Can Zora’s Model Work? | Round Table

Transcript

I think that the bigger problem though is just like content is worth zero. And we we know this through Ben Thompson's aggregation theory, right? It's that in a world of infinite content, the thing that captures the value is the thing that can aggregate it and curate it for you. That's who's going to get paid. It's not the content creator. Quick shout out to today's sponsor, Algarand. We'll hear more about their Algo Kit 3.0 and how it's built to supercharge your app development on Algarand later on in the episode. Nothing said on Zox Research is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only and any views expressed by anyone on the show are solely our opinions, not financial advice. Pokio, Ryan, and our guests may

hold positions in the company's funds or projects discussed. Hey guys, welcome back to another episode of ZeroX Research. Today I'm joined by Ryan Cash Flows Connor. We've got Dan, Reverend Smith, and Westy here joining us today. Couple of boys from the data team. Great to have them on. Uh before we get into anything, as always, we are shilling our events. Uh Permissionless is coming up. It's going to be in New York late June. 0x10 is the code if you want to get 10% off tickets and see some of the boys here at the event. Hopefully. I I don't know if everyone here is going to be there, but I hope so. Um at least tenatively. We are hopefully all planning to be there. So, yeah, the four of us will all be there actually. And uh you didn't give Wesy a nickname, but here's a quick hint of alpha. I think

he'll he'll have a nickname after his talk at permissionless. We'll leave it there for the crowd. We got to leave that veil of suspense. Dan dropping some pre-TGE lore on Westy here with his upcoming talk. Uh, no, it's EG, event generation event. Maybe it's just GE. I don't know. We'll we'll work on the acronym. I think we'll figure it out. We're we're strugging everything. Maybe we're going to coin the talk and it's pre pret. So there you go. Uh we'll just lean into that one. But 0x10 10% off link in the description. We'll see you there in June at permissionless. All right, let's let's jump into it. Um I don't have a lot to talk about on markets. I think

it's it's been a lot of the same back and forth stuff. U people talking about tariffs, people talking about this, that and the other thing. The one the one maybe topic I do want to pull up again is um you know our resident macro GCR Felix had dropped his own piece on you know related to Bitcoin and and macro and other things. Um and I'm seeing talk that we saw a few weeks back around BTC decoupling from you know equities or you know US equities. Um we're seeing I'm seeing that crop up again like you know the the stock market is is down today and Bitcoin is up. So, um, people are kind of reiterating that point. I guess I'm curious, what are you guys thoughts here? You know, we've I think we've talked on this point a little bit, but I just want to know what people are

thinking. Yeah, shout out to Felix for the perfectly timed report, thesis, whatever you want to call it, on uh, Bitcoin outperforming US equities. I think what makes this a little different like this decoupling from the last one where it it lasted for like maybe a day is in that time the the S&P and US equities were were dumping pretty significantly and Bitcoin was just kind of staying stagnant or not dropping as much whereas now today I look at the charts and the S&P is down over 2 and a half% and Bitcoin's up over 2 and a half%. So to me, this is a pretty meaningful swing uh

in this direction. I think it comes from specifically Trump's comments um or I guess his truth social post where I guess the gist or the TLDDR is uh US dollar down. Uh and so people are basically uh buying gold hand over fist as if they already weren't doing that. Uh and then Bitcoin I guess is sort of coupled within this trade. Um, so that's what I'm seeing at least. I default to Felix for all macro takes. I've been so tuned into cryp I say this every podcast, but I've just been so plugged into uh crypto over the last three-ish years that I got I got no meaningful laring to do. I would say

that the um as someone who used to do macro no longer does, um it's definitely interesting. You've had now two days where Bitcoin goes up when markets go down. I think that that's pretty interesting. Um, for a lot of my career, um, if you could look at prices today and how they were behaving and really understand what was happening tomorrow um, with with a with a reasonable degree of certainty. I think that the problem with what Bitcoin is trying to achieve rather than just like what you know changing beta between sectors and countries and you know instruments and asset classes um is that Bitcoin is trying to or at least

the proponents of it want it to be this like riskoff asset when has when it has historically been anything but there is a huge behavior change that needs to happen for that to succeed. Um, it would be the most profound shift that I'm aware of in markets. It like, you know, we've all seen this shift in markets where the long bonds stopped working in riskoff environments and it's like kind of not worked. I mean, it's definitely not worked, but the degree it's like, okay, it's like it's off a little. 6040 is kind of broken. Um, you would really need a change in buyer behavior. um you know from an asset that used to go down 70% in recessions to an asset that goes up in recessions is a is a is a huge

ask. So I think while it's potentially promising I think you know it's still like you know show me is still you know Bitcoin has to has to prove that out. Yeah, I think that's fair. And I think there's a timing thing at play here, right? You know, even looking back a few weeks, it's people start getting out the decoupling posts and then a few days later, you know, I think maybe there's some lag effect to that price action relative to the rest of the market. Um, and we see this in other ways with with Bitcoin and crypto relative to other markets where moves happen on the weekends or like off hours and then, you know, the the week comes into play and then, you know, you see another move or like a a more concentrated move or, you know, something to rebalance the the activity that was occurring on the

weekend, whatever it may be. So, um, to Ryan's point, I guess at least, I think we we'll need more time to see like a verification of this idea if it's if it's really decoupling or happening at all. And and you have to see it's important when [ __ ] hits the fan like that's those are the moments where you need the thing to work for you. You know I think I think long bonds if [ __ ] hits the fan if you start seeing like runs on banks and financial institutions rolling over then you you probably although long bonds haven't worked like you'll start to see them work in that way because that'll be a very deflationary force. I mean, you got to think all the counterparty risk that is existent in Bitcoin, um, and all that leverage in that system, like I really doubt that

