Episode 30

full
Published on:

20th Jun 2022

30. Web5, NFT Watches, Discord Competitor, YGG Merit Circle DAO Legal Battle

In this episode, we discuss the former CEO of Twitter (Jack Dorsey) launching a Web 5 platform, Tag Heuer developing watches that can display NFTs, Nansen launching a new messaging application to compete with Discord, a settlement being reached between YGG and Merit Circle DAO, and so much more!

Episode 30 Keywords: Twitter, Web5 experiences, Tag Heuer, watches, NFT, Nansen, messaging application, Discord, settlement, YGG, Merit Circle DAO, legal, yield guild games

Transcript
Unknown:

Welcome to the metaphysics podcast. The

Unknown:

Metaverse and web three are bringing about the biggest

Unknown:

revolution since the internet itself. With your hosts Paul the

Unknown:

prophet Dawalibi And Jeff the juice Cohen. We will be bringing

Unknown:

you the latest Metaverse, business news and insight into

Unknown:

what it all means. The meta business podcast starts now.

Paul Dawalibi:

From the boardroom to the metaverse. This

Paul Dawalibi:

is the men of business podcast. I am Paul the Prophet Dawalibi.

Paul Dawalibi:

I'm joined today by my friend and CO hosts, Jeff the juice

Paul Dawalibi:

Cohen. For those of you who are new here, welcome to the the

Paul Dawalibi:

official podcast of the metaverse, what we do is we

Paul Dawalibi:

cover the most pressing, Metaverse, topics and news of

Paul Dawalibi:

the week, we look at all of it through a business and C suite

Paul Dawalibi:

lens, we dissect, we analyze the business implications of

Paul Dawalibi:

everything happening in this industry. For regular listeners,

Paul Dawalibi:

thank you for tuning in every week. Thank you for all the love

Paul Dawalibi:

the five star ratings and reviews guys I've gotten and

Paul Dawalibi:

I've read some of the reviews you've left. I read all of them,

Paul Dawalibi:

in fact, so much love there. I really appreciate it. We really

Paul Dawalibi:

appreciate it. It's why we do it. We love doing this. Please,

Paul Dawalibi:

if you haven't yet, if you loved the show, go leave a review. Let

Paul Dawalibi:

us know what you think. And share the podcast with a friend

Paul Dawalibi:

let a friend or a colleague know someone who's big into web three

Paul Dawalibi:

maybe, or crypto or gaming. Share the podcast with them

Paul Dawalibi:

because hopefully they will enjoy

Jeff Cohen:

it. Jeff, how you doing this week? Dude? Good.

Jeff Cohen:

Good. We are recording in the middle of the crypto winter.

Jeff Cohen:

Suppose maybe we'll talk more about that. But it's interesting

Jeff Cohen:

talk.

Paul Dawalibi:

It is interesting times I've heard I've heard

Paul Dawalibi:

different takes on this right I've I've heard people say this

Paul Dawalibi:

is just like one of many winters like there have been four other

Paul Dawalibi:

winters and this is the fifth winter. And each successive

Paul Dawalibi:

winter gets less and less sort of horrible. But yeah, like

Paul Dawalibi:

this. This is if you know the first one was devastating

Paul Dawalibi:

Blizzard This is a little bit of a flurry. So I've heard various

Paul Dawalibi:

takes and I think it's interesting. I think a lot of it

Paul Dawalibi:

is a little bit sensationalized. You know, obviously public

Paul Dawalibi:

markets have been getting killed and bitcoins been getting killed

Paul Dawalibi:

and many, you know, crypto projects have been hurting and

Paul Dawalibi:

companies you know, Celsius. Most recently I don't know if

Paul Dawalibi:

you saw blocked all withdrawals on their platform. So there's

Paul Dawalibi:

definitely like, like victims and all this. There are

Paul Dawalibi:

definitely casualties I should say not victims casualties and

Paul Dawalibi:

all this. But winter always seems so drastic to me. I don't

Paul Dawalibi:

know. What do you think?

Jeff Cohen:

I'm back? I don't know. I'm gonna assume you had a

Jeff Cohen:

good take about the crypto winter while I was while I was

Jeff Cohen:

gone. I agree with what you were saying when I was when I was

Jeff Cohen:

doing here what you were saying were this time feels a bit less

Jeff Cohen:

existential. Where it's like, yeah, the product market fit of

Jeff Cohen:

Bitcoin and crypto has sort of been proven. And this this fall

Jeff Cohen:

down deals a little bit more driven by the macro versus like,

Jeff Cohen:

hey, you know, crypto overall is going away or isn't a product as

Jeff Cohen:

use case. Now we are seeing some one off things like some of

Jeff Cohen:

these terror all these baby like algorithmic stable coins that

Jeff Cohen:

obviously that's not what we talked about in this podcast.

