Feb. 10, 2024
Bitcoin, Token Economics and Web3's Investment Strategy with Austin Barack of Relayer Capital
This week on The Index, host Alex Kehaya welcomes former Coinfund partner Austin Barack, now the Founder and Managing Partner of Relayer Capital. Get ready for a deep dive into token economics, the transformative power of Bitcoin and Ethereum, the types of Web3 startups he will be investing in this year, and an in-depth discussion on the trailblazing paths carved by smart contracts and decentralized applications.
Host - Alex Kehaya
Producer - Shawn Nova
Chapters
00:06 - Exploring the Future of Internet
13:52 - Venture and Liquid Token Overlap
25:23 - Community Engagement and Incentives in Crypto
Transcript
WEBVTT
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Welcome to the Index Podcast hosted by Alex Cahaya.
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Plug in as we explore new frontiers with founders, developers and investors, building the next wave of the internet.
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Hey everyone and welcome to the Index, where we talk with the leading entrepreneurs, builders and investors building the future of the internet.
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We do this because we believe that people are worth knowing and we want to share the stories behind why they are here, striving for a better future.
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I'm your host, alex Cahaya, and today I am thrilled to welcome my friend, austin Barak.
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He is a trailblazing mind who is transitioning from his influential role at CoinFun to embark on an exciting new journey.
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Austin has been a visionary in the world of digital assets and blockchain.
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I've learned a ton from him and he's gearing up to launch his own fund called Relayer Capital, and I'm so excited to have you here today and to learn more from you and share all the knowledge you have accrued over the last several years working with CoinFun in your careers.
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Thanks for being here.
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Thanks, alex.
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Yeah, it's awesome to be here and I always really enjoy our chats and excited to jam on crypto and all the exciting things that are happening now.
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For people who don't know you, let's walk through your background and how you kind of got into this space and I'd love to just specifically hear what's the why that drives you to spend all of your time in the future of the internet and web through, and crypto specifically.
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I first came across crypto in 2013, when Bitcoin was making its first run in the spring there, and I found it really really interesting in this paradigm shift in the way you think about value and the way you think about how users can self-custodial their own assets and creating this new digital form of gold.
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But really until 2015, 2016,.
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It didn't click for me until I then came across Ethereum and it was just like blew my mind as far as the broader surface area of application building, where you could take the programmability of smart contracts and build all these really interesting novel decentralized applications that can then improve the way that people coordinate around the world, reduce the trust requirements and also just make the financial system a lot more inclusive and I was working at the time early in my career to cross-border payments startup and Bitcoin was interesting from that perspective of being very tangential in terms of the opportunities for remittance and store of value.
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But Ethereum was that moment.
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For me.
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2017 went down this.
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People sometimes call it a rabbit hole, but it's a rabbit hole or it's a one-way street, but either way, I never turned back and I just I don't think there's anything more interesting that's happening in technology right now than the building of this next internet and crypto, so left in 2018, started my own project, a DeFi project, then worked at a crypto ETF issuer and then been a coin fund for the last three and a half years.
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Until very recently, worked with a number of really top founders across Pre-seed, seed, series A and Liquid projects, and recently left to launch my own fund, investing across a whole bunch of different segments, but really doubling down in the areas that I'm most excited about, and that new company is called Relayer Capital.
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You mentioned that Ethereum was the thing that kind of pushed you over the edge, and I had a very similar path.
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I read the Bitcoin White Paper, probably in like 2010, 2011, and I was like man, this sounds super interesting, but I didn't quite grasp the impact.
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Then I had an experience with Ethereum that really unlocked for me the paradigm shift.
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I'm curious do you recall interacting the first time with Ethereum and what was it that you did that kind of caused that shift for you?
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Yeah, so it was a couple of things.
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One, it was just the idea of self-custody self-custody but also being able to interoperate with a whole bunch of protocols and the idea of composability on one chain, and at that time there weren't a lot of DeFi protocols that you could use, so the amount of composability that was possible was pretty limited, but testing around with early iterations of DEXes.
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Another really interesting piece was the idea that you could have other sorts of assets that live on the chain, that live on this base layer, so the idea of die and other decentralized staple coins and what that could mean from a payments and remittance perspective.
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But then just the concept of an ICO and how it allowed for raising money in a very, very different way, and that's a fundamental innovation that we saw in 2017.
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That was really impactful.
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And then in 2020 and 2021, we had the rise of DeFi and NFTs and we're going to have even more verticals emerge this time around.
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But the possibility for composability, programmability, building new sorts of decentralized assets and new use cases was just really, really cool.
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And also, I've been invested.
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I had a kind of interesting childhood, but I've been investing since I was 10 years old in stocks and started trading options when I was 16.
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So I've been around markets for a long time and I always found it a little bit boring that markets were five days a week, 9.30 to 4.00 pm.
