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

Welcome to the metaphysics podcast. The

Metaverse and web three are bringing about the biggest

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

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

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

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

talk.

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

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

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

winters and this is the fifth winter. And each successive

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

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

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

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

is a little bit sensationalized. You know, obviously public

markets have been getting killed and bitcoins been getting killed

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

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

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

definitely like, like victims and all this. There are

definitely casualties I should say not victims casualties and

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

know. What do you think?

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

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

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

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

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

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

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

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

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

these terror all these baby like algorithmic stable coins that

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

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

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

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

would say

the the silver lining for the metaverse stuff

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

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

crypto companies are well financed a lot of these

Metaverse web three blockchain gaming, like a lot of these

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

and the good companies will have capital to survive whatever

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

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

capitalized because of the volume of money and dollars that

have been flowing into the

space. I want to start,

Jeff, as we usually do with kind of a fun

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

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

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

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

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

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

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

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

being developed on the Bitcoin Blockchain by one of the

companies of Twitter see former Twitter CEO Jack Dorsey. And

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

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

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

truly decentralized Internet where you know, ownership of

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

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

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

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

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

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

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

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

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

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

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

this?

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

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

itself is all about centralization. So I think

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

that a lot of the biggest companies in but greed are

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

human nature works. Like when people create entities that are

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

always going to be some form of centralization. Otherwise

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

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

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

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

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

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

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

how,

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

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

the internet, or a truly decentralized Metaverse, in your

mind could never exist, or will never exist.

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

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

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

that many of the big companies that are building the

infrastructure layer of web three, are themselves backed by

what he considers institutions or for like, what two companies

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

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

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

decentral instrument work, like direct veils are going to become

direct democracy, I guess.

The I mean, democracy is an interesting word

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

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

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

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

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

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

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

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

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

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

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

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

can you achieve those benefits still with some amount of

centralization? And

it's also a really hypocritical argument by Jack

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

creating this division, which the company has shareholders. So

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

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

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

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

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

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

web five vision that he is espoused?

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

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

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

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

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

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

watchmaker. The headline here tag horror watches to display NF

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

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

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

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

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

added functionality to one of their smartwatches were in the

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

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

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

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

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

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

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

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

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

positive when Twitter made it such that you make your profile

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

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

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

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

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

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

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

clearly gaming is has been wanting to talk about,

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

estate, like there's some various things that nfts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

very easily with their Apple Watch, you would think?

I think we'll see your guests, or

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

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

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

they bring?

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

apple smartwatch ecosystem that well, but could Metamask just

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

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

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

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

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

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

development to where I think metal Metamask could probably

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

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

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

would love to have this either created watch face.

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

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

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

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

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

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

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

a little bit of a sensational headline here. Dump discord

Nansen launches messaging app for web three communities. It

says the analytics platform Nansen aims to take a bite out

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

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

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

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

the login with your crypto wallet, you connect to groups

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

own. The firm describes the app as a crypto native

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

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

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

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

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

this app in the ecosystem. It's a

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

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

competitive advantage, particularly with the network

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

Having said that, I think the wallet integration is

interesting. And it's potentially an area where

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

the year, Discord had talked about doing an integration with

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

because they got a bunch of backlash from their community.

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

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

this court hasn't really integrated any of that

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

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

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

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

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

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

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

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

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

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

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

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

crypto and telegram I could talk about tech specially talking

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

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

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

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

interesting, because it's actually the opposite thesis

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

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

so curious what you

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

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

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

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

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

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

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

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

your potential customers immediately just by requiring a

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

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

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

as as a downside because that was the reason discord has

exploded as the platform of choice for these communities. Is

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

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

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

communities bring in as many people as possible, create as

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

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

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

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

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

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

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

say that a vertically focused plan like chat, or community

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

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

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

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

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

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

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

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

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

sense. That's fair. I could see

a little bit like vertical almost like a message

boards like a reddit but really hyperfocus to create

discoverability because I think if you just log into discord and

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

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

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

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

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

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

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

work. Yeah.

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

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

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

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

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

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

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

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

created Mid America circle Dow, they help gamers interested in

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

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

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

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

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

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

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

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

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

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

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

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

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

giving back the value of that investment

right at that point in time.

Now, the resolution, just to get to the

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

walking away with 10 times their original investment that after

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

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

get a return on their investment, and not just their

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

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

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

thoughts on this.

Yeah. And it gets an interesting moment in the future

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

The Metaverse future of crypto because people and we were even

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

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

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

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

essentially be have their investment voted down to zero in

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

institutional investment into these daps when really kind of

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

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

people on LinkedIn kind of referencing the story in a

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

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

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

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

that it possibly could have happened, who really hurt any

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

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

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

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

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

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

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

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

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

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

based on based on this,

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

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

decentralized, autonomous or semi autonomous kind of

organizations. And, and it creates a level of anonymity

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

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

being a Dao absolves you of good business practice, ethical

business practice. And, you know, following contract law

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

decentralization starts to feel like anarchy, and systems break

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

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

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

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

investment or otherwise, you have a really big industry

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

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

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

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

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

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

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

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

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

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

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

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

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

critical here? Right? Why? Because

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

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

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

really understanding or thinking further about what the

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

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

the entire crypto space is facing a little bit of a

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

seen since the outbreak stablecoins The price of Bitcoin

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

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

dealing with institutional investors and folks that

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

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

funding environment for Dallas, specifically very, very quickly.

Yeah,

I think people in in emerging industries

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

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

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

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

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

We're all black me.

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

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

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

a bad few bad actors, decentralized or not autonomous

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

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

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

tolerant that frankly, because it ruins it ruins it for

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

absolutely love that weekly new show live stream we do Wednesday

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

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

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

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

listening. We'll see you next week.

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