Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Wasabi, the protocol that will unlock billions $ for NFTs and tokenized Real World Assets
134 Plays2 years ago
Eren and Mason are CEO and COO of Wasabi protocol, an NFT options protocol that’s functioning and thriving in the bear market.
They’re lining up partnership after partnership with big names in the space to unlock opportunities and liquidity for their user.
Discover how they got started, how they are doing and their future plans, also discover how options work !
Sponsored by Wasabi Protocol - #NFA #DYOR Use our referral to support the Podcast : https://app.wasabi.xyz/r/THEPOLYMATHEXPERIENCE
The Polymath Experience is a podcast owned by its listeners, join us on Discord to be rewarded : https://discord.gg/PwYt39W95k
Recommended
Transcript
Introduction to Wasabi Protocol and Founders
00:00:00
Speaker
Hello everyone and welcome back to the Polymath Experience.
00:00:02
Speaker
I'm your host, Polymath.
00:00:04
Speaker
And today I want to make it clear how special and how much of a privilege it is to have these guys with us.
00:00:12
Speaker
I genuinely think they're building something that will become a cornerstone of the financial markets of tomorrow.
00:00:18
Speaker
We've talked in a previous episode about tokenization of real world assets and the effects they will have or it will have.
00:00:26
Speaker
And while they're basically building the layer that will allow for these effects to take place.
00:00:32
Speaker
They have massive support from OGs in the space.
00:00:35
Speaker
They're the definition of Web3 native.
00:00:37
Speaker
They're doing so much better than a lot of people out there in these market conditions right now.
00:00:44
Speaker
And it's really cool to see.
00:00:46
Speaker
They've seen what's on the other side of the financial market and they don't want anything to do with it.
00:00:50
Speaker
Guys, meet Aaron and Mason, chief executor and chief operator of the Wasabi protocol.
00:00:56
Speaker
Welcome, guys.
00:00:57
Speaker
Thank you.
00:00:57
Speaker
Thank you so much for that kind introduction.
00:01:01
Speaker
The privilege is all ours.
00:01:16
Speaker
Thank you.
00:01:17
Speaker
I really appreciate it.
00:01:19
Speaker
Yeah, I've been looking forward to this one and preparing it was like, it's so cool what you're building.
00:01:27
Speaker
I see where you're going and I see what you're doing.
00:01:29
Speaker
And I really wanted to short everything when I was preparing for today.
00:01:36
Speaker
Yeah.
Aaron's Background and Interest in NFTs
00:01:37
Speaker
Can you briefly or not so briefly tell me about
00:01:40
Speaker
what each of you were doing before you got into this, like the part of the journey that led you here.
00:01:47
Speaker
Yeah, for sure.
00:01:48
Speaker
I can, I can start it off.
00:01:50
Speaker
So I'm fairly technical, studied engineering at school, computer engineering.
00:01:57
Speaker
And then I had the opportunity to work for two early stage startups.
00:02:01
Speaker
That was like a great experience.
00:02:03
Speaker
I was able to work with the co-founders pretty early, was able to scale their companies.
00:02:10
Speaker
But the thing is, I come from a family of artists.
00:02:14
Speaker
My mom's a precious painter, grandparents are sculptors.
00:02:17
Speaker
And I've always wanted to be an artist myself.
00:02:20
Speaker
Maybe I wasn't brave enough to pursue that career.
00:02:23
Speaker
But with NFTs, I found a niche that was the intersection of art and technology.
00:02:30
Speaker
And I just couldn't resist but enter the space.
00:02:33
Speaker
I met Hasan, my co-founder in New York, after school when I started working full-time here.
00:02:42
Speaker
With Hasan, we started trading a little bit.
00:02:44
Speaker
We started building strategies.
00:02:47
Speaker
And then thankfully I met Mason at the Magic Eden Ethereum launch party.
00:02:56
Speaker
And then we just clicked right off the bat.
00:02:58
Speaker
He's been integral to the team, to the whole progress.
00:03:01
Speaker
Like I couldn't have asked for someone like more better or like important to the project itself.
00:03:10
Speaker
That's amazing.
00:03:10
Speaker
Amazing to hear.
Mason's Journey to Decentralized Finance
00:03:15
Speaker
I'll jump into mine.
00:03:16
Speaker
So I first bought Bitcoin in 2015 when I was in college, but not really for the tech, because people were buying it and using it to buy other things.
00:03:28
Speaker
And after that, I kind of fell off.
00:03:31
Speaker
Like I didn't really pay attention to it.
00:03:33
Speaker
I was in college for finance.
00:03:36
Speaker
After college, I graduated and I started working at Deutsche Bank.
00:03:40
Speaker
So I wasn't able to trade like the stock market, like, you know, like an average person would, I would have to like report it and ask to be able to trade this, blah, blah, blah.
00:03:49
Speaker
So when GameStop started and I was watching all my friends outside of banking, making all this money in GameStop and like,
00:03:55
Speaker
having fun and it was during COVID, right?
00:03:57
Speaker
Or like maybe right before COVID.
00:03:59
Speaker
I was like, what can I do?
00:04:00
Speaker
So I got back into crypto and bought like Dogecoin super early.
00:04:05
Speaker
And then I made some money there.
00:04:06
Speaker
The Robinhood thing happened and everyone was like, oh, we hate Robinhood.
00:04:09
Speaker
So I left Robinhood and I went to Binance and I got more into the altcoins before eventually getting onto the chain and getting into like DeFi summer, right?
00:04:19
Speaker
A lot of it was on like Binance Smart Chain,
00:04:22
Speaker
And I was seeing all these new protocols coming out, stuff like PancakeSwap and ApeSwap and just watching how these protocols made complex financial trades and like...
00:04:36
Speaker
like financial instruments palpable palpable to like add the retail user right like just watching a person that was like a cashier at walmart being able to trade on these exchanges and understand a permanent loss and like how this how everything worked so i got super deep into it there and then eventually nfts came up i just like you know obviously like you see the pictures and you fall in love with the pictures and then there's money and
00:05:02
Speaker
It's just all snowballed and I just fell in love with it there.
00:05:06
Speaker
But growing up, my dad's a commercial real estate developer.
00:05:09
Speaker
So I got to see how illiquid the real estate market was.
00:05:12
Speaker
We want to talk about real assets.
00:05:14
Speaker
I could watch how people with large amounts of real estate would need cash and inflow, like cash injections and stuff like this to pay for property taxes or whatever it might be.
00:05:26
Speaker
And I got super interested in the idea of like,
00:05:28
Speaker
basically tokenizing assets, right?
00:05:31
Speaker
Like, how can we tokenize this piece of real estate to like give the owner a cash inflow without needing to go to a traditional bank and like ask for a loan or stuff like this.
00:05:41
Speaker
So yeah, I just like really fell in love with the whole idea of decentralized finance and like putting power back in the people's hands and taking it away from the banks.
00:05:50
Speaker
And then I left Wall Street and joined Aaron.
00:05:54
Speaker
on this journey.
00:05:55
Speaker
Creech, that's awesome.
Vision and Challenges of Wasabi Protocol
00:05:57
Speaker
Wasabi Start, did you start from the long-term vision of like eventually everything is gonna be on the, everything's gonna be a token and we're gonna build a platform for it?
00:06:08
Speaker
Or was it more, we need a way to easily trade NFTs,
00:06:14
Speaker
that anyone could understand on the UI and we're going to build that or maybe somewhere in between?
00:06:20
Speaker
So for us, we always knew NFTs were going to be more than PFPs.
00:06:24
Speaker
Like real estate is an example.
00:06:26
Speaker
Another example is IP.
00:06:29
Speaker
Most of the time, like my experience at startups, the most valuable thing a startup has is its IP.
00:06:36
Speaker
And right now with this technology, you could basically tokenize deeds, you can tokenize companies, you can tokenize the IP within the company.
00:06:46
Speaker
And one of the most opaque sectors in the industry is like that, especially for startups.
00:06:53
Speaker
So NFTs basically unlock a lot of different potentials on use cases we can't even think about yet.
00:07:00
Speaker
And we kind of made a bet on that opportunity.
