James Dyer & Jason Goldberg: Pepo & Decrypt – New Token Models for Media Engagement

Transcript

you work out in the morning walk out in the morning and every day 6:30 or 7:00 that's you oh that's me that's me yeah six days a week and I eat like crazy probably seven meals a day just just grazing twenty-two twenty-four seven I have like three meals a day there's a lot of weight especially travel and work everything most people get that I just drop weight sweet nice probably hi welcome to epicenter my name is citizen Cuchillo today we have yet another interview from the etherium community conference which took place in Paris in

early March so today I bring you my conversation with Jason goldberg CEO of pepper and OST and James Dyer head of product at D Crips now if you hadn't figured it out already Peppo is one of our sponsors and i'm pretty active on the platform and we actually partnered with them at the theory community conference to put together this amazing podcast studio and so if i'm able to bring you all this content from the conference it's in large part thanks to them and we do have quite a bit of content coming out in the next little while now this was a really fascinating conversation because we discussed something that I'm deeply interested in and that is new monetization models in media and the reason why we had Jason

and James on together is because decrypt was announcing a new app that they've built on OST technologies and with this new app that leverages OST readers of decrypt will be able to earn tokens for reading content and interacting on the site now these ideas have been around for a long time even in the early days of epicenter on the LTV Network longtime listeners will remember the LTV token and the magic word and the proof of listen and all these incentives to listen to the podcast but they've never really been executed very well and so I'm really interested to see the interesting things that decrypt will be doing with this app

and so with that let's go straight to the interview I'm here with Jason Goldberg who's the CEO of OST and Peppo Pipo Pipo Pipo as long as you're saying it and James Dyer who's the co-founder at decrypt and decrypt is a media property or media company but I'll let you guys introduce yourselves and more in more detail yeah please introduce yourselves and let our audience know how they how you got involved in crypto sure so Jason Goldberg and I've been serial entrepreneur for over 20 years the first product that I worked on was Abel chat rooms back in 1990s been

working in community and Internet for a long time I fell down the crypto rap rabbit hole in 2016 when I was working on an app that I had launched called pepo which was we had this novel idea back in 2016 to enable influencers to earn money directly from sponsors advertisers fans without going through platforms and it's been great and realized back in 2016 that that would be a really hard thing to do so we had to build a ton of technology to do so and so that led us to building OST opens symbol token so the idea for Peppo came but we had more oh it was the first pepo I'm like literally the appleís people way before I was safe before simple

token OST stands for open simple token right and yeah we launched an app in 2016 it was basically any influencer could create their own channel and the app we had lots of foodies travel bloggers people could join their channels the idea was to build up kind of the like the web to experience like messaging to the influencers and then layer on the economic model later okay and so I mean I didn't notice this history of people like we had over 200,000 users I mean it was a real serious app and we shut the whole thing down because we said all right we literally say you know say go down the rabbit hole was I started getting obsessed with art how are we going to create this economic models at the app and how we enable kind of peer-to-peer

payment so there with microtransactions and all the stuff and that like led me into aetherium and my co-founder Ben Bowlin we started like brainstorming like literally we'd spend weekends was brainstorming how to do this start diagramming how to create these experience we wanted it like we we had like on this whiteboard it was like if you were to enable every Instagram user to be able to you know to to earn when they post have every like earned money what kind of user experience would you have to enable and the AHA then was okay well don't just do this for pipo build technology to do this for any app and that's when we just pasted you know I basically made this this tough call to say let's turn off the app and focus the entire organization towards building the enabling technology still use a much

bigger opportunity okay yeah it's interesting so have any I didn't knows about the history of people so have any of those people from sort of like before do we see them on the app it's really interesting so it wasn't until a couple days ago that we even started to let people know from the old people that we existed because we took a different approach this time so we we built all this technology to enable you to integrate these microtransactions into the app and then we went out and spoke to people to try Peres was the the right features the app to build and that led us we didn't have 30-second videos before before the app was just like chat rooms with I was like you know kind of almost like a whatsapp group with the influencer um and now we layer in the new version the app that we launched you

know a couple months ago it's entirely community driven community told us you know short form video real authentic and then every like transfers of value so we decided also to launch it into the crypt of community to start and we haven't really marketed to anyone outside the community wanted to get it right within like a tight-knit community and then expand out we're just going really broad mm-hmm and it wasn't until a couple days ago where we actually went out to about 50 of the top influencers that earners earners about kind of creators in the original pepo and say hey you know we launched this app it's mainly used by crypt up people now do you want to you know come on and check it out and we've had a couple of them join a couple great so we have this woman who's a food to

foodies in India one dinner yeah yeah and they are like hey they'll love this and I can earn money from it school so well and so when the time is right we'll start to push out to the original user base of people not yet okay and that means it takes a lot of patience and kind of another word for it I'd like to not just kind of say hey everyone join us it's like it's like it's not ready yet you know it's not ready after have ever enjoyed you want you want to deliver a disappointing experience yeah okay well we'll come back and we'll come back James please please tell us about yourself it's funny actually because I guess my journey in terms of coming into the space there's been a few few different times of me and mr. go where

cross paths so Ivy University I actually co-founded a video discovery product myself it was called swish a lot of similarities we were curating the best of the Internet's 30-second video clips we did it for about like mine and the serosa platform yeah it was that time when all this kind of stuff was going on initially the premise was you know to really focus on quality of video and pull it in from other platforms you know focused on I guess like the emotions that people really wanted to fill out them whether it was like excitement or or amazement or intrigue so we did that for about a year

