Luca Netz & Michael Lee on Building Crypto's Digital Disneyland on Abstract

Transcript

And so again, like this is where we just crush it. Where when we're collaborating with like a global brand, you'll see us being very selective in that it has to overlap with the audience that we have, right? That Gen A, Gen Z, cryptonative audience where we're, you know, we're bringing in, you know, like an F1 versus like a Proctor and Gamble. These are real people. Those are real users. Others may claim levels around there in terms of users. It's farmers. It's bots. It's anons. These guys are real users. Like that is our value proposition and we've got to scale that big time. But I think we have all the ingredients and we have the foundation right now to really start marching in that direction. It's something that activates a part of the

brain that is reminiscent of DeFi summer and of the times in crypto where you would come back to an application or a platform of applications. Once you do that, I guarantee you every global brand will start coming knocking on your door. Welcome back to the Rowup. We are your hosts. I'm Andy. I'm Robbie. And this is your home to learn from the biggest guest, the brightest minds at the tip of innovation. Our goal is to help spread the collective knowledge of everyone in our community. We are breaking crypto out of its echo chamber and taking it to the real world. Sit back, relax, and enjoy a quick word from some of our awesome partners who make this show [Music]

[Music] possible. The intersection of AI and crypto is moving fast, and soon an agent will be managing your onchain transactions for you. But without guardrails, it's a disaster waiting to happen. Newton locks agents to your intent with cryptographic proofs and real penalties if they slip. Learn more at Magic Newton on X. What's going on, guys? Welcome back to the rollup. Today we have our abstract fam in the house, Luca and Michael to talk about the rising success of abstract streaming, consumer applications, crypto's breakthrough moment, and more. Of course, with Robbie, Michael, Luca, good to see you guys. Welcome to the show.

Happy to be here. What's good? It's your first time to have you guys on. Y man. Yeah. Hyped. So, Michael, it's your first time, Mr. Mr. Tech ZKYNC. Background, builder. Uh, lot to your story. Would love to just get a brief rundown of who you are. Who's Michael? What's your favorite ice cream flavor? Why are you in crypto? Again, like I'm a cryptogeezer, right? just coming out of Bitcoin from like you know the PaloAlto how Finny days of California Avenue at Anony's Nutouse but I think for a lot of like us that came out of crypto in those early days it was just it was like that cipher bunk

movement right where you know there's like an alternate version of the internet um some of us also came in through Silk Road um so like again like a lot of it was like you know the stories you hear from like the generation before us that built out the commercial internet where crypto felt like you know like kind of like our kind of wild west frontier and then got super lucky to where I was in the Ethereum seed around helped build out ETH2.0 and that was a way to make Ethereum go fast but to be honest like that was like a lot of my Chinese uh friends that I grew up playing World of Warcraft with that were probably one of the earliest contributors both you know investors and contributors technical contributors to Ethereum uh back in what 2014 2015. So again, like just kind of growing up

playing Call of Duty, World of Warcraft, uh eventually got me into Ethereum and then just kind of been on and off uh just in crypto, you know, helping out projects uh that kind of spun out of Ethereum, including ZKYNC, but had a stint back in television and then as well as uh AAA gaming with uh uh Activision Blizzard where he launched five games. And then obviously meeting absolute Chads like Luca along the way. um probably met what we met like what like two plus years ago where you know I think what Luca the entire Pudgy team were doing like that was like the great white hope right like in that these were probably the most equipped people uh to bring crypto mainstream and again like they have proven that out time and time

again. So when it came time to build the ultimate consumer chain where you're kind of bringing the crypto avengers together, it just made sense, you know, to obviously, you know, link up with Luca, Lorenzo, and the whole crew. You kind of look like Steve Aayoki, man. I'll take that as a compliment. Well, I appreciate you coming on, Michael, and I didn't realize that you were quite the crypto OG as well. Um, uh, crypto's dog here. So, you know, kind of even coming out of the Ethereum seed round, you feel like, I don't know, 150 on the inside. Michael, I got a quick question before we get into the

meat and potatoes here, given your your OG days in the cipher punk movement. You know, Ros Ross is free. The free Ross movement worked. And curious if you have any takes on uh on how that that the whole cipher punk movement has evolved with with now Ross being free. Yeah. Yeah. No, I think I think a lot of that was, you know, again, personal take, but, you know, was made a scapegoat. Like, yeah, like there's [ __ ] that he did that he probably shouldn't have. But again, like, you know, he it's like, you know, Sean Fanning and crew with Napster, like these were like he's just creating a marketplace like, you know, people people want to get high. Um, people are going to want to link up and, you know, do things. Um, you know, he

just created the the the rails to do it. Um, you know, I think if with under better guidance, he would have probably helped us accelerate consumer crypto much faster than the pace that we're currently on. Free Ross. Guys, thanks for being here again. Excited to chat about Abstract. Luca, it's probably your third time on or so. Um, but we've only focused on Pudgy Penguins because I think the last time we had you on, I'm I'm not even sure if Abstract was really in its even like test net or still like idea phase. So, I'd love to understand your perspective, man, of of the abstract story and and kind of why this made sense for the Pudge Penguins brand as well as yourself and kind of what what's the story from the kind of transition

from Pudgy Penguins into abstract. Yeah. So, the story is a pretty interesting one. I'll try not to give you a super loaded version, but I think it kind of started with like, okay, Pudgy had web had had we were in Walmart. We knew we were we knew we were going to Walmart. We had this whole like NFT integration tied to the toys. Uh you know, we needed to go onto a layer two. When I was kind of exploring which layer 2s to go to, we started to procure, you know, grants for the ecosystem.