Bitcoin becomes this riskoff asset when when you go through a March of 2020 or a, you know, 2008 or something like that. We'll have to see. Hopefully, we don't have to go through a a March of 2020 again anytime soon, but you never know with the way Trump and and associates have been acting and the way the markets have been responding to that. Um, but speaking of the way that certain participants in spaces have been acting, a big talk of the town right now. Let's jump right into it. Zora has been all over the timeline. The base team and Jesse Pollock have been really running and gunning with this one. Um, I'm just going to I'm going to pull and

go through some things to set the stage here. I think you know, most people if they're paying attention, they they kind of have the gist of what's going on here. But, uh, essentially, you know, Zora's platform, which used to be more NFT kind of content focused. They they made this pivot and shift to content coins where, you know, posts that you make on this like Instagram like platform are essentially all, you know, associated with a coin or a token and then those can be, you know, bought and sold and traded like any other coin. Um, but they're really leaning into this idea and the base team and and Jesse Pollock have been pushing it pretty strongly like this kind of, you know, concerted marketing effort behind Zora and what it is. Um, they think sort of the big first gasp here was um, this

basis for everyone post. This this coin launched and let's just let's drop the chart here. Um people got very excited initially um by you know the I guess the sort of immediate price action and the support from Base Team, Jesse etc. Um but as a token and you know as a lot of these launchpads and other platforms go uh I do know that a big portion was of the supply was sniped. People were talking about some of those details. It seems like you know an early big red candle was from some snipers dropping a big amount of supply that they were able to chew up. Um, this got people initially riled up, but um, I think ultimately like the Zora team, Jesse, the bass team, like they're behind this idea.

They, you know, I think that didn't really phase them. They didn't really care. Um, he went on some follow-up podcast to kind of like lay out the vision was just sort of like, we're just going to keep coining stuff. We're going to drop our content on Zoro. We think it's cool. Um, it's a good idea. um had some had some funny moments like a montage of like basis for this, basis for that, basis for pimping, etc. Um people made fun of that, but I think he's he's really just getting into this like marketing idea of like we just want people to coin stuff on here and like use the platform. Um they're super behind it. Uh I I guess for you guys, I'll pull that off the screen. Like I want to get into it. There's a lot of angles that I think we can take, but

maybe just starting on the first half of like Zora as a platform and like putting coins alongside posts, social posts basically. Um, what are our thoughts just like basically on the design? Yeah. Yeah. No, I think it's interesting. Um, I I think you had a great set the stage there and I think for most of our listeners, everyone will know the outrage we saw on crypto Twitter. Uh, they got absolutely crucified for this. I think a lot of that stems around the marketing uh of the just like the comm side of things. Uh we can get into that in a minute. But uh overall, I personally think the the platform's interesting. Should you tokenize everything? I don't know. Nobody knows.

But there is an interesting way that a platform like this is better for creators, right? This was a lot of the promise of um you know NFTTS back in last cycle. I think this is kind of similar to that in some regard where if you are a creator uh you can earn for your posting your content, right? the the platforms currently monetize that activity through ad space. Um, and the idea is that some of that is valuable to you. So, you can do kind of interesting things, right? You know, they're tokenizing every post that puts it on a on a basically a bonding curveish sort of style. Uh, they're using Doppler uh built by the wetstone wetstone team and that's a a hook built on top of uni v4.

Um, it's really interesting actually. If you care about like AMM tech, you should definitely go read that. uh they have a white paper and a docs that I 100% recommend or there's a good I think there's two podcasts on bell curve about that like touch on the topic. Um, but uh overall like I think it's kind of interesting, right? Like I don't know. My content is definitely not optimized for the an Instagram like platform. Um, so I'm not like a good user of the platform, but I find it fun. Like dude, I don't know. I like scrolling the app. You can double tap things. The similar style of liking things. You buy like a couple cents of a post, right? It doesn't feel like I'm, you know, it's it's a much different experience when I log on to like I don't know, pump.f fun and like I'm like all

right I'm trying to find the next thousandx like there is a totally different user experience. Um and so I broadly find the idea the most interesting shot on goal in the crypto consumer space right now. Um I'm excited about it and yeah I think there's like a very meaningful argument to be had of like should you like should this exist? Like the answer to me is nobody knows so why not try it. Um, and I don't know. I saw a lot of push back on that idea of like if why not's the only reason to try something like it's probably dumb. It's like, yeah, these are all startups, dude. A lot of these things are going to fail. There's going to be 99 shots on go or there's 100 shots on goal. 99 will miss and hope we hopefully land that one. Um, and I think that's really where

we we're at in the industry now, especially on the consumer side. Like it's a very tough nut to crack. Um, gaming, consumer, both of them. Uh, and I I think we're we need to embrace experimentation on that side. So, I don't know. A lot of the people I got into debates with on Twitter, they're like, "This is really stupid." And then I'd ask, "Have you downloaded the app?" And then they would stop replying. I'm like, "Okay." Like, "Yes, if you look at this through the context of Pump Fun and you're trading like through the unis swap front end, yeah, this this probably isn't a good like I don't think it that's not what this is supposed to be. This strictly supposed to be like a consumer app uh with that crypto backend." Um, so I don't know. It's interesting to me.

So, I have a lot of thoughts here. Um, I think in general I agree it's a great shot on goal and I don't think any of the controversy is like a bad thing. If anything we should be pushing the grounds of like what is acceptable in this industry and so for me like I don't mind any of like pushing boundaries, trying new things, etc. But my qualms definitely come from the mechanism side of things. Like to me, I don't think the actual mechanism they have lines up with what they say that they want in this platform or what they're trying to do.

