Do NFT holders have rights?

Transcript

GM GM welcome back to web3 Academy your trusted source for relevant and legitimate web3 information so you don't fall behind the internet Revolution I'm Jaybird joined by my co-host Kyle reedhead and we believe that web3 is going to change the world that's why we're here to guide the world's top talent down the rabbit hole as you participate contribute and capitalize on the opportunity friends welcome to a new episode of web3 Academy called web3 debates this is a new session where Jay and I are going to chat for about 20 minutes or so on different subjects that are coming up in the web 3 world generally I think Jay and I will take a

different size from it I guess it will depend on what's going on and we're really just going to break down certain Topics in the space and the reason you want to do this is a couple one is because we put out a survey and many of you asked for shorter content and so we think that this is a great way to do it number two in our roll-up which is on Fridays we talk about all the news that happens of the week and we try to get through all of it and sometimes we want to go deeper into subjects and we can't because we want to keep those up to around an hour as well so that you're not listening for three hours about the last week's news so what we decide is we're going to take this episode and anything that comes up that is like

really being debated in the space that maybe you're all wondering about we're going to try to get to the bottom of it and at least give our and share our opinions on it here in this episode something new called web3 debates it might get a bit heated if you can see if you're watching Youtube right now Jay's got some sunglasses on that's because we're gonna be throwing some real shade at each other and he's just trying to protect himself I don't know where this episode is gonna go we'll find out but it's going to get a little bit crazy sometimes we'll see today's episode is actually coming stemming from a conversation that happened in our Discord and also something we wrote about in our newsletter which is kind of around the story of Doodles no longer being an nft project and really this is a big deal I think across all nft

projects as they start to figure out what they really are and people realize that these are actually businesses and what we're going to discuss here is what rights do nft holders actually have in terms of the overall business just to set some context of what the heck we're talking about here is over the last couple years nft holders have gotten this expectation that because they own an nft they are the same as like a shareholder of a company and thus they've been demanding projects to give frequent updates on everything that Founders are doing right this is what happened with Doodles and this became a big deal there and I think the thing that people need to realize and we're going to dive more into this but is that the nfts are not the business there is a business and then businesses have nfts

that may represent maybe the brand maybe the community maybe other things it depends on the nft itself but there is a business that is usually a Incorporated company whether it be in the US or Europe or otherwise that they're doing their own thing to build a business and then you have these sort of nfts which is the community holding these things that might have different utility to them right and so there's this weird dynamic that these entities are not actually have anything to do with the business they don't own any Equity of the business itself but they do succeed if the business succeeds in hopes so long as they bring value to them and so the kind of weird part of this all just to finalize this context here is that oftentimes people are buying these nfts which is then funding the actual business okay

and so in like traditional worlds you probably if you were getting funding you would take percentage of equity of a company in the nft world that's not the case it's not what's happening and so there's this weird dynamic here of like does the business owe something to these nft holders do they really need to involve them in the business itself or do they are they something else I think that's really the foundation of this conversation we're going to try to break that down so that if you're an NFC holder of any of these projects they're all sort of thinking this through right now and so this will help you understand what you should do as an ft holder and if you're launching nft how you need to treat and interact with your olders web3 is obviously changing the game here and so we want to kind of dive into how it's

changing it if it is and what that means for nft communities in the future so we'll dive further into that we'll talk about the doodle story real quick too just to get you some more context before we get into any of that though let's take a second to hear from our sponsors the future of social media is here and that future lives in web 3 on top of lens protocol web 2 social platforms are broken and right for disruption you see the epicenter of social media is the creators and yet they are the most neglected web 2 platforms like Facebook Tick Tock and Instagram are all essentially robbing creators of their worth creators are a new type of entrepreneur forming new types of businesses yet with web 2 platforms creators don't own their content to their profiles and that's their product in business instead they are tied to the