Uh ultimately I thought to myself like whichever chain is in the world's biggest retailer tied to this product tied to crypto's best community or one of crypto's best communities thought we'd bring a lot of value. So I was trying to procure some sort of grant for that. As we were kind of going through the negotiations it was pretty clear that like we would get a pretty sizable amount to go build on a chain. And then I think like you know if some chain is offering me 10 20 million bucks like why right and ultimately it came down to the thought where I thought like we would leak a lot of value by just committing to somebody else's chain and it was clear that like we were the edge case and the thing that somebody would

champion if we were to go build in that ecosystem. Um and that like we would create hundreds of millions of dollars in speculative value there. And so as an entrepreneur, like I wanted to be fiscally responsible. I didn't want to leak that value. Like, okay, yeah, I can go take 10 million bucks, go build on this chain, but ultimately like I'm bringing hundreds of millions of dollars in value to their ecosystem. That seems like a bad tradeoff. Like what does it actually take to build our own chain and our own ecosystem is kind of how like the idea first came around. But then as like we kind of committed that like okay you know a chain is something we're willing to explore there's so many holes like we don't build blockchains etc whatever then I was at a dinner with

Saigar and he was just telling me as he was building frame he's like dude like I love build like building a chain is really fun it's super exciting I think we have a great technical team to do it uh but ultimately like I the the community side the marketing side like all of this is a real burden on me and naturally like everybody has different parts of their brain. Some people are really good at the marketing stuff and really good at the technical stuff, but you know, most people aren't really good at both. And it came clear to us that, oh, there might be some sort of opportunity here where it's like the Saigar and crew have been building a chain for the last year. They're really well positioned from a technical perspective to go and embark and build this the way that it needs to be built.

And we have the community and the marketing side down pat. I think we're one of the if the if not the best team in crypto at at marketing and community building. Uh and then and then that's when I was like, "Okay, we take it a little more seriously." And then like as we're kind of exploring the opportunities, you know, Michael was talking to me about a lot of the ambitions that he had, a lot of the different partnerships and places and where he saw blockchain going. And then I was like, "Oh [ __ ] a third piece of the puzzle which is like ultimately you can't like you each or needs its own form of leadership." Like I'm the CEO of Pudgy Penguins. Michael's the CEO of the foundation, right? Like you you can't just be the CEO of three different things. And I'm not I know myself well

enough. Some people can. I'm not equipped yet to be that. And so, okay, you know, Saigar came to the picture, then Michael came to the picture was like the perfect person to be a CEO. And I was like, oh well, the chain can actually happen. Let's let's go and explore like what it is to build a chain. Let's actually take this thought seriously. And this is where the moment really came where I was like, "Oh, this is super bullish." Because when you take a deep dive and you explore all the other blockchains, you kind of come to a couple different conclusions. The first one is everyone's doing the exact same thing, right? Following the exact same build pattern, building the exact same ethos, everyone's general purpose, you know, really just trying to follow the leader and hope, you know, throwing darts at the wall and hoping that they

become the next Ethereum and Salana. And to me that's like a super fragmented and anti- first principles approach. Like if you think about first principles entrepreneurship like there's like there's like roadmap to like how you scale. Like building a general purpose like right off the jump is like totally like the antithesis of like first principal entrepreneurship. Like how are you going to go and build like that? It just is like it's like it's like building a city. Like you build cities around attractions, right? And around vocal points. Like you don't go and just like plop into the desert and just go build a utopia and be like they're just going to come. They're just going to come. We're going to build everything and everything first. Like no, you start off with a with a you know a Disneyland or or something that brings people to a

destination and as this attraction gains momentum, you build you know more facets around it, more attractions around it. And so the ethos and how everyone was building it was really flawed. And then the second part was like we were looking at the competitive landscape and it was like everyone was doing these backdoor TVL deals trying to prop up these fugazi vanity metrics and it's like nobody was actually building a blockchain with integrity. You could tell that if you were actually like to run like a good entrepreneurship like you know a good entrepreneur like rundown. You're like they're not actually thinking about this critically. Um and yet they're getting these huge valuations, these huge fundraises. like how it just super flawed. And then and then with that was

like the third part of that which kind of like was a straw that broke the camel's back was really like us reminiscing on that same line of thought with Pudgy and why we bought Pudgy, right? Like we bought Pudgy because everyone was doing the same thing and following the same playbook, the board ape playbook, right? everybody was trying to be apes and then when you looked even more critically it's like oh they're they're not even it felt like nobody was a good entrepreneur in NFTTS and and that a lot there was a lot of holes in what they were building and it just was against first principles and there was nothing really too innovative and nobody was trying to do something different and there was a glaringly obvious playbook you know with NFTTS that I thought was just obvious but

wasn't obvious to everyone else and then I had that same conclusion with abstract I was like well why isn't there like one website for all of these chains where I just to go to go go go to and do everything, right? Like no [ __ ] no like figuring out what the ecosystem wallet is. Just like right now blockchains are very fragmented. They're like puzzle pieces. You got to put them together, right? Like if you're on Sooie, you got to go download this wallet and then you got to go to this experience and you just got to go like eight different places or Ethereum or it's all like this, right? And and then I think that it was it was that trifecta for us was like, "Oh [ __ ] I see the same opportunity in blockchains that we saw in NFTts, which is like the bar is still incredibly low.