So in my brain, um like what they're trying to build is basically Instagram or a social app but using crypto and empowering creators um and and allowing them to have a different mechanism of income basically. And to me the what they have does not really achieve that. What they have when they they make every post one billion tokens and the creator only gets a certain number of basis points on the trading volume of those tokens. What you you get is very very small amount of income to the amount of dollars that are put in from the users.

So if you think the flow is oh I'm scrolling my feed like I would Instagram. I like a post and the creator like that is like monetary value to the creator. This mechanism does not do that because the creator only sees a very small percentage of that buy. A better mechanism would be some sort of NFT potentially or just a tip to the creator where the creator gets let's say 97% and in Zora takes 3% or something that would be much better from an income perspective uh versus this mechanism. uh and and what you end up getting when you design it this way is that it looks very similar to Pump Fun. The mechanisms are

basically exactly the same. You just add revenue share for the creator. Um and then you add some sort of social graph where you can sort of you can you get to know creators, who they are, what kind of stuff they create, but it's essentially pump fun. And you're already seeing the pumpf funification of Zora where the front page of the top volume traded tokens. It literally looks the same as Pump Fun. It's like a bunch of slop that people create just to create trading volume. And what you incentivize with the platform is for people to come in, try and create something that like goes viral, creates speculation, and there's no actual value or content being created. Uh like just your random

Instagram creator that you're trying to onboard is not going to see much benefit. And even like you scroll your feed right now of Tik Tok or Instagram and you'll see a post with 5 million views that if that same post was on Zora, it would be worth like $2,000 in market cap. Like I just don't think the desire that they have to recreate Instagram within this crypto environment is what they're doing with this design. So yeah, that's a it's a long rant there, but how can you be confident that that five million views post like wouldn't have market value for one, and then two, like if that, you know, you play this out on

a long enough time horizon, let's say every let's say Instagram adopted this exact model, right? So we don't have to go through the battle of onboarding these users. We just switch the switch the model. Um, you know, there's some degree that's like if that's what posts get valued at, then like that's what they're worth. And maybe it isn't a lot of money because social content is like largely ephemeral. Well, if it isn't a lot of money on that point, then creators don't make a lot of money. And so, if you're trying to empower creators and the posts aren't worth very much and they only see two two and a half% or whatever the basis points, which I think is way less than that, it's like you're not really helping creators. I think a better design would be make it so you have basically every post has a cap at 10,000

NFTts that can be minted and once it reaches that cap then you fractionalize the NFT and then it becomes tradable and so creators like because most posts are going to be in this realm of like not very valuable they see a majority of that value but then eventually if you get a really viral post you can have some sort of price discovery. Isn't that what the first iteration of it was? Basically, like you tokenize your post with NFTts. I was I didn't use the first iteration. I I didn't use the first iteration either. Yeah, I think that was essentially it. They had like unlimited mints. They had limited mints. Some of them were free, some were paid.

And Drip is also or I guess they're now got bought by Jupiter, but like the Drip model is similar in that regard. And that never really like got traction. So that I that's the other thing is I think there's just something about tokens having less friction that um and just an industry that has really rallied around like the trading of tokens. It makes it just a more enticing mechanism. But to your point, I don't know if I mean that leans into the speculation side of things which they tried to like position themselves away from. So I don't know. Yeah, it makes more money. It gets more eyeballs like speculation does and so like you might as well lean into that.

But what you lose is like this actual like heart heartbeat and like creators creating for for art's sake. Like you just get like slop that people want to trade. Whether you're building D5 protocols, enterprise solutions, or nextG DAPs, Algoit has all the tools you'll need to build faster, safer, and smarter on Algrand. Algoit 3.0 now offers native TypeScript and Python support, visual debugging, and seamless testing. Build, test, and deploy with tools designed for speed and simplicity. Start building with Algo Kit today by following the link in today's show notes. This episode is brought to you by Ledger, the global leader in digital asset security. Celebrating 10 years of innovation, Ledger remains the most

secure hardware wallet for your crypto and login. Trusted by 7 million users and securing 20% of the world's digital assets. Follow the link in today's show notes to grab your Ledger. Now, the content hurdle, I think, is the hardest thing. Like, and that's my least favorite thing about the app today is like my feed sucks. Here's my thoughts is I people are going to pay for that shitty content, right? Yeah. Yeah. I think that's what I want to lean into is like I don't care what the virtue signaling of like we want to get creators more money. That doesn't really matter to me. My thought when I was thinking about this design was I thought the end goal would be more like we're going to replace traditional algorithms with just the market you know

you take the polyarket approach and it's if users are going to be the marketplace and they're going to decide what is trending or not because they're buying and selling these posts then you know you're taking away the complexity of like building an algorithm for people and instead you're just delivering them the marketplace and so then the trade-off there is like I guess I don't have like tech spend and dev spend on this Algo and it's just, you know, I put tokens underneath everything and people trade them up and that decides what goes into people's feeds. I don't know if that's really better or not. I mean, like you said, you'll end up seeing slop. You'll see memes and things that like the market at large is deciding that that you should see. Maybe a complete replacement of that model is not really like the answer. But I also

know that like putting a rev share on the trading volume of like my posts that get one view are never going to mean anything to me. And like sure they're going to mean something to the the top 1% of users that make money, but those guys, you know, the people that are top 1% of social media posters and influencers, like they're making money in a whole variety of ways today, right? They've got sponsorship deals. They're probably getting paid by some of these platforms directly via ad share like Twitter does. Like they have different ways to monetize. They go through Patreon and do like private content behind their public content because sometimes the public content doesn't pay. Um, so I don't know. I'm torn. I don't know that the model really even like matters that much. I got a followup to that one specifically real quick,