00:07:03
Speaker
We thought like people weren't looking at it.
00:07:06
Speaker
It was a greenfield kind of industry.
00:07:09
Speaker
And after trading in it,
00:07:11
Speaker
Even with PFPs, we realized certain problems, right?
00:07:14
Speaker
And the biggest problem being fragmented liquidity, no access to liquidity.
00:07:20
Speaker
And that is unfortunately the case for the whole crypto ecosystem.
00:07:25
Speaker
So if you can solve fragmented liquidity,
00:07:30
Speaker
or illiquidity for NFTs that are unique, that are traded much less than ERC-20s, then you could basically solve the same problem for any other asset that is represented on the chain.
00:07:43
Speaker
Like we got into building Wasabi.
00:07:47
Speaker
We started with options, but the overall idea was to connect to the all parts of the market, including marketplaces, lending protocols, different DeFi protocols, and basically facilitate a much more efficient trading.
00:08:03
Speaker
Nice.
00:08:04
Speaker
Yeah, it's...
00:08:06
Speaker
Yeah, that's awesome.
00:08:07
Speaker
Are you, before we get into the good stuff, are you guys still doing DeFi by yourselves on your end?
00:08:16
Speaker
Because I do remember Mason saying that you fell in love with it and you were still in it, I think.
00:08:23
Speaker
What's the alpha these days?
00:08:25
Speaker
Like beyond Wasabi, where's the opportunity for DeFi these days?
00:08:29
Speaker
I've been pretty wholly focused on Wasabi.
00:08:31
Speaker
I'm still trading shitcoins like a normal D-gen.
00:08:35
Speaker
Obviously, there's some interesting protocols and DeFi protocols coming up on Arbitrum and Polygon and stuff like that.
00:08:43
Speaker
I've just been mainly focused on stacking ETH.
00:08:47
Speaker
to see what happens.
00:08:47
Speaker
Because I think like, like when you saw in the DeFi summer, right, there was a new protocol like every day, if not multiple protocols every day with like high yields.
00:08:57
Speaker
I mean, the yields just are not there because after Luna, everyone's scared.
00:09:01
Speaker
Like before Luna, if...
00:09:04
Speaker
The protocol wasn't offering over 100% return.
00:09:07
Speaker
Nobody was even looking at it.
00:09:09
Speaker
And now if the protocol is offering over 100% return, everyone considers it a scam.
00:09:14
Speaker
It probably is.
00:09:17
Speaker
So I've just kind of been chilling, seeing what people are coming out with as far as the tech goes.
00:09:23
Speaker
But I haven't been really yield farming or doing any of that too much.
00:09:28
Speaker
Just more so playing around.
00:09:29
Speaker
Nice.
00:09:29
Speaker
Nice.
00:09:30
Speaker
It's an interesting market to be in right now.
00:09:32
Speaker
You're talking about
Wasabi's Real Yield and Tokenized Assets
00:09:34
Speaker
100%.
00:09:34
Speaker
And when I was preparing the episode, I saw the remillionaire pool that you guys had on Wasabi that was offering 100% APR.
00:09:45
Speaker
How exactly does... I didn't want to get into Wasabi yet, but this just piqued my mind again.
00:09:52
Speaker
How exactly does that work?
00:09:54
Speaker
What's that pool about?
00:09:56
Speaker
What's the dynamic behind it?
00:09:57
Speaker
So the thing about our pools is it's what we like to call real yield.
00:10:04
Speaker
The way you earn yield does not depend on like other people purchasing a token after you.
00:10:11
Speaker
It is basically you just deposit your NFTs into a pool and that pool issues options on your behalf.
00:10:19
Speaker
And by issuing options, you collect actual premiums in the form of ETH upfront.
00:10:26
Speaker
And Remilio is like a very interesting collection that has a lot of fans, including our very own Mason here.
00:10:34
Speaker
I've heard people like to speculate.
00:10:37
Speaker
And as they're speculating, you're making money on your assets.
00:10:43
Speaker
So, OK, I'm going to do complete guesswork because you already got it.
00:10:47
Speaker
This is not my field and I don't understand options very well.
00:10:51
Speaker
But my guess right now would be that instead of you having to interact with an external marketplace or lender, people directly put the asset in one of your pool.
00:11:02
Speaker
And that's how the premium goes directly to them.
00:11:07
Speaker
instead of having to be shared?
00:11:09
Speaker
Is that something like that?
00:11:10
Speaker
Yeah, exactly.
00:11:11
Speaker
So once you put assets into Wasabi, we deploy a smart contract that only you can deposit into or withdraw from.
00:11:23
Speaker
So you have full control over your assets still.
00:11:27
Speaker
But that smart contract programmatically based on your risk tolerance issues options to the market.
00:11:35
Speaker
And as it issues options, you collect premiums.
00:11:40
Speaker
And to Aaron's point on the real yield side, when you saw these projects on like Binance Smart Chain that were offering, you know, 100, 200, 300%, like that percentage was based on the tokens you would get back from their protocol, right?
00:11:56
Speaker
So like pancake, like cake token or whatever.
00:11:59
Speaker
This is actually ETH, right?
00:12:01
Speaker
So that yield is determined on the amount of ETH that you've received from writing the options.
00:12:07
Speaker
So it's not like...
00:12:08
Speaker
We don't have some arbitrary token that we're just returning to you and saying that you're earning whatever percent.
00:12:14
Speaker
Like this is truly ETH.
00:12:16
Speaker
That's really cool.
00:12:18
Speaker
What's the risk?
00:12:20
Speaker
The risk is defined by you.
00:12:22
Speaker
If you're writing options for a collection, if you're writing puts, the risk is purchasing assets for cheap from that collection.
00:12:30
Speaker
And you have to determine what is the cheapest or the highest price you want to buy an NFT from that collection.
00:12:39
Speaker
With Kohl's, it's the opposite.
00:12:41
Speaker
Like if you want to sell your NFTs, what is the cheapest price you want to sell them for?
00:12:45
Speaker
Worst case scenario, you're going to sell them for that price.
00:12:49
Speaker
Best case scenario, you're going to continuously earn money on your NFTs.
00:12:54
Speaker
Why are...
00:12:56
Speaker
people who own NFTs right now not doing this more as a way to at least put them to good use?
00:13:05
Speaker
I think it's just like, as with all innovation, it takes a little bit of time to get the market to educate, to get them to trust the product.
00:13:15
Speaker
But I'm very confident that in the close future, people are going to understand the implications of WhatsApp.
00:13:21
Speaker
Hey there, it's me again.
00:13:23
Speaker
If you're enjoying the content, you're going to enjoy this because you're going to have the ability to support us.
00:13:28
Speaker
I want to tell you about our partner, Wasabi Protocol.
Building Wasabi: From Concept to Market
00:13:32
Speaker
It's an option-based protocol that allows people to make bets on certain NFT collections.
00:13:40
Speaker
But that's not all.
00:13:41
Speaker
because what is right now NFTs could be anything in the future that is tokenized.
00:13:46
Speaker
They are on the brink of powering one of the most important layers of the future financial markets.
00:13:53
Speaker
I'll give you a couple examples of how you can use it right now.
00:13:56
Speaker
Imagine you have an NFT that's gained a lot of value because there's been a speculative hike and you want to keep that NFT because it's dear to you, but you also want to capture some of its value.
00:14:08
Speaker
After it's increased a lot,
00:14:10
Speaker
you could bet that the price will decrease by staking a little bit of capital and capture some of that value on the way down.
00:14:21
Speaker
Which means that you get both of those aspects that are important to you.
00:14:28
Speaker
You get money, but you also get to participate.
00:14:32
Speaker
And the second one is, if you're convinced that a collection is gonna go up, you can bet on that by risking some capital and not the price of the whole asset if you don't have it.
00:14:44
Speaker
Go check it out, the links are in the description.
00:14:46
Speaker
wasabi.xyz slash r slash the polymath experience.
00:14:51
Speaker
Thank you so much for checking them out.
00:14:52
Speaker
And thank you so much for using that referral link.
00:14:55
Speaker
If you do, always do your research.
00:14:58
Speaker
Only use tools and amounts that you're comfortable with.