The valuations are incredibly high and the tone has still yet to be set. Like nobody's really set the tone outside of Ethereum and Salana. Uh, and I still think that there's a separate tone in our in our spirit, a consumer tone that I think has yet to be really set, which is like a more curated uh, experience that is really easy for the layman, for the average person. Because I think like people in crypto don't give themselves the credit they deserve, which is like this is a very sophisticated asset class with a very sophisticated user base, but like your local barista, like the true mass, you know, is is not here. And they're not here because the puzzles are too are are too complicated to put together. Uh and

and and then and then probably the final piece was like the ETFs, right? When the ETF started happening, it was like super clear. It was like institutions are here and they're coming and the floodgates are open and that is now finally a self-fulfilling prophecy. But if we want crypto to be the industry that we want it to be, right? like the true infra and backbone for the next generation of the internet that it is going to have to break through to that barista and to that waiter and to that average Joe and that is really my specialty, right? Like my whole career was been was made speaking to that average person, that lowincome

person, right? Just somebody on like the the middle side of the barbell, you know, you know, blue collar. And I was just like nobody was building for that. And that I think was also then the biggest opportunity because I was like oh [ __ ] there is a consumer build that we envisioned that we started to flesh out and map out that nobody else was building that to me the consumer opportunity is hands down by a Texas mile the biggest opportunity in crypto. Right? because it is the it is the blue ocean right now that you've kind of really tacked off. The tech is finally here. Anyone who says it isn't doesn't know what they're talking about, right?

The institutions are finally here. Those are evident in the inflows and the ETFs and all of the progress being made there. Well, we're finally at the final frontier in crypto and the final frontier is consumer adoption. And but to build for consumer and to truly actually win that race, you've got to build it differently. It's got to be different. It can't be the same build as everybody else because one, the the build that everybody else has been building is just a a completely flawed build. But to build for consumer, it's unbelievably flawed, right? And it started with portal. So people, you know, for people who are not familiar, a good analogy here is like abstract the blockchain is ourthropic, right? And

portal is our claude, right? So portal is our consumerf facing product. It's the product that if you've never interfaces with the blockchain before, I hands down believe it's the best zero to one onboarding in crypto. You want to onboard somebody into crypto, send them to portal.abs.xyz. I promise you there will be there isn't a better onboarding experience and there isn't a better probably not only a zero to one but probably a oneto five experience. I think a lot of what we're focusing on now is like the five to 100, right? uh which Salana and Ethereum and Base have been doing really well. But I think our foundation of our zero to one and our one to5 is just unparalleled. And that will put us in a position, I think, to

scale and to reach people that and really fulfill the the 10-year promise that I think a lot of builders have set out to build, which is, you know, how do you bring consumers on chain, you know, via the masses and actually do it, right? You can do it on the back end on the B2B side. There's a lot of ways, but I'm interested on getting the barista and the high schooler. I'm I'm interested in getting these people on chain. Um, and that's how it kind of came together. And then probably the later end of the story is, uh, you know, we we had a little bit of good momentum because I think a lot of people have trusted us, uh, over the last couple of years. We're a team that has told people that we're going to do things and we do them. Um, and so we came out of the

gates, you know, gaining some momentum, doing all the things that I think you need to do when building a blockchain. And then Pangu happened. And the beauty about Pangu is, you know, Pangu was the eighth I thought it was the 10th biggest airdrop of all time. Somebody fact checked me and said it was the eighth biggest airdrop of all time. We aird dropped all the early abstract believers, right? People don't know this, but it was like $50 million to the abstract community, Giga Chads, and elites, and we brought a lot of people in. And I think that really created the hype. They were like, "Dude, holy man, eighth biggest airdrop of all time." It was a two for one special because if you were an early abstract believer, you already got an airdrop. You already got rewarded for believing in us and it was a pretty big airdrop to say the least. I

mean 50 million bucks amongst 15,000 people, 12,000 people. It was it it was a pretty meaningful one. Scaled accordingly of course, but you know that happened and then we were you know the market was hot. We launched literally putt penu at the pico top of the market. Um, you know, basically from December 16th, January 16th, it was just hot. We delayed mainet a little bit and then we launched mainet probably six weeks after Pangu. Now, we'll take we we took this one on the chin. It could have been a better launch. I still think all things considered like we're builders that build and and want to build not like just hype something and create some hype

extraction moment or some you right like really for us day one you know though to the community it was like you know month six day one was mainet and that's when the build really transpired we came out a little lackluster a couple bugs couple third parties weren't indexing correctly whatever uh so we kind of had this huge hiatus moment off of the airdrop then we kind of came back down to reality But that was beautiful. Like I I was telling I just did an interview before this and I said, "Look, red candles and FUD make community." And the beauty about the Pudgy Penguin story and a huge part about our success was that huge FUD moment, right? It actually followed the exact same Pudgy trajectory, and it's why I mentioned it, which was like Pudgy was the hottest thing in the world for

two weeks and then FUD, FUD, FUD for months. It washed out all the non-believers. Then I took it over. We brought it back and then and then as we started to gain momentum, we became the biggest and the best and the rest is history. And so Abstract really followed actually a similar play pattern for a couple weeks. Everyone in their mom was like waiting for Abstract. Mingnet, you know, came came out a little came out of the gates a little less hot than anticipated. I still think way better than most. Uh but we had we had all the wind in our sales. Uh, so we kind of got grounded back to reality and then and then we just had a choice which was like listen to the peanut gallery and everyone telling us to pivot to build,

you know, blast or whatever they wanted to do. We stuck to our guns. We fixed all the problems and we just said, "Dude, we know this is the way to do it." And we just and we just stuck to it. I think it's two and a half, three months maybe since that moment. Uh, and I'm so happy we did. And now I know of a ton of chains building their own portal style product which you know seemed obvious. You know we're leading the charge. I think we're one of the you know most anticipated chains right now. But more importantly I think we're one of the most you know like real chains in terms of like activity and actually doing it right.