yeah we got to we got to like we got have a decent amount of users but I think in about a year in again we were answering some of the monetization questions that weren't really answers there and kind of at the same sort of time a lot of my friends from university on the startup scene were you know going in really interested in all this blockchain and cryptocurrency stuff and it was about that time that I started I decided to stop suing this this video app which was called swish and I set up an educational platform called light paper so the general problem for that was everyone was too big so I thought

the promise of this technology so back in what tail end of 2017 start of 2018 know no one you know apart from the super insiders could actually clearly articulate what this stuff was and why why was it exciting hmm so we built like a platform to break down the fundamentals into building blocks make it simple kind of the joy lingo for blockchain Gupta currency though I'm pretty well six months in we had an opportunity to join up with some other guys who are building a media property called decrypt WeChat with those guys for a little bit decides to join forces and that's why I'm in today so I'm one of the cofounders of decrypt we are a media platform covering the space we do

news we do education and we do collections and yeah that's that's fair by me maybe we can pick up you guys are growing pretty fast yeah yeah with we did pretty well we young been publishing for just over 80 months with 20x to the size of our audience this year so that's just there were 55,000 readers a year ago to just leave a 1.1 million so so we're growing but yeah I think it's important say that you know along the way we trying to build a brand which is you know de mystifying this space pulling back to the conversation a while ago it's a truth bear for the site and yeah you know one where we're telling compelling stories I'm curious because I

mean we're both both in media I mean different types of media I suppose but what do you think was what do you think is sort of lacking in this space where you know you felt the decrypt could could could fulfill or answer it like to sort of like a user demand or like a community demand just in terms of a joke my business model in this case were you just talking about the location the content yeah and our positioning I can speak to my personal premise I think it always comes back to this notion of you know making this world intelligible helping people to understand what matters you know where their promises

and you know by the same token you know I think would be naive if we didn't call out but know there's a lot of scams that I've taken place in the space there's a lot of bad actors so it's calling those by the same token so yeah I think it's it's about highlighting the genuine successes I think it's about making the big ideas easy for the outsiders to understand and I think that's you know an important role to play and Gorder awareness and adoption and you know hopefully this space continuing to grow and have an impact which we all want to see hmm can you talk about your affiliation with consensus yes so having talked about that so we are a wholly owned subsidiary we are editorially independent and

technologically agnostic obviously that's you know Crisco peeler for a media company we need to preserve our integrity so that's something you know that we have really kind of focused on in terms of the foundations and setting ourselves up as a as a as a media property that's out to succeed how do you what what kind of things have you implemented to ensure this journalistic integrity and I guess I guess journalistic integrity is one thing but the other is you know I think I think we can all we can very easily get into sort of into our own bubble how do you ensure that decrypt is really agnostic and covering like you know a wide range of technologies from like Bitcoin to super

experimental stuff everything in between sure so I mean I'm not gonna be able to answer in as much fidelity as the people working on the editorial side who write you know taking a lot of steps to ensure that this is this is in place I work more with the guys on the tech and product side but I can speak I can speak a little bit in terms of ensuring ensuring our independence I think if you look back historically at other media publications what they used to do is basically draw a line I guess between church and state as it were and that's you know the guys though actually in the trenches wearing the stories and then you know the money making part of the business where this content is effectively being monetized I've made

will talk about some of these business models sure they're today but you know it's super important to kind of keep those separate and you know those incentives between the journalists and how the the media company is looking to make money on there's wires UNK Faust as it were there they're not crossed okay yeah cool I mean yeah I mean I think I think that it's I'm not I don't consider myself to be a journalist although some people on Twitter sometimes you know put me in that category but you know I think you know of course as a media property that accepts sponsorship oh you know over six years of doing epicenter I think I've had to make you know we've had to make

choices and and we've had to yeah be quite diligent but you know I'm not going to say that there isn't sometimes buy sees that that can you know a surface but yeah it's a it's an interesting challenge but so today I mean I think this conversation should you know the reason why I want to get you guys in here was to talk a little bit more about the sort of challenges and also the opportunities that exist in terms of monetization of sort of media platforms so you know both of you run very different media platforms one being a social media platform you gather being like a proper sort of like journalistic

media a company but you know this question is to both of you you know generally what what kind of issues and what kind of problems are you solving with the different things that you're doing so like with Peppo and you know we'll get to talk about this little bit more in detail but the the monetization model that you're implementing in decrypt yeah I think from the the people aside you know the first person foremost we're a technology company and we built OST technology open simple token technology to enable any application to inject the Internet of money into their application and that's basically our reason for existence and so how do you do that we enable smart contract wallets

to be embedded in any app with SDK that we developed and then everything that's needed in order to make sure that those transactions can happen at almost zero cost on kind of scalable layer to chains and we go into deeper and deeper as to even lower down the protocol how that works and pepo as an app you know halfway through 2019 we we looked at it we were at a place we felt our technology platform was ready to be used by third parties and we decided not to wait for others to adopt it it's like you know you can trying to get people to adopt frontier technology that they don't know that they need yet is always complicated and you can take a long time and we said what we really need to do is to prove some use cases