Jeff Cohen:

And frankly, I'm not educated enough to talk about that. But

Jeff Cohen:

we have seen those maybe go away. Generally, you know, this

Jeff Cohen:

is the time to start to be building great things. So I

Jeff Cohen:

would say

Paul Dawalibi:

the the silver lining for the metaverse stuff

Paul Dawalibi:

is a lot of the projects that raised venture money and a lot

Paul Dawalibi:

of these companies are just very well financed right now. The big

Paul Dawalibi:

crypto companies are well financed a lot of these

Paul Dawalibi:

Metaverse web three blockchain gaming, like a lot of these

Paul Dawalibi:

companies have raised a lot of money in the last 12 months. And

Paul Dawalibi:

and the good companies will have capital to survive whatever

Paul Dawalibi:

however long this winter lasts, right? I think that's in my

Paul Dawalibi:

mind. That's the silver lining, good companies are well

Paul Dawalibi:

capitalized because of the volume of money and dollars that

Paul Dawalibi:

have been flowing into the

Unknown:

space. I want to start,

Paul Dawalibi:

Jeff, as we usually do with kind of a fun

Paul Dawalibi:

story. And and this one you fly. And I have to read it to really

Paul Dawalibi:

understand what they're talking about here. But the headline is,

Paul Dawalibi:

what went five is and why you should know about it. I mean, we

Paul Dawalibi:

we talked at length about web three, I didn't think we were

Paul Dawalibi:

already behind the curve here. But seems we've we've not only

Paul Dawalibi:

gotten past web three, we've skipped web four. We're at web

Paul Dawalibi:

five joking here. What they mean by this is it's a combination.

Paul Dawalibi:

This is being developed by Bitcoin blockchain. Or it's

Paul Dawalibi:

being developed on the Bitcoin Blockchain by one of the

Paul Dawalibi:

companies of Twitter see former Twitter CEO Jack Dorsey. And

Paul Dawalibi:

basically what they're the way they're describing it. It's a

Paul Dawalibi:

combination of web three. Dotto are web three and web two Dotto.

Paul Dawalibi:

Two plus three equals five I guess and and that it's a more

Paul Dawalibi:

truly decentralized Internet where you know, ownership of

Paul Dawalibi:

your content is is all built on the blockchain. And you know,

Paul Dawalibi:

there's nothing that is centralized, I guess there's no

Paul Dawalibi:

central servers, there's nothing. There's nothing that is

Paul Dawalibi:

not owned directly by the users. So there's no web monopolies.

Paul Dawalibi:

There's no large tech companies. And the argument that Dorsey

Paul Dawalibi:

makes is that web three, while it talks about decentralization,

Paul Dawalibi:

is not truly decentralized, because it says VCs own it. It's

Paul Dawalibi:

a he's quoted as saying it's ultimately a centralized entity

Paul Dawalibi:

with a different label. So would you buy this web five argument?

Paul Dawalibi:

Do you think it's a bit silly to be talking about web five?

Paul Dawalibi:

Before we've really flushed out web three? What do you make of

Paul Dawalibi:

this?

Jeff Cohen:

I just feel bad for what for a while. But to me, you

Jeff Cohen:

know, it's, it's a bit, it's a bit much. I mean, what three is

Jeff Cohen:

itself is all about centralization. So I think

Jeff Cohen:

they're getting the main notes. Like to me, it's not a problem

Jeff Cohen:

that a lot of the biggest companies in but greed are

Jeff Cohen:

backed by VCs and half owners. I just think that's kind of how

Jeff Cohen:

human nature works. Like when people create entities that are

Jeff Cohen:

going to create a company that you're going to have, there's

Jeff Cohen:

always going to be some form of centralization. Otherwise

Jeff Cohen:

nothing's going to get done. Like in this web five is just

Jeff Cohen:

going to be a roving army of individual robots, where it's

Jeff Cohen:

like you just join a company one day, and then you go to the next

Jeff Cohen:

Dow the next day, like, I just don't think that's how humans,

Jeff Cohen:

like, fundamentally as a social species that work like that.