We're our messaging is farmers will get smoked so farmers have not touched our ecosystem. Our ecosystem, I think, is a top five ecosystem in crypto. I don't think you can five five chains that have more on the chain, more fun and engaging things to do on the chain than abstract. The product is beautiful. The AGW with the portal combination is just smooth. It It's accomplished everything that we wanted it to accomplish. And now we're focused on like really taking the experience and all these things to the next level. All the metrics are up into the right DEX volume, wallets, transactions, just growing month over month over month. And I think it's just increasingly clear here that, you know,

when it comes down to L2s, it's really abstract and base. And once I think we win the L2 race, I think we'll go and and really compete to be one of the biggest and best chains in all of crypto. Um, but but that that's the story. It was actually I gave you the loaded version, but I think it was worth the context because I think it's pretty pretty cool in hindsight. Yeah. kind even back to like early days Ethereum like the early days of Ethereum when it launched what July of 2015 there was a bunch of us that came from from web 2 consumer that really had the same vision that I think you know Luca was just like articulating it we were just too early right it was like you're trying to you're trying to do Uber like back like I don't know in the late 90s

or like you know people AT&T had the idea of Uber like you know eventually like they knew where you were right because you had the handsets and eventually when they had the you know some version of like you know uh a mobile phone like they knew where like you know GPS- wise where you were but the infrastructure wasn't there like you saw the same thing with mobile gaming like the Unity game engine came out in what 0405 and it wasn't really until about 2012 you saw Clash and you know uh you know things like uh Candy Crush and then later on 2015 you saw Honor of Kings really just like make you know mint mobile gaming as a category. So there's a lot of us that uh came from consumer into the early days of Ethereum where we

were just like working night and you know like nights and weekends and just like the infrastructure wasn't there. Uh I think to Luca's point I think everyone ended up overindexing on infrastructure to where you have what 217 L2s that are either in production or coming out this year. Another 115 L1s and what people forget about uh consumer which I think uh Luca team always articulate is that it's actually not the actual infrastructure like the infrastructure as long as it's good enough there's three things you need to get right it's you know one it's curation right people come to a marketplace right this is why people go to the app store right or the play store or they go to Netflix for content or Amazon for you know for goods

you know they want to come to a portal where it's vetted right that there's you know that when you come in as Luca and team are bringing in people from crypto curious people from Tik Tok Instagram there's one in three chance that they're going to discover an app that's interesting and fun, right? Because if they're dumpster diving for for apps, they're going to turn out and never come back on chain. U but once you actually curated a marketplace, you got to do discoverability, right? So like as I'm, you know, kind of growing up on the app store, I'm playing Clash. I'm getting served, you know, Fruit Ninja. I'm getting served Candy Crush. I'm not getting served a workplace productivity tool and vice versa, right? And this is where as people come in and they find their anchor app whether it's like if it's like gotcha then we're going to

like you know introduce them to you know multiplier. If they're coming in through myriad we're going to introduce them to like you know Pandora right and vice versa. And then lastly I think this is where uh you're going to we're going to really unlock the the expertise of you know I think what the the Pudgy team have done which is distribution. That's the third thing right. We're probably the the best ecosystem where we can help you get from zero to one. You literally see people coming here, you know, project and they they literally overnight stumble upon 25 50,000 DAUs, right? You saw myriad go what in two in less than two months get up to 300, you know, no, it was like

473,000 users. Um, literally just like, you know, 0 to 60. And eventually you have product market fit and you can get from you know we get you from zero to one they're going to get themselves to from a one to 100 and then we meet them on the other end where we then help them get to a million DAUs you know if it's that type of business um that they're building. So again like you know this idea of consumer crypto has been around for forever but only now do we have the infrastructure and only now do we actually have you know a team like abstract uh where we actually understand you know what it takes to you know you know reach reach the masses and and to Michael's point it's pretty interesting because like if you have a fun really good app that is like positioned for

like our ecosystem and I spotlight it you're making half a million a month just set like we've we've done it now like 10 times we've like proven it. It's pretty spectacular, right? Like I if you're a builder and you're listening to this and there's some and you're building like a fun viral engaging product like I we just click a button and we we can get you 20 25 to 50,000 users snap of a finger and if you have good monetization loop half a million plus a month in revenue and then you take it. Right. Is that the weekly badge that you're referring to? It's it's it's badges. It's spotlight. So spotlight is that the badge is badge takes that number even higher, right? But the

spotlight is just like the top six apps on portal. That spotlight is a beast for that reason because people are constantly coming there clicking. If they see something new, they're all clicking on it. And if it's good, they're staying. You know, it's pretty awesome. To reinforce the data that you guys are describing, 300 400,000 daily active users on some of these apps, these are real people. Those are real users. Others may claim levels around there in terms of users. It's farmers, it's bots, it's anons. These guys are real users. For for those builders that are listening and they're looking to drive real revenue, we've talked about this on the show. This is crypto's coming out moment. It's time to break out of the echo chamber and approach real people and real users outside of

the box of crypto. We have the builders. There is the ambition. I think there's a level of confusion for these builders as to how to break out because they've been talking to the same people for the same long playing the same playbooks. What are a few pieces of advice that you know you could provide to to the builders and the audience that if they're not driving that that level of revenue right now and you're saying that they can be driving half a million dollars a month in real revenue from real users on abstract. What are some things to help them get started and what kind of advice do you have for those guys? Innovating finance global institutional and onchain deep liquidity to drive capital efficiency.

Now maximize yields on institutionalgrade liquid staking with me. Unlock trillion dollars of capital via Fitbitcoin. All of this secured by Mantle's treasury of billions in stables and ETH capital pools. This entire ecosystem is coordinated by a vast network of seasoned VCs that are aiming to create the next generation of banking and financial technology. This is Mantle. Yeah, I think I think you know our ecosystem is it it's it's really tailored. I mean at this point you can you can you see what we're going for which is like I want to entertain the user, right? Everyone tries to build.

