BNC Blog

As I prepared to attend Magic Con in Philadelphia this weekend, I took a minute to reflect on the impact Magic the Gathering and trading card games have had on my life and career.

When I immigrated to America in the late 90s, Pokemon was all the rage. I would see my fellow students break out their trade binders during lunch while kids would gather around to stare wide-eyed at the collections of rare cards. While people loved to collect Pokemon cards, very few actually played the game.

Years later I watched Yu-Gi-Oh for the first time. The intro music, the ancient Egyptian sub-theme, and an entire world built around people who played trading card games…it was like nothing I had seen before. I played the TCG and while it was fun, the hype lasted for a year and I moved on.

It was at this time a friend told me to check out Magic The Gathering.

“It’s the granddaddy of trading card games.”

Created in 1993 by Richard Garfield, and published by Wizards of the Coast, Magic The Gathering is indeed considered the genesis of the modern trading card game.

I fell in love with MTG. Perhaps it was the beautiful art or the funny flavor text on the goblin cards. More than likely it was the wonderfully fleshed-out fantasy setting of Dominaria full of elves, wizards, and dragons. MTG was my introduction to the world of high fantasy.

Since then, I played many different card games including the World of Warcraft TCG which was later converted into Blizzard Entertainment’s digital card game, Hearthstone. I played the Hearthstone beta and I was hooked by the sleek UI and streamlined gameplay. I eventually moved on to MTG Arena and even tried out Gwent and Runeterra.

My experience with digital card games was foundational to my eventual Web 3 career transition. When I first learned about Web 3 I immediately saw the potential for NFTs to revolutionize the gaming industry. Moreover, I saw how NFT technology could be implemented in digital card games to enable something that had been missing from the genre…trading.

All the cards you acquire in digital card games are database items that you have no real ownership over. Blockchain technology has the power to turn database items into real digital assets that can be traded on a peer to peer basis or sold on secondary markets.

My first job in Web 3 involved working on a metaverse trading card game. I work on a number of different blockchain games at Gala but we also have our own digital card game called Legends Reborn in development by Kung Fu Factory.

As a kid collecting Pokemon and Yu-Gi-Oh cards, I never imagined I would have the opportunity to work on trading card games in my professional life.

Despite my day job, I still love to shuffle up and hit the tournament scene to play Magic The Gathering in my free time.

I am stoked to be in Philly this weekend for Magic Con.

You can guess what I will be playing.

Cheers,

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I can say with confidence that the killer game for Web 3 adoption will be an MMORPG — a massively multiplayer online role-playing game. Some of the earliest games to feature in-game digital currencies and real money trade from outside the game economy were MMORPGs like World of Warcraft and Runescape.

Real money trade or RMT is the exchange of in-game assets like digital currency or digital items for fiat currency like Dollars or Euros.

This was an unsanctioned feature of early MMORPGs that allowed gamers in poorer parts of the world to farm digital currency in a game like World of Warcraft and sell that currency to western gamers who would be willing to buy WoW gold in exchange for fiat.

The RMT mechanism gave rise to the Chinese gold farming phenomenon that saw gamers in China selling digital currency to western gamers via illicit means.

Real money trade was not sanctioned for a reason. While RMT led to serious issues in the game economy like rampant inflation in the value of WoW gold, it enabled one of the earliest methods for people to make money while playing video games. This was happening in Asia long before the rise of professional gaming in the west.

Blockchain integration in gaming has many promises but in its simplest form, the appeal of Web 3 gaming is that it allows people to own their digital assets and for people to make money while playing video games.

As opposed to being an unsanctioned exploit, in many ways, blockchain games today are being built around the mechanism of real money trade.

This is why MMORPGs have tremendous potential in Web3. This genre of games has built-in digital currencies, game economies, token generation, and token sinks as a basic feature of gameplay.

Most Web 3 games struggle to figure out good economic design in order to balance token generation and token sinks. Some games simply don’t need blockchain integration and often tokenization is forced into the game to the detriment of the overall experience.