Jeff Cohen:

It's just not really, we're not mercenaries. It's not, we're not

Jeff Cohen:

robots. So it just, to me, it's it's, it's not it's not how not

Jeff Cohen:

how,

Paul Dawalibi:

yeah, I mean, I guess it's the implication of

Paul Dawalibi:

what you're saying that true, a truly decentralized version of

Paul Dawalibi:

the internet, or a truly decentralized Metaverse, in your

Paul Dawalibi:

mind could never exist, or will never exist.

Jeff Cohen:

Well, yeah. Because in order to have these, in order

Jeff Cohen:

to have these things created, you're gonna have to create so I

Jeff Cohen:

guess if he's saying like, okay, is his issue, as I understand is

Jeff Cohen:

that many of the big companies that are building the

Jeff Cohen:

infrastructure layer of web three, are themselves backed by

Jeff Cohen:

what he considers institutions or for like, what two companies

Jeff Cohen:

a VC funds, stuff like that. Now, I'm just not sure how else

Jeff Cohen:

things would be formed, right? Like, is everything going to be

Jeff Cohen:

coming down and we're just going to have large like, you know,

Jeff Cohen:

decentral instrument work, like direct veils are going to become

Jeff Cohen:

direct democracy, I guess.

Paul Dawalibi:

The I mean, democracy is an interesting word

Paul Dawalibi:

I was gonna call it just went five the way they've described,

Paul Dawalibi:

it feels like total anarchy, right? Like, no structure, no,

Paul Dawalibi:

no centralized authority of any kind. No, you know, nothing,

Paul Dawalibi:

driving a vision in any way. Feels a little bit like anarchy.

Paul Dawalibi:

And I just don't understand why 100% decentralization needs to

Paul Dawalibi:

be a goal or why it's an important goal read, like, if

Paul Dawalibi:

you can get something. And I know, these are fake numbers,

Paul Dawalibi:

but 80% decentralized, were just some key infrastructure is it

Paul Dawalibi:

you know, is centralized in some way? And maybe that's a little

Paul Dawalibi:

bit like more web to Dotto, but if web 2.0 is 80%, can we get to

Paul Dawalibi:

95%? Or whatever it is, right? Like? I don't understand why

Paul Dawalibi:

100% Is the goal here? Like, what is the benefit, really? And

Paul Dawalibi:

can you achieve those benefits still with some amount of

Paul Dawalibi:

centralization? And

Jeff Cohen:

it's also a really hypocritical argument by Jack

Jeff Cohen:

Dorsey, right? Because he has created a company that is

Jeff Cohen:

creating this division, which the company has shareholders. So

Jeff Cohen:

it's like, oh, it's different because you Jack Dorsey, own it,

Jeff Cohen:

versus Coinbase, which is owned by, you know, a16z yourself,

Jeff Cohen:

like, how is that different? Right? You're still creating the

Jeff Cohen:

employees, the employees are building a product. You know, it

Jeff Cohen:

to me, it's new. That's why I was struggling before to

Jeff Cohen:

articulate. It's like, I don't know what's different about this

Jeff Cohen:

web five vision that he is espoused?

Paul Dawalibi:

I think it's more just I think it was silliness. I

Paul Dawalibi:

don't know. But interesting article, and it works because we

Paul Dawalibi:

clicked on it, and we talked about it. But beyond that, I

Paul Dawalibi:

don't think there's much to it. Let's talk about something that

Paul Dawalibi:

I think is we I think we both agree is more interesting, and

Paul Dawalibi:

that is tag tag coyer TAG Heuer, tag Boyer in the news. A famous

Paul Dawalibi:

watchmaker. The headline here tag horror watches to display NF

Paul Dawalibi:

T's, the ultimate status symbol, display NF T's in real life as

Paul Dawalibi:

the new cool. Free the no CEO of LVMH tag Boyer explains all. So,

Paul Dawalibi:

no who's one of the one of the sons of Brecknock know who owns

Paul Dawalibi:

LVMH, which is this huge luxury conglomerate. I think he's a

Paul Dawalibi:

pretty big crypto enthusiast himself. And the idea is they've

Paul Dawalibi:

added functionality to one of their smartwatches were in the

Paul Dawalibi:

background, you can connect it to your crypto wallet, like meta

Paul Dawalibi:

mask or ledger live, and the watch face will display your NFT

Paul Dawalibi:

artwork. If you're watching this episode, instead of listening to

Paul Dawalibi:

you can see an example here of a bored ape in the in the back of

Paul Dawalibi:

a watch, or in the dial of the watch. Jeff, your thoughts on

Paul Dawalibi:

this, you know, luxury status symbol combined with NF TS is

Paul Dawalibi:

this. Finally, an interesting use case for these NF T's?