Ryan. And okay, you just named a lot of extra [ __ ] that those people have to go do to make the money that's like built around their brand versus just doing the thing that they want to be doing, posting, right? Like I don't know what's an extreme example, Jake Paul. Like that dude has a team of people that he has hired to solve all of those problems. Like what products can I sell to my community and what advertisers can I work with that's going to pair well with my community? and the message I want to be delivering and things of that nature. Um, so maybe for someone of his size that is always going to make sense, but think of like your I don't know upper middle tier Tik Tok influencer, just some dude who like quit his job doing his thing on Twitter or like some some

gal tweeting about or posting about like, you know, her nursing video recaps or whatever. Like those people are the ones I think is maybe most interesting for where they don't need to do all these other things. They just keep doing the thing they're doing. um no ancillary services or goods or things they have to sell that they have no interest in um or ads they have to bake into their Tik Tok videos. They just keep posting the way they've been posting and their community is what I guess they're more directly monetizing instead of through ad space. So that that's the only piece I'd add there and why this is potentially kind of interesting. Well, I I think that there's I think there's a bunch of flaw.

I So I think that this is interesting first how we're framing it. Dan was bullish. Uh Wesy moderately less bullish. Danny like way less bullish. I am going to give you your ultra bear take. Um I I think that um tokenizing content of this nature is a zero. Um I think and I think that's it's that way for a few reasons. I think one in the internet era you're seeing the price of content as to zero and in many cases it is zero. Like the market price of the marginal Instagram post is zero. Um, so you know, how far are you g are you going to get from tokenizing it? I think you have to hope for a speculative frenzy, right? You want a pump fund game

to form around it. So the fact that like Bass and Zora are explicitly like going to the market and saying this is not for speculation. It's either dishonest or they're completely wrong. Like you have to kind of bootstrap that that activity. Um, and I think that given I mean, look, let let's go back to like how are creators how do creators monetize? I think it's I think it's a flaw it's a flawed argument to point out that you know they don't get paid for doing what they're doing for just posting. Most businesses operate on giving giving away some core product for free than monetizing around it. That's what music has been forever, right? like music creators in the music industry, they give away their music essentially for

free or the label took 100% of the proceeds and they monetize around it through merch and live events and and inerson appearances. Um, so like and even at Block Works, right, like we're giving away our podcast for free and like maybe you sign up for the research or like we monetize the ad space. Um, it's also flawed to think that like the ads like the ads are a problem. The ads are what makes the product go. Um, YouTube over the past three years has paid out $70 billion to creators. Over that same time period, the digital content market is only $32 billion in size, right? So like creators are getting paid and the correct creators

are being paid. Like there there's a reason that Instagram does not pay the marginal content creator. It's because if that marginal content creator churns, it doesn't matter, right? like that they they've made that calculus. Um I think it's odd that um Zora would flip ads for direct to creator payments. Um the global ad market is $600 billion in size, right? Compared to like I don't know again that digital content creator market being 32 billion over the last few years. Um, like you can also view it from like a crowdfunding lens where X has had the uh creator monetization button where you could just send

payments to creators. Very very small market. Very small market. So like I don't know it I I think that the I think that the app rests on a lot of rest on a lot of flawed um premises that just like they're either not problems or they're creating problems by like having the game being played this way. Yeah. No, I think you bring up good points and I also think uh like even Twitter paying their power users as well, right? If you have five million impressions over a three-month period, then you're eligible for activity, right? And so that's kind of where they've put that line in the sand and said this is where your content is no long like the marginal value of your content is no longer zero. Um so that's another interesting one where I start to think that's potentially interesting is

right, let's say like uh I don't know, everybody listening to this uses Twitter, so I'll try to use this as an example. Um, and we'll use that five million impressions per uh every quarter as the the line in the sand where it's like if you hit that line then instead of paying you like let's say that that you had the Zora platform underneath and it was exact like I'm still using Twitter in the same way you're still using Twitter in the same way just my posts get like put on this curve. Um I don't know like is this curve idea even uh tokenizing the post and launching it in this pool like is that interesting at all I guess is the question because this way you're not saying like okay my mom's tweets will not you know they are worth zero no offense to my

mother but you know maybe someone else's aren't like if Twitter is paying me then like mine are provably not worth zero let's say. So I'm curious who you think that like if that is interesting at all. I want to say I think there's two maybe questions here or it's like there's two pieces of this to deviate from. One is are the tokens valuable? Well, that might depend on how the tokens are designed, right? Like do you get anything from buying the token relative to the post or are you just purely speculating on the price of it because other people are speculating on the price of it because it's from, you know, Drake or whoever dropped the post, right? And he gets a lot of views. Um, so if there's nothing behind that, like

if it's a memecoin, sure, like there might be value in trading it as a speculative like venue, but it might not like the resolving price at the end of the day like over a long time period might be zero because at some point like the mind share of that thing goes to zero, which and that's probably okay though, right? Like think about the think about if you could chart like my daily impressions on a tweet, right? It would look like a rug at some point. But the the um the problem is that the UI is not um it doesn't set you up for that experience. Like the Instagram UI is for um visual content creators. It's not for discovering financial assets. So what

they've done is they've given you this very visual UI and then they've took the speculative like grid format that has been used across financial applications since the dawn of financial applications to today. They've stripped they've stripped that out so that you can't assess financial returns or like relative prospects of assets. So like I think that that's a big problem in the UI if you want these to become memecoins. You're giving users pump fund and then you're taking all the useful features from pump fund away, right? So like you you create hops that you have to go to deck screen and now like pump fun is just like it becomes your place for for for playing this speculative game. I I think that the bigger problem though is just like content is worth zero. And we we know this through Ben