and show everyone was possible and so we set out to see if we've come up with a use case that was worthy of kind of being like a showcase to demonstrate to the world what what our technology was capable of and the process we went through was to just start by interviewing lots of people and we had these you know a number of hypotheses early on and as these things go some of them most of them were wrong but the way we found out was by talking to people and we started by just talking to people in general about their social media consumption you know how they were using sites let's say like Twitter YouTube we talked to podcasters and kind of what their frustrations and challenges were and how they were you know monetizing their podcasts we talked to people about

their likes and dislikes with patreon as an example we talked to people about things like LinkedIn and Facebook and Instagram we went all the way around and what we uncovered through all these conversations was that computing stood out once we heard that increasingly everyone's a content creator that everyday we're creating tons of content and we're basically uploading that content to these you know large dominant web tool platforms who are monetizing our content and our data and you know most people unless you're Kim Kardashian are not making much money from it we heard from a number of folks podcasters in particular that services like patreon should work but don't work as well as they should and if they don't shut you

down yeah so they're not censor resistant right and totally yeah but I had a cosmos newsletter and just like disappeared no reason was a whaleship thing I was it was on patreon uncovered a lot of things around so as we found us you know no matter where people are creating content you know with with an abundance of content you know people feel like they're giving the content for free not and very struggling to monetize we found that it's hard for people to stand out and get noticed and recognized there's a the signal versus noise problems continue to you know to increase and then we found that just the the payment structure also made in web 2o

made a lot of these problems insurmountable so for instance you know pretty much every website app uses stripe as a payment processor these days stripe speeds are 30 cents on every transaction plus 2.8 percent of the transaction because Visa MasterCard charge them 25 cents and 2.5 percent and you know you can't have a 1 cent or 5 cent transaction you know if you're being charged 30 cents and 2.8 percent so it makes micro transactions impossible so that's where the internet money comes in and we said ok well we can solve this problem right we can do have these transaction to be personal person on a blockchain you have no value loss you know you don't have anyone in between and collecting rents on it and

you don't have to pay the credit card processors as well so there's an economic difference and then use the fact that you know tokens are transferring or values transferring to make the experiences richer and so for instance in pepo you know every token not just earns money you know every like not just earns money but it also impacts the relevance engine and the person's ation cutting down on the noise so you know say it how do you use kind of value and this internet value to actually make experiences better yeah I was talking to Paul yesterday about this very thing and I think that the challenge in podcasting and particularly I think in the Western world because I I mean from from what I've heard in my conversations with people and say China for instance is that the ecosystem is very different but

the particularly challenge with with sort of Western podcasting is you know these platforms behind you pipe Apple podcast Spotify energy and all of the others not none of them are nearly none of them have monetization built in or you know sort of frictionless payments so you know if you want to do any any form of monetization well you've got to lock your users into this other platform like patreon or whatever whatever you choose to go through and that's just not the way people consume and it's it's it's not seamless right so there there are platforms too that allow you to monetize content but but it's not it's not frictionless

there's not like a one click in my podcast player like Spotify where I can just tip you know whoever I like well let me see so you know patron this product is a great example we went and spoke to must have been dozens of podcasters and what we found was talk to me we funny because we didn't even start any crypto we started just talking people who talked people about religion sports politics and you know frankly we were just crawling patreon and finding kind of you know we look for people I called them basically grinders basically people who were not yet the superstars but you could tell that they were doing a lot of work trying to make money but not that's the area they said let's talk to them because they would have pain points right so you find these people in that category and here's what we heard

it's funny sweet what we heard is that we won is that because the you call tipping but let's say the the value transfer is not contextual that most people didn't don't do it in fact we found that only the podcasters superfans and the you know clicking over to patreon and signing up for a subscription the other thing is economic model that because of the stripe thing I was talking about the you know 2.8 percent and 30 cents that they can't allow you to just kind of give 10 cents 20 cents so you have to sign up for a subscription which is usually 2 or 3 bucks a month with a recurring subscription that it's hard to cancel and so the model doesn't lend itself towards this kind of like wow I really like what subset at minute 30 you know and just click the button to say ok you

know great job set we also found frankly that people hate the word tipping the whole idea of tipping is not something people associated with online content but people are very open to showing appreciation with value transfers and so that's you know that's you know kind of that's received tokens of appreciation and are more than just like right and so it's like and that's so it took anyway so people my point in all this as pepo has been developed through a lot of direct user research I've done personally with our team over a thousand interviews in the last year where literally we spent 30 minutes just talking to people we try to find pain points we try to explore and discover kind of what are things that they're trying to get done that can't get done what are

the hacks they're doing to try to get it done and figure out how do we build a better product to make you make it possible for them with pipo we decided and this was a fit one of the it's the hardest to two big decisions we made one was in in July of last year I think July we we were like exploring all these things and we have like all these ideas of like well you create a button that you could like tip people on Instagram with or on Twitter and we're like no we need a place to start and we kept hearing from people what we need is one authentic connection to the content creators so we said all right how do we create this authentic connections that led us at 30-second videos because it was like you have to be yourself in the