00:15:02
Speaker
Remember that all financial investments carry risk.
00:15:06
Speaker
And back to the episode now.
00:15:07
Speaker
Yeah, I mean, we've seen the growth, right, since our launch, like we've seen it grow, our user base grow like by 300%, trade volumes increased, quitted increase.
00:15:17
Speaker
I really think it's partially the market, right?
00:15:20
Speaker
Because so many market participants have like stepped away to go touch grass or whatever they're doing while the market sits.
00:15:26
Speaker
The less dedicated user isn't really exploring protocols as much right now, right?
00:15:32
Speaker
Like even me, right?
00:15:33
Speaker
Like I said, I wasn't
00:15:34
Speaker
over there, like yield farming and stuff like this on new protocols, just because like we're focused on building or like focused on doing whatever we're doing.
00:15:41
Speaker
And I think that's, that's kind of market wide.
00:15:42
Speaker
So as the market starts to rebound and people come back, people will be looking to learn about protocols and like start earning money more.
00:15:51
Speaker
For sure.
00:15:52
Speaker
Before actually jumping into the protocol, I wanted to go back to before you guys started, because you're building a really cool financial protocol, but you're also building a business in Web3.
00:16:01
Speaker
And I know that some people listening here are also interested in how do we, because you've done the hardest part.
00:16:09
Speaker
You've gone from zero to one.
00:16:10
Speaker
You have your product, you have users, you have backing.
00:16:14
Speaker
What was the, and this probably goes maybe more to Aaron, what was the first few days?
00:16:20
Speaker
What were the steps that you took in order to make this a reality?
00:16:24
Speaker
What was raising funds for such a process, for such a product like?
00:16:29
Speaker
All of that good stuff.
00:16:31
Speaker
Oh man, it was a lot of step by step work.
00:16:35
Speaker
You don't realize it like until you get into it.
00:16:38
Speaker
But most of the time, like launching something like this is always like doing a huge plan that is like very long term.
00:16:47
Speaker
And you need to take all the necessary right steps to like de-risk certain outcomes that you want to achieve basically.
00:16:55
Speaker
Like with us, we initially started by conceptualizing.
00:16:59
Speaker
After conceptualizing, we wrote our white paper.
00:17:01
Speaker
And as we were writing our white paper, like we were basically planning to build an options protocol or like derivatives protocol.
00:17:10
Speaker
for an asset class that was popular for the last two years.
00:17:14
Speaker
It just had spot trading.
00:17:16
Speaker
It just had like buy low and hopefully sell high.
00:17:20
Speaker
And a lot of the conversations we had was, oh, like this wouldn't work.
00:17:25
Speaker
They're not liquid enough for this to work.
00:17:27
Speaker
And like it was a constant like going back and forth of refining our idea and trusting in ourselves that what we were proposing made sense.
00:17:37
Speaker
We like ran some simulations.
00:17:40
Speaker
to see how a product like this would potentially perform previous market.
00:17:45
Speaker
And then we were able to obviously convince some investors, we were able to raise funds, we built a team.
00:17:53
Speaker
After building a team, building a product is important, but at the same time, your go-to-market is at least as important as your product.
00:18:03
Speaker
You need to keep in mind the distribution channels you will have, which Twitter accounts you will work with,
00:18:10
Speaker
Or are you going to give ads?
00:18:12
Speaker
Who are those people going to be?
00:18:14
Speaker
Can you work with any kind of communities to basically tap into a lot of potential users who would benefit from your product?
00:18:22
Speaker
We're a protocol, right?
00:18:25
Speaker
At first, we didn't have liquidity aggregation.
00:18:28
Speaker
So it would be cool.
00:18:30
Speaker
It's very nice to have demand, but if you don't have initial supply,
00:18:34
Speaker
that demand quickly goes away.
00:18:38
Speaker
So how do you bootstrap liquidity on your protocol?
00:18:41
Speaker
How do you incentivize early LPs?
00:18:44
Speaker
Those are all questions that we thought very hard about.
00:18:47
Speaker
And then we came up with solutions that really helped us
00:18:52
Speaker
take a step-by-step approach until we actually launched.
00:18:56
Speaker
And we did some test net trading competitions to build a user base first and to understand if the product was comprehensible enough, if people were able to understand how it worked.
00:19:08
Speaker
We were able to refine it thanks to that early user supporters.
00:19:13
Speaker
And slowly, we've been extending it.
00:19:15
Speaker
Nice.
00:19:16
Speaker
What were the decisions, the main decisions that you made when it came to your go-to market?
Networking in Web3 and Key Influences
00:19:21
Speaker
What options did you dismiss?
00:19:23
Speaker
What options did you embrace?
00:19:25
Speaker
Because it's like from a founder's perspective, it's an absolute shit show because you're being promised gold left and right.
00:19:34
Speaker
And it's so hard to separate the actual gold from the noise.
00:19:38
Speaker
Yeah, I think we as a group or like as a team, like sincere people and like
00:19:46
Speaker
to work with people that we find similar to us.
00:19:50
Speaker
So having those conversations, we've had various parties approach us wanting to help us.
00:19:56
Speaker
And it was always a constant vetting where after meeting them, we would spend a couple of calls with them.
00:20:03
Speaker
We would spend some time with them.
00:20:06
Speaker
And most of the time, in our case at least,
00:20:11
Speaker
I was able to tell who was more into helping us for the potential upside rather than actually believing in the product.
00:20:20
Speaker
And we always went with the people who actually believed in the product.
00:20:24
Speaker
And I think that was the best thing we've ever done in our go-to-market.
00:20:29
Speaker
Like this is gold advice, especially when like in the bull market, things get crazy.
00:20:37
Speaker
Your DMs get flooded with people wanting to sell you something, wanting to help and you don't like it's hard.
00:20:45
Speaker
Yeah.
00:20:46
Speaker
It's hard to really choose.
00:20:47
Speaker
But it's like you've done things well because you're surrounded by probably some of the best people that you could have in your corner.
00:20:57
Speaker
I'm thinking of the wizard because he's the absolute perfect person to have as a fan of your product.
00:21:07
Speaker
We have our magician in the cold here.
00:21:11
Speaker
How did that happen?
00:21:12
Speaker
I've known Wiz since like before crypto.
00:21:14
Speaker
I started following him on Instagram when I was in college because he was like a big bond trader and I was obviously in finance and I got into municipal bonds and stuff.
00:21:23
Speaker
So yeah, so I started following him in college.
00:21:27
Speaker
I think he had like, I don't know, 10,000 followers, maybe, maybe less.
00:21:31
Speaker
Um,
00:21:33
Speaker
And then I started to see him on Instagram.
00:21:36
Speaker
Like, this is like the pancake stop stuff.
00:21:38
Speaker
I remember him posting this stuff about yield farming.
00:21:41
Speaker
And it was like, you steak cake to earn syrup.
00:21:44
Speaker
And I'm like, what is this?
00:21:45
Speaker
And I'm like, what is going on here?
00:21:48
Speaker
But I mean, he's a smart guy.
00:21:49
Speaker
Like, he's making money.
00:21:50
Speaker
Like, I see these percentages.
00:21:52
Speaker
So I went and looked at it.
00:21:53
Speaker
And then him and I actually started trading shit coins together in Instagram DMs.
00:21:59
Speaker
uh before we like went into like telegram and like went fully in so i've been around he's a good friend of mine he's a great guy and yeah so like soon as we had this project i was like he's like a perfect person for this and we chatted and and he's a very very helpful
00:22:16
Speaker
That's
Importance of Derivatives in Markets
00:22:17
Speaker
so cool.
00:22:17
Speaker
When we were talking before, you were saying that you were looking at, you want to provide futures and derivatives.
00:22:24
Speaker
And I actually want to understand why, and I think people listening to this might as well, of what is the role of derivatives and futures in the market?
00:22:35
Speaker
Why do we need them?
00:22:37
Speaker
What impact do they have on the market?
00:22:39
Speaker
If you look at fungible tokens or non-fungible tokens, derivatives volumes are at least like 2x.
00:22:46
Speaker
that of the spot volume.
