How Zora is Redefining the Creator Economy | Jacob Horne

Transcript

I think that big idea is that content has or like you know any form of media on the internet has some kind of fundamental value and you can use crypto to discover that value with open markets this episode is brought to you by Aries markets to learn more about Aries markets follow the link in the show notes below hey everyone quick disclaimer before we get into today's episode nothing said on bell curve is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and the views expressed by anyone on the show are solely our opinions not Financial advice our guest and I may hold positions in the companies funds or projects discussed all right everyone welcome back to another episode of bell curve today I'm joined by Jacob the uh founder

and CEO of Zora welcome Hey all right first uh in studio uh podcast ever saving the best for first uh guest wise here so amazing yeah I love the lights cameras everything feel real and uh yeah this will be this will be really good and we've got a lot of ground to cover today so I want to talk to you about Zora and and um you know before we get into some of the weeds of this new app that you guys launched I want to rewind the clock a little bit and do uh get a little bit of a sense of the history of the company yeah um you guys have been around for a long time and you've kind of seen different nft metas through you've seen um the rise of uh meme coins and you guys have built a very differentiated app with a super unique

sort of vision of the future and it's an idea that I've been getting uh sort of quietly obsessed by on nights and weekends so maybe can we just start in general with a little bit of a history of Zora like what were some of the early ways that you saw the nft market and all that type of stuff yeah for sure um yeah so Zora is 5 years old now which is um which is crazy um and it actually started as a side project in 2019 when I was still at coinbase yeah um I got really inspired by the unisox project by the Unis swap team which for those who don't know was basically they tokenized a pair of socks um there were 500 of them and they launched them in Unis swap pool and then people can buy and sell them yeah um um and it was kind of

mind-blowing to me because one um I was going deep on Unis swap as a protocol at coinbase and I was like wait you're telling me you just gave me the entire like superpowers of coinbase in like one function call um that anyone could access and that was kind of like a light bulb moment for me um but it also kind of was this big hint towards a version of the future where we can start to apply all of these kind of financial markets to things outside of just like Finance themselves so um I have a funny story actually about unisox yeah I don't want to blow this guy's spot up but he's still active in crypto I heard about yeah this guy who is the founder of an early Ico project who saved the project by investing the treasury into unisox at the beginning of the run and

it's just so funny in crypto where every once in a while you see you know socks that get tokenized go from you know a th000 up to $15,000 a sock and you're like who is trading this and it's some guy that's yoloing the treasury event early I yeah that's actually hilarious I did not know that um well yeah so I had a riff on that um project which was like okay like what else could we start to tokenize that um is in the world if like fashion or culture was kind of like the lens that I was coming at it from so I built a project um with my co-founders called St Fame which was basically like okay I'm going to create like a street wear brand and we're going to tokenize a long sleeve shirt that we're doing we actually had a face mask just before Co

was a thing that was like hilarious and SCS wow that's got to be um getting ahead of fashion trends already yeah um and I was actually coming at it from the Dow side at the time which was okay if you've got this like um permissionless market for goods that means you can create a permissionless and Community owned brand on top of it yeah um but what was interesting is that no one really cared about the Dow and everyone was really obsessed with the tokenizing goods piece yeah um so that was like the thread and the starting point for the first version of zorao which was actually tokenizing physical Goods yeah um and then this was in 2020 and we very quick found that uh one super rare and nfts were starting to pick up and that two connecting the onchain world to the

offchain world was actually quite complicated yeah so we um then moved into the N nft world and was like how can we help people tokenize their um their content their media their art and everything all above yeah um and I would say the past five years has basically been this very consistent and somewhat squiggly journey of like what is the most effective and value way valuable way to token that content um and have essentially been iterating through the market models underneath so going from like one of ones and auctions to open additions um and like open mints basically uh and then also iterating through the user experience so going from like a more of a Marketplace um context into like a social context yeah and fast forward 5 years we've kind of

um found that obviously the more liquid the more open the um kind of more upside and the more growth that comes with um you know unlocking that liquidity so we've kind of been chasing and you know um iterating around how do we unlock that liquidity and now we've landed on um coins essentially as like that next phase um as a as of a month ago okay I want to remind the clock a little bit back to 2021 and 2022 when nfts were really taking off so I think that people who were around back then kind of have a vague memory of maybe something like Crypt punks or board apes or something like that running really hard yeah um and they think of nfts as sort of one homogeneous sector of the industry but actually there were a bunch of different

ideas that were coming together and colliding all at the same time yeah and I think one way that you can look at nfts and meme coins right now is actually the unbundling of some of those ideas into different Market structures definitely so at that time you had you know as you mentioned kind of this idea of tokenizing and fractionalizing real world assets and this was actually an idea that existed pre- crypto obviously there were some pretty relatively successful startups I think around this like Rally Road is an example of um they started by tokenizing shares of uh kind of antique cars right for example so you kind of had some people that approach the market from that perspective you also you used to have a lot of debates as well in the nft community about is this about art right is this like an art

and collector type thing or is this a altcoins with pictures trading thing right and so this was exemplified by some of the different marketplaces that cropped up at that time you know famously blur really pushed you know the idea of this is altcoins with pictures and U there was a big debate around royalties at that time as well like should artists get royalties and right um and so and then also right like one of the models that I think Zora has done a really great job of pioneering is instead of these like smaller collections that exist today like making nfts um you know cheaper increasing the volume making more people collectors as opposed to very high value of a small group of nfts Y and so you know I'm curious you know when you look at all of these different ideas that kind of got

bundled into this one sector is it appropriate to kind of look at meme coins today is the extension of the altcoin with pictures idea it seems like there's a little bit of a rebirth of collectors and the idea of royalties which I know we'll get to talk about the zor platform today but that's coming back into Vogue like talk to me about the different you know colors and flavors of the nft market yeah I actually think they're more merging I don't think these are necessarily at with each other um I think they're they're different attempts at the exact same idea and I think that big idea is that content has or like you know any form of media on the internet has some kind of fundamental value and you can use crypto to discover that value with open markets and I think um in the

