80% of the users in many cases are actually not real users even at all. And it also turns out that if you're going to sort of KYC the wallet or do some proof of humanity, That's not enough either, because then they just sell the wallet to someone else who basically does that stuff. Selling wallets is a huge thing. We discovered that when we had a mint and we did a KYC before, something like 30,000, 40,000 wallets were sold off to people around the world that wasn't related.

That's a bigger number than I thought.

Yeah, it's large, right? And we see this with some of the airdrops. Now, again, anytime there's money involved, all sorts of people will try funny things. So this will evolve, and we think reputation layer will solve that. Because if you keep doing that, then your reputation will sink, and eventually you have to start from scratch. And if you don't have reputation, just like in the real world, you tend not to be able to have the same opportunities. Like, I can't get a job, maybe.

I firmly believe it. It's a reputation-based world, and what you put out there is what you stand for.

Exactly. And so we have to have a reputation that's worth protecting. And so that's what Mocaverse is building. We're doing partnerships with groups like SK, for instance, to bring on millions of users. SK is the largest telco in Korea.

Wow.

And I think it's like 30 million users or something. But again, there's many other places we do that. And I think it allows all of our projects, all of our portfolio companies, the hundreds of them, when they launch a project with us, that they can actually target a user that actually has a reputation and that's provable that they're actually wanting to do good things with it. And that means also they can be rewarded with maybe more tokens as a result, because you know that they might use them and use them in a productive manner, right? So that's an important space. So digital identity, particularly reputation, is a really big focus area. And then the other thing, of course, is what we're now doing with Open Campus, with EduChain, is we're starting to do student loans on chain. And that's really cool. Now, what's cool about that is that you can take all the benefits of crypto, better, faster, cheaper, certainly in financial systems, and now bring that over to students who not only can get cheaper loans as a result of that, but also get introduced to the world of crypto and start to learn about money. And now this is what we think is the superpower of Web3 and blockchain, which is that once you are onboarded to Web3, you are more financially literate than before, usually in a pretty big way. Which means you have different attitudes to risk, to money. We think the future is such that if you believe in a capitalist future, then we need to create more capitalists. One of the reasons why the world is so divided in terms of wealth is because the capitalists actually have money because they know how to invest.

Yeah.

And the labor economy doesn't know how to invest and doesn't think about it that way. And as a result, they've been left out. The value of capital versus the value of labor over the last 30 years, it's been asymmetrical. Yeah, good one. And we need basically people to understand that they need to invest. And it doesn't have to be just buying a house, right? It's like whether it's stocks or tokens or things that you believe in and understand better.

That you have conviction in.

Exactly, conviction. And it begins with introducing you to financial literacy and financial awareness. And starting with students is, I think, the best way of doing this. And of course, it means that the student also receives a wallet. And that means if this person repays his loan, or receives a loan through crypto, that person is in crypto for life as well, right? Student loan globally, the whole market is about $3 trillion.

That's huge.

That's huge. It's massive. But what's fascinating is that if you can take 10% of that student loan and put it on chain, then actually you're more than quadrupling total sort of DeFi TVL. I mean, just think about that. So that shows how early we are on one hand. On the other hand, it just demonstrates sort of the potential of our space in terms of how you can really sort of accelerate and grow. And the reason we picked that sector is because we looked at student loans and we said, wait a second, there's trillions of dollars there and it's somewhat inefficient. It's just captive.

Old, tired system.

Exactly. Where if you tokenize that, not only is it better for the students, but then eventually you could actually, as an RWA, tokenize the student loan portfolio. And that's actually where it gets even cooler because then people can buy and trade student loan portfolios on an individual level. And someone can maybe get a cheaper interest rate because they would be able to demonstrate that. And someone else wants to support you, or maybe it's someone from your neighborhood, or maybe it's someone from your club or whatever and say, you know what, I'll back you and I'll give you a loan and you don't have to pay 10% or 8%. Or in places like Asia, for instance, like in Philippines or Indonesia, It can be up to 30%. Right. Wow. Right. It's crazy.

Student loans.

Student loans, because they're not federally backed in those cases. And as a result, it becomes very extractive as well. But again, because of better yields and because of other things you can do in DeFi, you can actually reduce the yield and reduce the cost of the student loan. And what I also love about this is that it's a kind of concept that you can tell to someone who's not in Web3. And they would say, okay, fine, if you're helping more students get student loans and get better education, they'll get it. And I think that's how you onboard people and get people to accept that actually crypto is a force for good.