Thompson's aggregation theory, right? It's that in a world of infinite content, the thing that captures the value is the thing that can aggregate it and curate it for you. That's who's going to get paid. It's not the content creator. So like you know it's it stinks that you know people want to like like artists for example like for as like since the um for for for literally hundreds of years people have been upset that artists don't get paid for making the amazing work that they make. And it's terrible. And like I'm sorry that they like chose a profession that does not monetize well, but like it's the reality

of it. And I don't think I I think that you have potentially thousands of years of uh historical evidence that content creators don't get paid. And I don't think that simply swapping in crypto rails is going to change anything about that. I I will say going back to some of your points from before about YouTube and other platforms like I think they they do get the you know the ones that are successful do get paid today and in some cases it's it's directly right like there's a lot of v you know Dan was kind of like they have to go through all these venues to go and do that whether that's you know if they're launching merch or if they have a Patreon and they like have private paywalled content behind their public content like I think creators have gotten really effective at like I think the thing that they are

selling more so is their brand and their personality. I think we're getting into this age of like people are getting into these, you know, parasocial relationships, whatever you want to call it, but like the user really forms an attachment attachment with a creator and then they're willing to pay extra money to see more from them. And it's again, it's less so about the content specifically. It's about that personality and they just like want to absorb more from them and they're willing to pay extra for that. Um, but like their marginal Instagram post like yeah, you're right. Like they don't care. It's like they'll like it and they'll look at it and that's great, but um they want more. They want more behind the scenes. I think an interesting summary of this uh especially Ryan's bare points are focusing on the creator sort of focusing on the supply side. Uh

which is like a very crypto thing to do. Everybody thinks about the supply side and not the demand side. And uh maybe users don't want to trade the posts because they're all worth nothing. Yeah. Uh, so I think that's kind of an interesting framing as well. That's the most important of this discussion, the point of this discussion. Um, when Nikita Beer got hired at Salana Foundation, I read all his tweets going back to 2022. I I plan to read the rest. Um, but one of one of his most interesting insights is that most consumer applications, they're not just that they don't just come out of nowhere and they often address latent demand. So if you're a consumer um app creator or a startup and you want to build something, you shouldn't just like come up with a

new game, you should look to where consumers are bending over backwards in the market to do a thing and then address that demand. So he gives the example of um you know he sold gas to discord I think it was um it's um it's a polling app and he observed that um in Snapchat uh users were linking to a an Arabic polling app to spin up polls um in their local friend groups. So they were going over these massive hoops. one, putting a link in their Snapchat story, two popping over to an Arabic app that you had to translate into English and then going back to the Snapchat app to like play this polling game. And that was like the um that was the ideation for for gas. So like he took the set of

features in the market that were extraordinarily popular and he bundled them and served that latent demand. That's what Pump Fund did with memecoins. Like for 10 years in crypto, both the supply side and the demand side bent over backwards to launch arbitrary units of value and like find the next thousandx in that space. All Pump Fund did was said, "This is already popular. Let's put it into a single UI. Let's make it super cheap and let people um you know do what they've wanted to do, what we've observed them wanting to do." Zora does none of that. There is there is there is no demand in the market to buy post. And like you can even look at Jack Dorsey's first Twitter post, right?

Like he tried to sell that for tens of millions of dollars. I think it cleared for like I I could I could have the facts wrong. I think it cleared for like a few thousand. Like no, it was like 2 million, but I don't think anyone's ever going to be able to resell that to your point. I'm You're saying he sold it for 2 million? I'm like fairly sure we we I will say you know branding it in the area of era of the NFT phase you know I think there was a lot of thought around like oh I own this post like I own the IPO like you know some of that nonsense I think was circulating at the time but uh yeah I wouldn't be surprised if you would struggle to resell that today sold for $280 Jack never mind well yeah we also have like and I know

like we shouldn't like it's startups you should be forward looking you should be experimental, whatever. But like we also have a graveyard of startups that have tried this or variations of it. I know that this game is a little bit of different. It tried us to take what Pup Fun did and like apply it to the things that failed, but like there is a graveyard of startups that tried this in 2021 and it it didn't take off. Okay, I'm I'm not over the Jack Dorsey tweet. man man who paid 2.9 million for NFT of Jack Dorsey's first tweet to lose almost $2.9 million. This is the mo this is the Mona Lisa of the digital world says crypto entrepreneur Cena Algoit 3.0 includes all the tools and open source resources you need to

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touchcreens, making it easier and safer to manage your transactions and assets. Alongside Ledger Stacks and Ledger Flex, they have also launched the Ledger Security Key app, offering a safer alternative to traditional passwords and enhancing your digital security. Follow the link into today's show notes to get started with Ledger today. That's tough. I think I do think there are a lot of top NFT buyers who would be crying today looking at the the sale price that they would get in today's market. But speaking of things that are worthless, I think there's another part of this discussion that we need to get to is that the team has announced details of and sorry this image is so garbage, but it's from mobile. But the team has announced details of the Zora token and

they explicitly state it is for fun only and does not entitle its holders to any governance rights or a claim on any equity ownership in Zora or its products. So naturally I think the timeline is very insensed about this point as well with what some 65% of the total supply allocation going to a combination of like team contributors insiders etc. Um let's dive into this one. I know Dan, you were very excited and heated about, you know, hopping on the Zora train um before this. Now that this has come out and there's no chance of gaining any upside in the future success of Zora, like has your tune changed? Okay, so on the first point, whenever like crypto Twitter over the

last 12 months, I mean history, but really the last 12 and really the last six months has been in like let's say 80 85% or greater agreement on anything, your hit rate on fading that opinion is 100%. So the overwhelming like revolt or title wave of uh posts was like to hell with Zora. And I was like, "Okay, so immediately I'm intrigued." Um, and I was already using the app. I had downloaded it about a month or month or two before. Um, and I was like, "Okay, this is like certain from a strictly from a UIUX standpoint, it was hands down the best crypto app we've had."