earlier stages of nfts it was kind of like a great bridge to this moment because it was a little skoric it like looked and felt like the art World which was you could wrap your head around okay there's one of these there's one addition or like one nft for this picture it's going to go up for auction and then I'm going to be seen as the one person on the entire internet that is the collector of that thing and you know that worked at the time like there was maybe no more than um 5,000 monthly transacting users like for that whole era like this across like super rare Zora Foundation any other of these marketplaces but we were seeing multi-million dollar sales in those auctions and the the fundamental limit

that that ran into was one there's only so many people who can pay that much money for a picture on the internet and then two there was actually a lot more demand under the curve where you would have so many people trying to like um parti and bid in that auction and there was an artificial scarcity placed on that like why is there only one of those so one of the big jumps that we uh made was like well what if it's the moment in time that we use as the kind of scarcity and the constraint and anyone for a day can mint that picture for a dollar um and that basically 100x the size of the number of people who were able to and wanted to collect and then it started to tap into well actually that leads to larger holder bases which means more of

a network effect which means more attention which means more liquidity and actually like you're helping more um creators essentially capture more value than they were even in the one of one format um so if you kind of take that thought train next which was like well instead of it being a scar supply for a moment in time with the open Edition format coins are actually a really fundamental user experience breakthrough because the secondary market for nfts is extremely inefficient yeah um so the way that we kind of arrived at coins from first principles was that like we found that a lot of people wanted to collect um you know some of the amazing content we had on the secondary but it was like uh very low liquidity and then you required basically the seller on the

other side to accept and then there was a lot of like negotiation around prices yeah but if you just move that to a coins model on a liquidity pool like Unis swap anyone on the internet can buy any amount at any time which is way more fluid way more easy um and then kind of actually is a much more efficient market that can start to price it as well was an early iteration of this maybe something like the nft platforms like uh blur or maybe tensor on uh salana they allowed you to kind of bid like do like floor sweeps in like a pretty automated way is that kind of yeah that was starting to get close you could do like um floor offers basically yeah collection offers which was like I don't care which one I get I just want to get one of them so that kind of tells you

that people don't really these aren't like one ofone individuals and it's really important you know which You Know Hoodie Toran or whatever people get it's just they just want one of these things yeah exactly it was like uh the flaw was like fungible actually in practice this episode is brought to you by Aries markets Aries markets deployed on apts in 2022 and is now the largest lending protocol with $280 million in tvl to learn more about Aries markets follow the link in the show notes below today's episode is brought to you by Ledger the global leader in digital asset security celebrating 10 years of innovation Ledger is trusted by 7 million users secures 20% of the world's dig digal assets and Remains the most secure Hardware wallet for your crypto and login follow the link in this episode's

show notes to grab your Ledger today one other debate I'd be Cur I know we'll get into this as well but I'd be curious to get your perspective on because it's changed quite a bit I think um over the over the last couple of years is the royalty debate so you know I remember in the very early days of nfts before people really got their heads around how it worked on chain yeah um was this idea of royalties for creators and people were so excited about this that you could programmatically enable you know royalties into the future that would go towards creators and so it would fix some of the um the funding problems or the the split that you see in in the music industry or the film industry or whatever and then everyone collectively realized that oh this is actually not being enforced at you know the token

layer the smart contract layer this is being enforced at the exchange layer right and there were a lot of wars that ended up coming up around especially around that time like Unis Swap and blur and you had the traders who said we absolutely should not Havey and now I feel like it's coming back into vog and I know that's a huge part of the Zora platform today yeah so you know walk me through you know when you were listening to that royalties debate at the time you know what were what was your sort of thought process and how do you think that the industry has evolved or they thinking in that over time yeah I guess that there was like a beautiful oneyear period of time where it actually worked in that nft construct um but as you said it was enforced at the platform level

and then kind of this OB opened up which was well we can create more liquid Market by removing that tax yeah um and ultimately like people who are coming at these assets from the speculative side don't really care or want to honor that royalty system they just want to get the most efficient price yeah um and then the market trended towards that model because it was actually more liquid and you saw more activity um I think like how it's coming back uh it's coming back in a way that's like a little bit different because now we're moving to this coin model where basically all of the liquidity is put in something like Unis swap yeah um that the Creator essentially owns the starting LP position so 100% of the coins go in the

pool and then it's a single-sided position so as people are buying and selling with eth more eth goes in the pool and then that's basically starting the market and there are LP fees that are generated from that yeah um so it's a nice iteration on the prior construct because uh that basically exists by nature of the Unis swap protocol um out of the box um so the only way you would be able to kind of undercut that as a protocol is if you remove that LP fee but then there'd be no incentive to provide liquidity so it's like it's actually finding like a nice flaw there um and no matter where the trades come from you might have wallets like R you know rainbow metamask Phantom Dex screener routing those trades through the pool they're going to go wherever

the most liquidity is yeah so if 100% of the supply is going there at least in the early phases the liquidity is going to be there okay that's super interesting and that's roughly you know maybe making a connection to the recent meme coin Mania over on salana this is the Meteora model right this is you know you as a you launch this Creator coin use single-sided LP and that's a way that you can sort of you're providing liquidity but you're also sort of monetizing and selling into the market right yeah that's right and that's super interesting and that just that feels so much better than and know I remember uh empathize or sympathizing a little bit more with the non royalty side of I mean ultimately at the end of the day it was going to be Market based if you if you were really creator that had a great

collection you could probably enforce that royalty but now it always felt like a little bit of an annuity or something that would uh depreciate over time and now this feels like a very sustainable sort of model I think it's one step closer I feel like there's still a lot of um open territory here to actually solve what like value capture looks like because I think that um that LP fee will I think diminish over time as well especially in the success case because then you'll have other people providing liquidity so your percentage of those fees will go down ultimately I think most of the value capture is actually going to come at the coin layer itself yeah and I think there's a lot of um room for mechanism design for it's like well how can we increase the percentage ownership that a coin creator has but