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So when I came across a market that was 24.7,.
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I'm like I was made for this.
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That's your speed, so it was really fun.
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Yeah, I feel like people like you are built different.
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It's just like because not everybody can handle that.
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I think we've had this conversation before.
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I cannot handle trading.
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It's too much time, attention and stress, so I have a lot of respect for that.
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With the 24.7.
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Crypto literally never sleeps.
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Let's break down composability and self-custy a little bit.
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So for people who maybe have never set up a wallet before and you're trying to explain why this matters, why does self-custity matter and what does it actually mean?
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How do you frame that for people?
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Self-custity ultimately means you're in control of your own financial situation, your control of the assets, and there's no other party that says you can't make this transfer, they can't seize your assets, and this is something that we're generally pretty fortunate in the United States to live in an environment where we haven't had to grapple with these questions for the most part.
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But when you look in many parts of the world, censorship, resistance and non-seizability of assets is really important, because there isn't always the same amount of trust in governments and there's institutions aren't always as unfallible as they may seem, and we've seen that recently with some of the banks going under in the past year and what we saw in the global financial crisis.
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It's really just cash in a digital context where, when you have cash in your pocket, you can do whatever you want with it and no one can take that from you, and it's really the same thing, but adopting that to the digital era.
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Yeah, I think that's a solid explanation.
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I think we have seen, especially recently, a number of cases, especially with FTX.
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There are a lot of retail customers and, frankly, professionals, like people who have been in this space for a very long time, that are very experienced on what self custody is, who had a lot of assets on FTX and when that collapse happened again seemingly infallible organization to many, like many people got that wrong, including me, like I lost money on that, you know, like I had money tied up on that and didn't get it out fast enough.
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And so I'm like right there with everybody else, admittedly, and I think it's like that for me one of my hopes that like a positive outcome of that situation is a lot more people who got educated on it, on self custody, and I think we're seeing a bunch of exchanges come out that are like now starting to try to provide the best of both worlds give you the self custody of your assets on the exchange, but also provide the same like level of user experience that you got with FTX, because it was a great product.
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That was a really big part of it and you know a lot of the people that were using FTX know how to self custody their assets.
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But the difference was the trading user experience was just generally a lot better than you could get on chain.
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So people are making that trade off where there was the trust element of securing your assets with another party for that better experience.
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And that's why I'm so excited about this cycle because we've had such an improvement and wallet user experience and minimizing the complexity of transacting on chain and then tons of upgrades and next generation protocols that improve the capabilities of what you can do on chain.
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So now the need to make those sort of trust assumptions for the better product or it's no longer really that trade off where you can get the same quality of product or nearing that level on chain.
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Yeah, what are some of the projects and products that you are excited about that solve some of these problems?
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Yeah, so one the idea of account abstraction, so being able to pay gas in any token, not necessarily needing to pay in the token of a given network, to be able to create wallets without needing to manage seed phrases and seed phrases is, you know, for folks that aren't familiar or those series of words that you have to write down that allow you to then recover access to your wallet If you lose access.
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Otherwise.
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We're seeing a lot of wallets make that process easier or not even require seed phrases, allow for social recovery, allow for biometric recovery.
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We're seeing other examples of applications even allow for logins using a password and an email and if you want access to the wallet, to the private and public keys, you can do that over time but it's not required day one.
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So you can kind of progressively decentralize.
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And we're seeing, on the application side, perpetual products make a meaningful leap forward, and that was what people used a lot for FTX, for derivatives and protocols like DYDX, like synthetics, like drift and a whole bunch of others, making the user experience a lot better there.
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And then also projects like Jupiter, which is going to be exciting to see their token go live end of this month, but it's kind of night and day comparing using Jupiter today versus trading on DeFi a couple years ago, where you can do a DCA, you can get optimally routed to exactly where you want to go and the user interface is so clean.
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It's just like people are really, really in a good place.
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Yeah, I mean the DCA feature is incredible.
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I mean just like for people what that stands for.
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It's dollar cost averaging.
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So if you have a bunch of tokens you want to buy or sell, you might just want to do it over time.
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That might be part of your strategy for cost averaging.
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Or it might be a market that doesn't have a lot of liquidity there's not a huge volume of trading and you want to sell or buy into it without doing like a big price impact.
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You can do that on Jupiter and you're maintaining custody of your assets the entire time and it's kind of set it and forget it.
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You can tell it, for example, I want to buy $100,000 worth of this token over the next seven days and I want to buy an even amount every hour, and it will just do it for you.
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The user interface is dead simple.
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If you have a wallet set up, you just connect to it and you configure it to whatever you want and it just works.
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That was the first time I had something in DeFi that that was that easy when I did that.
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Yeah, it's really awesome.
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I'm just saying it's not only for retail users that want a dollar cost average, even for more professional investors and traders for markets that aren't very liquid.