That is not saying a lot, but it was immediately interesting. I was like, "Okay, this team's probably like somewhat confident. Like, I'm intrigued by the idea." Um, and then like the whole shebang happened and I was like, "Honestly, [ __ ] coin everything." Um, so I I did go to bat for all of the for Zora and then um yeah, this is super disappointing to me. I did not know this was a thing. I don't know when this exact post came out, but um I missed it if it was if it was earlier than this. And uh yeah, I started circulating I guess in the last 24 or so hours. And in 2025, I do not think you can have a business and launch a memecoin associated with that. I just like don't think that's the right thing to do. Um

so they're basically explicitly saying this has no value. It has no rights and it um is strictly for fun only. That is directly within the docs. And yet there I think the breakdowns like I don't know roughly 65 or so 70% of the token is going to the team and its investors. Okay. So how do you you immediately cannot square those two things? We're keeping a bunch of this worthless thing for ourselves. for what reason? Um, I don't know. I've been spending a lot of time thinking about like the problems in crypto today. And I think at the very height of that list is how uninvestable liquid tokens are right now. Um, I don't think anybody really realizes the gravity of the situation. But like

almost every project has some extremely big red flag that you just like can't justify a meaningful position at it in it in these at these valuations. Now, there's obviously exceptions to this, but uh it's like a pretty decent blanket statement in my mind. um whether it's like just a totally busted vesting schedule or whether it's um you know unclear relationship between the labs entity and the token or whether it's the foundation doing funny business around OTC activity or whether it's market maker and centralized exchange dealings like all of these things are huge huge issues and it's basically all over the industry. Um, I I mean more on that I

guess in a different pod. But yeah, I guess my rant there really really is just like in 2025 it is like time to launch things and be the solution rather than add to the problem. And I just I really can't get behind a business with investors launching a forefront only token. Um, super disappointing from like more of like a ethos standpoint. And then honestly like yeah let's say this has like a 0.1% chance of displacing social media as we know it because this idea is fantastic and it works and becomes the next big thing and I have no ability to get upside in that right like this is a forun only token that confers zero rights to governance or anything to do with the product. Um I don't know

like I now I don't have that element right and let's say it was like a more traditional style token like I don't know a or something. Um, yeah, that would be fantastic. Right now I could have a potential like uh shot at the governance rights or the future cash flows of this awesome thing that's going to change the world of social media. And how great would that be if a token was sitting at the center of that, right? You had this permissionless capital formation happening around this awesome new product that totally changed social media as we know it, right? That that would be a fantastic moment for crypto. Uh, and now we're not going to get it.

Um, so I don't know. I think some of the push back I saw to this was like, yeah, we don't want you need to manage expectations and you don't want to set yourself up for failure. Like say this is just saying we're not going to be successful, so we're launching this thing so whatever happens happens. Like I don't know, this is a business and it it's just disappointing. It's it's more insidious than that. It is it's a way to monetize your equity without selling your equity. But but I would say that it's not the team's fault. Um the market rewards people for doing this. I think that there's a lot of um um impressionable uh uninformed uh or just people who don't care. You know, they're they're not sophisticated

capital allocators and they are, you know, they're there to buy these valueless tokens that, you know, teams are and it's it's going to work out really well for the team. Like they're going to make money. They're still going to have upside in their business and the market is allowing them to do that. um it's up to the market to shun things like this um if we don't want to see them anymore. So on you know we'll see how the launch goes. I I think you've seen some improvement in the market environment in 24 and 25 where you know the lowflat high FDV coins are being punished uh coins without tokens are being or sorry tokens without products are being punished meme coins are being um you know pure meme coins are being punished so you know perhaps the market

is wising up to it but you know I I think Bach has the best kind of framing of this um he tweeted earlier today uh launching a 300 million million FDV token just for fun and without any responsibility than giving 56.7 million to investors and the team members as just a little joke. Fantastic. I hate that you're right. I think you're right and I absolutely pains me and disgust me that you're right because the market does reward this and so it will happen and people are just going to keep getting steamrolled.

One one more thing I'll add uh and I'll drop this slide as well. Um, I can't blame Bass or Jesse. You know, Bass Ventures, I think I'm pretty sure, invested into Zora in their in their earlier round. Um, you know, they're supporting their their port co, I guess you could say, and they're they're championing them. And they've been doing that with a lot of projects in their ecosystem. So, you know, it's it's hard to like dog them too hard for like trying to push this and be like the kind of put some marketing power behind one of these things, but it it does taste a little sour to then, you know, see a nice big post with 150 million plus volume, hundreds of thousands of coins created, uh, like one week after Jesse and the base team start saying coin everything and then they

drop the details of the token. Um, you know, I think people often get upset about or at least talk generally about, you know, pre-TG tokens and airdrop farming juicing their metrics and and sort of, you know, maybe selling those downstream to, you know, maybe less than savvy investors, um, like Ryan is saying, but it just feels like another case of that. I I do think this will be an interesting case to test that theory, Ryan, of like the market is rewarding this because in other cases, you at least have some plausible deniability or they try and make it seem like some utility will go to the token at some point and this is just a very clear like no this is for