also give a lot of certainty and predictability to the market that they can't just like sell the whole thing in One Clip and you nuke the whole thing um and we can build smart contracts around that to automate it and make it transparent um so that's a that's open territory but I think that's where it's going to go okay cool I want to spend a lot of time talking about just the market structure of this in general but maybe to try to summarize what we've discussed so far and I want to get to a very critical point which is kind of capital formation around uh yeah like nfts and kind of content that's created online so maybe the early iteration of nfts yeah where these either like oneofone collections or very low yeah very low volume collections right where the price got bit up and even at the

even at the very Pico top of 2021 and 2022 speculation there weren't very many Traders and the Zora Insight was actually there is much more demand for creators underneath the curve it's just we need to find a better Market structure and maybe allow people to enter at a cheaper price right that's right and one of the um maybe I really like this idea as well of the market uh zooming in on kind of a skoric idea okay these are pictures online this must be an art Market but I think your guys Insight which I want to you know dig into here is that actually there are other types of online content that get generated that might have value as well like the value of a social post might have value um and so maybe talk a little bit about kind of the evolution of this

idea from you know this is online SES into looking at the wider world of digitally native content that gets created and trying to create a Marketplace that assigns value to that somehow yeah so I think the big aha moment and why we saw the 2021 Mania was that actually you can tokenize pictures and you can buy and own pictures on the internet and that there is in fact crypto to buy demand that and there's like a few reasons why like um people come at actually wanting to buy collect or trade is like um the nft side is has like art or collector style um kind of characteristics to it which is like I want to support that Creator there's like a patronage aspect um there's also a status component to it which is like I

want to be seen as the largest owner or supporter of this thing on the entire internet and then there's also um this more speculative or um uh in Market driven side which is playing kind of an attention game or an attention Market which is just like okay uh I think this image or this piece of content or video whatever it may be um is going to get more attention in the future than it has right now and now you actually have a medium which you can express that opinion financially where that used to be I'm going to buy the you know nft for this collection you know off the floor um and I'm going to like trade the swings and then now that's like almost certainly how um a lot of like the mcoin market is showing up now which is

basically like people are are speculating on the current and future virality of a thing um so they kind of like resemble attention markets in a way yeah um and then yeah I think like from 2021 to now the Market's increasingly realizing that it doesn't just have to be monkey picture it can be any picture yeah yeah talk about this idea of attention markets in general and maybe I would love to start uh connecting these ideas of nfts and meme coins attention markets and social media yeah um so tension markets you can think of them like a prediction Market they're very simple um which is you know let's say you've got um a mcoin yeah and you can come at this from the perspective of there's a current market cap and current holder base and you know maybe I'm

tracking how far far and wide this image is being shared on traditional social media yeah given all of the above do I think this is going to get more or less attention than it has right now yeah if think that it's peaked then you're probably not going to touch it you're not going to buy it you're going look on the next one if you think it's actually very early in its attention curve then you may buy it if the market cap feels like it's suitable um it's all very like um it's it's kind of hard to pin exact measures between these twoos but people kind of building a sense of like you know how many views or who's going to share it is going to have what impact but the attention Market um game is essentially if you think it's going to get more attention then you buy it if

you think it's going to get less attention or it's reached a peak and you already hold it you'll probably sell it or you won't buy it at all and it's a it's very it's very simple but that actually I think he actually pretty fundamental breakthrough for how we started price and create marks around attention on the internet outside of like ad exchanges being like maybe the closest analog that we have currently I like okay I want to return to the ad exchange example but let me just give what I think is probably first the knee-jerk reaction to this and then we can break into or we can get delve further into why I think this actually makes an En meta sens and is a huge breakthrough MH what I would say hey this doesn't make any sense why should something uh it just you're playing a

game of uh greater fools Theory right where at least you know traders in financial markets are assigning some sort of value to a thing like they're getting paid to buy or sell and you know eliminate inefficiencies and assign a uh you know assign price Discovery to a financial asset yeah there there are no cash flows to these pictures online there are no cash flows with associated with something like a a social post or something like that so right how is this not just degenerate gambling so I think there is a lot of degenerate gambling in there and then I think like the part of the knej reaction very sympathetic to is that these valuations are probably orders of magnitude larger than they should be yeah but the market I think that's just part of the Mania we're going through right now um what I will

say is that and this is this connects it back to like the nft side of the spectrum there is some non-speculative demand that is growing and constant um in the crypto world for basically The Collector side yeah which like there is ation status piece to this I just genuinely want to support that Creator or I want to be seen as the owner or collector of this piece of content yeah um and then the kind of lines there is a spectrum there where it's like in the same way people love flexing that they were early to like a certain album or artist or whatever like you can start to play the speculative game on the status side as well but obviously crypto means that that line with the financial piece

um blurs but I will say that it's like that is actually um I think that's like a very valid knej reaction but I think part of it is because the the valuations currently are way higher than they should be yeah um but content on the internet as we know otherwise social media wouldn't really be a profitable business does have some non-zero value so now we're creating markets to discover you know what that non-zero value is quick shout out to today's sponsor Aries markets Aries markets deployed on APS in 2022 and is now among the top 10 lending protocols across all blockchains with $280 million of tvl Aries markets has expanded its product Suite to become a fully integrated dii Hub combining lending borrowing and More

in 2024 alone Aries introduced several new features to better meet the needs of its users including native usdt support an incentive program and more click the link at the bottom of the show notes head over to Aries markets and tell them that I sent you Ledger is the global leader in digital asset security trusted by 7 million users and securing 20% of the world's digital Assets in recent years Ledger has built a comprehensive ecosystem of products and services making digital ownership more secure and accessible for everyone Ledger's newest devices Ledger stacks and Ledger Flex introduced the world's first secure touchscreens making it easier and safer to manage your assets alongside Ledger stacks and Ledger Flex they have also launched The Ledger security key app