00:22:49
Speaker
And there are two reasons for that.
00:22:51
Speaker
Firstly, you can basically get leverage.
00:22:55
Speaker
And by getting leverage, you're managing your risk better.
00:22:59
Speaker
So like instead of paying the whole capital needed to purchase an asset,
00:23:05
Speaker
you're borrowing money to purchase it.
00:23:07
Speaker
And worst case scenario, you lose, like if the asset devalues, you lose a fraction of the upfront cost you would have paid if you bought the whole piece.
00:23:17
Speaker
Secondly, you're able to short the market, right?
00:23:20
Speaker
Like at the beginning of the call, you said you've been waiting to short
00:23:25
Speaker
NFTs because everything's going down.
00:23:28
Speaker
And without derivatives, you don't have that opportunity.
00:23:31
Speaker
And shorting doesn't necessarily have to be in a bad sense where like you want that asset to go down in price.
00:23:38
Speaker
It could also be like insurance.
00:23:41
Speaker
We all buy house insurance.
00:23:43
Speaker
And the reason for that is if any like unpredictable event happens, we want to basically hedge ourselves in the case of that event happening.
00:23:52
Speaker
So derivatives enable all of those.
00:23:56
Speaker
And then also on top of that, like if you look at like real world assets and stuff like this, right?
00:24:02
Speaker
Like you think like, all right, you're, you're a builder and you know, you're going to need X amount of lumber over the next, you know, six months, but you don't want to pay for it all up front and have it sitting around in a warehouse.
00:24:15
Speaker
Like you can, and you think it's going to go up because there's a forest fire or whatever it might be.
00:24:20
Speaker
Like you can buy futures, but,
00:24:22
Speaker
to make sure you have a set price on this asset so that when you need it, you can get it rather than like, okay, I know I need X amount of lumber right now.
00:24:33
Speaker
Let me fork up all the upfront cash and find somewhere to store it until I use it.
00:24:37
Speaker
So stuff like that, like food, oil, you see all these things have futures and people trying to bet on the price or get a better price before a conflict or something like this comes up.
00:24:51
Speaker
It's really cool to see the non-speculative aspect to it, the actual utilitarian view, because when you're talking about this, I'm trying to think of, okay, how does that apply to NFTs?
00:25:02
Speaker
And obviously the gaming
Finance in Gaming Economies
00:25:05
Speaker
use case comes up where you're a CS2 player and you're going to need this or that item and...
00:25:14
Speaker
you know that the price is going to go up.
00:25:15
Speaker
And so you could maybe go onto Wasabi Protocol and kind of lock up that price for you without necessarily doing it because you want to profit from it, right?
00:25:27
Speaker
Yeah, just you want to get a better price from it and you want to use it, right?
00:25:29
Speaker
Like think about like MMORPGs, like World of Warcraft or something like this.
00:25:34
Speaker
Like, you know, you're going to need iron to craft a sword, right?
00:25:37
Speaker
you know, whatever it might be.
00:25:39
Speaker
And that just adds an extra layer to the in-game economies that we've seen in Web2, right?
00:25:45
Speaker
And I'm very excited about that.
00:25:47
Speaker
I think it's going to be massive.
00:25:49
Speaker
It's actually mind-boggling.
00:25:52
Speaker
It's really hard to... When...
00:25:57
Speaker
Because you guys have thought about it.
00:25:58
Speaker
How do you think the markets will look like in, I don't know, 50 years?
00:26:03
Speaker
Do you think that real physical assets will, what will the value compare to online assets and the metaverse and all of this?
00:26:15
Speaker
Like, I think it'll always be cycles.
00:26:17
Speaker
We'll have the like bulls and bears and like both kinds of markets depending on the like macro economy.
00:26:25
Speaker
But we already have these like gaming guilds.
00:26:28
Speaker
All we need is a couple like very successful, very popular games for these guilds to actually like start trading more sophisticated.
00:26:36
Speaker
because that is going to basically give them an edge, right?
00:26:40
Speaker
If you can like use these resources in the best way possible, then you're going to be able to win the game as well.
00:26:47
Speaker
Do you think we're going to add like a layer, like an extra slot on the team?
00:26:51
Speaker
They'll have their, I don't know, like I don't play that many games, like their healer and their defense and then their trader.
00:26:58
Speaker
That's kind of... Their finance guy.
00:27:00
Speaker
Yeah, exactly.
00:27:01
Speaker
that gaming economy expert that makes the trades and makes sure they have the best resources.
User Responsibility and Self-Custody in DeFi
00:27:08
Speaker
I think some have it.
00:27:10
Speaker
So the way that I, like a natural progression for me, right.
00:27:13
Speaker
Is I played a lot of like,
00:27:14
Speaker
NHL and FIFA growing up, Ultimate Team specifically, which are basically NFTs.
00:27:19
Speaker
It's like cards that you form a team with and this and that.
00:27:23
Speaker
When I got tired of playing the game, some of my friends are great players, top 100 in NHL, very high-end players.
00:27:32
Speaker
Like they would, they would just give me their coins and then I would sit there and trade the markets for them and like help them build better teams.
00:27:39
Speaker
Right.
00:27:39
Speaker
Because I knew how to corner the markets and knew the psychology for this.
00:27:43
Speaker
So I definitely think that will happen.
00:27:45
Speaker
Right.
00:27:45
Speaker
A hundred percent.
00:27:48
Speaker
The world's about to get even crazier.
00:27:50
Speaker
You're going to have, like you already have kids dropping out of school to focus full time on, on video games, but it's even, it's going to become even more of a reality in the world.
00:28:01
Speaker
barely years to come.
00:28:03
Speaker
Yeah, definitely.
00:28:04
Speaker
That's nuts.
00:28:04
Speaker
Based on the, like, we're in the middle of the FTX trial, and so there's this, I think there's this view that's a little bit more, maybe not wary, but more scrutinous around protocols and about platforms.
00:28:23
Speaker
How do you fare in that?
00:28:24
Speaker
Like, why can you guys be trusted?
00:28:26
Speaker
Because I'm putting my reputation on the line here.
00:28:29
Speaker
How do you...
00:28:32
Speaker
Why do people trust you?
00:28:33
Speaker
So that's a very interesting question because what I think is required for people to logically trust you is very different than how governments right now legislate various protocols.
00:28:48
Speaker
And if the current legislation was correct, right, we would have never experienced FDX because FDX was very close with the US government.
00:28:58
Speaker
but they were basically using user funds for their personal needs.
00:29:03
Speaker
And unfortunately in the legislation, there is no like, I don't think there is anything that checks if why the user funds are used for, but that's the most important thing, right?
00:29:15
Speaker
Because like, if I have some user funds in the protocol and if my user wants to withdraw them,
00:29:22
Speaker
They should be able to at any time if they're not actively using those funds in a trade.
00:29:27
Speaker
That's why our traders can trust us because with Wasabi, you always have self-custody.
00:29:36
Speaker
So any ETH or like any token you deposit to Wasabi, if they're not used in an active trade,
00:29:45
Speaker
you are the sole controller of your assets.
00:29:50
Speaker
We have like no ability to basically take your assets and use them in other places or transfer them into our own wallets.
00:30:01
Speaker
So that differentiates us from most of the centralized exchanges, most of the other protocols in the space.
00:30:09
Speaker
How do you guys set it up?
00:30:11
Speaker
Do you have a pool?
00:30:14
Speaker
a liquidity pool for that?
00:30:16
Speaker
Or does each have a separated smart contract of each user have a separated smart contract or wallet?
00:30:22
Speaker
We let each user have their own separate smart contract.
00:30:27
Speaker
For example, when you're using GMX, you're doing it straight from your wallet.
00:30:32
Speaker
Did you guys have that conversation of going one route or the other?
00:30:37
Speaker
And why did you pick this one?
00:30:38
Speaker
So with us, like if you're purely trading, you could also pay from your wallet.
00:30:44
Speaker
But if you're issuing options, so like, let's say you want to earn on your NFTs, then you need to put your NFT in the protocol.
00:30:56
Speaker
And if you do that, or like if you want to issue put options, you need to put your ETH in protocol until someone takes the other side.