30-second video and then the hardest kinda decision we made up to lead up to the people in launch was we decided to narrow the focus just to the crypto community to start and this was really controversial internally we had so many arguments about this because we've been talking to people as I said in like politics and sports and religion all these different topics and we're like we're gonna focus just on crypto and I was like why like why does crypto and it was like you know what same reason why Airbnb launched in San Francisco before it took over the world same reason why you know you got to pick one market and figure out the density of it get it right for the one thing yeah and we got the one thing I'll just keep him for was funny we also found out early on that

crypto itself is not is not in their community there's so many different subcommittees inside of crypto totally yeah yeah yeah and I mean I think like people has found you know at least one subset of the crypto community I think which is sort of like the defy community there seems to be a lot of people like a lot of people you see here will be there not so much so like other other communities let's tell people a lot of Dow people yeah I mean activists activists as well and you're starting to see like yeah like this sort of new wave of people coming on like so this is a whole food bloggers it's sort of foodies which is kind of cool and it's an

interesting use case I think like for for a video app to be able to people take pictures of their food you know in restaurants and things like that so I think the it tent it lends well to the to the application so I want to talk a little bit about ecosystem growth and you know what were the what are the levers that allow a relatively new ecosystem to grow because the importance I think with any platform is to have is to have network effects so once again I'm pointing to the platform's behind us you know have a podcast Spotify etc you know if these pot if these platforms are successful well it's because there's a lot of people on there and you know as a podcaster for instance I'm glad that

I've got a lot of people when I have a podcast listening to us or on Spotify or wherever but you know if all of a sudden I have to move all my listeners to something to one platform because that's where I find the sort of marketing features or monetization features that I find that's an enormous amount of work in in the case of pepo you know what what kind of things are you experimenting with here so that people actually start using the platform and then content creators you know feel that well you know this is a good platform where I can start creating content I mean I think I think there's a few things going on here one is a whole lot of patience and being trying to say like smart not fast now same time we're moving fast but like I mean by smart not just fast is you

know we've always said is that we need to get if you we need to get it right for one community and one set of people and then expand out from there rather than trying to go conquer the whole world and I also kind of you know I coach our team on patience the scent of basically is like look I have no idea Pipo will be the next snapchat right or the next Instagram and the chances are one in a billion of it happening of it happening you know hundreds of millions or billions of users but what I do know is that if we get a loyal user base that is using pipo it's going to track lots of other companies who want to have that same internet of value technology embedded in their apps as well and you can get that snowball effect but you

start with pipo and then you get to the next you know larger larger app and the next larger app the next thing you know you've got whether it's a snapchat or Instagram or a tick-tock percent okay how do we use that technology and application so it's for instance in the you know in the podcasting world you know we wouldn't be able to go out and sell our technology today to Spotify or Apple but you find some upstarts in the podcasting space who you know they make some inroads and then you know the next level the next level next level you so it's you can't cut corners you got a you got to let these flywheels kind of build now the key for us in terms of like features and pepo is follow the users and make it useful for them and we need to find you know we're constantly

searching and the way we searched by having conversations by talking to people and finding out what does it take to make the app essential you don't want to be something that's people are stacking is like you get just another thing in their toolkit you want to be something that's when the first things I think about when they're kind of have something in mind and what we hit on in the last few weeks is communities one thing that we found is as opposed to tik-tok which is entertainment kind of bite-size content where people just want to have like a random bit of delight that they kind of sink into with pepo people were using it for professional for working for work kind of related purposes and with professional work with is like the I like to call it the sort of crypto Twitter tick-tock steam it but

but also like a little a little bit LinkedIn and that's something with the so would you so you guys say what is if it's professional what does that mean well see you you talk to me in a well professional is more deliberate you go searching for checker topic or a particular community that you're kind of invested in and so we went deep on on launching these communities of epicenter you guys you know host a community on pepo we launch them at eat Denver and then we've been rolling out of things about 50 communities on people now and communities allow people to congregate there are 30-second videos and conversations around topics to get almost like you know notifications or subscriptions and kind of followers for those topics they're a lot I've been event based but it's you know what we're doing is we're learning as we as we

build the app and we're building it with the users and again as I say it's like look I I think we're onto something I think we're gonna we're gonna show the next you know you know year that you know people is an app that on its own is very very interesting and gains a huge following and shows that you can you can earn more than just likes I also think we're very rapidly proving the value of the technology through people and I can tell you we've had dozens of companies that come to us because they see what would be the old Depot and they say I want that in my app cool yeah I mean III I guess when I use the app I don't really I don't necessarily it doesn't necessarily come to mind that you know people could be used in other applications that you know you could

find you could find that that that that people button you know in a podcast app or on a social network or something like that but yeah it's about growing an ecosystem and the social media app is just one of those ecosystems and then you know and we'll talk we'll talk now a bit more about what you guys are doing at decrypt but you know creating the bridges between those those different communities where you might have a strong community on over on on pepo and then a sort of overlapping communities on decrypt and then those tokens can can flow also between those platforms so now I want to move now to a little bit more on the sort of the OST model and what you guys are building on top of OST so

obviously pepo is built on top of OST what so my question to you James is what is it in the OST technology that you find interesting and made you want to build this this sort of community payments platform ah yeah cool listen I can pick up where where Jason left off and why you know we're one of the companies that are looking to leverage this technology Sbrocco back at Def Con last year I was at that conference and I saw people in action and I guess for me was one of the first times where I've actually looked at what

is a web free product and you know it doesn't feel or look like a Webley product yeah and kind of it meets those same user standards that some of the kind of best-in-class products more broadly in there in the tech space have been able to hit so super-high level that's how you guys how are you guys using using this tech and able to deliver this user experience with blockchain technology so that was the hook for me in terms of I guess the different component parts and as of why it's been really fantastic for us to build on top of it super fast it's cheap and I think for us is you know a fairly