funsies. So if the market also rewards this, then it's like, yeah, people are going to continue to do this. But if like it just trends to zero super fast, then I think this might be potentially like a place in which that kind of stops and people start being more transparent or more like you more deliberate with how they launch tokens. One thing I'd also add is I don't know. I saw a lot of people being like bringing up the conspiracy, putting on the tin foil hats of like, oh, Jesse knew about the airrop, so he started talking about it, blah blah blah. Um, okay. First of all, let's pretend that's real. Like, I actually kind of like

that. You know, this one got users to use a thing and get an airdrop. That's always probably net positive. Then two, um, it's like, okay, Coinbase does not give a [ __ ] if they get an airdrop for like 100K or whatever it is. It's not going to move the needle for Coinbase. That is not why they're doing this. Uh, they're supporting applications on their ecosystem. Like, that's what you should be doing. Toy tweets about every [ __ ] application that is on Salana and he's using time.f fun. Like, this is just like you are the spokesperson of your ecosystem. You should be using and interacting with the things on your chain. I see no problem with this. Um, and then two, the there's a lot of like hate around their um, airdrop like snapshot time frames that was disclosed

months ago. Um, they said there was the first one was March 3rd and it was like a 5-year window. Um, kind of a weird way to structure it, sure, but it's not like malicious. They said the first one's today, the next one's three days before the token launch. That is exactly what they did. So, the whole conspiracy stuff like I don't really find interesting. Um, going back to that slide you were showing though, I do want to comment on their marketing style. Uh, what in the hell am I looking at on this pre previous slide? Uh, we got the the word art from 2015 on this. But, uh, okay. Interesting. Um, but yeah, like now it's a funsies token, so these numbers mean jack [ __ ] to me, which is like, why are you telling me these then? They should just be going to your board of

investors. Like, don't tell them to me. They mean nothing. Well, they they want to trick you into buying the coin. Like that's Yeah. So, that's what it's like hard to square that like I took the default position. It's not malicious and you were like, "No, it's worse than that." And it's really hard to take my side when there's stuff like this that we walked through. Yep. Yeah. Yeah. They're stuck in the DDR age, I guess, with the uh the coloring and design here. I will say to your point around the snapshots like it totally makes sense like just when you consider the pivot and you know the the revenues and the usage of the platform previously prior to that like there's a big gap here in activity and you can see that in the revenue on the platform. Um oh one thing I'd add on this is I really

need to go back and add uh NFT era revenue. So this is only uh chain reev because they do have their own chain and then uh launch of the coins platform which happened in like midFebruary. So slight caveat, it's going to be a little bit higher than this, but the trend should look roughly the same. Um, yeah, and then honestly saying that out loud about their chain, if I kind of want to change tunes slightly, but I think it's really really interesting. So everybody talks about how REV is going to trend to zero. All the apps are going to take all the value. They're going to leave and build their own chains. And then we have in practice a application that built a chain, struggled to get users to its chain and then launch its new product on base which has fantastic distribution

right they went the other way around the circle and uh everyone kind of just like said ah tune that one out doesn't fit my narrative right and it's like I think the consensus uh the market's consensus opinion around app chain versus general purpose chain is severely underweight the distribution benefit you get from being on a chain that already has all the integrations. And the Zor founder is clear about this. He's like, "Yeah, if we did all of this on our chain, we'd have to like get the unis swap frontend integrations and this that and the other about getting user flow into your platform." And you can't do it's like very hard to bootstrap that on yourself versus building somewhere where it happens. So, uh, it's either everyone's really underweight, the value of

distribution, or, uh, it's just the the lynch pin in that idea is you have to have your own critical mass or it's never going to happen. Um, so yeah, I don't know. I thought that was just kind of like an interesting angle as well. Like they have their own chain and they launched on base. Yeah, I I kind of wanted to set you up for that with this chart that we have. And like you were saying, maybe some of the NFT data is not in there, but I think it still illustrates the point that like there was a time when most of the revenue was being basically paid back to Ethereum. Um, and they've, you know, sort of pivoted and changed their model now to where their costs to run this thing and operate on, you know, base as just an app there. Um, you know, they're able to

give basically all the value that they were giving to ETH to users. And it, you know, there might be a caveat to what users are since I think it's pretty limited to who is getting that value today. Um, I'm sure that base post itself was a big chunk of of the revenue that got shared. But either way, like this is a massive shift in like what the application actually does and how it serves its its users. Yeah, quick extra layer of color there. So, the platform charges 1% fee on trading activity and like just over 50% of that goes back to the users and the other half goes back to the labs entity and then 0% goes back to the token ever because it's just for fun. Yeah.

um chains are going to do well forever until the end of time. Yeah, I think the the reason why I think uh everyone's severely underweight in consensus opinion there is I don't think anybody realizes how well the or what the split between uh chain rev and app revenue looks like apps are crushing the chains right now. Um it's it's beyond 50/50 in favor of the apps, right? And so, um, I don't know. I I was like, okay, like, do you want to go upheavee your entire business and take a huge risk on it continuing to exist or do you want to continue doing incredibly well? Um, so I don't know. I I just think that whole argument races to the end state, which like yes, if you like play it to the

extremes, I totally see where that's coming from, but I don't know. Starting from the end state and working backwards just totally does not work in practice. I do think we see this a lot, right? Everyone likes to tout this point of like fees will compress, this thing will compress, margins will compress, and then the assumption is like in a year the value of that thing is therefore 90% lower because at some point in the future they'll compress. But it just ignores all the nuance of of anything else happening in the middle of those things, which is where usually a lot of the value gets found, right? Like that compresses and they find other ways to monetize and they become a much more successful business outside of that.