Jeff Cohen:

I like it. I mean, NF T's have always been about

Jeff Cohen:

being a status symbol. That's why we were both very actually

Jeff Cohen:

positive when Twitter made it such that you make your profile

Jeff Cohen:

picture NFT. So I think it's a really smart use case. You know,

Jeff Cohen:

watch us have always been a bit of a status symbol, like a show

Jeff Cohen:

off kind of status purchase. And the fact that you can now

Jeff Cohen:

display your NFT and have it be validated by the blockchain is

Jeff Cohen:

actually something that I think is pretty useful. I think this

Jeff Cohen:

will probably get a decent amount of adoption. It's one of

Jeff Cohen:

the better use cases for NF T's that I can think of. I mean,

Jeff Cohen:

clearly gaming is has been wanting to talk about,

Jeff Cohen:

obviously, all the time has been really good use case. Our real

Jeff Cohen:

estate, like there's some various things that nfts

Jeff Cohen:

blockchain has worked for. This is actually up there my mind.

Paul Dawalibi:

Yeah, I agree. I really liked this. And, and I

Paul Dawalibi:

think you hit the nail on the head with the idea of status

Paul Dawalibi:

symbol, you're combining an NF t, which is already a status

Paul Dawalibi:

symbol, with a watch, which is also a status symbol. And the

Paul Dawalibi:

dials of watches are a big part of that status, right? Like a

Paul Dawalibi:

Rolex with the Wimbledon dial is worth more than a Rolex with

Paul Dawalibi:

just the black dial. And, and you know, so the certain dials

Paul Dawalibi:

become more collectible. Here you have a dial that is it,

Paul Dawalibi:

assuming the NFT is unique, completely unique, right. And

Paul Dawalibi:

that's, that makes it more desirable, it makes it more of a

Paul Dawalibi:

status symbol. If you own a very valuable and rare NF T, all of a

Paul Dawalibi:

sudden, that watch becomes an even greater status symbol. I

Paul Dawalibi:

think it's kind of genius. And it's, it's super easy for them

Paul Dawalibi:

to have implemented right? Like, this is something Apple could do

Paul Dawalibi:

very easily with their Apple Watch, you would think?

Unknown:

I think we'll see your guests, or

Paul Dawalibi:

Well, that's what I was gonna ask you. Do you see

Paul Dawalibi:

it? Because there's no bigger install base of smartwatches

Paul Dawalibi:

than the Apple Watch? Do you see that as functionality that maybe

Paul Dawalibi:

they bring?

Jeff Cohen:

I think we will. And, you know, I don't know the

Jeff Cohen:

apple smartwatch ecosystem that well, but could Metamask just

Jeff Cohen:

create an app on there, because I believe this is just basically

Jeff Cohen:

metamath Like whatever crypto wallet you're using as an app

Jeff Cohen:

that then displays the, you know, the, the image of the NFT.

Jeff Cohen:

So technically, I don't even know that Apple would

Jeff Cohen:

necessarily have to accept it into their their store. But I

Jeff Cohen:

don't know that there would need to be a massive business

Jeff Cohen:

development to where I think metal Metamask could probably

Jeff Cohen:

just go and do this themselves. And I think it would be very

Jeff Cohen:

wise of them to do so. Because it's a great use case. And yeah,

Jeff Cohen:

I'm sure there's plenty of people with Apple Watches I

Jeff Cohen:

would love to have this either created watch face.

Paul Dawalibi:

I mean, with Apple, it's always better when

Paul Dawalibi:

it's like a first party thing and it's an official watch face

Paul Dawalibi:

that they offer or whatever. I don't know what the API's for

Paul Dawalibi:

like third party watch faces looks like. But you know, I

Paul Dawalibi:

really liked this idea of luxury watch and call it luxury NFT.