Everyone in a lot of people in crypto try to build a lot of different mechanisms and they're all meaningful builds, don't get me wrong, but I think the one nerve that nobody's really tried to own is fun. Like fun, man. People stay because they want to have fun. And if you actually look at blockchain rails, like people I think totally misinterpret blockchain rails, but if you're like a web two builder, blockchain rails is like Stripe without the [ __ ] PayPal without the [ __ ] right? And if you know what I'm talking about, like fun is a really interesting category because fun is the most handicapped category when it comes down to payment processors. Meaning fun usually to a bank is high risk, right?

And when you're high-risisk payment processing, the toll that they take on both the the operation of your business and the fees that they take are insane. Meaning, you know, a high-risk payment processor is going to charge you 5 to 10% depending on your business, right? Most fund applications in the world are high risk. And so five to 10 percent is a gargantuan fee. No one should be taking five to 10% fee of anything, right? And then on the other side of it, you have all of these restrictions and just you you know, I know people that you know have fun applications that are considered high-risisk. They have whole teams that are managing the the requests from the bank. And so I actually think fund on crypto solves a huge problem for people building fund. Now, I think for

us, like a lot of that is like new different iterations of gaming. I'm a huge believer in gaming. I think gaming got a bad beat uh in 2021. I mean, it got a great beat in 2021, but since then, it's got a bad beat because a lot of people got burned because gargantuan pumps and obviously things went down, but I think gaming is going to play a huge role here, like new novel mechanisms to wager and to bet amongst one another. I think like this is really just the place that we want to tackle and the and the place that we're really servicing our users. I think my advice one if you're building fun in crypto I think the best ecosystem to deploy is on abstract. I'd probably say it's abstract and Salana be hard to refute any of the other two. Um I know abstract because I

can give you PMF instantly if you have a great build. So I think most builders in crypto what we found now building the chain is like there's really two things. One, builders in crypto are great builders and great developers, but they're really bad at community building and product market fit and marketing, right? That's that's probably universal for a lot of ecosystems. And so, you know, we kind of supplement the the you know, we have a amazing community team. We put community on our back. You don't you know, I encourage all builders to build community on the chain, but you know, you don't it's not as prevalent as maybe the next one because we everything's like nuclei. I was going to say like nucleus nucle it's like a giant nucleus you know that we've kind of got going on

where it's like everyone is a part of the same community whether you're a part of onchain heroes or abstract or multiplier like you're all part of the same group which is a really interesting you know dynamic that I have yet to see before uh you know within a blockchain ecosystem and then the other side of it is I think really building in the spirit of web two. So what I mean by this is it's actually pretty frustrating but a lot of builders in crypto speak to the web 3 audience and the web 3 audience only meaning you know everything is denominated in ETH. Everyone's saying connect wallet things like that. But I want to try to reinvent this narrative where it's like web two users are web three users but if you build for web

three users you're alienating web two users because they don't understand that positioning and that framing. Right? So meaning if I told a web three user to create an account, they would understand it, right? If I told a web two user to create an account, they'd understand it. If I told a web two user to create a wallet, they'd be like, "Wallet, wet in my pocket." Right? And I think there's like a lot of framing and messaging and positioning that I think a lot of web 3 builders handicap their TAM by building for web 3 and web 3 only. And it's something as simple as like messaging, right? And just like words on a page and denominations. And in the beginning with abstract, I let builders kind of do what they want. I think this next phase, you're going to see us really get in the

trench with a lot of these top apps and refine this messaging, refine this build. Because for a minute there, you know, first couple of weeks, I was like, well, let's just let's not even try to go out. Let's just we got to capture in because we we made a mistake by going, I think, too far out rather than inward. I think we've captured a lot of that inward crypto existing audience. I think you're going to see a a huge pivot from us in terms of how we really are marketing outside of the cryptosphere and speaking to that net new user. But that would be my advice to them. One, either deploy on Abstract or Salana. I would say abstract because I think from an app perspective, we could just click a button and give you those users. But it's hard to say that Salon, it's hard

to argue that Salana isn't leading consumer today. Uh but we're I think a a close second in terms of I think that consumer adoption curve but you got to give credit where credit is due and live in reality. I think it's Salana based and abstract right now in the consumer push. Um and then and then on the other side just like build for that web two user because the web two user is a web three user, right? Like and the web three user they're both the same people but a web three user is not a web two user, right? And so you'll you'll handicap your TAM. That' probably be my advice to them.

Yeah. And you see just a lot of people coming over to Abstract, especially cryptonnative like startups because like the the one thing that they want, you know, isn't a grant, right? It isn't, you know, any type of engineering product help. It's users. People want to build sustainable businesses. So like, you know, and this is no different than web two, like why is the app store, why is Steam, why why are these marketplaces like dominating? It's because it's it's a massive user acquisition engine. Like that's the thing that people don't quite understand coming over to web 3. The same rules apply and I think we just because we have all have web two backgrounds and we've you know operated at scale like that's just so obvious.

You're just unlocking kind of new superpowers using crypto rails. But if you look at abstract, it is the ultimate user acquisition engine where you know when people come over and this is why we're super focused on kind of a gen Z uh user base with discretionary spending power um from 8 to 12 high GDP uh you know markets because like those are again this is no different than what Apple does. This is the crypto version of Apple where if we can deliver, you know, onchain heroes to, you know, myriad, you know, to, you know, monsters fund like if we can give them users from the US, Western Europe, you know, China, Japan, Korea, like again like like Luca

is saying like overnight they end up with like 50, 100,000 users. They're actually becoming sustainable businesses overnight where then now they're able to graduate and then like kind of eventually try to figure out how to grow even further. and we kind of bring in that next cohort to kind of kingmake like to be honest like that's what people want and I think as and again like abstract's not for everybody. You have to be a leg you know a competent team or you know a quality team with a quality product because again it's like we're building the ultimate nightclub whether it's in New York, LA, Miami and we have all the cool kids, the celebrities in there. It's like we can get you in but we can't get you late.