fairly small company this technology that Jason the guys ersity have been building you know it's a it's a toolkit and you can configure that in different ways our use case it equipped is slightly different so we are looking at the intersection of us as the publisher the people that are consuming our content and then the brands that want to connect with our audience in a way which is completely non intrusive so we have a slightly different configuration but you know having that toolkit we can if we added all this stuff ourselves you know it would take a long time would be incredibly resource intensive so um you know the SDK is they offer allow us to real quickly they allow us to iterate

and you know ultimately answer the problems that our users have so then let's talk about the technology a little bit in the SDK and how are you guys are leveraging that so what are the different components that are part of the the OST sort of toolkit and how do you leverage it I'll give you a high-level maybe of Jason's to jump in as well he can he can give us a he can give us a deep dive so in our particular use case we're doing initially a lot more kind of company decrypting the company to user interactions instead of user to user interactions so example on pepo people in the community of sending

value to each other what we're looking to do is share valley between companies and our users so we'll talk about this a little bit later on today which I'm which I'm excited about but to crypt is launching what we're calling to seasons do clip seasons RC releases of article 8 based oakum which is brought to you by a brand so it could be an epicenter season it could be a samsung season and then in one of these given seasons there is a limited run of tokens which users can so users earn by reading the content users and by engaging with this content by sharing it and then you know once they build built up a number of these

they can they can cash out for the wards that are valuable to them okay know obviously what the brands getting from this side is they are co-sponsoring this token and they get to be really immersed into the experience and their brand is front and center every time one of these interactions interactions take place can you give me an example so let's let's say you know you have an exchange you know that wants to sponsor one of these seasons what what are the kinds of interactions that would allow readers or users of the platform to to get those tokens and where where would the sponsor find sort of web connection yeah yes I

mean I think one thing just to kind of kick this off is I think web 3 is teaching a lot of people that their attention actually has value I think users are becoming a lot more cognizant of that you know it's a bit of a hangover from all these huge web to monopolies that have you know been able to make millions billions of dollars from you know using user information and and data so I think you know we're trying to play a small part in kind of making a bit more of having a system with a bit more parity where users overwater from that so your question example we're keeping it simple to begin with let's say our users are reading an article on the epicenter podcast or

they're reading an article talking about what the guys that people are doing they with the article once they with the iSchool that get an option to be able to complete it as soon as they complete that that given piece they give a reaction they'll let them know user how they felt about that so that's this piece was great this piece is bearish this speech is bullish and then as soon they've completed it as a reward for them completing and obviously they're investing their time and attention in this content they will instantly using the UST tech go being talked about they'll get sent one of these co-branded one of these co-branded tokens they'll add to their wallet and then you'll see in the wallet that they have one of

these one of these cabana tokens brought to you by the by the brand partner for that particular season and then all those tokens roll up to the decrypt tokens so I can talk a little bit the neighborhood technology that makes that possible okay so that's good okay so so OST is a layer 2 ethereum smart contract solution and so well we what we do basically is we enable brands like decrypt to deploy tokens on layer 2 etherion chains the value of those tokens are determined by locking value and contracts on layer 1 so let's say you could take any ERC 20 token can be eat it could be die whatever it is and use it as the base for creating the

token on layer 2 and then you basically create a mapping of let's say 1 2 1 & 2 whatever or 110 whatever you want the exchange rate to be but that gets fixed in the smart contract so that whoever receives the layer 2 tokens they know the value of that token is based on what's ever in layer 1 and so for instance the OST token and OST you know most recently trades in the range of the alexey 0.9 cents to 1 point 5 cents and users see the fluctuation of that but you could also have it the backing of the token on the layer 2 could also be backed by a stable coin like dye or USD see if you wanted to okay so you for instance like your you know the decrypt token could be back my die instead of

the always coloring so that you would have like a stable value charlie up to them ok so then they you know then the the the platform would provide that that liquidity correct in the smart contract correct exactly and so and what this does is it creates a regulatory compliance solution that also enables the UX to weaker that we enable so repertory compliance is that the decrypt token has no secondary market it can't be changed trade on exchanges it's only value is derived by what's backing it and in the kind of what's what's being staked on layer one and so technically an owner of isolate decrypt token if it was backed by dye and let's say if it was one-to-one would saying okay I know this token is worth a dollar because there's dye and a contract that backs that and they ever want to call on that

they could although the in-app experience redemption we've created is more compliant which is how do you cash out for gift cards what is part of the SDK that we provide same thing as in Pico yeah and and all that is part of you know delivering a solution that actually speaks to what users want and need versus trying to just do what is the best optimal solution that you might have safe couple years from now which would be you know user can just use their own key you know their own their own keys and just cash that wherever they want let's say right because for now gift cards work really really well so the the next part of neighborhood technology is that our SDK which we're talking about enables brands like decrypt to embed a smart contract wallet basically have a smart counter well then

every one of their users can get and we deploy a number of smart contracts for on behalf of every user on the layer two chains including basically a what's called a token holder address which is where the users tokens live and they can access that from multiple devices a recovery contract would allows them to recover using a six digit pin with it labor covering module and all this is kind of the blockchain under the scenes being you know lower down than any user really needs to know about that makes these you know basically almost zero cost token transfer as possible okay interesting I I wasn't aware that there was like you could actually do like this