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You could set it up to say I'll buy $500 of this token and it'll execute every hour for some amount of hours or days, but you don't necessarily have to sit at your computer and click every hour to get that going.
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That's very cool.
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They had to sell tokens.
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When I've invested and gotten in early and then been trying to take some profits in a really illiquid market, I've literally sat on five different exchanges and sold tiny amounts.
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Looking at the order book manually and reading it and doing it, it is really painful.
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That was maybe two or three years ago.
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Now it's like at least in Jupiter on Solana.
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You can do it no-brainer.
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You don't even have to think.
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It takes you two seconds to set that up.
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I've talked about this before.
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I've always thought about starting my own fund.
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I don't have nearly the experience that you do, just learning from you and maybe sharing some of that knowledge with others.
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You're doing part VC, so investing early stage, and then you're also doing a liquid strategy, meaning you buy tokens that are tradable today.
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First let's talk about the VC and then I want to talk about the strategy around liquid.
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How do you think about making seed stage investments?
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What are you looking for?
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If you're a founder listening to this, this is a great thing.
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You're going to get some good intel on how to approach Austin.
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But how do you make these good investments and maybe give some examples of teams you've invested in in the past and walk us through, if you're comfortable.
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Walk us through how that matches how you think about it, the kind of returns you were able to generate when you get it right.
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That's a great question.
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There's actually more overlap than people might imagine between venture and liquid, because crypto is this one really unique asset class where you can have projects at the same level of maturity, either be still private or have a liquid token.
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Essentially, you have liquid tokens that are at the earliest stages of development and then you have things that are even more mature, that don't have a token yet live.
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The framework that I end up looking at these teams and the projects is quite similar, but when I think about the venture side first, ultimately it comes down to the team.
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The team needs to be that best in class, know what they're building, know the opportunity, know the product gaps, back and forth.
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When you're investing at the early stage, you're ultimately investing in the people and you're going to try and help them as much as you can.
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On the investor side, it's got to be folks that are really mission-driven and mission-driven over the long term to build something, because we sometimes see tokens go live within six months or a year at these really high valuations and you need someone that's intrinsically motivated and is going to want to build something over the long haul.
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Outside of that, from a product standpoint, it's really two things.
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One, that they understand the product gap or the product opportunity and are laser focused on building towards that.
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Then the other side is you need a team that ships quickly and is narrative, but also has the right sense of what limitations or guardrails needed to be put up from a risk perspective, because crypto is all about internet of value, in particular, with DeFi protocols or anything that really manages the funds of other folks.
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You can have a vulnerability If you have a hack.
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That can I mean.
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One, you lose people's money.
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But two, it could be the death of a protocol.
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You really need to make sure that things are properly audited, that things are properly documented and that you roll out in a staged and guarded way.
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One of the other pieces is, when you look at a team, do they have the right sense of how to bring a product to market?
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Because the technology and the product are only one piece, but if you don't actually get the intended user using that product, then it's all for naught Finding founders, and it doesn't only need to be one founder the founding team or the supporting team but to have that combination of technical expertise but also folks that really, really know how to communicate a vision and bring the product to market.
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I thought about this a lot.
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I think some of it is very quantifiable and you can judge it because you can look at what they've shipped in the past.
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You can look at how they've handled.
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If they've built a company before or operated in a company before, you can figure out their strategies around, go to market, for example, or how they balance shipping with security and stability and things like that.
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There's this magic with people where they have the right combination of humility and coachability, but also ambition and drive and focus and being that intrinsically motivated to just grind towards a vision.
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That part of the person is very hard to be 100% certain about.
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I just feel like when I look at the pattern recognition at least on my own, when I've made the seed stage investments there is this instinctual feeling.
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I get on top of all of that where I'm like this feels right about the person.
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I don't know if that is the best thing or not, but I do feel like at the earliest stages the people matter so much and knowing people is the most important part of all of those things, because the right people will figure out wherever they have a gap in the market the other areas that you mentioned.
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They'll solve that problem eventually.
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The average startup pivots once.
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When you're making an investment in an early stage team, you're not necessarily investing in that 100%.
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Their current idea is going to be the idea that's successful.
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You're saying that these are the group of people or this is the person that will be able to pivot appropriately and iterate to find the right market opportunity.
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And one of the things that makes that decision a lot easier, when you're determining who to invest in and not, is you know I often have a relationship with founders months or even years before I invest and you know I'm always happy to have a conversation or chat with the founder or give advice, and having those longer term relationships just and knowing the people more makes that a lot easier.
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Yeah, that makes a lot of sense to me.
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So, all right, let's talk about the liquid side.
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So I think, honestly, investing in like liquid tokens in a bear market is obvious is kind of the easiest thing you can do.
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I mean, you don't try to time the market.