Well, by making their lives easier and better and just improving and uplifting humanity. Right. Democratizing that access, as you said before.

Yes.

So that's a really powerful concept. The first time I've heard it, but it makes such sense. That industry is ripe for disruption.

Yeah. And it's necessary as well.

Yeah, necessary. And all these monumental changes that are happening, I'm just so excited to see them starting here in New York City, right? Like really big. So, um, yeah, I just want to thank you again for being on the podcast and I look forward to catching up with you after some time has gone by and revisiting these ideas and seeing where we're at. And I'm a big fan of Mocaverse and Animoca Brands, and I love your whole, everything that you're doing with that system. So I highly encourage everybody to check that out. And thanks so much for being here.

Thank you for having me.

So, and now we have a bonus for you, the rapid-fire round where I'm going to ask out some questions, just simple answers. Let's see what he has to say. First one, bull market top for Bitcoin this cycle, pick a number.

$150,000, maybe $200,000.

Okay. Ethereum versus Solana, what's your pick today? Loaded question.

Loaded question. The reason why this is tough is because I'm a big believer in Ethereum.

Same.

But I think Solana is better at their marketing and communication. So if it's short term, it's probably Solana. If it's long term, it's Ethereum.

Okay. I would agree with you completely on that one. I would have been the same. Biggest mistake crypto founders make?

Not understanding that a huge part of their value comes from creating more powerful networks.

I like that. Most underrated crypto project right now. I know that's tough for you to be able to say, but—

So I would say as a category, I think gaming. Gaming actually has the highest usage rates on chain. But tokens generally have not done well because of sentiment.

Right.

And we're putting money behind this, and we believe that gaming will make a massive comeback over the next 6 to 9 months. And that's because sentiment overall in gaming will improve, not just in Web3. Actually, Web3 is growing in terms of crypto adoption in gaming. And yeah, so we think gaming is underrated as a category when in fact it is one of the largest growth categories in Web3 from a utility standpoint.

There you heard it. Gaming is not dead. Crypto gaming is not dead. It's just one of those industries that has had a lot of flack and that it's been tough times for it lately. But I truly believe, I mean, obviously your whole theory is that gaming will help onboard new users. And so we're going to come back in a big way. All right. I like that. Adoption, biggest barrier to mainstream adoption, regulation, UX/UI, or trust?

Biggest, sorry, what?

Biggest barrier to mainstream adoption.

Improving financial literacy.

Okay, so none of the above. Okay, I like that. I like that. Just a few more here. Which comes first?

Can I elaborate on that?

Oh, go ahead.

Go ahead. Yeah. So the problem, when you think about it, any kind of adoption wave that we've seen, like even in the first waves of the internet, wasn't actually around having access to a computer or understanding the internet. It was digital literacy. Yeah, right. I mean, By the time the internet came about, everyone was using Windows 95. Everyone had a computer already. So it wasn't that.

Right.

It was around understanding, why should I go online? Why should I visit a website? What does it mean? I could read a magazine that was just better, or I could open a newspaper. They didn't understand. Digital literacy was low. I remember when I had a very, very, very small, brief stint at AT&T, I had to print out my emails for my boss. for him to understand what was going on because he wasn't actually using—

You had to print out your emails.

You had to print out emails. And you'll hear a lot of stories back in the '90s of people who did that, for instance. Right. And so that was a barrier of growth. And then as more people were more sort of digitally literate, they also started educating others around them how to do it. It became more of a social support network. And then there was an acceleration. And that's what's missing in in this space, how do we get more Web3 adoption? Is by getting more people to become financially literate. And then the people around them will help them around sort of— it's not hard to open up a MetaMask wallet, right? It's not hard at all.

It's just the will to do so.

Well, it's the why.

Yeah.

Like, why should I open a wallet? What does it mean for me? But if I understand something about money and value and investing, then I'll do that.

That makes sense. It's the motivation behind it. Because if you have that motivation, none of those matter, really.

Absolutely.

I mean, you have to have a basic element of trust in some sort of interface, but you're so right on that one. It's been my favorite answer so far. Last few questions. What comes first, crypto in every wallet or AI in every app?