00:31:04
Speaker
But if your assets are free, you can always withdraw them.
00:31:08
Speaker
Nice.
00:31:09
Speaker
There's one thing.
00:31:10
Speaker
So I'm, you already know, I'm a big fan of decentralization.
00:31:15
Speaker
And I think that, like you were saying, Mason, that we need to put the power back in the hands of individual.
00:31:22
Speaker
But it's cliche, but with power comes responsibility.
00:31:26
Speaker
Because, and we've seen it recently,
00:31:31
Speaker
How many times in the past 18 months have we seen Bandal pull for bored apes on the brink of putting up 50 or 80 apes on auction?
00:31:43
Speaker
Because people who are not trained investors and trade traders will make mistakes.
00:31:49
Speaker
They will act on impulse.
00:31:50
Speaker
They'll be like, hey.
00:31:51
Speaker
hey, I have this 5K asset.
00:31:54
Speaker
I can put it up as collateral and get 3K to buy this other thing.
00:31:59
Speaker
This seems like a very, very good idea because wow, profit, free profit.
00:32:04
Speaker
And then it was FOMO and it was a bad idea and people are losing money.
00:32:10
Speaker
And so how do you guys view this balance of we embrace decentralization, we're opening up the global financial market,
00:32:19
Speaker
but let's make sure we don't burn ourselves in the process and our users.
00:32:24
Speaker
Is that something that you have in mind?
00:32:27
Speaker
For me personally, I'm more of the person that like, you should be able to try these things.
00:32:33
Speaker
And if you get burned, like you won't do it again, right?
00:32:36
Speaker
Like you learn the hard way, but I'd much rather have that than needing to go through a bank and like justifying every action I want to take with my own money, right?
00:32:44
Speaker
Coming from banking, like,
00:32:47
Speaker
I've seen it like where a client wants to move 10 grand, but then they have to go send a letter to the bank and say, I'm doing this to moving it over here for this reason.
00:32:56
Speaker
Like they have to justify every small transaction.
00:33:00
Speaker
And I think that's insane.
00:33:01
Speaker
And it's like, it's my money.
00:33:03
Speaker
I want to use it how I want, but I do see like education is a big part, right?
00:33:07
Speaker
Like we're, we're constantly trying to educate the market on different strategies and like different ways to like manage risk.
00:33:14
Speaker
Um,
00:33:15
Speaker
Risk management obviously is massive.
00:33:19
Speaker
And there is a learning curve there.
00:33:20
Speaker
But I've seen people that have not come from finance that have just taken the time to learn and figured it out and become wildly successful.
00:33:32
Speaker
It's a free market.
00:33:33
Speaker
That's the thing that's the most exciting to me is it's a completely free market.
00:33:39
Speaker
Yeah, and everything's transparent, right?
00:33:42
Speaker
Like in the case that you were describing, the Bandau case, Franklin is bored, who's like a popular figure, a key opinion leader.
00:33:51
Speaker
I guess he was bored and he decided to list some of his PAYC at like lower than floor because he knew a certain loans on Bandau were about to default.
00:34:04
Speaker
And if they default and if you're the first person to put a bid on the auction,
00:34:09
Speaker
you get, I believe, a 2 ETH reward.
00:34:11
Speaker
So he calculated how much he would make or how much he would end up buying those Bored Apes for if he listed his Bored Apes for a cheaper price than Floor.
00:34:23
Speaker
He did.
00:34:24
Speaker
Everyone could literally see him from his handle, from his ENS domain name, that it was him.
00:34:31
Speaker
But people just got scared and they decided to sell their NFTs.
00:34:36
Speaker
And then the NFTs and loans on Bandai went into auction.
00:34:41
Speaker
He put the first bids.
00:34:42
Speaker
He actually purchased them for cheaper than he sold his Bored Apes.
00:34:47
Speaker
And at the end of the day, he made a bunch of money.
00:34:49
Speaker
So like to Mason's point, it is great to have these tools, but you got to do your own research.
00:34:57
Speaker
And it is very transparent, right?
00:34:59
Speaker
Like it is the data is available out there.
00:35:03
Speaker
How much of research are you willing to do?
00:35:06
Speaker
Even if you're not that willing at first, once you get burned from a trade like this, then you're either going to leave the space or you're going to be more careful next time.
00:35:15
Speaker
Where do you guys fare on, are you like fully libertarian?
00:35:19
Speaker
I feel like Mason is.
00:35:21
Speaker
You as well, Aaron?
00:35:22
Speaker
I would say so.
00:35:23
Speaker
Like, as long as you're not touching other people's rights, I think you should be free.
00:35:30
Speaker
It's funny because I'm more of a libertarian myself of...
00:35:36
Speaker
I'd rather people can make their own choice, but I feel like there's a limit to where one should go or not to which one should go, but to put the bottom line above everything is something that I have a few problems with.
00:35:52
Speaker
And so I respect what Franklin did.
00:35:56
Speaker
in the like that's smart like you understand these protocols better than most people do and you also have the the pockets to act on those strategies but still in a sense it's like come on that's feels a bit extreme I don't know like I I don't know if it's extreme because like anything in the world right like if you're making money on something if you're making money on a trade
00:36:24
Speaker
you're basically putting a spread between your buy price and your sell price.
00:36:30
Speaker
And like most of the time that's kosher to do, right?
00:36:33
Speaker
So like, why should Franklin care if it's okay to put a spread between the trades?
00:36:41
Speaker
Yeah, fair enough.
00:36:42
Speaker
And one of my big things is, right, like we watched, like I know retail can learn how to do this because we watched them do this in Wall Street Pets, right?
00:36:52
Speaker
We watched them all sit in a forum and talk to each other and learn how financial market works and understand what a short squeeze is, understand how to buy options, understand how to do all this.
00:37:03
Speaker
Like they are capable if they want to do it, right?
00:37:06
Speaker
So that's my whole thing is like you should, if you want to do this and you're taking the risk, like,
00:37:11
Speaker
You should be spending your time and like learning more about it and figuring out how to risk manage and this kind of stuff because I know it's possible.
00:37:19
Speaker
Right?
00:37:20
Speaker
Like, I don't think the government should be like watching it, like just like protecting people that are lazy.
00:37:26
Speaker
Right?
00:37:26
Speaker
Like...
00:37:27
Speaker
If you're lazy with your money and you lose it, like that sucks.
00:37:30
Speaker
Like, I'm sorry to hear it, but like, you know, but like in cases of fraud, obviously like FTX, like that's not like, that's definitely a bad, bad thing.
00:37:37
Speaker
Like FTX should be held responsible.
00:37:40
Speaker
These people, like there's no way they could have managed that risk.
00:37:42
Speaker
Like there's a problem there.
00:37:44
Speaker
But as far as decentralized finance goes, like you can learn how to, how to do it all.
00:37:49
Speaker
If you take the time.
00:37:50
Speaker
I absolutely agree with you.
00:37:51
Speaker
And this makes me think of the fact that we're still so early in our space because what you're describing is what I consider as the core of the community, of the people we...
00:38:06
Speaker
who genuinely care and want to do the work in order to get money.
00:38:10
Speaker
Because at peak bull market, 95% of the population that's there has got here because someone told them, come here, there's easy money to be made.
00:38:22
Speaker
And then they make money, they lose money, most of them.
00:38:27
Speaker
don't, don't take the time to really figure out how exactly that happened and don't learn and go back to, to something else.
00:38:36
Speaker
Well, and the thing that like when I started, right, when I started on like finance smart chain and like playing with these protocols, I liked it because you needed so little upfront capital, right?
00:38:47
Speaker
You can go in and test out these protocols with $10 if you want, if you're on a chain with like less gas than ETH or something.
00:38:54
Speaker
So you can learn it for way less upfront costs as it would be to learn...
00:38:58
Speaker
uh in the stock market right like yeah you're on robin hood and you're trading like amd or something like that's hundreds of dollars for sure and this is more transparent and you can just like see what's going on you guys need to create an academy because with your mindset and the tool that you're that you're creating you should you should build an academy to actually teach people about that i'm asking putting it out there
00:39:22
Speaker
Someone just longed Refik Anadol's winds of Yawanova on wasabi.