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platform set to launching Q3 of this year segment aims to allow users to easily create access keys and share ownership of nfts with other friends and community members the team is going through their Beta release soon and has opened up their waitlist for web 3 Academy listeners if you want to stay in the Forefront web3 sign up for segments wait list today with the link in the show notes below shared ownership is a game changer and we want you to be there first all right welcome back as Kyle said today we're breaking down what are the rights for nft holders we're debating do nft holders have rights should they have rights what is that involved and this story really started on March 15th when Doodles announced an initiative related to their doodles to wearable collection

uh and this is the gold sock initiative so if you collected there's 12 different types of socks in the Doodles 2 wearable collection if you collected all 12 socks then Doodles said they would send you a pair of gold socks this led to a bit of a negative reaction to say the least from the judo's Community one of their members tweeting I paid 32 000 for my doodle I think you guys should hook me up with some socks for free like come on and then that led to a lot of conversation in the Doodles Discord which led poopy who is one of the

founders of Doodles great name to post this in their Discord which subsequently went viral on Twitter he said we're trying to go from a startup to a leading media franchise we are no longer an nft project the more time money resources we invest in following the latest build in public trends that fuel speculation the less we have to achieve our long-term Vision we are not going to spend any resources appeasing those with financial motivations we never have and never will if we are going to focus energy on any group of people it will absolutely be our most loyal collectors so this was taken as a screenshot put on Twitter and whoa did it ever get a lot

of attention and a lot of conversation of basically this line Doodles is no longer an nft project going viral I was gonna stop there let me just finish up with a little bit more that happened here so then poopy who clearly gets a little bit of emotional and probably as a Founder should maybe take a deep breath a little bit more and not get so emotional but he got it oils that's why I sent hello that's right Kyle's burning essential oils because he knows he might go off the rails on this one poopy continued to get into it in Discord and if you are a Founder do not do this somebody was going off on him in Discord which don't get me wrong if you're a founder and you have to deal with nft holders losing it on you and completely rude and inappropriate ways which is

exactly what poopy had to deal with you shouldn't have to deal with that I'm sorry you have to deal with that but just remove yourself do not get into a yelling match with holder and she told this holder to floor it and get the [ __ ] out in their Discord and this led to a lot of people screenshotting poopy saying that basically saying poopy saying that we should all leave and that also went viral so then poopy responded and said look Doodles isn't an nft project I stand by that this is true but what's also true is I've dedicated my career to the blockchain I'll never abandon the pursuit of delivering the promises of this text to the world Doodles started

as an nft and this is the amazing thing about building strong Community one of the Doodles members made a meme that said floor it and get the [ __ ] out and he turned them into stickers and he said any Doodles folders in America who message him he will send you free stickers and now there's photos of these stickers up all over the place wherever there are Doodles holders all right do you want me to take the first take of this video you okay so you take the that's what happened you take the first take okay so anyone that's been listening to our podcast for a year I remember being in Madera or I don't know I was one of the Portuguese ads last summer and I forget what the thing is we were talking about but this is when this

whole Trend started of like you need to build in public and this and that and I remember getting keyed at the end of a podcast and it was like look man this doesn't make any sense right the NFC holders they don't own the business okay they are not Equity holders of this business and I think that most of the people who hold these things and I would say over 50 are Traders or speculators and it's probably more than 50 so that's the first thing we understand this is not actually a bunch of real community members community members help a business grow most of this is people asking for updates on the business because they want to know if they should sell or if they should buy more okay they're doing this at a financial curiosity to make money in the short term now my opinion is this Doodles for

example wants to become the next Disney okay do you know how [ __ ] hard it is to become the next Disney do you know how goddamn hard it is to build any business ever 99.9 of all businesses fail okay and here's the thing if a business fails I don't care what your NFC does it was anything new with that business whether it has Equity or not whether it has governance or not whether it does whatever it has IP or not that entity goes to zero if that business fails okay I can 100 guarantee you that now if the business succeeds there's a good chance that ft probably goes up in value maybe not though if they actually do nothing with ft you never know right they can be completely different but 100 if it fails your nft goes to zero okay so what we need to do is Empower

entrepreneurs to build amazing businesses and do everything we can to help them build a business because it is so goddamn hard and I'll tell you right now that 10 000 people who own an nft they're not thinking about this business they're not thinking about Doodles or whatever other thing we're talking about every single day to make a business actually succeed you need to wake up thinking about that business you need to be having lunch talking to your wife talking to whoever and you're actually like [ __ ] I don't know what you just said because I'm thinking about this business when you go to sleep it should take you five hours to fall asleep because you're worried about this business is going to go out of business or like how you can make sure that you LeapFrog the next competition that is how you make a business succeed okay is