Oh, I think AI in every app will come much faster, but crypto is a currency for AI. And at the end of the day, I think a lot of people will just trade and use crypto because it's the easiest form to navigate and transact with your AI and other AIs.

Yeah. So they kind of go hand in hand.

That's right.

Okay. And last 2 questions. Will GTA 6 have a crypto element? What do you think?

So first, I think GTA 6 is going to definitely create massive, massive interest in gaming, which is great for gaming macro, which means it's great for gaming tokens. It's part of our thesis, which is, of course, next year at this point. It's delayed yet again. But will GTA 6 have crypto? I don't think Take-Two is going to launch a token themselves, but GTA 6 does have an ability to run your own roleplay service, right? The RP service. And because the regulatory framework is much friendlier, I don't believe it's necessary for them to be hostile towards crypto. And rather, they'll sort of take a more laissez-faire approach that if you want to run crypto on your servers, up to you. And I think that's certainly something that a number of projects that we're involved in are also working on at this moment in time.

Oh, that's cool to hear. Very cool.

Wow.

And last question, I kind of know what your answer answer may be. But so we had this sort of rippling effect across the industry of the AI agents as the last hot narrative. I mean, it felt like the beginning of DeFi summer, right? What's going to be the next hottest narrative in crypto?

Next hottest narrative?

You know, like the thing that gets everybody excited again. You know, AI agents was the biggest new thing or revival, right? So do you think that that next big wave is going to be gaming?

So first of all, I do believe gaming is because it's already there. So I think gaming is going to be a big one. One of the beautiful things about our space, though, it's never just one thing.

Right.

When you think about, for instance, gaming was growing, but gaming really couldn't get big until DeFi Summer came around. So it's a confluence of all these things. It's not just one thing. And I'll give you one other thing that I think, for instance, NFTs are going to make a big comeback overall. And the reason why is because as more people start to make wealth in crypto, What is the ultimate status symbol? What's your flex? The flex is basically the social flex is having the NFTs, which comes down to the next point around what is it that will make Ethereum great again? And I think it's going to be when people start going back into NFTs in a big way. When you think back in '21, when I think Ethereum was like, I think $4,000 or something like that, all of the interest was in NFTs.

Yeah.

But it wasn't just the interest in NFTs, it was the fact that Ethereum was basically 99% of all the volume of meaningful—

I mean, that was where you went to buy the most valuable.

Exactly. And that was the reason for you to use that, right? And I think as we progress, we see versions of this, for instance, like digital art with the project that just basically bought the CryptoPunks IP to basically build a museum. That's an example of basically very wealthy individuals or groups of people coming together to basically do something to preserve history.

Right.

And art is an asset. It's an asset class.

Big one.

Many of the biggest banks in the world actually have an art vault. Right. And I expect a future where basically crypto companies are going to build an art vault as well. And that's going to be these NFTs. NFTs today still do half a billion dollars of sales a month. Right. A lot of people don't really realize that. That's astounding.

Everybody's like, the narrative is NFTs are just dead.

Yeah, it's not dead at all. And it's also a deep cultural sink in terms of investing in— they don't necessarily just trade them, they invest them, they own them, they use it as identity. Still, how many people use a Pudgy Penguin or Bored Ape or Mocaverse as their profile picture, for instance?

Yeah.

So it's absolutely that. The only thing is that Ethereum dominance in the NFT space hasn't been as big as it used to be, right? So that half a billion is actually not all on Ethereum. Ethereum is maybe is maybe the majority in terms of quantum, 30%, 40% maybe, but it's all around other things, including Solana, Bitcoin, and the L2s as well. Right. So I think the key for Ethereum to really come back in a big way is when we all start buying NFTs again in the way that we used to.

Which we will inevitably do. And I am right there with you. I believe, I mean, I did a docuseries on it, NFTs Are Dead. It was called, like, irony, of course. Last time NFT NYC was happening and just the sentiment was as great as ever, but they, you know, they hadn't done anything in a while. And yes, they will come back in a big way. Gaming will come back in a big way. It's inevitable. And it's so great to be able to talk that through with you, one of the most brilliant minds in that space and most definitely in that sector. So anyway, thanks again for the lightning round. I can't wait to share your answers and we'll see you again soon.

Thank you for having me.

Thank you.