I I've personally been a pretty vocal fat app believer as I call it like there's the like fat protocol thesis that Joel Manro outlines many years ago and that still seems to be the prevailing view or at least the you guys were espousing here and with my fat app view it was not necessarily that you know apps would always be app chains or go to app chains immediately. it would just be that the percentage of value that gets created and captured is going to go more so to apps over time and we are seeing that and where they live kind of almost doesn't matter. Um, wherever you can capture the most value, which if you're leaning on something like base

for their distribution, like that's where you're going to capture the most value as an app. Uh, and I also think over time like generalized chains are going to have trouble capturing a lot of REV unless they're specifically designed for trading because a lot of REV comes from priority access to state and if you're not if you don't have like constant trading volume and volatility, there's not a lot of reason for you to be included in this block right now and pay a lot for it. And so I I think that trends down over time at at the same time that app revenues as a percentage of value captured continue to rise uh as a percentage. Yeah.

Yeah. Why do you think uh Bass wants more tokens on the chain? What drives RV? Baby 100%. Very rational outcome. Um I'll quickly share screen here if that's cool, but I want to uh I don't know. I just like made the claim that the apps are doing really well and I feel like I that's one I got to back up. So this chart at the bottom um I love this chart. So it's blockchains on the left column network REV uh and then the change in REV. So we're looking at the 7-day view. So this is week overweek change market share and then same columns for app revenue. So app revenue week overweek change and market share.

Um one this week's pretty interesting. I think Salana is the large outlier here on actually increasing week-over-week RV this week. Uh but two, again, this is what I want to show where Salana generated 21 million in RV and 38 million in app revenue. This is not fees. This is specifically revenue. Uh Tron's the weird outlier here where outlier here where everything's like a payments chain basically. So um basically there is no app revenue. uh Ethereum, you know, 2x in app revenue from rev and base uh you know again same as the same style like 700k versus 3.3 million in app revenue. So again we see that the apps are doing very very well.

Um and I just feel like the market is like unaware of this at times right and when all these discussions happen it's like oh of course they'll leave they can make more money. It's like well they're doing quite well. Yeah, Shapiro on our team has put together a um a time series of aggregate rev to aggregate app revenue where app revenues um on top, rev is on the bottom um the denominator and it's up and to the right, right? So app re revenue is growing much faster than Rev. And on the chains that are deemed most extractive, uh it's actually quite the opposite that apps are kind of bringing in the most cash there and an increasing proportion of fees paid on the chain. So um yeah, there there's a there's a historical

problem in crypto whereas like okay everything's open source but it's like really hard to get all this stuff because the data structure is so complicated. um for the first time I think you know narrative is going to take a backseat to data and I think block works data is like kind of on the lead in the lead there of um crafting data driven narratives as opposed to finger in the wind uh politically driven narratives. Yeah, I think that's like a really interesting example of exactly how you described too. One thing I'd caveat here is I don't have Hyperlid on this chart yet.

Um it's like a really awkward fit right now to be completely honest. Zora is an awkward fit as well, right? You have rev and then you have applications on top of the chain that are built there the revenue that they generate and both of Zora and Hyperlid um have like a enshrined application let's call it uh where there's a the same business is you know operating an application. Um so we need like a total revenue column here uh that is in the works. Do not come after me with yourh mobs. I know you guys are doing very well. Uh, and I appreciate Hyperlid.

He was adding Bacia right there. To be fair, you do have it in some of the application charts at the very least. So, we can uh show how dominant Hyperlid is relative. Yeah. Yeah. I mean, it's just and the lines are going to continue to blur there between apps and chains and just reality. And maybe an interesting point like there was so much talk for such a long time about like really solving interoperability. But what I find interesting is that more and more it seems like all the apps are just going to solve interoperability for their particular use cases more so than the underlying chains will. Like you see it with trading apps where they're just like, "Yep, we're just going to hook up to these 20 chains because that's where the users want to trade and we don't

really care that they're not really compatible. like we'll just we'll do all the routers and all that behind the scenes. The user doesn't have to care. The chain doesn't have to care. Like we'll just do it for them. Um and I just find that so interesting because I think for such a long time like interoperability of chains was such a massive focus. It's like this is such a big driver for things in in the space and yet like if the apps see a need and there's value for them to add a feature from some other ecosystem that they don't have in their app today, they'll just integrate it and it doesn't matter if there's like some native interoperability between these things.

Good take. Yeah, interrup has been like a very like cryptonative problem and as we're seeing really nicely packaged consumer experiences consumer experiences on top. Um it's just not just not in focus anymore. Awesome. Well, I think this was a great pod. We were going to talk some more things, but uh I think if we pull and and talk Radium Launch Lab, we'll have to save that for another time and give it give it some real justice and go through the data that Sharples has made available for us. Uh as always, the genius. Um maybe one last reminder for the crowd out there, 0x10, we'll see you guys at permissionless in June. Uh we'll leave them with one takeaway. We'll go

around the room. If you want to be mad at Zora, if you want to say BTC's decoupling. One last thought. What do you guys got? I don't like tokens launched by projects that are just for funsies. Tokenize everything. I'm down for it. Um, memecoining is one of the most successful uh products in the history of technology markets, and you're all going to have to deal with it. It's coins all the way up and it's coins all the way down in this industry.

Thanks for coming on, guys. It was a good chat. Uh we all got to get mad about Zora today and uh we will see you all next time. [Music]