the only way you make a business succeed and so if you have to spend most of your days and your hours updating people that don't actually care about this business they just want to sell it you're wasting time and if you want to give governance to these nft holders these people that they're part-time caring about this business they're actually run their own companies or work for another company and probably own 50 different nfts and want the information on all these different entities they don't care they're actually helping you with this business for the most part there is probably I don't know five percent of the holders that actually are trying to do something here which is great okay but most are not I don't think that a business so long is there working in their best interest to grow this business and not rug people I don't

think that they should owe anything to these nft holders now obviously if you notice that the founder of the business itself is not including the holders in events or access I don't know in community things like doing things for their tea holders probably just get out you know what I mean like you don't need to ask them just if you don't feel like you're getting what you deserve as an Etsy order Lee sell your nft and go to a different Community because remember your nft is ownership over the community it is not ownership over the business now you hope that the business and the community work well together and like for example I love our community and we use our community all the time at Webster Academy to help us create better content we just started a new show

because our community recommended that we should do shorter content in different style content now did we give do a vote necessarily through governance like no but we definitely went to them ask them like we're taking action based off of what they said and so that's great you should definitely use your community involve your community in your business but you don't owe your community anything in terms of like here's updates of what we're going to do next and like we're going to execute it this time because you want us to have this done like I don't think any of that should matter and I think that's ridiculous and I think entity voters need to realize who they are and if they're a Community member just be a Community member which means support the business but don't ruin it for the founder which is already struggling it's

so hard to be a founder and now you're going to make him do all this other [ __ ] and like ask for free stuff all the time like it's hard to make a business profitable it has to be profitable or that business goes out of business like when your friends start a business don't ask them for free [ __ ] give them money buy their product buy their service you know that's how you support your friends in starting a business and if you are a community holder an ft holder of a business support the business don't just expect everything for free and yeah you maybe paid 32 000 for nft that's your own fault Doodles didn't sell it for thirty thousand dollars you bought the top and 2021 that's your fault take ownership above that sell it at a loss or get the [ __ ] out just like he said

I'm on poopy I'm on poopy side I'm completely on his side and I mean we've been saying that attitude projects need to stop calling themselves projects for a long time now they're businesses and you know what business is [ __ ] hard get in or get the hell out you're in or you're in the way that's my thoughts let's take it from two perspectives from the Creator's side as you said and you're very well presenting the Creator side Kai it is very hard to start a business running a startup you need to be fast you need to be agile you do not need to be appeasing 10 000 shareholders as these nft holders are acting like so I heard Luke and next who's the owner of pudgy Penguins now

say I've run eight figure businesses before and this is harder than that because I have 10 000 shareholders and I'm also running a startup that I'm trying to get to to seven eight nine figures right so that is a real issue for creators and for the Creator as you say Kai this isn't an nfg project this is a business do not appease to your community at the same time if we look at the perspective of a holder and I think that this is the issue there's two type of holders financial gain holders who are here to speculate and here to make money and unfortunately that is most holders right now that is actually a large percentage of holders right now

we've seen that with what's going on with wash trading with all the marketplace Wars so that is somebody that just wants to make money screw them who cares here's the thing there is holders who are your community members in the case of doodles here's what happened as a result of everything that came out of this Doodles dropped about 10 on their floor price it's not a huge amount it's considerable it's not massive and here's the more indicative number the holder count so the number of wallets that hold a doodle went from 5400 to 5200 it dropped one percent so what happened was the one percent that

were there and I'm sure there's more than this they're there but those one percent that were there for the financial speculation they got the [ __ ] out they left they floored it and they got the [ __ ] out and that's a good thing now here's the thing if you are a nft project I do think you need to focus on your community community is an incredibly powerful way to build so you need to figure out as an nft Creator how you involve your community there's many different ways to do this if you look at the board API Club example they had given their Community many different games to play they've given them things

to do by constantly creating and shipping things if you look at the pudgy Penguins example they have created IP around their Community holders so pudgy Penguins went to 16 of their nfts and they said we are going to license your nft and we're going to turn it into a toy and as part of this license you're gonna get money flowing back to you now that's only 16 out of eight I think it's an 8 000 collection but there's an idea right in doodles they have a treasury that is Doodles down that is managed by the holders a lot of nft projects are doing that as well so you need to figure out the way that you interact with your

community Frank the gods and the gods Community they said that they were going to build in public to the Max and and I don't know if they still do this but this was last year when every day they would post what they did that day now that's extreme and I'm not suggesting you do that but what I'm saying is you need to figure out what works for you as a Creator in order to involve your community because you can't burn them and don't do what Doodles did here I agree that do those needs to act in this way to build a business but I don't think you should go burn your community along with it definitely not and I think where people are getting confused is this whole idea of like everything needs to be decentralized to governance right