00:39:28
Speaker
Nice.
00:39:28
Speaker
Which is really big.
00:39:29
Speaker
I don't know who did it, but like it's one of the like we had a squiggles long before, but like it's the like second time we're getting a fine art piece long through wasabi.
00:39:42
Speaker
And it's a big piece.
00:39:43
Speaker
I think it's currently at around like seven eight or so.
00:39:47
Speaker
Damn.
00:39:48
Speaker
And how did that work for a long like that?
Impact of Wasabi on NFT Markets
00:39:52
Speaker
How much, you don't call it collateral, right?
00:39:56
Speaker
The premium, is that what you call it?
00:39:58
Speaker
The margin that they have to put up?
00:40:00
Speaker
Yeah.
00:40:01
Speaker
How it works is we basically, we have this new product called liquidity aggregation.
00:40:07
Speaker
were able to originate loans.
00:40:09
Speaker
And these loans could be on assets you already own or the assets you want to purchase.
00:40:15
Speaker
So this asset in particular was listed, I believe, on OpenSea for, let's see how much, it was listed on OpenSea for almost eight ETH.
00:40:26
Speaker
It was 7.696 ETH on OpenSea.
00:40:32
Speaker
we purchased it so the trader they paid 2.6 eath up front on an 8 eath asset so that's more than 3x leverage and after paying 2.8 eath we basically paid the remaining amount purchased it from openc placed it in an in a loan on niftyfy
00:40:53
Speaker
And the trader has the opportunity to pay that loan back in 13 days to receive custody of the underlying asset.
00:41:04
Speaker
Or if there are bids higher than their breakeven price, then they could just sell into the bid in the market.
00:41:12
Speaker
And I think what happened was Refik Anadol yesterday, one of his pieces was purchased by MoMA, Museum of Modern Art in New York.
00:41:22
Speaker
And I think someone's just longing the news.
00:41:26
Speaker
Good for that, man.
00:41:26
Speaker
That's sick.
00:41:28
Speaker
This seems, even now that you're explaining it to me, and I'm going to ask you in a second to explain again exactly how options work, but what is the difference between doing this and just going on the platform that allows this and just press long?
00:41:43
Speaker
Or is it the same thing?
00:41:45
Speaker
You have limited downside and the platform that like, there is no other platform where you can do this.
00:41:51
Speaker
So like the thing is these, like, this is an NFT that is being sold on open sea for 80.
00:41:58
Speaker
You like this person probably is not looking to hold it long-term.
00:42:03
Speaker
Maybe they don't have eight ETH available.
00:42:05
Speaker
right now and because of that through us they have the opportunity to get exposure to the nft for only 2.6 eth instead and if they like their belief is that the price is going to increase but whatever happens right even if the price decreases a little bit they could still exercise and sell to the market
00:42:28
Speaker
And their loss is going to be like 0.1, 0.2 ETH in the worst case scenario.
00:42:34
Speaker
This is sick.
00:42:36
Speaker
I can't wait to see what the platform is going to look like during the next bull run.
00:42:42
Speaker
It's going to be insane.
00:42:44
Speaker
Where do I log Wasabi?
00:42:47
Speaker
The Wasabi Passes, maybe?
00:42:50
Speaker
You could buy some Wasabi Passes.
00:42:52
Speaker
I'm considering it already.
00:42:53
Speaker
I have some liquidity coming and I think it's one of the purchases.
00:42:57
Speaker
But if you're listening, don't front run.
00:42:59
Speaker
Based on the use of Wasabi these days, what are people bullish and bearish on right now?
00:43:04
Speaker
That's a very good question.
00:43:06
Speaker
Because like...
00:43:08
Speaker
We've had some major events in the NFT space, such as the Elementals Mint for Ozuki, D-God's reveal of Season 3, and then Pudgy Penguin's Walmart announcement.
00:43:23
Speaker
And also, I guess, the OnlyForce Fortnite announcement.
00:43:28
Speaker
And in all of those cases, we've always had open interest kind of showing where the market was going to go for that collection on Wasabi.
00:43:38
Speaker
We've had a lot of people coming us asking for shorts in the Ozuki case, as well as the DGods case.
00:43:45
Speaker
Like in DGods, actually, we had a couple of traders.
00:43:49
Speaker
They were like sweeping all the shorts, all the put options that we had on platform before and after the announcement.
00:43:57
Speaker
In Pudgy Penguin's case, we've had a good group of people longing Pudgies as well as little Pudgies.
00:44:06
Speaker
And at a certain point, we had an open interest of above like 150 ETH on a single day.
00:44:13
Speaker
We've issued, like we've originated over a hundred, over a hundred loans through partner lending protocols.
00:44:21
Speaker
And on top of that, we've issued a lot of options on Wasabi as well.
00:44:25
Speaker
So it's been very interesting to see how like these people who kind of know
00:44:31
Speaker
or like have a feeling of what's gonna happen, come and place their bets before the market actually realizes those bets.
00:44:38
Speaker
Yeah, that's really cool.
00:44:40
Speaker
And what we were talking about in our preparatory call, you were enlightening me on the, what synthetic assets actually are.
00:44:52
Speaker
And so what happens when someone comes in and longs little pudgies after the announcements, what actually happens on the market after they've put out those calls on Wasabi?
00:45:10
Speaker
So in a regular perpetual market,
00:45:14
Speaker
um like in like what we've seen so far you wouldn't be affecting the underlying market if you're longing on that perpetual protocol because it's synthetic you're trading against an index price with wasabi we're actually physically settled meaning there is the actual transaction of the underlying asset so once you come and long little pudgies or pudgies on wasabi
00:45:38
Speaker
What you're doing is you're getting a loan and with like that loan, you're purchasing assets from the market, from the marketplace, and then you're placing them in loans, increasing the actual spot market price of the underlying asset.
00:45:55
Speaker
So it's a self-fulfilling prophecy.
00:45:59
Speaker
It kind of is.
00:46:00
Speaker
And looking at the numbers, we've seen that
00:46:05
Speaker
on a couple of important days, Wasabi generated 12 to 15% of the overall daily trade volume for these assets for only 4% of the cost.
00:46:18
Speaker
That's nuts.
00:46:19
Speaker
That's nuts.
00:46:20
Speaker
And so if when there's a call, this is what happens.
00:46:24
Speaker
There's a loan, it's placed into a loan, and you do it for a fraction of the cost.
00:46:28
Speaker
If on the other side, you have someone that's shorting the news on Wasabi as well, do they interact with the other people's options?
00:46:38
Speaker
Or is it a whole other process?
00:46:42
Speaker
so the put options affect the market as well um you can think of put options like a stop loss order so what happens is let's like you reserve a price to sell your nfts at and if the market price drops below that price that you reserved
00:47:00
Speaker
You can basically buy from the market and sell into Wasabi to that reserved price that you have.
00:47:07
Speaker
And you pocket the difference between the market price and the put option reserved price.
00:47:13
Speaker
And what that enables is...
00:47:16
Speaker
As a savvy trader, maybe I know what the elementals drop is going to, what the effect should be on azokis.
00:47:27
Speaker
And I say, okay, I believe buying a put option at 8 ETH price point is good enough because I want to stop losses.
00:47:36
Speaker
I believe that's the fair market value for azokis.
00:47:42
Speaker
And let's say it drops to 4 ETH.
00:47:44
Speaker
What happens when I exercise my put option, I buy it from the market for four ETH, increasing the market price, and sell it for eight ETH, generating a higher sell value, which kind of rectifies the market back to where it should be.
00:48:00
Speaker
I see.
00:48:02
Speaker
And I'm on that subject.
00:48:04
Speaker
I'm interested, Mason, how you haven't worked on Wall Street.
00:48:08
Speaker
Like, how does what you guys are building compare to what exists out there?
00:48:13
Speaker
And how do you think those institutions will react to that type of protocol or and will or and will embrace that protocol?
00:48:20
Speaker
Yeah, I think so.
00:48:22
Speaker
Like Wall Street is obviously a lot more opaque.