like you got to show up with like a damn good product. Story of my life. Um, so you have people on the chain now. Obviously, tons of users. You know, some some of my closest friends that have been in inside and out of crypto are racing roaches. They're on multiplier. They are in this chat right now on Telegram uh doing lotteryies on Gotcha. They're they're enjoying it and they're they their their girlfriends are using it. They're getting weekly XP. It's something that activates a part of the brain that is reminiscent of DeFi summer and of the times in crypto where you would come back to an application or a platform of applications and use it on

a daily or weekly basis, talk about it with your friends and create this consistent kind of um funnel where it's just you're just keep coming back to it. So like like you guys said I think this is like one to five but we it's time to go from now five to you know 50 to 100 and that is going to require another level of distribution. Uh Michael, I know you've been traveling a lot, doing a lot of meetings, work, and there's quite a bit of plans around um how you guys plan to kind of scale this to the next cohort, which I think specifically as Luca is saying is pretty much now longer part of the ingroup, very much part of the out group uh in terms of crypto or not. So h how do we get from

you know this group of diehard power users right now ac across let's say a dozen apps to several dozen apps with you know 10x the amount of users globally in these countries uh and different communities and realistically like what does that look like? Yeah, I think if you the I think what we're doing with consumer crypto is no different than what you've seen with hiphop street wear, right? Any any cultural movement, right, where like you look at like something like Off-White, like you know, again, like what Virgil did, he wasn't the first, right? you had like Stuy and uh a ton of other like kind of you know OGs in street wear but you know somehow like the way that you

know Virgil built Off-White it ended up you know collabing with LBMH right and I think ultimately you know when what you first do is like you have to kind of like you know shore up your base like we have to make sure that we have a lock on kind of Gen A genz cryptonatives from these like uh you know 8 to 12 markets that matter um that really drive you know discretionary spending which then again like Luca was saying like piles into a lot of these you know fund based apps once you do that I guarantee you every global brand will start coming knocking on your door right because what do they want if you're a global brand you want one of two things you either want a bag

which they got the last two cycles because it's paytoplay and there's nothing wrong with that right you get a patch on the jersey you know you get a press release um but nothing really happens happens because they're not really motivated to like make something, you know, with with that underlying tech and they're not really sending their users on chain. The other thing that they would rather also want is get to a younger demo, right? This is why LVMH is like, you know, [ __ ] with, you know, street wear or Adidas or Nike, right? Uh, and that's and that's just street wear. That's anything cultural where it's like a younger audience like hip-hop. And so again, like this is where we just crush it where when we're collaborating with like a global brand, you'll see us being very selective in

that it has to overlap with the audience that we have, right? That Gen A genz cryptonative audience where we're, you know, we're bringing in, you know, like an F1 versus like a Proctor and Gamble. Nothing wrong with Proctor and Gamble. They're massive, but you know, like that ven diagram doesn't really overlap. And when you do bring on, you know, one of these global brands, you're putting them on crypto rails in a way where it's like you're injecting abstract directly into their tech stack. It's not like a side thing where kind of what you saw with Starbucks where Starbucks had their like main like, you know, rewards app, but then there was like a separate experiment on, you know, on crypto rails like in parallel. Like that doesn't help. Like it has to be like in their existing app where their actual users

are. And if you do that correctly, you're getting 1% of their fan base every time you do this. So every brand that you're bringing on, you're getting some fraction of 1% of their fan base coming on to Crypto Rails specifically to Abstract. You do this 10 times, like you're going to trip over, you know, a million, 10 million, 100 million users. And again, the flywheel keeps going. Yeah. And brand new users as well. And I feel like there's two segments here, right? there's like the institutional and then there's like these more consumerf facing brands. How are you kind of thinking about this? You know, which path is more valuable or what what are the different strategies here for each path?

You know, I think from my perspective, it's, you know, when you work with global brands that have consumers, you're essentially bringing them onchain, right, into, you know, using abstract global wallet into the portal into streaming, right, where their users just coming and having fun, right? Right. And then we're also sending our users to their brands. I think the stuff that like I think Luc has been spending his time on talking to in institutions. That's how do you bring institutions into the eventual token, right? That you have to have a token because you know it's a decentralized uh network and you know it has to be owned by everybody and nobody. And I think what you're seeing now, you know, with, you know, so many of these tokens just, you know, pump and dump is just because, like, you know, they're just PvPing for a very, you

know, small amount of crypto liquidity. Like this is why, you know, you have Bitcoin and ETH just on a completely separate playing field, right? Because you have these ETFs that are bringing in uh TRFI liquidity. And again, like Treadfi is ridiculously smart. They've been studying this stuff since the early days. Like, you know, people fade them, but you know, there's a lot of smart people there that understand this stuff. And again, there's they understand consumer to a tea. So like the stuff that Luke is talking about like that's exactly how they're thinking. So they're trying to figure out who's going to be the winner, you know, as we move over to consumer crypto. Because with all these shifts in computing environment, cloud to mobile to containers to eventually blockchain, there's trillions of dollars each time we shift and it's every 8 to

12 years explosion of apps that are going to happen. And Tradfy understands this very very well, right? They made a killing on cloud because what did that do? It unlocked e-commerce, Amazon, social, Facebook. When we moved over to mobile, just these things because because I it's in my pocket. Mobility, that's games. There's a camera on it. Instagram, there's GPS, Uber. When we did um when we commercialized Kubernetes, that was streaming. Streaming existed, but Kubernetes optimized the [ __ ] out of it. So our first clients were Netflix, Discord, Twitch. So when you know Luca and team are talking about this next shift to consumer crypto, every institution understands this that whenever you shift

computing platform paradigms, trillions of dollars activates at the app layer and then ultimately that underlying platform that marketplace will also be worth you know billions. Is is that the right way to think about abstract and pudgy and conglomeration of these technologies and the distribution base is essentially as this as this matchmaking engine between the fun segment that that Luca described. Everyone's in it to have fun and the global brands that are looking for distribution and and abstract and pangu is the the matchmaking in between.