A Web 3 MMORPG has tremendous potential because the fundamental premise of play and earn is not a forced feature but rather a natural adaptation that has its evolutionary roots in RMT dating back to the earliest games in the genre.

I am very optimistic about the potential for a killer game to emerge in the blockchain gaming space that will change the hearts and minds of even the most stalwart critics of Web 3 games.

I am confident that game will be an MMORPG.

As always thank you for reading.

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Over the next decade, we will see many traditional content creators begin to adopt blockchain technology and specifically NFTs as a monetization strategy.

I have spent a considerable amount of time in the creator economy and I now work with many content creators in the Web 3 space.

The most consistent advice I give to content creators is “Diversify your revenue streams.”

• AdSense revenue can be sporadic.
• Merch sales depend on your personal brand appeal and your abilities as a marketer.
• Patreon is a fantastic monetization platform but unless you are a big creator, Patreon alone won’t cover your bills.
• Brand sponsorships have no guarantees of sustainability. When brands go through tough times, marketing budgets are the first to get cut.

While the aforementioned avenues are the primary revenue streams for Web 2 content creators, the opportunities to diversify have been vastly improved in the Web 3 landscape.

The ability to create and sell digital assets offers creators a range of new options for monetization and audience engagement.

Pio and Nick the Co-Hosts of one of the biggest Web 3 shows on the internet have already implemented their NFT strategy via The Nifty Portal.

This Nifty Portal is a collection of NFTs that “Serves as your premium membership pass into the NIFTY community, a group of aspiring and successful NFT collectors and creators.”

This is effectively a pass for super fans that has already done more than 2000 ETH in volume and has created an amazing community along the way.

Another prominent Web 3 show, Bankless hosted by Ryan Sean Adams and David Hoffman recently began minting their podcast episodes as NFTs.

These are tokenized podcasts that give 100 audience members the opportunity to own digital copies of their favorite Bankless episodes.

Imagine owning the iconic Bankless episode where Sam Bankman Fried floundered in a debate against Erik Voorhees only weeks before the collapse of FTX. It’s like owning a piece of Web 3 history.

While Web 2 creators understand the potential for revenue diversification via NFTs, many are hesitant to take the leap out of fear of alienating their audience.

The fluctuating cycles in crypto and notable busts like the collapse of Terra Luna and FTX have left many people weary of Web 3.

Web 2 creators who get involved in crypto face significant backlash and are relentlessly criticized for “Promoting a scam.”

If Web 2 creators are reluctant to touch crypto out of fear, this could have a ripple effect where Web 3 will exist in its own bubble and, Web 2 users will only believe in the prevailing narrative on crypto.

While there are massive hurdles to overcome, I remain optimistic about the intersection of the creator economy and the Web 3 space.

The opportunities for creators to diversify their revenue streams and engage their audience are vastly improved via Web 3 integration and there are tremendous synergies yet to be unlocked.

Thank you for reading.

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The question was “Why Web 3 gaming?” In retrospect, I wish I had answered this question differently.

Earlier this week, I was a featured panelist at the Blockchain Network meetup in NYC and this was the first question from the founder David Fung. I knew how to answer the question as I had made the case for Web 3 gaming many times throughout my career however, I never quite considered how I sound to someone outside of the Web 3 space.

I led with the monetary incentive for Web 3 gaming and while it plays well in a room full of crypto natives, I don’t think this is the best answer to win over the masses.

Indeed what made me realize the potential for Web 3 was my background as a gamer and the years of my life spent playing World of Warcraft and League of Legends. The epiphany I had was the understanding that with Web 3 gaming, players could own digital assets and trade them on secondary markets outside the game economy. I.e. people could make money playing video games.

However, I am a marketer by trade and it is important for people in my field to have a more nuanced answer to this simple question.

If I am at a bar and someone outside the crypto industry asks me why they should care about Web 3 gaming, telling them about the financial upside is not enough.

Most people don’t play video games to make money. They play games to have fun.