00:48:26
Speaker
There's like, especially like if you look at GameStop, right, they were able to have a
Decentralized Finance Adoption by Institutions
00:48:31
Speaker
short interest like that way exceeded the amount of shares that were actually available because like,
00:48:36
Speaker
This person sold and then they just kept compounding the short interest and reselling shares.
00:48:43
Speaker
With this infrastructure, it's completely clear.
00:48:47
Speaker
It's completely fully collateralized.
00:48:49
Speaker
So you know that your trade is fine.
00:48:52
Speaker
I guess there wouldn't be any short squeezes in this scenario.
00:48:56
Speaker
So Wall Street's an interesting one because of their opaqueness, they've been able to control...
00:49:03
Speaker
markets forever, right?
00:49:04
Speaker
So like the reaction from Wall Street at first is it obviously like, I mean, we saw it with Bitcoin and the ETFs, right?
00:49:11
Speaker
Like there was pushback.
00:49:13
Speaker
They didn't really want to give in.
00:49:14
Speaker
It took them what Bitcoin came out in what, 2011?
00:49:18
Speaker
And it's, you know, it's been
00:49:20
Speaker
12 years.
00:49:21
Speaker
And just now they're coming around to the ETFs and they understand it's not going to go away.
00:49:26
Speaker
I think it's going to take a little bit of time, but as they realize the benefits of like international payments and transfers and just like representing things on chain and making sure they like...
00:49:40
Speaker
there's not these complex backend systems of trying to track securities or track like where different assets are.
00:49:48
Speaker
Like everything is like on chain and like easily accessible.
00:49:53
Speaker
I think like they'll continue to adopt, adopt it.
00:49:56
Speaker
And they are doing it now.
00:49:58
Speaker
Right.
00:49:58
Speaker
Like what is it?
00:50:00
Speaker
X is it like chain link is working with Swift and like,
00:50:04
Speaker
stuff like this, like you're seeing it, it's like going to be people love this.
00:50:08
Speaker
I love this phrase.
00:50:09
Speaker
And so do a lot of people in the space, but like, it's a little bit at once.
00:50:14
Speaker
And then like, suddenly everyone will come in, right?
00:50:16
Speaker
Like, yeah, for sure.
00:50:18
Speaker
It's just going to be, it's going to feel very slow.
00:50:20
Speaker
And then all of a sudden you're going to see an in pouring of interest from wall street would be my guess.
00:50:25
Speaker
Do you, is that a strategy of you guys of, of trying to get like your first institution as a, as a user of Wasabi?
00:50:34
Speaker
We already have some institutions, not institutions that are traditional ones, obviously, but some of our biggest LPs are like we have the biggest NFT fund to my knowledge.
00:50:50
Speaker
who's like a big LP who's been helping us out as an advisor as well.
00:50:54
Speaker
We have like blockchain native DAOs who are within themselves organizations, right?
00:51:02
Speaker
Who manage funds.
00:51:04
Speaker
We've been like lucky to have them as well.
00:51:07
Speaker
So we have those types of clients.
00:51:10
Speaker
I think it's only a matter of time.
00:51:12
Speaker
until more institutions and more groups realize what the potential here is, we sold another option on the same collection.
00:51:22
Speaker
Nice.
00:51:24
Speaker
Someone's bullish.
00:51:26
Speaker
Or there is some kind of news that we don't know yet.
00:51:32
Speaker
You'll discover after the call.
00:51:35
Speaker
That's awesome.
00:51:35
Speaker
Congrats.
00:51:37
Speaker
To add to that, these institutions are hiring crypto people, right?
00:51:42
Speaker
Like I saw before joining Wasabi, like Bank of New York was hiring a blockchain analyst.
00:51:47
Speaker
Like I know people at Deutsche Bank, like there is a small team there.
00:51:51
Speaker
Like,
00:51:52
Speaker
these people have teams like they're well aware like now how much do they admit that like they're willing to do this is a different story but it's it's coming right
00:52:02
Speaker
100% is.
00:52:04
Speaker
And we're seeing it right now.
00:52:05
Speaker
Like there's more and more quote unquote open interest.
00:52:09
Speaker
At this point of the conversation, I have a few rapid fire questions that I'm going to
Rapid-Fire Questions and Personal Insights
00:52:15
Speaker
ask.
00:52:15
Speaker
And I've never done it with two people.
00:52:17
Speaker
So what we can do is I'll ask the question and then Aaron, you start and then Mason, you can give your answer as well after that.
00:52:26
Speaker
If you could only buy one NFT to hold for the rest of your life, what would it be?
00:52:30
Speaker
Oh, that's a good one.
00:52:31
Speaker
I was going to say CryptoPunk.
00:52:32
Speaker
I was gonna as well and then I decided to be smart for a second.
00:52:43
Speaker
If I gave you a hundred ETH to short one NFT collection into oblivion, what would it be?
00:52:51
Speaker
Who do you want to make mad?
00:52:52
Speaker
I feel like D-Gods.
00:52:54
Speaker
Like, pure, pure arts-wise.
00:52:57
Speaker
I just don't like that.
00:52:58
Speaker
I get that.
00:52:58
Speaker
Yeah, I'd probably say the same.
00:53:00
Speaker
D-Gods.
00:53:01
Speaker
The Romilio in me wants to say Bored Avia Club, but...
00:53:05
Speaker
Yeah, it was one of the collections I was looking at and thinking, this is going further down.
00:53:11
Speaker
If you could only hold one crypto for the rest of your life.
00:53:14
Speaker
Ethereum.
00:53:15
Speaker
I know Bitcoin is gold and it's probably going to get more valuable, but I like the fact that you can build on ETH.
00:53:22
Speaker
Yeah, same.
00:53:24
Speaker
Same here.
00:53:25
Speaker
Smart people.
00:53:26
Speaker
Who are your top three people in this space who you vibe with the most?
00:53:31
Speaker
Interesting question.
00:53:33
Speaker
I'll let Mason take that one.
00:53:34
Speaker
All right.
00:53:35
Speaker
I mean, I got to start with the homies.
00:53:36
Speaker
Like, Kuk, Kuk Capital, Wizard of Soho, obviously.
00:53:41
Speaker
Oh, Bob Lucas.
00:53:42
Speaker
I think Bob Lucas is one of the best people in the space.
00:53:45
Speaker
Like, he genuinely cares about the people in the space and he wants to see it grow.
00:53:49
Speaker
And then I got to throw in 6-5-2-9 just as a surprise fourth.
00:53:54
Speaker
Yeah, he's a legend for sure.
00:53:59
Speaker
Do you have anyone you want to add, Aaron?
00:54:01
Speaker
Bob Lucas for sure.
00:54:03
Speaker
I can't emphasize how big of a person he is in every sense.
00:54:10
Speaker
I think he is one of a kind when it comes to finding people in the space who are good at heart, who believe in the space, who are in here to create actual value.
00:54:25
Speaker
but who also have as much as influence and I guess like influence and power as he does.
00:54:32
Speaker
So we respect them.
00:54:35
Speaker
Obviously, Cook and Wiz have been detrimental for us.
00:54:39
Speaker
It's been amazing having them.
00:54:41
Speaker
I would add Spencer Ventures.
00:54:43
Speaker
He has great insights, like one of the smartest people that I've ever spoken to.
00:54:48
Speaker
It's been amazing to be able to bounce off ideas off of them.
00:54:52
Speaker
Yeah, that's awesome.
00:54:53
Speaker
Gives me hope when I hear, when I ask you questions, these questions and I have these answers, like there are actually good people out there.
00:55:00
Speaker
What's something about you people online don't know?
00:55:04
Speaker
What's something about me online people don't know?
00:55:07
Speaker
Interesting question.
00:55:08
Speaker
that I have a regular life as well.
00:55:13
Speaker
It's not just NFTs and options for me.
00:55:16
Speaker
What is that comprised of?
00:55:17
Speaker
Do you make art?
00:55:18
Speaker
I used to.
00:55:20
Speaker
I should get into it more.
00:55:21
Speaker
I like to travel, like hang out with friends, dine, like drink nice stuff, go party a little bit.
00:55:29
Speaker
Nice.
00:55:30
Speaker
What about you, Mason?