backing with died and I yeah that you know cuz I mean ultimately you could create a token that's worth like a penny for instance and and have it be back by died now the at the moment though you know these tokens you can use them in people to buy gift cards so that's a regulatory yes essentially the issue at the moment yes so our approach has been I called Landon expand versus go for the optimal and Landon expand is you know like rather than trying to spend the next let's say several years taury clearance to do the entire optimal solution which would be let's say user can move whatever money they want into an app like pipo and then you know cash out any way they want to whether it's

you know dollars or crypto or the bank and whatever it is we said let's let's get in the App Store first was something that is regulatory compliant and applicable which is a challenge in itself oh yeah yeah it was the first crypto app approved by Apple actually the conversation there was really funny because we we had our lawyers were cool but we you know basically the solution that we up Linux we are cadet with them for over I guess a year's worth of work with them it brought to Apple and Apple is like hmm interesting but we're not the law were Apple so won't talk to you about this and they dug into it and then we we got their clearance and but basically what get out here is talk to Apple like yeah you call like well I'll tell you I was I was in Osaka at Def Con

and we really wanted to move the app out of test fight and our lawyers are like we're clear we're good and so and the clearance I'm talk about here is basically we have meant to the solution where you can you can you can't you can basically can you can buy more tokens using Apple pay and Google pay so using their established means so relying on them to be de payment processor and then cashing out for anything that's a store of value like a gift card that store that could be Amazon Airbnb gift card it also could be an NFT it could be purchasing something a domain or whatever it might be anything is a store of value you don't need my transmission license for before maybe transmitter license right and so we got our lawyer sign up for it and then I was like alright let's let's get this thing to

into the App Store let's show during DEFCON that we actually can get this live in the App Store so we submit this to apple with a note basically saying you know we want to be first we want to show that this is possible to have a crypto powered in a punitive log I sent them all the legal opinions I sent a back-channel some folks into at Apple said try to get someone that we can get attention on this and they respond immediately it was amazing we had a woman on the app review team I think she was a lawyer I don't know for certain but based on her question I think she was she said let's get on some calls I was talking to three to four in the morning in a socket I'm back in Cupertino where she was and we went through three rounds of review and

kind of some revisions and they proved yet cool that's really interesting I would like to bring it back to you James and what's what I mean when you were speaking with advertisers sponsors on the platform what's you know what's that conversation look like where traditionally you're telling them like hey you know buy this ad space or maybe you're not even having that conversation because you're going through some some ad marketplace how does that conversation now change that now that you guys are doing this this co-branded token yeah so I think it's you know important to flag that I think these

business models tend to move a lot more slowly than the technology itself you guys probably both both both experience that and platforms and the monetization methods that some of these advertisers are used to you know what's been existing for a while so this is your ad exchanges this is your banner ads these are your sponsorships that you might put on a product like a podcast their business models which have been kind of established for a little while and that you know these ad buyers are familiar with so you know I do think and this relates to what Jason's been saying

and you know looking for that beachhead market the conversations that we're trying to have are with companies that are you know aware that they think there's a better way that these business models are slightly out of date they have you know a larger experimental and ad budget let us say and that they're they're willing to you know try things which are not totally unfamiliar with what we've seen before but you know introduces you know a bit of novel technology in our case and happy to work with us and and we play out those experiments I mean I think you know similar we're starting people in the crypto community and building out from there I mean I I would see like you get some pretty awesome crypto brands to

encrypt a native companies to prove some use cases that you can and take that to mainstream companies and they'll see the results first rather than just being sold on something that's fighting this guy very similar yeah one day I just want to know like you know nothing that I've mentioned at all in terms of monetization whereas James has in terms of his model is at all based on let's say validator economics or you know kind of sealing transactions on a blockchain or number go up and I think it's really important to emphasize that that aspect of it that you know there's this or this kind of place it's almost like the easy in crypto easy ways to just go to try to appeal towards you

know if enough people buy it'll create demand that'll increase the prices and everyone will make money and I think you having you know a these apps can't be just all kind of everyone's going to make money through kind of usage and network kind of fees that there needs to be more utility to them and I think it's important distinction because I think we don't in terms of creating this internet of value I think the first use cases we have today mostly around defy is around kind of let's say uh pending the banking system and it or maybe introducing that there could be an alternative form of banking we're kind of you know kind of Finance the actual kind of injection of kind of what does that mean for applications and products and Mama's ation models we've yet to see that yet

but I don't want to just fall back on well number go up ya know you foresee any I mean and this is questions for the both of you but do you foresee sort of bridges between the the decrypt token the Papo token and defy you know what are some of the interesting things that maybe you're brainstorming about well I'll speak on the on the people side and national sort Novosti technology side is so as part of the announcement we're doing today is we're also announcing the OSD redemption store SDK so today we're powering the store inside of pepo where you can cash out for Amazon Airbnb uber gift cards we also added estoppel

domains which is crypto domain site today as well and we're providing that also now in an SDK so the folks that decrypt are able to basically we beep our the cash had options for them they don't build that themselves either now next steps we want enable kind of crossover between the tokens so you could let's say you could take your your people coins and convert them to decrypt coins if you wanted to or to other partners we have and you know it's like you know what we're looking for is just more ways to create this interoperability and kind of network effects across across the system now in terms of where we go with that over time we want an able to be able to take more control over what's in their wallets today that the while themself is completely self custody so we nor