Paul Dawalibi:

together that makes it makes a lot of sense to me. All right,

Paul Dawalibi:

let's let's talk about discord discord in the news. And again,

Paul Dawalibi:

a little bit of a sensational headline here. Dump discord

Paul Dawalibi:

Nansen launches messaging app for web three communities. It

Paul Dawalibi:

says the analytics platform Nansen aims to take a bite out

Paul Dawalibi:

of discord, its dominance, with a new messenger service for NFT

Paul Dawalibi:

projects and more. So this is a crypto analytics firm. They

Paul Dawalibi:

launched the messaging app. The app requires a crypto wallet to

Paul Dawalibi:

use and it's targeted at NFT and crypto communities. Basically,

Paul Dawalibi:

the login with your crypto wallet, you connect to groups

Paul Dawalibi:

based on your crypto holdings, and which NF T's you verifiably

Paul Dawalibi:

own. The firm describes the app as a crypto native

Paul Dawalibi:

communications hub for web three communities now. I mean, I don't

Paul Dawalibi:

know if you want to address the headline, Jeff, like dumped

Paul Dawalibi:

discord. And if you think this is a legitimate competitor for

Paul Dawalibi:

discord, or if you you accept that this is maybe a bit of a

Paul Dawalibi:

sensational headline, and I think it is there a place for

Paul Dawalibi:

this app in the ecosystem. It's a

Jeff Cohen:

it's definitely a sensational headline, I don't

Jeff Cohen:

think people are, you know, Discord is going to lose its

Jeff Cohen:

competitive advantage, particularly with the network

Jeff Cohen:

effects it has and the ecosystem that's built around gaming.

Jeff Cohen:

Having said that, I think the wallet integration is

Jeff Cohen:

interesting. And it's potentially an area where

Jeff Cohen:

discord has left flank open a little bit. I remember, early in

Jeff Cohen:

the year, Discord had talked about doing an integration with

Jeff Cohen:

a wallet, and I believe they ended up backing off from it

Jeff Cohen:

because they got a bunch of backlash from their community.

Jeff Cohen:

So I think that is an area where maybe on the crypto front, a lot

Jeff Cohen:

of these crypto communities are on Discord. And the fact that

Jeff Cohen:

this court hasn't really integrated any of that

Jeff Cohen:

technology in like you actually an area where they're, they're a

Jeff Cohen:

bit open to open to attack. However, I don't love the idea

Jeff Cohen:

of gaining the top of the funnel for a messenger app to have

Jeff Cohen:

having to have a wallet. And then in order to be in these

Jeff Cohen:

communities, you have to have the NFT. Because with any

Jeff Cohen:

messenger app, like the number one thing is network, you need

Jeff Cohen:

to be able to message anyone, anyone needs to have the app. So

Jeff Cohen:

like, anytime you're adding friction to that top of the

Jeff Cohen:

funnel, you're gonna lose some of those network effects. So I

Jeff Cohen:

think ultimately, that that part is where I struggle with. I also

Jeff Cohen:

don't know that you need a separate messenger app to talk

Jeff Cohen:

about crypto, right? Like at the end of the day, I can talk about

Jeff Cohen:

crypto and telegram I could talk about tech specially talking

Jeff Cohen:

about discord. It's really who has the best tools for building

Jeff Cohen:

communities, and who has the most users, which is what the

Jeff Cohen:

platform that's going to win. Like I don't know that having a

Jeff Cohen:

vertical focused platform for a chat app is smart. Which is

Jeff Cohen:

interesting, because it's actually the opposite thesis

Jeff Cohen:

that I had for treat NFT trading platforms where I was actually

Jeff Cohen:

very bullish on the verticalization. Here, I'm not

Jeff Cohen:

so curious what you

Paul Dawalibi:

Yeah, I'm with you. I'm with you on the gate is

Paul Dawalibi:

the problem, right? Like, I think that sentence really

Paul Dawalibi:

bothered me where you need a crypto wallet to use it like

Paul Dawalibi:

right off the bat, you will eliminate you know 90% of

Paul Dawalibi:

discord user base probably right? Like if if we assume that

Paul Dawalibi:

if you look at the total gaming population, and then the total,

Paul Dawalibi:

right, you know, owner of crypto wallets, it's about an order of

Paul Dawalibi:

magnitude difference. So, right like you you eliminate 90% of

Paul Dawalibi:

your potential customers immediately just by requiring a

Paul Dawalibi:

crypto wallet. And I get it it it keeps it so that the people

Paul Dawalibi:

who own that, you know, NF T, that series of NF T's can all

Paul Dawalibi:

talk to each other. But I don't see that as a feature I see that

Paul Dawalibi:

as as a downside because that was the reason discord has

Paul Dawalibi:

exploded as the platform of choice for these communities. Is

Paul Dawalibi:

it allowed for discovery of the communities right? Like you want

Paul Dawalibi:

to you create an NFT project, you want to people to buy your

Paul Dawalibi:

NF T's. The whole point on Discord was to create these

Paul Dawalibi:

communities bring in as many people as possible, create as

Paul Dawalibi:

much hype as possible, so that you drive the price up of your

Paul Dawalibi:

NFT. I mean, if you gave it to only the people who already own

Paul Dawalibi:

it, I don't know how you create any discovery, right? Like you

Paul Dawalibi:

lose that whole piece of the equation. I don't know why you

Paul Dawalibi:

would want not want people who don't own it. Like they should

Paul Dawalibi:

still be allowed to talk about it. So I'm not I'm with you on

Paul Dawalibi:

the gates. The problem. I wouldn't go so far though, is to

Paul Dawalibi:

say that a vertically focused plan like chat, or community

Paul Dawalibi:

platform could never work. I just don't think a gated one

Paul Dawalibi:

could work. Right? If you said hey, we want to be the platform,

Paul Dawalibi:

not for gamers, but for just two people to talk about NF T's and

Paul Dawalibi:

NFT projects. So don't waste your time on Discord where

Paul Dawalibi:

there's a lot of noise and you know, a bunch of other stuff

Paul Dawalibi:

that I would get but then if you say hey, by the way, we're also

Paul Dawalibi:

going to gate it and you need to have a wallet and you need to

Paul Dawalibi:

own the specific NFT to talk about it. Well now that that

Paul Dawalibi:

doesn't make sense, right? That vertical community doesn't make

Paul Dawalibi:

sense. That's fair. I could see

Jeff Cohen:

a little bit like vertical almost like a message

Jeff Cohen:

boards like a reddit but really hyperfocus to create

Jeff Cohen:

discoverability because I think if you just log into discord and

Jeff Cohen:

you're not coming from somewhere It's hard to find things that

Jeff Cohen:

might be interesting. Like there's no true, you know, hot

Jeff Cohen:

topics or like, you know, rooms that are interested or because

Jeff Cohen:

you're in this room, you should join this. We're like so

Jeff Cohen:

discoverability on Discord is a bit of an issue. So I do think

Jeff Cohen:

maybe I'll soften my stance a little bit where I could see

Jeff Cohen:

almost like a Reddit crypto, you know, like a targeted Reddit

Jeff Cohen:

work. Yeah.

Paul Dawalibi:

Jeff, let's move on. Let's talk about legal

Paul Dawalibi:

battle in the web three and Metaverse world here. And this

Paul Dawalibi:

is this is a bit of an interesting like kind of a deep

Paul Dawalibi:

one here. So let me try and summarize as best I can. Please

Paul Dawalibi:

feel free to stop me here because I know you had done more

Paul Dawalibi:

research on this than I did. But the headline here is legal

Paul Dawalibi:

battle avoided after why GG and married circle Tao agree to a

Paul Dawalibi:

deal. So what's happened here is Merritt circle is a company that

Paul Dawalibi:

created Mid America circle Dow, they help gamers interested in

Paul Dawalibi:

play to earn games, by lending items from their treasury to be

Paul Dawalibi:

used for gameplay. It's basically a guild right marriage

Paul Dawalibi:

circle bow. It's a guild we've talked about guilds before on

Paul Dawalibi:

this podcast. Originally, the Dow passed a proposal that would

Paul Dawalibi:

cancel y G. G, yield guild games, which is a, you know, a

Paul Dawalibi:

larger organization, they would cancel YG G's simple agreement

Paul Dawalibi:

for future tokens. In other words, an investment that why GG

Paul Dawalibi:

had committed to in merit circle Dow, but thou passed a proposal

Paul Dawalibi:

that would say, we're only going to refund the 175,000 US dollar

Paul Dawalibi:

coin, that why GG contributed originally? In other words, why

Paul Dawalibi:

did you make an investment in merit circle, Dow med circle,

Paul Dawalibi:

Dow at some point says hey, we're going to cancel this

Paul Dawalibi:

investment and just give you back your money, as opposed to

Paul Dawalibi:

giving back the value of that investment

Unknown:

right at that point in time.

Paul Dawalibi:

Now, the resolution, just to get to the

Paul Dawalibi:

point here seems to be that why GG is walking away with still

Paul Dawalibi:

walking away with 10 times their original investment that after

Paul Dawalibi:

this, I guess, protracted legal battle? That seems to be the

Paul Dawalibi:

proposal that both sides have accepted. So why Gigi is gonna

Paul Dawalibi:

get a return on their investment, and not just their

Paul Dawalibi:

money back. But I know, there's some interesting conversation

Paul Dawalibi:

you have around, you know, what does this all mean? What does it

Paul Dawalibi:

mean for investment in Dows? Like, I know, you had some

Paul Dawalibi:

thoughts on this.