offering a safer alternative to traditional password management follow the link in today's show notes to get started with Ledger today one thing that I uh you know when I'm looking at these different coins that exist some of these meme coins it feels to me like there are two different types of coins here actually there are Creator coins and then there are there are almost short-term meme coins so an example of a Creator coin would be a trump coin like Trump is actually a Creator coin that's that is a coin that is associated with a specific person yeah and you know historically I think people have a really negative reaction to these things because they've been the vast majority I don't know you know we'll leave the Trump one out of this for a second but a lot of these like celebrity coins right

have been kind of grifty right it's been like hey I have a lot of attention I'm going to launch a coin you know retail or whoever my follower base is going to buy it and I'm going to dump on them right there been a very negative reaction I do think though you can squint at this and say maybe this a next generation of influencers will say hey I can launch a coin that will go up depending on how much attention I'm able to get on the internet and treat it like a real business almost like equity in my yeah you know my ability to get attention um and so I think there are going to be these longer term Creator coins and that's an enduring category but there are other coins which almost feel like you know harambe coin they feel like a a a viral internet Trend or

something like that and you know I know everyone looks at these meme coin charts as going way up and then dumping as being bad but if you were to look at them as kind of like that's what a social media Trend does right it's supposed to go way up and then down yeah you looked at the view the the median view chart for any given piece of content its halflife is going to look almost exactly the same exactly the same as that right and so from that perspective maybe the market is actually behaving exactly as it should right and what these Traders are doing is instead of a social media algorith algorithm creating price Discovery for that Trend or that Meme or that idea you actually have traders that are creating price discovery for that

Mee and idea and seeing how many people should see it yeah exactly and it's not like a blackbox algorithm that we have no idea how it's working or what it's optimizing for It's actually an open market in adversarial environment with that you know is starting to like genuinely price these things um I will say I think there's way more than two categories of coins like I think I think there'll be you know for every possible asset type that exists online offline onchain onchain there will be a coin for so I think like it's actually quite blurry if you look at um the meme coin ecosystem over the past year yes there's been Creator coins there's been these kind of like symbols or movements so like peanut and SPX that are kind of these like they they look resemble more

like political movements than they do anything else you then have like AI agents as a category with its own user experience and its own kind of Market forming around it like there's a lot of different types yeah I think the market is going to get increasingly granular and specialized with those different categories um but the one I'm most interested in the one we build all of our time around build spend all our time on is just specifically content yeah and I think like I do see the version of the a version of the future where Creator coins work but I think we need to figure out how to tokenize their output on the internet first like instead of jumping to straight to Let's tokenize Mr Beast I actually think we need to effectively tokenize all of his videos first before we can then bundle and create a create a

coin on top of those oh okay explain that connection exactly so think like where Creator coins struggle right now is that like it creates a one a lot of work for the Creator to actually like put value back into it and a lot of the value they're creating on the Internet is like offchain yeah um or even like um not even offchain like in the real world so like they're selling festivals or real world goods and it's very hard to programmatically and publicly route that back into the coin but if you imagine a world where every video is now being tokenized and we understand the value of every single one of those videos there's buy and sell demand going through them

there are royalties coming out of them or LP fees or even just the coin ownership you can then actually start to bundle you know aggregate ownership in all of those things using what exists on Chain versus trying to have this like Blurry we're selling T-shirts and pricing them in you know the token so I think like people are trying to scratch at the how do we bring the whatever value that creat doing into the Creator coin I think it's actually a little bit too early for it I think the idea is right but I think we need to actually figure out how to tokenize everything else they're doing first before we bundle it you know what it's so funny all right I'm going to draw an analogy that feels like it's reaching a little bit but but but uh I actually I was looking at a post today or the other day

um guy from Athena was describing that uh usde or Athena drove 95% of the incremental demand for the black rocks onchain treasury bidd over the last 3 weeks and it hadn't really occurred to me that but the analogy would be okay you have if you think about different issuing environments as like l1s right or different issuing platforms the closer the proximity is in between two different assets that want to interact the better so like let's take the trafi L1 uh where you have uh dollars which are backed by banks that have treasuries and different fixed income instruments right that but as soon as you bring the dollar represent represent onto ethereum

there's a huge problem between the you know the treasuries that exist in the trfi L1 and what exists on ethereum and so what you're starting to see is issuers move the a tokenized version of those treasuries on chain right so that it's easier to manage the risk and liquidity in between the stable coin and what's backing the stable coin exactly and there's an announ that's there's a little bit of reach but it's the exact same thing right in between a Creator coin where okay let's say I issue this on chain but yeah I'm selling Feasta bles or t-shirts or I've got an offline coffee bar or whatever so you really as a as a collector or an acquire you really have to squint at how am I going to see value here as opposed to if you have a bunch of tokenized posts that

directly relate to this and it all exists on the same environment right the Val yeah not get the value is more legible but it's also more programmable and or it can be automated so you're not introducing all of this extra trust and labor involved that is just like you could theoretically do it but I think it breaks down and then I think expectations get overinflated whenever there isn't you know transparency or legibility and how it works and I think that's where a lot of the failures have happened where it's like they're trying to underwrite it as if this person is now publicly tradable on the NASDAQ when it's just not that oh man that is so interesting okay so the value proposition from your perspective then or listening to you my conclusion is cuz I'm like why what is it going to be what

is the Catalyst here for creators to to start adopting you know to get off of YouTube or uh Tik Tok or wherever they're building these massive followings and monetizing very effectively is a better form of monetization ultimately and and you and maybe a larger Global audience that you can monetize these assets to as well yeah and a um just fundamentally a more conducive value system for spreading information on the internet yeah like I think the the like zooming all the way out big picture problem that we see is that like the internet up until this point the best we've been able to do to capture value from information is either through ads or subscriptions yeah and those both necessitate having some kind of wall around the content which is like