decrypt nor any of our other partners have any way of reaching into a user's wallet and taking their tokens or expiring them it's you earn it you own it now the next step is we want people who are maybe more crypto savvy to be able to say okay I'd like to participate and defy through that or I would like to you know maybe you know convert some of my tokens into crypto or into other you know other things I might want to do with their tokens we're taking an incremental step by step approach to that like it's like you know the number one reason why people aren't let's say adopting people faster is not that right now yes you know how do they get more value from the video format already so so do you guys work on these things we prioritize them based on user and it use

your interest you haven't I can add to that I mean I think it's they're kind of holy grail of this space that there's just this kind of seamless fluid transfer value which can go kind of everywhere in anywhere we're excited to see the interoperability options continue to evolve you know with OST but also you know all these great energy companies in this space I can just second with Jason set and that's you know you've got to start somewhere it's almost like Maslow's user hierarchy of needs and I think it's looking to provide utility here and now and that interoperability and users completing the loop and getting value from these

systems you know there's things that we can do before looking you know where these tokens can be sent exchanged and used elsewhere if you were to say if we just say to users and people you know lock up your tokens for a period of time and are in on them so you can't cash them out during that time yeah you could totally do that I mean I'm typing out a lot of tokens but a lot of them could be locked in defy and I users users could do that which way we'd want to make sure that you look we're an app in the App Store so we need we we have a higher God her name is Apple right and so we have to make sure we do such things in a compliant manner and you know today our wallet is self custody and we don't want

to move to us being the custodian so the user we'd have to find a really slick UX for the user to understand what she's doing and for her to decide okay I'm now defining my tokens I'm getting interest on it then obviously that's you know how am i earning eight percent interest from my keep my tokens of people but that could be interesting way to educate people and why people are willing to borrow dye and that's the Tri rates but even one step at a time that would be really cool I mean I think that's like a really interesting way to get people just regular people sort of like into defy and sort of understanding the who's on the other side of that 8% trade so you know with regards to the SDK I think one of the things that has been on my mind recently so we recently

did an episode with each time a loose piece of argent you're familiar with our gems you know they build a great wallet and I think a lot of the technology that that sits behind Arjun specifically with regards to the the wallet and so the multi-state wallet etc it's probably quite similar to that of a steam now you know for an app like theirs they're controlling the technology but they're all they also you know leverage basically basically have control over the entire user interface now for something like OST you guys are technology provider you're you know you're providing technology at the base layer but you're not you're not necessarily like sitting in InDesign

workshops with the client sort of coaching them on what are the user experience best practices around things like maybe you are but you know if you want to scale say that nobody I mean I just think the hypothetically if you if you want to scale you know you're providing an API anybody can use it now you know for for a company like decrypt that's building this this user interface you know there's a lot of really new and novel concepts in there one of which is recovery so you know if you take something like recovery I don't know if he has this at the moment but I presume you could have it where you would have maybe like one of your people friends can can help you recover your wallet how

do we create good user experience practices because it goes beyond just a technology there's really we need to create UX standards around things like recovery key storage you know where your keys are stored how you recover them and it's not super clean a couple things unpack here so this is a really great question the first is that to huge admirers and fans and close to the guys at argent a really great team yeah Arjun took the path yeah they took the path of being a standalone wallet and our kind of ethos ed OST was to be ingredient technology and so while they're under the you know like a lot of what makes it oscy technology possible has some commonalities with origin they wanted to be a wallet product where people use the wall of it and we said we want to enable

thousands of wallet products to be within apps using our technology just a different approach to a similar kind of problem solve we said let's go to folks who already have distribution like decrypt and others rather than us trying to gain we're gonna wallet downloads and are also it kind of philosophy there is that the we call like wallet as a platform that while it is not an app while it is just a basically well it's a number where tokens are held and that can be embedded into all sorts of different places it's a contract now in terms of the SDK itself and this is really important we have created the OST wallet SDK in such a way that all of the kind of the core functionality of the wallet and the user experience around adding multiple devices initiating

recovery going through the recovery process all of that is powered by the SDK in such a way where it's available in iOS and Android and react native in such a way where the team at decrypt they don't need to for that part of their application they don't need to adjust any of the UI at all so we basically it's like everything that's it said several layers of the wallet functionality they can basically just kind of take this and just like plop it right into their application and so and we've optimized that UX based on our user research and feedback so that they don't need to write any of that I think yeah I mean I can add to that like zooming out when we started to see UX coming out of the dawn of the Internet

there are all these weird elements that people haven't seen before like this is a form and I need to enter my information into a form and obviously there's been loads of research and best practices that have emerged out here yeah years of a still figuring out forms anyway so I mean I think that's all is to say that you know we're seeing these new patterns we're seeing like our users being able to recover their keys and over time I think the more and more people work in this space the more more people use this technology we see these best practices emerge and you know from our side I think implementing these

patterns starts with boring as it sounds that's good documentation that's good examples of what to follow yeah and you know in terms of these these recovery patterns and the other patterns that are more normal to web 3 you know being able to follow the the practices that step out has been it's been great yeah you should example this like so when we when we created the wall recovery module for the OSD well at SDK we did this from two fronts one is we start with user research and we put we got paper testing we put different options in front of people and we saw where they succeeded in where they failed and these are mainstream users we started with not with kind of say crypto savvy people and what we found was that a six digit PIN was the maximum that someone was able to