00:55:31
Speaker
Yeah, I mean, I think it's kind of similar, right?
00:55:33
Speaker
Like in our free time, travel, go to nice restaurants, just basically experience life.
00:55:40
Speaker
And especially living in New York, like being able to experience different cultures and like that kind of stuff.
00:55:46
Speaker
I think it all comes back to like Web3, right?
00:55:50
Speaker
Like experiencing these cultures and like experiencing different things makes you a more well-rounded person and like more understanding of different like things going on.
00:56:00
Speaker
It's one of the things we forget.
00:56:01
Speaker
Who of three becomes life.
00:56:03
Speaker
All right, we're out of the rapid fire.
00:56:06
Speaker
If you could, we already started doing it, but if you were to explain what an option is to like a five-year-old in very, very simple words, what would it sound like?
Simplifying Options and NFT Trading
00:56:19
Speaker
I would say it's a bet.
00:56:20
Speaker
It's a bet that you make with another counterparty on where you think the price is going of a certain underlying price.
00:56:29
Speaker
Okay.
00:56:30
Speaker
And if you could add a layer of complexity into a little bit more about how it works?
00:56:37
Speaker
You basically pay a premium to reserve a buying or selling price in the future.
00:56:43
Speaker
I need to stick to this and wrap my head around this because I don't know what it is with options, but it gets too complicated too fast.
00:56:51
Speaker
The best way that, like growing up when I was taught how options work, they explained it to me using like a car lease, right?
00:56:58
Speaker
So you lease a car and then at the end of the lease, you have an option to buy it or to just give it back to the dealership, right?
00:57:06
Speaker
So if the value of the car is 26 grand and you can buy it for 25 and you can instantly sell it, like you're gonna call it to yourself, right?
00:57:15
Speaker
That's a call option.
00:57:17
Speaker
If the value of the car is 24 and you can buy it and like the purchase price is 25, you're going to give it back to the dealership.
00:57:24
Speaker
You're going to put it, put it on the dealership.
00:57:26
Speaker
Right.
00:57:26
Speaker
So that's a put option.
00:57:27
Speaker
That's, that's simple.
00:57:29
Speaker
I'm going to cut this out and watch it again a few times.
00:57:33
Speaker
Do you ever feel... So NFTs are people's homes.
00:57:38
Speaker
Like an attack on Romilia would get Mason angry and maybe an attack on motherfuckers would get Aaron angry as well.
00:57:45
Speaker
Like it's your homes.
00:57:47
Speaker
It's your digital family.
00:57:50
Speaker
Do you ever feel guilty that you're giving other people the ability to short that home?
00:57:56
Speaker
I tried to hint my idea of like homes and shorting as insurance.
00:58:03
Speaker
Like we're giving you the opportunity to basically hold your home base no matter how much shit is happening, right?
00:58:13
Speaker
Like Remilio's hit the bottom very recently.
00:58:17
Speaker
And let's say you hold one and you love it.
00:58:20
Speaker
Like you love the way it looks, but you just don't want to lose money as it's dropping in price.
00:58:26
Speaker
Well, what you can do is you can buy a put option.
00:58:29
Speaker
You can exercise it as the price depreciates.
00:58:33
Speaker
You still hold your Remilio, but at the same time, you're not losing money from holding it because you're shorting another Remilio in the market at the same time.
00:58:43
Speaker
Like at the end of the day, these are emotional assets, but they're also financial.
00:58:48
Speaker
So it's up to you to be like actually pragmatic about it or emotional about it is what I think.
00:58:56
Speaker
Yeah.
00:58:57
Speaker
And to my point earlier, like I learned that the hard way, right?
00:59:00
Speaker
Like when NFTs like first started popping off and I was buying my first collections, like I had emotional attachment to all of them.
00:59:08
Speaker
And I'm like, oh, like I don't want to sell on the community.
00:59:10
Speaker
Like I'll give an example.
00:59:11
Speaker
Stoned Ape Crew on Solana.
00:59:14
Speaker
I bought it at three Sol.
00:59:15
Speaker
So it was like 200.
00:59:16
Speaker
So I paid like 600 bucks for it.
00:59:18
Speaker
It went up to 10 grand.
00:59:20
Speaker
And I'm like, oh, like, I don't want to dump on my friends.
00:59:23
Speaker
I love hanging out in this discord.
00:59:25
Speaker
Well, now I'm not in the discord.
00:59:27
Speaker
I mean, I'm in the discord, but I don't check it very often.
00:59:30
Speaker
Like, it's become a bear market.
00:59:32
Speaker
Now it's down to $300.
00:59:33
Speaker
So like, I should have taken the 10 grand like, and I think getting deeper into the space, you realize that like, nobody really cares.
00:59:41
Speaker
Like if you're up a bunch of money, and you take that money, like nobody's gonna like fund you for that.
00:59:45
Speaker
Like at the end of the day, you're winning like the amount of money that's life changing money is different to everybody.
00:59:51
Speaker
You know, somebody in Indonesia, life changing money is $500.
00:59:55
Speaker
But to us, we're like, oh, you're selling that for $500.
00:59:56
Speaker
But who are we to, who are we to judge somebody that needs that money, right?
01:00:01
Speaker
Like, we don't know what's going on.
01:00:03
Speaker
So I love this.
01:00:05
Speaker
I love both parts, both ways to look at it.
01:00:08
Speaker
And the more pragmatic version as well of
01:00:12
Speaker
You could keep the emotional side and protect yourself from the downside, which would require you to be a good trader also.
01:00:21
Speaker
Like you need to understand because it's still emotional.
01:00:24
Speaker
And so you're still going to think it's still going to go.
01:00:28
Speaker
It's still going to go up.
01:00:29
Speaker
Made me think like, made me wonder if there could be a like,
01:00:34
Speaker
NFT speculation index, know where you are and, you know, like know when to go and put a put on it or put a goal on it.
01:00:45
Speaker
Can you add that?
01:00:46
Speaker
Add that layer?
01:00:48
Speaker
Like an interest thing?
01:00:49
Speaker
Like a signal box?
01:00:50
Speaker
Yeah.
01:00:51
Speaker
I don't know.
01:00:51
Speaker
Yeah, like something to warn people who are not traders, hey, your assets probably overvalued.
01:00:58
Speaker
It's time to put a call on it, to put a put on it.
01:01:02
Speaker
We probably can't give financial advice.
01:01:06
Speaker
I kind of thought that was the way it was going to go.
01:01:08
Speaker
But it's a good idea.
Conclusion and Listener Engagement
01:01:12
Speaker
And...
01:01:13
Speaker
We're thinking of adding metrics to show open interest on certain collections, like what top traders or top holders of that collection are doing.
01:01:24
Speaker
And those are all good signals for you as an individual to look at.
01:01:29
Speaker
But as soon as we put it out there, then it's not an edge for anyone anymore.
01:01:34
Speaker
It's better to stay a little hidden.
01:01:37
Speaker
Man, this was fun.
01:01:38
Speaker
That's it for me for questions.
01:01:41
Speaker
Thank you guys for agreeing to do this.
01:01:44
Speaker
Do you have anything you'd like to add to people who've made it this far?
01:01:49
Speaker
I really appreciate the questions, the conversation.
01:01:53
Speaker
Thanks so much for hosting us.
01:01:55
Speaker
Yeah, thank you very much.
01:01:56
Speaker
The conversation was great.
01:01:58
Speaker
Yeah, glad you enjoyed it as much as I did.
01:02:02
Speaker
Yeah, if you made it this far, thank you.
01:02:05
Speaker
Thank you for coming.
01:02:07
Speaker
Don't forget to like, subscribe, put a comment, all the thing you hear on every single video or podcast ever because it helps a lot.
01:02:15
Speaker
Also, don't forget to go and check Wasabi either just out of interest or to check out something that I think will... Like the way I was describing it was...
01:02:25
Speaker
interviewing the founders of uh of uniswap before it becomes uniswap i think that's the scope that we're looking at and probably even more depending on the length of time you're uh looking at it so yeah thank you guys so much for coming thank you for listening and and uh i'll see you all soon thank you thank you my pleasure