then it's at odds with like my favorite one of my favorite quotes is um Stuart brand like information wants to be free but it's also expensive and that tension won't go away I actually think crypto solves that fundamental tension which is you can have information that is free and open to the entire internet it goes on a chain any developer can access to it like can access it and it spreads very everyone get gets access yeah and then by putting it in this market format or in coins there's actually now a direct incentive to spread that information as far and wide as possible um so I think like um yeah I think that that's why you might even that's like really high level but yeah for creators it's like hey like our picture is so

simple like we can DM creators on Instagram or YouTube and um it's like hey you should try um tokenizing this on Zoro it looks and feels a little bit like a blend of Instagram and YouTube yeah um and you don't need any crypto you can just like sign up with an email and upload and some amount of money may or may not come back and then more often than not they'll make more on Zora in like their first week than they have in years of being on Instagram or on YouTube wow um and that's for like a particular category of Creator like we're not going for they've got millions of followers and they have an Institutional business built around this it's actually the longer tale of people who are doing really high quality work

but are kind of in that like 10K to 100K messy Zone where it's like on the side but a lot harder for them to monetize okay let's compare this uh and I want to start now getting into what Zora actually looks like today yeah but the last macro point that I want to make a little bit is this might sound a little high level or high flutin to people but if you think about the way that you know the internet is monetized today it actually is monetized via ad exchanges right and so maybe could you just break down a little bit how that model works because actually the large like the Googles of the world right and the Facebooks are very very familiar with creating some sort of online exchange which prices the value of inventory right like social posts that that's a

thing that already happens this is just a different way of Y maybe Distributing the value right yeah exactly so like on Instagram um there's some of the world's highest quality content there that captures a lot of attention and the way that they monetize that attention is they're essentially auctions running on an exchange in the background where people are paying to insert their content in a particular person's feed yeah um and essentially they're like hijacking your attention but they're like pricing it so it's like hey if you want this to be viewed by a thousand people or 10,000 people or 100,000 people we know that that's going to cost you know X cents per um impression we're going to charge you for people who are acting on that but there are these huge

at scale multibillion dollar exchanges running in the background that constantly pricing and routing that attention based on who's trying to buy buy it um which are advertisers yeah um and it's a pretty good system like I think it's got us like I think um the current state of the internet is actually pretty amazing but I think like crypto is going to let us get like 10 times further than we have yeah um up until this point in a much more open um a much more open model yeah I'm not sure if you've ever uh come across this piece um I'm blank on his last name it's got Arnav Roa p on publisher exchanges which is a very interesting uh the blending of these two worlds right and where um already you see examples of uh exchanges of value so like Robin hoods like The

brokerages Brokerage models um you know melding with media right the acquisition of something like snacks um and actually Instagram Marketplace or Tik Tok uh are like good examples of even further right you can you can look at that but Zora repres presents a really exciting end state of this and you know La last on the macro point is that I think I could see in the future an Overton window shift of if you just think about how media has evolved over the years and centuries about who gets to decide what information is shared you can think about it as being you know traditional media the model is a very small group of editors right I mean if you look at the media landscape of the us back in the

early 1900s or at uh early 20th century it was there weren't as many different media agencies and there was like one guy and like Walter kronite right that would get on and you know essentially decide uh the ideas that got propagated to the American people right then you had dissemination of media you have um and but even still those are small groups of editors that are making these decisions and then social media was very disruptive where instead of people making those decisions it was software developers in Silicon Valley that was spreading those ideas but now you know we're at this very you know divisive point in politics and geopolitics in general and I could see people people are always saying this is bias this is not you know Facebook isn't

showing uh material for conservatives Twitter is now a platform for conservatives and uh there's always going to be accusations of blame or someone putting their finger on the scales but in a weird way a more fair way to disseminate information is markets if you just make it open like a markets based attention algorithm right I could see that really being a macro fit in this current ERA yeah it's certainly the ideal and I think it it's easy to see if you just assumed every piece of content had a live and open market on it you can see how that could work yeah it's just a matter of like how do we make it easy and fun and compelling for people to actually tokenize their content in the first place yeah okay so with that as the Super Future that would be very cool

and interesting let's zoom in on what does Zora look like today yeah uh if you go like download the app in the app store it's called Zora um it looks on mobile it looks and feels a lot like um this kind of crypto version of Instagram yeah um so you open up the app you see a feed of images and videos people can comment on them yeah but instead of seeing the number of likes and comments on a post you'll see the market cap and the trading volume on that post nice um and then you'll be able to see who are the holders of it are some of those holders your friends or not yeah um and from the the Creator side or creating side it's super it's easyest posting on Instagram um so we've done a lot of work you know three years ago you had to

download an app you had to buy eth you had to pay gas and it was like a the worst um first time user experience ever now you just download the app you sign up and you press post and you've just tokenized the thing um on the wide open world of crypto uh on web it also looks and feels a little bit like Instagram I would say the coin pages that we have actually feel a little bit closer to YouTube yeah but um we we have kind of designed everything in the stage to be content first it' be very easy for us to go like Giga Trader D gen mode and Hyper price charts everywhere and things going crazy but um I think like what we're trying to really establish in the market is this understanding that like this

isn't some project this coin isn't going to be like King made by some person who's going to have to spend their whole life you know working on making number go up it's truly just the picture um so like don't buy this thinking it's going to go crazy because you know some Magic's going to happen in the background it's like the value of this picture is what we're trying to discover and we're trying to build that context around it yeah um so yeah it's a we've tried to make it quite friendly and we focus a lot on like just onboarding as many firsttime creators as possible to crypto because we think that like expanding the types of content and the supply side is um one where we have just like natural strengths in with all of our work on the nft side but two I think