remember again and again and again and so you know obviously writing down 12 words would be more optimal but most people don't won't do it you obviously can't remember 12 words and but six digits was something that every people remember it every single time and so we then went to our security experts and said okay we need to find a way to enable a six digit wallet recovery from smart contract to be part of our wallet SDK so we started with the experience then we reverse engineered back to the technology and we peered out a way to make a six digit PIN recovery from smart contract now we also tested you at events and social recovery and it failed miserably right and so it's one of these concepts where I think a lot of us you know crypto nerds like we think oh it'd

be great you can ask three your friends to help you recover from sort contract your friends don't want to help you do that and you don't want it either most people they actually don't they don't get it that is it's not it's not a viable solution and so it's it's okay the fact that's from a security standpoint it would work but doesn't annoy me people are gonna do it so we focus on things that people I shouldn't use interesting how do you overcome the the challenges I guess that are linked I mean specifically with regards to the the deeper the decrypt token how do you overcome the challenges of sort of civil attacks I mean with I don't want to say it's harder on on pepo but you know people you need to have like a Twitter

account you need to it's like I'm an app it's but you know with with with a web browser it's maybe easier to automate sort of identity creations and and getting people to yeah I sort of like sure so I think to begin with we're launching on an app security is obviously significantly easier on an app it's much more it's easy to exploit on the web yeah looking to expand expand into the web later but first and foremost we're releasing the decrypt app where we're introducing these tokens and our seasons I think when we're looking from a token design point of view and we're looking at all these different actions and incentivizing these actions

you got to flip the coin and be like okay what's the malicious user gonna actually do here to try and exploit this so to start off with confirming that users read an article our kind of mechanic there to prevent you know someone building some clever bot that's gonna be reading thousands of articles a day and absolutely destroying our token was there that's a we put a sensible daily cap on the number of tokens that reader can use and we also attach a sensible kind of reading speed to our articles so someone who's a really quick reader what does that look like in terms of words per minute and we have a timeout so that's just an example of how we're

thinking about preventing abuse on that particular action but the same applies to sharing and being able to validate that I think you know there's there's simple things you can do to guard against these kind of malicious actors yeah the best thing is puts about there also and just you know you'll think that you come up with everything and then just watch the users and fill the holes as usual find them and it's like it's okay these apps right now are not completely decentralized from the redemption standpoint and so as I said the user has a self custody wallet it's a spark contract wallet they own their own keys you know we can't take money from them but we do play a role right now when the cash out and so there's always this kind of this safety net that well if someone goes to cash out and you

saw that they were a malicious actor we don't have to base it on with the cash out in that in that instance now they did something that was our mistake that allowed them to you know to accumulate lots of tokens that you know then we should let let them keep what they earn what's the future what is the future of media and tokens look like I mean this is this is a question that sort of like I've carried with me for for the last six over six years of doing a podcast is you know one of the new models look like and whereas this space going to go and I think there's been a lot of experimentation I'm even even in the early days of epicenter you know we're part of the Ltd Network and and there

were some early early experimentations there even before aetherium on counterparty with the lgb token you know other platforms have done this like steam it and okay let's not talk about the whole drama there but you know what's what's the future here and where are we gonna see the most innovation coming from yeah I mean look my perspective on this is that we're at the very beginning days of injecting the Internet of money into applications websites and enabling all new sorts of business models that are gonna be aided by the fact that anything that you can do anywhere you can transfer a piece of data or the API call or any kind of action the user could take online whether it's a five-star

review a high five and emoji whatever might be could have value attached to it and that can have impact on consumer experiences but also on business models and it can start to create new models of how individuals can monetize their data their content etc and I think it's gonna be it's gonna take longer at first and I think people wish to materialize when it does people are gonna be like whoa where'd that come from it's huge it's everywhere and I think we're at right now is like we're at least up to bat right so if like it's like I think you know six months ago was like will this ever happen at least now we're in the game all right and I think now that we're in the game we're gonna start to see some things moving pretty fast you think about defy as an example like you

know a hero and no one was talking about defy and suddenly it's everywhere right and we're at this like the beginnings of these kernels of like internet of value kind of percolating across and it's gonna be one app in the next step the next step and all the sudden you're like whoa like someone will create the next snapchat or Instagram or something maybe one maybe the next media site or whatever might be that'll be completely you know token powered and people like a whole new business model isn't been invented here I think it's a very good question I think I wish I knew the answer I wish I knew the answer that one said I think ultimately all of these businesses largely shaped by the business models that that much you know

we've seen that start the internet and media companies being completely upended we've seen that with the rise of social media you know I'm personally keeping my eye on this and I'm really excited to what Jason's alluding to and you know if this kind of elusive business model emerges from web 3 I think people are aware that you know there's certainly a different toolkit now where we can start you know building a new business model but why I come back to is just the notion of these web 3 tools being programmable trust and that's you know being able to good design good incentives between between different groups and you know hopefully a system

which is there's more equanimity between between the parties so I don't know but I'm excited to find out well I'm really looking forward to to seeing where this where this goes and I'll be following it very closely because it's it's a it's a topic that's very very near to me and where I'm really interested in seeing so the progression and you know I mean with the epicenter this could also be perhaps an area of experimentation and yeah who knows I mean we could most certainly brainstorm about it some more over beers or something thanks guys for being on the podcast thank you so much appreciate it Thanks [Music]