this is what was brought up in our Discord was like yeah but web3 is different right and we're changing the way the business are built and now we have like we want things to be decentralized and so meaning we need governance from the whole Community I think people are getting mixed up on what that really means so like you don't need decentralized governance for everything and you definitely don't want it in a startup it's a terrible idea there is like literally zero precedent ever that shows that you should have 10 10 000 people decided something to make a business start I don't know one business has ever worked out that way do you know what I mean maybe there's some I don't know like link style or something you know we've talked about this but again those started from one couple people that kind of got us

started but anyway and it's a different style of business but ultimately like you give governance to something when it impacts all of those people so like for example Facebook is at a point where businesses build on top of it many users rely on it for life right to communicate with family and friends whatever they should now have governance Mark Zuckerberg should not make decisions for three billion people that's Insanity right and that's how it works right now they should distribute governance via a token uniswot for example did the same thing unislab Labs built it they did not have a community that helped them build it it was just uniswap Labs there's like a couple people in the beginning that company built up to like there's 100 people working there now and eventually

they said okay so many people rely on this for their business and I need people who are providing liquidity to uniswap and people who use it underlying infrastructure for their business Etc we need our community to now help us decide where we go next with this because people rely on it okay because it's billions of dollars that are in uniswap okay so now we distribute uni tokens and now there's governance around that okay same thing is happening with arbitrum right they're launching a token exact same idea it's big enough there's a bunch of businesses and downs that build up it same thing it's Doodles though in these nft projects that's not the case Doodles is not a successful business yet build something that is worth something hopefully they can do that which again is not hard 99.9 will fail and if at

some point they build this amazing brand with this IP and that benefits this nft okay now the nft holders who at that point probably will be less speculative holders and more like people who want to be a part of this thing now you give them some governance and some say in the direction of the whole entire business or the brand of the app here whatever it is that these nfts get so I just think people need to reframe what web3 means and what governance means like it's not just give it to everyone let everyone make a decision that's not a good idea here's the thing if that was the case let's say Doodles has a conversation with Disney about making a show together and it's not necessarily going to happen they don't know but they're in conversations right it's very likely

that they're in conversations with some big production houses right now if you're a holder and you have governance you're going to vote that Doodles should share that publicly because this is the type of news that is going to pump your value but is it good long term for doodles to share that news publicly absolutely not no way they should do that because a it just causes speculation it's not a set plan and B I'll bet you if Doodles was going to engage in some sort of agreement like that with Disney right now it would probably mean that Disney takes everything like Disney would get 90 of the deal and doodles would keep 10. so they'd be selling their shirts in order

to get that but the holders would value that because certain holders only value floor price and that is not what you want coming back to what you say Kai it should be based upon engagement like governance and opportunity to participate in the community should be based upon engagement the way your Facebook example is like if you have multiple Pages if you're active on Facebook then you should have more say not just because you hold an nft what have you done for me here's the thing what people need to understand is that the reason why entrepreneurs can build successful businesses is because they have a vision they're seeing it in the future and they block out all the noise businesses can make a change all the time and there's always opportunities and things and you need to learn how to say no or say yes to certain things

right but what happens is let's go back to Facebook for example for anyone that was around when Facebook first started Facebook realized that they need to launch a news feed right because before that you had to go on someone's profile to like talk to them they're like no let's do a news feed when they launch that feature everyone lost their [ __ ] people started creating groups say like and Facebook we don't want to see more of the news feeds the worst thing in the world and then after like 30 days it was the greatest together and everyone use it now it's how we every social media platform works like if they would have done governance more than 50 of people were complaining on Facebook back then they would have had to turn that off okay so what people didn't understand is like usually most people unless you're

thinking about every day and you have the vision of where this is going in 10 years you're probably going to make the wrong decision which is why so many businesses fail so you need people that have the vision that can have the conviction of that Vision to say no to things and if you just open it up to a community who's not really focused on this thing all the time you're gonna just be all over the place and where your business goes you're going to be going down this route then the next route like all over and it's just it's a mess it makes no sense if you're going to invest in an nft project just like if you're gonna invest in a business invest in the entrepreneur invest in the person that's got the vision you know what I mean like that's the way you should be thinking of nfts