I didn't even know this, but like the Pudgy Penguin case study gives us so much leverage when having these conversations. Guys, guys, we're Michael's able because Michael's really leading the charge on on a lot of these B2B conversations. He speaks that that language better than anyone I know that like, you know, for example, we talked to Disney. Disney will not talk to anybody, but we have Pudgy Penguins is such a they're so aware and conscious of it or we'll talk to, you know, Paramount or NASCAR. We'll do like all these different conversations. And Pudgy is such a prevalent role in terms of like the credibility side of like

it's a it's a huge o door opener for people to work with us and I think a huge closer for getting a lot of these deals done because we bring so much to the table. I mean you guys will see the full picture here in probably the next 12 months but the Igloo ecosystem is just so they they it handholds each other so much right Pudgie's top offunnel really the topest broadest top of funnel brings people in from crypto brings people in from web two that segus into a bunch of other different funnels because of the credibility and the trust that we've built there that comes back to the chain and then the wallet and then you know some of the you know there there's an app or two that you know we might you know you know play into the

whole flywheel and just they all it's all about each piece of the puzzle supporting one another. You know a lot of people have asked us like yo the igloo has a lot of things going on within it and I was like yeah it would be a problem if they all didn't really tie into each other super super well u and so they're not distractions they're all they're actually pieces of the puzzle that uplift one another and actually support one another as one succeeds the other succeeds. You'll see it even with uh with Pangu. Pangu will go up. All the meme coins on abstract will go up, right? You know the we have what we have probably have the best outside of Ethereum. I think we have the best NFT ecosystem by a Texas mile in terms of quality of builder that comes from Pudgy, right? Chains are not made

right now if you don't have a hot NFT and memecoin ecosystem. Boom. So Pudgy supports there. Then what people from Walmart are coming in scanning the QR code, hopping into the experience. then they're on the chain as like a novice user, right? So, it just it's just such a I I actually bask in it a couple days ago over the weekend. I was like, damn, we're really doing it, dude. It's it's all fitting together like a puzzle piece. Um, so they, you know, to that point of just Pudgy is a huge anchor here because specifically on the creative stuff, like anything that is like IP driven, it really gives us all the leverage and more to go and close these opportunities and and and and we've seen some of the best app some of the best apps in crypto are tools to go

and drive IP. You know, OpenC, Pump Fun, uh, Topsh Shot, like it all comes back to IP at the end of the day. uh or at least like the exciting fun stuff in the things that we're trying to build or trying to help incubate and bolster within our ecosystem. Yeah. I think the interesting thing on on Pudgy is that it it resonates with both cryptonative startup founders as well as global brands, right? If you're kind of this, you know, you're a builder, like you know, cryptonative builder, you look up to what Luca, Lorenzo, Chef, Fedon did with, you know, Pudgy. Like literally it is the it is the only thing that went from cryptonative to mass market right to

Walmart to target where VANC introduced their you know Bitcoin Ethereum ETFs using a penguin like that is what find me someone like in crypto that doesn't want that right that trajectory for for their project and then on the I think Luca touched on this and on the global brand side you know if you're Disney you're any one of these is like glo, you know, you're worth a couple of, you know, tens of billions. They're not going to talk to you unless you you're at their level, right? So, I think where what what the penguin does, the fact that it's in retail, it's has over 40 billion views on gy, right? More than Disney. These are things where it's

like, okay, like, you know, this team actually understands how to build a business. Not only how to build a business, how to go to, you know, mass market. And then all of a sudden, the conversation's different. Yeah. I think within the crypto circles that that level of distribution is really what a lot of teams are looking for now. I mean I I've been putting this out for quite a while. It's just that like the technical differentiations used to somewhat matter when there wasn't like this kind of baseline for fast cheap chains. Now we're just so far past that. The UX has gotten there and it's just like no longer a differentiator. Um, and so I see that I see I see this like slow endgame for abstract starting to appear where you just kind of become like the

top of funnel for for all of crypto. Um, where where you you're able to scale the the IP of Pudgy Penguin so large that um, as you say, you know, these mega consumer brands are interested. I I'm just curious like what's your 12 month 18month abstract vision here? like how do we go from, you know, I kind of asked this earlier, but like what's the what's the the next big like leap for you guys as as far as like if we were to have this conversation in a year or 18 months, you know, where are we going to be? Michael, me or you? Okay. I I think 12 to 18 months from now, we got to have five to 10

monster big companies, brought them on blockchain rails, really using that as as as a as a place for top brands who want to get on chain to kind of come into. That would be one. The second one, Portal really needs to be the first ever crypto super app. You go to one place, you can do everything. best trading experience, best discovery experience, best social experience. Uh, and and and it just needs to be the hub, not just for abstract. I just think for crypto, I think there's there's a there's a vision there. Um, and I think from uh we and

probably the most important metric, but I I think over the next 12 to 18 months, if there's 10 viral crypto apps that just break through, half of them need to be from abstract. Half of them need to come from our ecosystem. Uh, and and that that's that's the that's the hardest part, I think. You know the the blockchain side is like that there there some of your destiny is in the hands of others to a certain extent like people forget Salana was great but wasn't until Jupiter I remember I was using Salana on orca and radium it was booty you couldn't trade anything you know you were buying the samau you remember that sauo that husky that thing was horrible to trade on that and then Jupiter came