So what are the non-financial reasons why Web 3 gaming is compelling?

✅Decentralization and Digital Asset Ownership

Decentralization is an important net benefit of Web 3 gaming as it allows players to truly own their in-game assets enabling greater control over gameplay experiences and transparency in how the game actually works.

✅Interoperability of Games

Digital asset ownership enables the interoperability of games where players can take their digital assets from one game to another allowing us to move ever closer to the goal of an open metaverse of games.

✅Novel New Game Play Mechanics

Web 3 integration allows for novel new gameplay mechanics to emerge such as player-owned economies and player-created content resulting in more immersive gameplay experiences where players can influence the game world in a meaningful way.

✅Community-Driven Development

Community-driven development is also a net benefit of Web 3 integration as it enables kickstarting game creation through crowdfunding in exchange for allowing the community to have a say in the direction and development of a game.

While the aforementioned benefits exist to some degree in Web 2, they are mitigated by corporations that have created walled gardens of controlled ecosystems where players have little to no agency.

The integration of Web 3 empowers gamers in a meaningful way and opens up new possibilities in how games of the future will be experienced.

These are the reasons why I am excited about the future of Web 3 gaming and why I transitioned my career to be at the frontier of this new industry.

As always, thank you for reading.

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I am still skeptical about the notion of virtual land and the Metaverse as a whole.

I have yet to find someone who can properly articulate what the metaverse is and why owning virtual land in the metaverse matters.

The basics are easy to understand. The first time someone explained the metaverse to me, they drew an analogy to Ready Player One. Simply put there will come a day when people care about their virtual status more than their physical state in life. This will excelerate over time as we spend more time on the internet. Owning virtual land in the metaverse will matter for the same reasons owning land in real life matters…location, proximity and scarcity.

Virtual and augmented reality will play a key role in the metaverse. We will all be wearing VR headsets and do everything from working, playing and socializing in a virtual space. That was the premise behind Mark Zuckerbergs radical shift to the Meta rebrand for Facebook. Given the amount of time we will spend in the metaverse, the location of our metaverse land and proximity to other land owners will be a key factor of our virtual social standing.

However speculation around these radical shifts in culture have yet to bear tangible results. We have been talking about the metaverse for a few years now and aside from a small, niche segment of our society I don’t know many people who spend much time in the “metaverse” as we have come to understand it. The notion of metaverse land having value is also nebulous at best given that scaricity drives the value of real land while metaverse land is infinitely scalable.

The ferver around metaverse land peaked early last year with the Otherside mint from Yuga Labs. Since then the speculation around virtual land has undoubtedly cooled with the onset of crypto winter.

Meta is struggling to get traction around Horizon Worlds and had to ask its own employees to spend more time working in the metaverse despite their reluctance to do so.

Decentraland was reported to have surprisingly low user counts late last year and users claimed that it felt like a lonely ghost town.

With all that being said, I am still keen to see how the metaverse and virtual land component of Web 3 plays out in the coming years. If digital items can have speculative value, it goes without saying that virtual land should also have value especially if we are spending more time in the metaverse.

However the challenge lies in virtual land being inextricably linked to the metaverse. The success of virtual land and realization of its speculative value is tied to the success of the metaverse and I am not quite sure that will happen anytime soon.

Keen to hear your thoughts on the matter.

Image: Dall E 2 — via NightCafe Studio
Input: Metaverse Traveler

As always, thank you for reading.

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Twitter user Coby had a very controversial take last year when he referred to NFTs as shitcoins with pictures. I have recently begun to reevaluate my view of NFTs as cultural markers of taste as I observe the frenzy around the new NFT marketplace BLUR.

Blur is an upstart NFT marketplace that has managed to overtake trading volume on OpenSea by a wide margin over the last few weeks. This is partly due to the gamification of trading on the Blur marketplace where users can earn Blur tokens by buying and selling NFTs.

According to DappRadar, over the last 30 days:

Upstart Blur has generated over $1.24 billion in trading volume.

While established OpenSea is sitting at a trading volume of $436 Million.