that's what um inter in like I think we'll create more Traders cuz I think there's a little de gen in everyone it's just that there's not always ways you to express your opinions financially so if we're starting to expand the amount of content and you know niches and subcultures that are now like showing up in this world then we think that'll one convert more existing crypto Traders but turn more people into Traders for the first time as well that's really interesting that you guys are coming at it from the everyone's trying to get the right form factor on this right if you you know speak to a bunch of early stage VC and accelerators in crypto or even outside of crypto everyone is into this idea of gamification of trading and the people that are more on the finance side of this call it gambling right or but

you can kind of squint at this and see a bunch of different uh you know people are trying to create new and unique experiences uh outside of just logging into a brokerage app right they're trying to make it more interactive and you guys are kind of coming at it from the other side of things and you're saying okay this is what social media kind of looks like but what if we added a little bit of a finance element in a trading element to it and it feels like you're both going towards the same thing just from different starting points yeah I think that's right and we're also trying to tap into you that if you look on like Tik Tok comments or um you people going like in before viral or investing in a thousand likes like people are actually starting to already Express that type of behavior on

traditional social media so it's like what and then obviously that's a great form factor to win a lot of content win a lot of Supply it feels familiar but instead of it being a like button it's like well if you double tap you just bought a um or you can like trade it um and you know I think there's a risk where you can go too far to the social side yeah um and I think we actually started there like a year ago we actually have been like going more and more Trader focused but it's like coming from this like social core Traders AI enthusiasts and deons listen up the game is changing and desk is leading the charge to celebrate their launch desk is running a trading campaign with three major highlights 38% of their token Supply will be allocated to airdrops they're offering the lowest

trading fees on Earth and finally they will be running a desk referral program the more people you invite the bigger your rewards will be to get started click the link in the show notes below and make sure to follow at trade ones this episode is brought to you by Moro Moro is the first and only defi protocol coinbase has integrated directly into their main app giving millions of users access to borrow against their Bitcoin on coinbase just as web 2 companies like Google Amazon and meta were built on internet protocols the largest financial companies of the future such as coinbase will build on decentralized protocols like Moro whether you're an individual fund fintech or institution Moro is for you follow the link in today's show notes to try Moro today how does the market structure piece of this evolve

over time because the criticism of meme coins that I think has a lot of legs is I I actually really didn't like this when it there there was originally meme coins were they were taking off because they were more fair than these high uh low float High fdv VC coins and supposed to be fair and Retail is supposed to win and probably that didn't end up happening in a lot of cases but also the trading apparatus of for like what was going on underneath on the market structure side of meme coins became professionalized very quickly you had sniper Bots that were sniping up like basically maxing out the bonding curves of something like pump fun yeah um and Retail was generally losing so how do you imagine over time like what degree do you imagine retail people are sort of

speculating on posts versus there's a more profession Prof Market making and trading apparatus that exists to price the value of these posts over time that retail can benefit from like how do you yeah I think yeah the best case version of the future probably finds some good relationship between both like I think um you know if we play out the market as the algorithm version of the future it's probably going to be people who are running you know what look like feed models on social media actually is trading models to be like oh I've seen this piece of content and I think it's going to reach this amount of people who are going to enjoy it enough that they want to buy it and like there will be a lot of like I'd say probably be dominated by mostly um Al like you know

uh machine based trading B trading uh but for that to really work you need the consumer side to one um feel like it's a fair and open market and like they want to be able to buy and they're not going to just get their eyes ripped out you know one block later exactly um which I think is what's been happening now um so yeah most the market structure currently is basically just like you have a bonding curve either on your own custom Smart contract or you put it just directly into the something like Unis swap which is what we do yeah um but what we're really focusing on is one the starting market cap you can do there is actually like still probably too high like the starting market cap we have right now is um around $1,800 we want to

get that down to zero yeah and then then the challenge becomes like well how do you have a basically Z market cap and then not make it free free for someone to buy the whole thing right and then this is where I think all the interesting mechanism design is going to play in which is like how do you have you know billions of these micro markets that maybe you're trading between one cent and a dollar or a dollar and $100 um and there's a lot of work there but I would also say like a lot of the problems now is I just don't think there's actually enough Supply so there's excess demand going into things that shouldn't be getting to it which is just like why you see these huge kind of like immediate runoffs and things get ripped out because people actually just don't know what they're trading yet they

don't know if they're trading a project they don't know if they're trading a picture they don't know if they're trading some AI agent like that I think a lot of that illegibility is just showing up in the market activity where people just genuinely don't know what value what value they should even be at in the first place there's so there's almost a fundamental valuation question here of price discovery of what should this be and then there's a whole under like Market structure question here of what is the right mechanism designed to ensure right a decent outcome and I would encourage listeners if they haven't gone go back and listen to an episode that we did uh did two episodes actually one with uh Jesse Walden and Austin um from wetstone launching Doppler we also did a Roundup on kind of the um the mechanisms of pump fun so we

can link both of those in the show notes but per yeah I think it this I would love to get a sense of you know what are the diff what's the design space for this look like and you know reading uh we'll we'll Link in the show notes a little bit of uh some of the blog posts that zor's written which have been great uh for understanding but you guys are built on Unis swap today y um and what that reminds me of and what might be familiar with some listeners is this idea of well it's changing right now but initially pump fun uh being built on top of radium or or eventually routing trades to radium that Chang now they have their own amm pump swap y but you know talk to me about that kind of Market structure and design and uh like

why build on Unis swap here versus you know building your own amm or something underneath yeah so we actually ran an experiment um end of last year called wow to at once we realized that it was like okay moving from nft to basically coins is the move we wanted to make we started doing some of this like Market structure um experimentation and the first version we did was actually on our own bonding curve and our own um our own protocol essentially and what we found was the gains that you get in um customizability at least for the stage that we were at then were offset by like how hard it is to just build enough distribution and liquidity out of the gate and the Integrations you need so