and once I used Jupiter on salana I ate Salana get it it's this is the one it's the best experience Right? Phantom Salana, Phantom, Jupiter combo, right? So, you know, without that, Salana is I don't think Salana, right? Ethereum, same thing without MetaMask and OpenC. So, you know, some of it, but it's also about like who you cultivate and what's the value prop for that. And so, I think we're really just focused on the value prop. Our value prop is users and distribution. We have the interface that if we put you at the top of that interface, I will give you instant PMF, right? And with that instant PMF, you should be able to snowball that into bigger and better and more PMF, right? But that zero to one is so important. And that I think is just

walking the floor of all the developer conferences. You know me, I'm shaking hands with everyone, talking to everyone. That's everyone's biggest problem, dude. Is understanding the consumer experience. But to be frank, we're doing like weekly masterminds. So I do weekly masterminds with the NFT founders and the memecoin founders. Peter's doing them with the app builders. IgAR is doing them, you know, like we we can we can adjust we can fix your all the woes with your product within a couple weeks of these of you asking questions and showing in these masterminds. Not too worried about that, right? Like I think the big case is like getting you users and compounding that and allowing that to segue into more users. Like that is our value proposition and we've got to scale that big time. But I think we have all the

ingredients and we have the foundation right now to really start marching in that direction. Yeah, I think whenever you look at these like big shifts in computing paradigms, whether it's the cloud to mobile to containers, now to blockchain, I think you're looking for three things, which Luca all just hit on. I'm just, you know, regurgitating or giving people the TLDDR. It's you always have to have the big breakout native platform hits, right? like the things that are like you know like whether if it's you know if it's cloud it's got to be you know Facebook and Amazon if it's mobile it's you know it's Uber and Instagram like whatever that is native to crypto you know to

blockchain on crypto rails like Luca said like half of them have to be launching off popping off of abstract once you have that checked off the second thing to know that you're on this trajectory to where you are the consumer chain is global brands adopting it into their tech stack. Once you start seeing that like this is what happened with AWS, right? AWS started, you know, started with a bunch of like Y Combinator startups and then all of a sudden it was on this trajectory to being used by Fortune 100 and then all of a sudden CIA started using it, right?

The same thing with containers with Kubernetes. It started with the crypto, you know, the the startup, the cool kids like Netflix, Discord, Twitch, and then we got 72% of the Fortune 500 in like a 26-month span. Same thing for us. It's like that second thing, the signal non-payforplay actual organic adoption by global brands. You know, once we get about like half of them, half the global brands that are coming on chain are using crypto rails building on abstract, then you know, oh [ __ ] all the all the crypto native kids, the startups are using abstract. All the global brands are using abstract. Then that last third piece is what you're seeing with, you know, uh, Tradfi and, you know, they're creating products around, you know,

coins that they believe in, Bitcoin and Ethereum to start off, right? I think Salana's getting to that point. Like when you start Trady rallying around, you know, the actual like token that has hopefully technical utility, game over. Now you got the liquidity coming in. Awesome guys. As we speak, Pangu is breaking into the top 100 coins by market cap. I think there's a natural place to wrap. We we got away from this a little bit. Maybe we didn't ask last time Luca was on the show, but um we end every podcast by asking uh if you were stuck in an elevator for one, two minutes with anyone dead or alive, who would you choose to be stuck in an elevator with to explain abstract, explain Pangu, explain Pudgy, explain

what you guys are doing here? Who would you guys choose and why? Steve Jobs. Mr. Jobs. Why? I'd probably take Mark Zuck. I'd say Mark Zuck. Mark Zuck's really beat the allegations, man. And he's really he's really he's really him. I'm not gonna lie. I think I think people actually don't give Mark Zuck the credit he needs and deserves. I think I I'd take Mark. I think Mark would get it more than Steve.

I feel like Steve could give me the cold shoulder and be a waste of a minute. He's either gonna love me or he's going to hate me. And I can't take that risk. I feel like I'd me and Mark would get along swimmingly. So I' I'd go Mark. And why would I go Mark? I always thought I said it on an inner igloo last week, so it's pretty funny. I always thought Facebook would buy Pudgy Penguins. Now I have no interest in selling, right? So now, you know, but when I first bought Pudgy, Lorenzo asked me, he's like, "Yo, what's the plan here?" And I was like, "We'll sell to Facebook or Coinbase." Those are the two I would think I I thought and Facebook because if you actually look at our social we actually reig a ton of the al like you know Facebook's big objection is social media

is bad for people we'll look at pudgy penguins as the premier example if they're going you know as a contrarian take to that if you look at meta right the face of the metaverse no better face of the metaverse than a cute penguin if they're going there uh and I think it's just a great way to just like Trojan horse a lot of the products they're doing and I think Zuck would would get it and So, I I I I actually really have a lot of respect for Zuck. Super young. Uh, still super young. Uh, did it when he was 20, you know? I I I I would probably go Zuck, actually. It'd be a contrarian. Most people would not think that. Probably. Then Elon, then then Steve. Uh, but I would go Zuck. I want to talk to Zuck.

Michael, I'll go the other end of the spectrum. uh to the OGs of the internet uh itself like Vince Surf, Bob Khan from DARPA uh when they actually essentially created the rails that became the internet uh Tim Berners Lee who invented the worldwide web what in '89 because again like with the stuff that we're doing now we're just extending the internet this is like the arc of the internet that started way back when with DARPA from like the 60s the 70s to the commercial boom that we all grew up with to essentially you know what web three is just an extension of you know what web two is you know the worldwide web is capable of so I think that trio of folks they would get it right because

effectively like these are the the inventors of the internet itself gentlemen thanks for joining us today it's been awesome to watch the abstract journey follow the entire Pudget Penguin journey and uh look forward to the next 12 to 18 months I think that some of these brands are going to rock the socks off of what what people in crypto think is possible and hopefully inspire as well. So, appreciate it, guys. Thank you. Thank you guys.