To be trailing an up-and-coming marketplace by about 1/3 of the trading volume is a major blow to Open Sea, the once-dominant NFT trading platform.

With the NFT marketplace wars heating up, it’s worth asking what makes Blur such a strong competitor.

✅ Blur does not have any marketplace fees.

✅ Blur does not enforce creator royalties.

✅ Blur’s implementation of its native token rewards incentivizes high-frequency trading on the platform.

More than anything else, it’s the token rewards that have led to Blur’s dominance as an NFT marketplace.

In season 1, Blur airdropped its native token to everyone who traded on the platform. While the exact tokenomics and criteria for the airdrop were not explicit, it was clear that those who transacted frequently on the Blur platform received a greater share of the Airdrop token pool.

After the Season 1 token distribution, crypto Twitter was in a frenzy as the FOMO for those who missed out reached a fever pitch.

With Season 2 underway, Blur has clarified how users can take part in the next airdrop.

Traders can accrue “Listing Points” and “Bid Points” by interacting with the platform and their odds of receiving an airdrop increase in proportion to the number of points they have. Moreover, users can increase their odds of receiving the Blur airdrop by making use of all of Blur’s listing and bidding features.

While Open Sea will not compete with Blur on token airdrops for regulatory reasons, they have been forced to make changes to their policies on creator royalties.

OpenSea recently announced that they will temporarily eliminate their 2.5% marketplace fee as well as their enforcement of creator royalties on NFT sales.

“There’s been a massive shift in the NFT ecosystem, In October, we started to see meaningful volume and users move to NFT marketplaces that don’t fully enforce creator earnings. Today, that shift has accelerated dramatically despite our best efforts.”
– OpenSea Twitter

With the erosion of creator royalties and the further infusion of DeFi yield farming in NFT marketplaces, we can see NFTs for what they really are.

“It’s extremely simple. They are altcoins with pictures. Anything suggesting otherwise is larp and cope.”
— Cobie (@cobie) August 14, 2022

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Blur is the most disruptive new platform in the Web 3 space. As I dug deeper into the new NFT marketplace, I learned more about Blur’s pseudonymous founder Pacman and the person behind the digital avatar, Tieshun Roquerre.

According to LinkedIn, Roquerre was still in high school when he moved to San Francisco in 2014 to work as a full-time engineer at Teespring. In 2015, he dropped out of high school to start StrongIntro to help tech companies grow their engineering teams through employee referrals.

Roquerre went through Y Combinator for StrongIntro before starting his undergrad at MIT in 2016. He dropped out of MIT to start Namebase in 2018 and went on to receive a grant from the Thiel Fellowship before raising a $5 million round for his startup. In 2021 Roquerre successfully sold Namebase to Namecheap and went on to start a stealth company in 2022 which turned out to be Blur.

Blur is currently the top NFT marketplace and has logged over 1.4 billion in trading volume to date. What is more significant is that the platform only launched in October 2022 and has managed to overtake Opensea in a matter of months.

Roquerre has undoubtedly achieved a monumental feat at a very young age.

He has disrupted the entire NFT ecosystem by creating a platform that strictly appeals to the pro-NFT trader. This is in stark contrast to OpenSea which was designed with the retail buyer in mind.

Although pro-NFT traders are a very niche demographic, they tend to be whales with considerable sway in the wider NFT ecosystem.

According to @proof_eth on Twitter,

✅ 20% of Blur’s volume comes from only 15 wallets.

✅ 50% of Blur’s volume comes from less than 300 wallets.

One possible explanation for Blur’s success is reflexivity in markets which Roquerre has written about in his blog.

“Stock markets don’t reflect the true price of assets, they reflect the prevailing social perception of the value of assets.”

This is understood as the prevailing bias and can be applied to the NFT market.

NFT trading volume has a massive impact on the prevailing bias about NFTs and the biggest drivers of trading volume are whales.

If you can build a platform that appeals to whales and incentivize high trading activity, you can drive reflexivity in the NFT market.