like a lot of people invested in Moon birds not because of moon words direction we didn't really know what it was but we liked Kevin rose right I don't know I think people just need to reframe their expectations and realize like you probably don't know the best thing for every business if you did you'd probably be a billionaire by now and you wouldn't be playing around with monkey jpegs you know yeah I mean to give you a direct comparison I think a really easy comparison that we've made many times is nft holders versus VC funding right so a lot of these nft projects went and they sold an nft to get their initial funding and then they also went and got VC funding Doodles did this proof did this a lot of major projects have done this yoga Labs did this right so here's the difference

though nft loaders are sitting there being like well I give you funding why don't I have ownership do you know how much valuable Insight VCS give to a business a Creator is not calling up their nft holders and being like hey I know that you've run multiple billion dollar businesses can you help me figure out how to do it this time no if you're a Creator you're doing that with VCS you're contacting your all your investors and they are providing immeasurable amounts of mentorship advice and guidance and networking and relationships and connections that Propel your business forward in a way that's not just about the money so my view is if you're an nft holder either

step on the plate and do something for your community and if you can do something for your community then maybe you have a leg to stand on and then maybe you can complain and yell at poopy and tell him to [ __ ] off or whatever right but if you're in a Chase person who just purchased the nft and you're upset that your floor price hasn't gone up you have no leg to stand on floor it get the [ __ ] out I think it's just like starts to say that the SEC kind of knows what they're talking about is like we just have a bunch of invest now everyone in the web through is an investor and the problem is they don't know what being an investor is right they think they have these rights but they don't they have these crazy expectations to me

it's like if you're an NFC of older for a business like Doodles number one be grateful that you have an entry point into a company to have some sort of upside of the company whether they share Equity or share revenues or whatever some will do it some will not in judo's case they gave you some of that funding so what everyone paid they gave you some treasury to help the business out do stuff with it one be grateful that you have some upside which otherwise you could not you had to be an accredited investor in the US specifically to get any upside from Doodles or any company ever in the US right now all of a sudden you can so that's pretty cool so be grateful number two hopefully the business is going to do things out of the ordinary to reward Community holders

which most of these projects businesses do do you know what I mean like you said with Yuga and others like they're doing things Doodles didn't have to give some of that funding to the treasury so now that the entity voters can like go and do something with that money they didn't have to do that but they did it you should be grateful for that there's a lot of opportunities coming people are getting jobs now that work in that Doodles Dow all of a sudden they can work full time doing that because there's funding they're like things are happening as a result of someone taking a chance on something called Doodles a business you you need to be grateful that you have these opportunities and then leave it at that either participate like Jay said and help that Community grow or help that business grow or don't or just hold on to it

because you're like I like the founder I think this thing will go up great just hold on to it and that's all you need to do or if you don't like it and you don't appreciate it and you want someone that's going to update you every day sell it and go to D gods or whatever it is whoever was doing that right like you have the choice to move these things around and do whatever you want but like you need to manage your expectations and you need to start letting these things blossom into real businesses and right now you're just getting in the way because you're probably 21 years old and in your mom's basement and this was like your whole life savings you put into Doodles piss off yeah I mean to take that one step further you own the IP it depends upon the project but in judo's

case you own the IP go start your own Doodles business you know you think you can do it better go take your Doodle put it on a t-shirt make it a toy right no Doodles is IP ownership for the holder LS I can do that yes you could do that right right yeah I know right so go do that and you know what you make some money doing your own thing you'll learn that running a business is [ __ ] hard and you'll actually support Doodles you actually might raise the floor price because a whole bunch of people buy your T-shirt and they're like [ __ ] Doodles are cool that's what community members should be doing that's my final thought Kai any final thoughts no I don't have anything else to say I think that was a great little we really debate because I

think we ended up being on the same side there Jay so maybe you didn't need your sunglasses on this episode we'll see for the next one for those that are listening if you enjoyed this one please let us know in our Discord or on Twitter and if you have other topics you want Jay and I to discuss and Give opinions on I'd love to hear what that is we will be doing these weekly so buckle up these should be fun and doodles poopy I support you I'm not a holder but maybe one day I will be Now's the Time so our price is low-key get in it's probably a good thing all right thanks so much for listening everybody have a great day thank you for listening to web3 Academy we hope this helps you along your web 3 journey and if it does please share this episode And subscribe

so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility implementation anyway so you should not take any of this as Financial advice thank you friends and see you in the next one