like showing up um on things like Dex screener uh being integrated with all the different routers and um kind of uh apis that exist that a lot of the um wallets are built on yeah uh and the Unis swap is actually like really really good um especially surprising yeah and with uh so we're on V3 currently we we'll move to V4 um but V V3 B basically gave us everything we needed out of the box which was we could put you know 100% of the Supply into a pool we could do a single-sided position so we didn't need to actually add any Capital into the market and then also by nature of it being in Unis swap other people could start to LP as things grow very quickly

versus in your own bonding curve unless you want to build all of that logic typically you're stuck and you have to live by that curve through the whole thing which is you know um which can be a limiting factor for its growth um and then on top of that it was just like yeah simple um it's just like simple to do that so we were like okay maybe there is a version of the future where we need to get you know increasingly specialized um kind of like Market models that push the limits of what you could do with like Unis swap V4 but it was like this will get us started out of the gate and then we also wanted to normalize the experiment for ourselves to some extent which is we don't want to necessarily innovate too much on the market that the mo the model that we can

see is working we're trying to innovate on the type of Supply the user experience and everything on top of it yeah um so it just made it possible for us to focus on that that part as well okay question what um on the the so when you're doing the single-sided lp that's um whatever the Creator token is or that that token that's being created is an eth is that the other pair that's right yeah um and is that something you know as you think about expanding or the next like three to five years you think it's always going to be eth or would you see it pairing with usdc or something like that yeah I could see it pairing with usdc I could see it actually starting to pair with um other meme coins you open it up and people could start to play with like linking these to each other

but um eth was the easy starting point just because a lot of our minting ux and smart wallet stuff was built on eth being the primary currency sure but I could see usdc being a better one as well that's interesting um that's interesting for uh eth uh eth as a token and just L1 tokens in general because the same thing happened right on pump fun it was Soul was the and now it's usdc now it's usdc man a little bit bearish all on I one token price um okay so you started on univ V3 which introduced concentrated liquidity now we're moving to V4 where there's going to be a much more Rich design space and much more heterogeneous group of amm so what will you be look like what would be nice features right for a new uh amm for

you yeah so the the first one is um actually unlocking that lower market cap and like the lower part of the curve so instead of it being $1,800 it's like we get it as close to zero and then yeah what is the why why is it difficult to go below $1,800 just because if we set it any lower then you could spend extremely small amounts of eth to basically buy the whole Supply in One Clip and there's nothing we can do about that so we've actually been working quite closely with um with wetstone and the Doppler team on like iterations that get us closer to more efficient um markets at that lower end of the curve because you know not every picture is going to be worth 1,000 bucks or 2,000 bucks we they're probably going to be worth a lot less than that yeah um and

what does the team doing exactly they're I'm trying to reach back to that interview but they basically are only releasing certain certain amounts of Supply at a time or uh yeah it's a little bit more complicated than that it's kind of like this um the ux is still swapping but it's kind of like a reverse Dutch auction in the back end that lets you you can buy small amounts at um low at low value but if the higher the amount the more it's going to like up your price and it's kind of like balancing the two but like right how that shows up right now is that they actually have multi pull liquidity pulls that you can get more granular curves so instead of just being one curve for everything you can have like okay here's what our curve looks like from0 to $10 market cap here's what our curve looks

like from $10 to $1,000 and stuff like that you can get more granular nice okay um and then there's a bunch of like stuff they have to do around that um to manage it all which is like where a lot of the magic of their protocol is um but yeah it's kind of like uh if you were to do a Crypton native version of a reverse Dutch auction it would be Doppler yeah um so that's what they're doing and then like other features I think that would want to show up so right now um LP fees come back to the Creator in both the coin and in eth MH um with like V4 hooks you can do these things where it's like actually they could just pick a single currency that they earn all of those things back in so instead of getting like two coins

showing up and maybe you don't even want eth you just want usdc we can start to manage that also for Zora's fees instead of ask like getting fees and all of these different tokens you can actually collapse them into just one desired token that you'd want on the back end yeah so I think like a lot of the LPF management side is actually really interesting to me on the hooks the hooks side um so but they get unlocked by Unis swap still like they don't need us to right we actually we have to write those but like we don't have to build our own version of unisoft to do that which is great so I'm imagining being a Creator here at a launch I create some sort of uh you know token or content and then I get entered into I'm I'm essentially an LP here right providing single-sided

liquidity MH um going forward into the future is their Challenge from the like I I would guess that the ux that you want here is to make it as simple as possible for someone that has zero technical knowhow to be able to manage this effectively right they don't have to manage any of it yeah yeah so they just show up they post and then money just starts showing up oh that's great yeah so and they get notifications where every time they're they're getting trades um we actually give them a percentage of their own coin for free at creation so the value of that is obviously going up and down every time but every time there's a trade a little bit of money shows up in the in the app which is great who is tweaking the parameters on these LP pools because you know I'm imagining my analog here is I'm

imagining providing liquidity on univ V3 right like there's a lot of um analysis that goes into you know creating a profitable strategy as an LP there it's actually famously pretty difficult to do yeah so is it the Doppler team is it some combination of the Doppler and zor team working together to make sure that it's working for creers or right now it's just Zora like we're kind of we're brainstorming new versions like with the Doppler team because we're seeing this is like the like one of our local maximums right now um but yeah right now it's just like out protocol team um and you we've only got a month worth of data in this but we've already made a couple of tweaks in the in the first couple of weeks that had a bit of an impact is there opportunity here for a new class

of Market maker sort of where you know you have right I would imagine that this is not an area of the market that winter mute looks at and says I got to get involved in assisting with price discovery on you know tens or hundreds or thousands or millions of individual coins but maybe I could I could I could see that this Market hopefully it grows and becomes orders of magnitude larger and there are many more assets that you have to keep track of and maybe Zoro doesn't want to keep doing that forever but yeah it sort of seems like there's a niche here for some new type of Market maker to come in definitely and I'll say like we don't actually have to manage any of we basically like one way deploy all of these pools and then we just let the market figure it out currently I think