“What most people don’t consider is that the prevailing bias can affect the underlying value of the asset and vice versa.”

The $blur token airdrop which is awarded to users who buy and sell with frequency on Blur is designed with reflexivity in mind.

“When the prevailing bias of a market affects the underlying value, and the change in the underlying value feeds back to affect the prevailing bias the market falls into a positive feedback loop.”

The $blur token as an incentive is the primary driver of high trading volume on Blur. It creates a feedback loop that attracts new users to the platform resulting in exponential growth.

However, the feedback loop means the main value proposition of Blur is its token airdrops which artificially generate trading volume driven by whales.

Time will tell if this is a sustainable long-term strategy.

Curious to hear your thoughts on this.

As always thank you for reading.

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I have been thinking about the different types of NFT traders and the motivations that drive people to exchange digital assets. Here are some of the cohort categories I’ve been considering.

✅ Dabblers are intellectually curious individuals who are willing to dip their toes into the NFT space. These are retail consumers who don’t have a lot of capital to deploy in speculative assets. They are cautiously optimistic about the potential of NFTs and consist of a demographic that will make up the next wave of Web 3 adoption.

✅ Collectors consist of users who are in the NFT space for the love of the game. They like to build a diverse portfolio consisting of a wide range of collections that are seen as a form of self-expression. Collectors will only buy assets they are comfortable holding for a long time and will only sell if it’s an offer they can’t refuse. While they enjoy pondering theoretical returns, they are not really in this space to make money.

✅ Speculators are believers in the potential of specific NFT projects over a long time horizon. They are specifically looking for the next big thing and are willing to make outsized bets on projects they really believe in. They generally have a long-term exit strategy in mind.

✅ Pro NFT Traders consist of flippers, investors, and whales who drive a significant portion of the volume in the NFT space. It is important to break down the individual subgroups within this category to better understand the cohort as a whole.

✔ Flippers like to get in and out of an NFT project fast. They will mint and list within a day if it means an easy 2X gain on a project. They also like to study market trends to quickly arbitrage undervalued assets. They are not emotionally attached to any given collection and prioritize gains over anything else.

✔ Investors generally tend to stick to a project a bit longer than flippers. They are looking for projects with a promising future and are doing due diligence to ultimately score a 10X or even 40X return. These are power users who are willing to deploy a ton of capital behind something that will go up in value.

✔ Whales are individuals who hold a significant amount of valuable NFTs. They tend to have an outsized social and financial influence and can exert a sense of gravity on the NFT market through their buying and selling activity. Whales have so much power that they can skew the supply and demand dynamics within this space.

While the motivations for whales can vary, they are perhaps one of the most fascinating groups in the NFT space to try and decipher. They make up a significant portion of the transaction volume on NFT marketplaces like OpenSea and more recently on Blur.

The NFT community is not a monolith and it’s important to understand the individuals and the motivations that drive user activity in the Web 3 space.

Let me know your thoughts on my categorizations and if there is anything I missed.

Thank you for reading.

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“I would imagine you would feel some level of guilt when some of the companies that you are promoting end up leaving retail investors holding the bag.”

This was a line from Hasan Minhaj during a 34-minute debate with Kevin O’Leary on The Daily Show.

O’Leary is an iconic investor, educator and judge on Shark Tank. He is fondly referred to as “Mr. Wonderful” and is one of the most influential figures in modern finance.

The crux of the debate fell on O’Leary’s dual role as an investor and spokesperson for FTX.

Hasan Minhaj pointed out that O’Leary has a lot of influence over retail investors and was handsomely compensated for promoting FTX while his followers lost their life savings.

My highest-performing article from last year was titled “Why Influencer Accountability Matters”.

Sponsored By FTX — Why Influencer Accountability Matters

What do the following influencers all have in common?

medium.com

It was about the influencers who promoted FTX and their lack of accountability after the collapse of the infamous crypto trading platform.

A lot of people said I was being too harsh.