Jeff Cohen:

Yeah. And it gets an interesting moment in the future

Jeff Cohen:

of Dallas, which I think is a little bit tied into the future.

Jeff Cohen:

The Metaverse future of crypto because people and we were even

Jeff Cohen:

just talking about this earlier, like, will the future companies

Jeff Cohen:

in the metaverse be formed as Dows. So I think this is a

Jeff Cohen:

little bit of a seminal moment in the sense that, you know, if,

Jeff Cohen:

if, if it were that anyone who invested into a Dow could

Jeff Cohen:

essentially be have their investment voted down to zero in

Jeff Cohen:

the future, I think that would really, you know, kill a ton of

Jeff Cohen:

institutional investment into these daps when really kind of

Jeff Cohen:

destroy the, the, the essence of the product and itself. So I've

Jeff Cohen:

seen, I've seen a lot of like crypto bros on Twitter, and

Jeff Cohen:

people on LinkedIn kind of referencing the story in a

Jeff Cohen:

positive light, sort of talking about almost like, Brett like,

Jeff Cohen:

you know, bragging and dunking about how great it is that the

Jeff Cohen:

Dow has the autonomy to do this. And I view it as a really big

Jeff Cohen:

negative, if this if this were to have stood, and even the fact

Jeff Cohen:

that it possibly could have happened, who really hurt any

Jeff Cohen:

future institutional investor who says, Hey, I'm going to

Jeff Cohen:

invest in a doubt, because they know that at any point, you

Jeff Cohen:

know, the tyranny of the majority, and now could just

Jeff Cohen:

say, hey, well, thanks for the capital you gave to us a year

Jeff Cohen:

ago, we've now 10x their business, and here's your money

Jeff Cohen:

back like, or they could just say in the future, well, here's

Jeff Cohen:

nothing, we voted you out. So I think in what when you create a

Jeff Cohen:

structure that is autonomous and doesn't have a legal entity or

Jeff Cohen:

legal structure behind it, you run a lot of risks. So if I were

Jeff Cohen:

an institutional investor, I wouldn't touch it now. You know,

Jeff Cohen:

based on based on this,

Paul Dawalibi:

you know, it's the it's a little bit the

Paul Dawalibi:

confidence of the mob, right? Like, you have these

Paul Dawalibi:

decentralized, autonomous or semi autonomous kind of

Paul Dawalibi:

organizations. And, and it creates a level of anonymity

Paul Dawalibi:

that that makes it feel like that should be able to get away

Paul Dawalibi:

with things that normal organizations can. I don't think

Paul Dawalibi:

being a Dao absolves you of good business practice, ethical

Paul Dawalibi:

business practice. And, you know, following contract law

Paul Dawalibi:

really, again, we run into a situation where too much

Paul Dawalibi:

decentralization starts to feel like anarchy, and systems break

Paul Dawalibi:

down. And to your point, if all the institutional money loses

Paul Dawalibi:

trust, what happens to Dows? I mean, these things need to be

Paul Dawalibi:

funded from somewhere. And if no one has any confidence in the

Paul Dawalibi:

ability of these Dows to honor agreements, whether it's an

Paul Dawalibi:

investment or otherwise, you have a really big industry

Paul Dawalibi:

problem, right? Like, this is not you and the crypto bros can

Paul Dawalibi:

laugh about it. You know, all they want, I agree with you,

Paul Dawalibi:

this is a really dangerous kind of story to cut to have come

Paul Dawalibi:

out. Because it casts doubt on the trustworthiness of any of

Paul Dawalibi:

these things. And when you put your money into into something

Paul Dawalibi:

like this, where does it go, you know, have any control over

Paul Dawalibi:

getting it back at any point in time. And, you know, if we were

Paul Dawalibi:

to not talking about Dows here, and we were just talking about

Paul Dawalibi:

any old web three startup, where the founder decided to just give

Paul Dawalibi:

the investor back their original investment, right? We'd be

Paul Dawalibi:

saying this guy is shady, this, this is criminal. This is this

Paul Dawalibi:

is a crook. Right? Like, shut their business down. Just

Paul Dawalibi:

because it's centralized wire, like, why are people not as

Paul Dawalibi:

critical here? Right? Why? Because

Jeff Cohen:

people, people are looking at it and be like, Oh,

Jeff Cohen:

how cool was it, like, the little guys all came together?