this new market maker acted that will emerge that you're um alluding to was kind of what I was saying earlier about how um there's like a category of Engineers ml Engineers who are really good at writing feed algorithms which is like given a piece of content who should I show this to and how viral will this be and that's going to determine whose feeds it show up in I actually think that's the exact type of Market maker that will emerge here which is coin showed up on chain I'm going to inspect its metadata in the content I'm going to make an assessment of like how viral do I think this content is going to be and then where should that like how far will it go and you can actually then make a trade based on that Insight that you have you know what was the unlock have

you heard of a something called yapster yeah yeah yeah isn't that kind of exactly what so for listeners in the audience I I've only seen it I didn't get accepted to the one point it was like a 300% beta or something like that I made it into a couple rounds it was fun yeah but the idea is that it's a social app right you sign up and you have to post something like 0.25 Soul or something like that at the time you get a certain amount of points then you get shown successive rounds of memes and you get shown say five memes over the course and you have 5 seconds or 10 seconds to allocate points and you're trying to allocate points based on what you think other people in the round will also allocate points to yeah um and then you kind of go through successive rounds and

the people that are successful at allocating points to what everyone else does you stay longer and longer and you get rewarded for that and then at the end I think the people that may you can launch the most highly rated meme on yeah everyone gets add drop some of the meme that was chosen proportional to how well you did the rounds yeah was that mechanism that feel this is one of the big unlocks for me is like that looks a lot like a social media feed and kind of what you're describing here as well with these ml Engineers who are very good at guessing what to show people and how long people are going to look at it and that thing and then where I think that starts to play out is actually a Marketplace for feeds which is given um so it's like if I'm getting really good

at predicting that well why would I not actually just have a website that is serving a feed to these users and because it's not um like one of the big unbundling that happens in crypto social versus traditional social is obviously like Instagram has a monopoly on all the content they're the only ones that can access it and they're the only ones that can construct a feed on it because that database of content is not accessible yeah in crypto it's completely blown open every single coin every single piece of content is available to everyone so now it's like well imagine 10 different websites uh with 10 different feed algorithms there's now competition for who can actually show me the most relevant things to me and then the the business model for the feed

providers is like you have to find things that people are willing and like enjoy enough that they just want to buy it yeah um there's also that you can come at it from the speculative side but I think that'll probably stay mostly private which is like I don't think you would open that up that's that's Alpha so your job will be of all the available information and content on the internet what is the most relevant to the the user that is on my website right now such that they're going to like it so much they want to buy it to support that content or buy the content or support the Creator basically yeah this is a very so maybe to zoom back out here for a second I think one of the things that is very appealing about this to me is um one you know people people have to

remember like a lot of people talk about nfts like they're dead right and I think that people are kind of unfair in terms of their expectations around timing and how long it takes to build things out Bitcoin now has product Market fit it's 17 years old you know it took a long time right and many many people famously in the media have proclaimed Bitcoin dead there's a whole website dedicated to this um and it got went through different rounds of P2P cash which is the original Vision um and now it's this digital gold uh defi is another good example of it took off there was a massive amount of speculative fervor around it you know most of those coins have not reached new all-time highs I think the vast majority of them haven't actually and now you're just starting to see some of those real Thor problems uh

get solved and uh everyone's building out stable coins and like def looks Prime for for Resurgence here and same thing with nfts right there was an initial speculative fervor which I think tells you that there's something real here but then you know what's been so great about this interview is sort of figuring out the success of okay this is what worked this is what didn't work and coming towards uh this new idea of um onchain social which doesn't look very you know I've never really liked the onchain social where it's like okay this is exactly like Twitter but it's decentralized on the back end like yeah I don't think that's compelling enough of no one cares about that what I would say is that um so I would say tokenized images are not dead nfts might be for that use case though cuz like we we like

categorically moved away from nfts as like part of this this model I'll even still debate that I I I still this I think it always exists and I think there will be increasing value yeah but I view it as kind of like I think um the nft market or like the the form factors that I think are durable and will stick around will continue to resemble like the top 1% Market that exist which is like if you compare nfts like the digital art world to the real Art Market there's so much head room for growth but I think there are order of magnitude larger opportunities for this larger idea of tokenizing just all content yeah and tokenizing images that had a lot of overlap with nfts that is like breaking

away and moving away yeah I completely agree with that because I mean on the The Art Market side of things what has always made sense to me is I sort of view these pfps that The pfp nft Meta made a lot of sense to me you maybe you spend a thousand or or sorry like $20,000 on a really nice like zenya suit or something like that it feels more relevant to me in this age to spend money on a profile picture that you think is really cool and everyone's going to see you know yeah I think watches are probably a closer analogy I think watches are great yeah yeah that's exactly right um well yeah this is uh this is super exciting I um and you also have the launch I saw I guess last thing is the Zora meme coin I saw that you

guys are launching is that correct yeah so we're launching the um yeah official Zora coin so where where tokenizing zor at large as well so that's that's going live in Spring um we just announced that uh in March I think so we're getting we're getting pretty close to that which is going to be exciting exciting man um cool well look this has been a great conversation this has been a huge uh I've been yapping a lot of people's ears off about some of these ideas so it's been great to connect with you who's thought about it very deeply and our building something you know super exciting if folks want to try out the Zora app or just follow you guys or find out more information what's the best way to to do that yeah I'd say go to um our website so zoro.com um and then Zora on

the app store and then on Twitter we're just Zora zo um so you can find us there sweet Jacob this been a ton of fun we have to do it again thank you for being the first uh guest here yeah yeah IRL this was really fun cool perfect thank you yeah take care yeah