No one knew FTX was a giant ponzi scheme and it’s unfair to hold influencers accountable for what had happened.

That’s totally valid.

To be clear, I don’t think we should blame influencers for the consequences of the FTX debacle…and in hindsight, I may have failed to convey my actual point.

What I wanted to bring to light was the disparity in outcomes for the influencer and the influenced.

The parasocial relationship is at the heart of what makes influencer marketing powerful.

The audience looks to their favorite finance influencer as someone who could be relied upon for quality education and advice. No one expects to lose their life savings on a recommendation from an influencer they trust.

The dynamic is further complicated by the fact that a lot of influencers are being paid to provide financial recommendations.

What the FTX situation demonstrates is that influencers have little regard for the outcomes of their recommendations. At the end of the day…the audience is just stats and metrics on a dashboard.

Influencer accountability is important because it entails a greater sense of responsibility for what happens to your audience.

When shit hits the fan, a person like O’Leary can wash his hands clean of the situation and walk away. He has many other investments and he will financially recover.

Meanwhile, his audience will lose their homes, and their kid’s college tuition and some are going to get divorced.

It was refreshing to see Hasan Minhaj relentlessly challenge Kevin O’Leary on his position of influence over retail investors.

The outcomes for the influencer and influenced are drastically different and there should be a greater sense of accountability in this space overall.

As always, thank you for reading.

You can watch the full video here:
https://www.youtube.com/watch?v=I30_q6Tjaxk

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When Facebook rebranded to Meta in 2021, I took it as a sign that times were changing and we are entering a new era of technological innovation powered by Web 3. After all, I believe Facebook represents the shift from Web 1 to Web 2 when we went from static web pages to user-generated content.

Through the early 2000’s the internet consisted of websites owned by brands and corporations. With Facebook, we saw a shift in what made the internet compelling. The content on Facebook was comprised of posts from our friends and family and the platform made being on the internet about being with our peers.

Over time we saw normal people attract an online following and some people went from relative obscurity to being famous on the internet. This trend only accelerated with platforms like Twitter, Youtube, and Instagram which gave rise to the modern creator economy as we know it.

Zuckerburg could spot trends from miles away and he has always been quick to pivot. He saw the shift from desktop to mobile and pushed Facebook to adopt a mobile-centric strategy. He also purchased Instagram to solidify Facebook’s positioning in the modern era of mobile-first applications and social media.

However, the latest pivot from Facebook to enter the Metaverse may have been a step too far. In 2021, Facebook rebranded to Meta.

I was confused by the rebrand initially.

That was when someone explained the Metaverse to me for the first time.
It’s the world of Ready Player One except it’s not just a work of fiction. Facebook was attempting to create the metaverse using Web 3 technology. They owned Oculus and had VR capabilities in-house so the synergy was already there. I grew up watching the Dot Hack anime and Sword Art Online. I understood the potential of virtual worlds powered by VR headsets and the immersion potential that existed with such tech, especially in video games. Moreover, they were going to integrate blockchain and NFTs into existing platforms in an effort to onboard the masses. If Meta could pull this off, it would be a massive technological feat.

It was around this time I quit my job in the creator economy to chart a course in the Web 3 industry.

The crypto space was booming at the time and the momentum felt unstoppable.

However, a lot has changed over the last few months.

Meta’s first attempt at a metaverse, Horizon Worlds fell short of expectations netting only 200,000 users in the year post-launch.

This was when we saw the first round of layoffs.

Meta is now dropping NFT support for Instagram and Facebook as well as laying off 10,000 additional employees likely involved in their Web 3 initiative.

“We’re looking closely at what we prioritize to increase our focus. We’re winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses.” — Stephen Kasriel Meta’s head of Commerce and Financial Services

I still hold quite a lot of hope for the future of Web 3 and the metaverse so it’s difficult to see things play out this way.

Perhaps the metaverse was just a bull-run pipe dream or too ahead of its time.

It seems clear the world is not ready for the metaverse especially not one led by Meta.

As always, thank you for reading.

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