Jeff Cohen:

And like, you know, we're able to vote out the man without

Jeff Cohen:

really understanding or thinking further about what the

Jeff Cohen:

consequences of that really mean. And I think you brought up

Jeff Cohen:

the correct word. I mean, it's trust. And I think right now,

Jeff Cohen:

the entire crypto space is facing a little bit of a

Jeff Cohen:

confidence or crisis of trust, or they just look what we've

Jeff Cohen:

seen since the outbreak stablecoins The price of Bitcoin

Jeff Cohen:

Aetherium. And now, you know, throw in this a little bit with

Jeff Cohen:

Dallas. Trust is a fragile thing, particularly when you're

Jeff Cohen:

dealing with institutional investors and folks that

Jeff Cohen:

inherently didn't trust this system to begin with. And then

Jeff Cohen:

you throw in stories like this, and it really can pull off

Jeff Cohen:

funding environment for Dallas, specifically very, very quickly.

Jeff Cohen:

Yeah,

Paul Dawalibi:

I think people in in emerging industries

Paul Dawalibi:

underestimate how damaging just one or two pieces of bad news,

Paul Dawalibi:

just one or two bad actors can be to the the investor sentiment

Paul Dawalibi:

on the space as a whole. Right? Like, it's one of these things

Paul Dawalibi:

where what's the, what's the crypto motto, it's we're all

Paul Dawalibi:

we're all gonna make it or whatever, right?

Unknown:

We're all black me.

Paul Dawalibi:

Um, but I think I think like the better one, if

Paul Dawalibi:

we're talking about Metaverse, web three, in general is more

Paul Dawalibi:

like, we're all in this together, right. And if you have

Paul Dawalibi:

a bad few bad actors, decentralized or not autonomous

Paul Dawalibi:

or not, it really spoils everything. And it's something

Paul Dawalibi:

that I think we need to call out. And everyone should be

Paul Dawalibi:

calling out and be really careful about and, and not be

Paul Dawalibi:

tolerant that frankly, because it ruins it ruins it for

Paul Dawalibi:

everybody. So interesting story. And look, in the end, they got

Paul Dawalibi:

10 times their money back, which I also kind of laughed about,

Paul Dawalibi:

like, in the in the universe of investor returns a 10x is, you

Paul Dawalibi:

know, considered to be, you know, the UN except an excellent

Paul Dawalibi:

return, not more than excellent return. So, you know, it's sort

Paul Dawalibi:

of all worked out. Maybe they were expecting 100 extra turn. I

Paul Dawalibi:

don't know, maybe they're still upset about it. But the fact

Paul Dawalibi:

that it did get resolved is somewhat promising. Jeff, that

Paul Dawalibi:

wraps up this week's podcast Time flies when you're having

Paul Dawalibi:

fun. I just want to remind people, guys, please share the

Paul Dawalibi:

podcast, please send it to a friend or colleague. Make sure

Paul Dawalibi:

to subscribe to our brother and sister podcast if you want to

Paul Dawalibi:

call it that met a woman and business of esports. Go follow

Paul Dawalibi:

Jeff on Twitter at Jeff Cohen 23. He's always got interesting

Paul Dawalibi:

things. And make sure to watch this guy's Wednesday evenings

Paul Dawalibi:

830 Eastern Time Jeff's there. I'm there. We do a whole show on

Paul Dawalibi:

gaming news. So if you love the gaming piece of the content we

Paul Dawalibi:

do here because gaming is a big part of the metaverse, you will

Paul Dawalibi:

absolutely love that weekly new show live stream we do Wednesday

Paul Dawalibi:

evenings at 830 Eastern time. You get Jeff's hot takes on a

Paul Dawalibi:

whole bunch of things there. And I promise you it's worth worth

Paul Dawalibi:

the time. So don't forget guys, the most important thing of all

Paul Dawalibi:

though, the future is fun. Thank you, Jeff. Thank you guys for

Paul Dawalibi:

listening. We'll see you next week.

Unknown:

Thanks for joining us here on meta business. Make sure

Unknown:

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About the Podcast

META Business
From the metaverse to the boardroom...
Meta Business tackles the most important Metaverse industry news. Business experts dissect and discuss all of the hottest topics and happenings, from a unique C-suite perspective.

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Paul Dawalibi