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You can never time the market in any environment.
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But you can't kind of sense.
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If you've been through a couple of these cycles in crypto, you can kind of sense like, okay, you know things are down a lot right now.
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They're probably going to go, maybe they'll go further down, but at some point they'll be up a lot again, and so it's sort of like easy.
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But when things start running hard as they have in the past couple of months, and you start looking at being in another bull market and none of this is financial advice, do your own research.
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But I'm just like yeah, no financial advice.
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I'm just very curious about how do you manage risk in a bull market environment, which I guess we're in one now.
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I don't really know how to define that.
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When you look at that and there's been a lot of price appreciation you kind of look at historical movements, like history has repeated itself a lot in crypto, but that doesn't mean it always will, and so I'm just like how do you think through that, how do you help LPs through that, and just generally, how do you think through managing risk in this kind of environment?
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The way that I think about it is one to your point on bull markets and bear markets.
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This happens every cycle in crypto.
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But it happens elsewhere, like we saw in technology bubbles of the past, where when you have an industry and even like before that, like think about the railroads and how they, you know there was a speculative mania around them all that time ago.
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But things with so much potential inevitably get overheated and are valued way more than they should be in that short period of time, because people always underestimate how long things will take to be built and to reach fruition but necessarily kind of underestimate how big they can be in the very long run.
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So we see things get too expensive in the short term, but we also see things in the depths of fear, get way too cheap, and that's where we were in parts of 2022 and 2023.
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So we've had this massive recovery bitcoins maybe triple where it was at the end of 2022.
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Solana is more than 10x where it was and one of the most interesting ecosystems, so a lot of growth that's left for that ecosystem.
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But when you think about taking profits, when you think about how to allocate, it's really a decision around.
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Where do you have conviction and what are the appropriate risk buckets, and at least that's how I'm thinking about it.
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Everyone should do their own research and apply what's relevant for them.
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But the way I look at it is on the liquid side there's essentially three buckets of the names where I have the most conviction.
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This is how I adjust it from a percentage waiting perspective, where there's teams that have really interesting products that are showing traction, where I'm really confident in the team and their long-term approach.
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But maybe there's some element that's not de-risk.
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Maybe they haven't seen as much traction or don't have the dominant share in their vertical that I would like to see.
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Or maybe there's a certain element of the roadmap that I haven't seen shipped in and I want to see how that develops.
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Or maybe they've taken a little bit longer to ship than expected and that would be for me more in that lower end bucket.
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And you graduate from different protocols in different levels of buckets to more of a mid-size to a larger size bucket, as you get more conviction and as you're able to de-risk some of these elements and one of the ways that that's often easiest to manage a portfolio, especially if you have an asset that's run 5, 10, 20, 30x, which could happen in crypto, and I mean that's the exciting thing about crypto that there's these opportunities is to reevaluate.
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Well, if there's an asset that was in my lowest risk bucket but still something that I have conviction on and it's now just because of the price appreciation in my highest risk bucket, should it remain there?
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Should I diversify out of this position into some of the other names where I have more conviction?
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And using that framework has helped me think about things and be able to manage risk in a much more nuanced way, especially with big moves up and down.
00:23:05.569 --> 00:23:17.022
And then also when you have a thesis, and everything that all of the investing that I'm doing is names that I have thesis driven, that are long-term conviction driven buys.
00:23:17.022 --> 00:23:35.304
But when you have a thesis, map out what you expect to happen over time in terms of roll out of new products, advancement of the technology, protocol upgrades, traction and development, and then determine like well, it's been a few months, have they reached where I expected them to reach?
00:23:35.304 --> 00:23:37.069
Why haven't they or haven't they?
00:23:37.069 --> 00:23:41.965
And then use that framework to determine how it should be weighted as part of the overall portfolio.
00:23:42.414 --> 00:23:51.938
How do you get that intel, how do you get answers to those questions, because I think that's kind of that part, big part of the alpha for somebody like you is getting answers to the like why isn't this team shipped?
00:23:51.938 --> 00:23:56.167
And curious how you approach that gathering that information.
00:23:56.575 --> 00:24:11.021
That's one of the things that I like most about crypto, where in equities, in the stock market, you get quarterly reports and, other than an occasional press release or an announcement of some other kind, that's all the data that you get.
00:24:11.021 --> 00:24:15.217
In crypto, you get data block by block, by block by block.
00:24:15.217 --> 00:24:24.208
The data is all on chain so you can see exactly how many users, how much protocol revenue, how much dex activity whatever the relevant metric is.
00:24:24.208 --> 00:24:29.340
You can see that on an ongoing basis, in real time, what the level of usage is.
00:24:29.340 --> 00:24:32.667
And then also there's Twitter spaces.
00:24:32.667 --> 00:24:39.406
There's, you know, teams are in Discord, they're publishing regular updates and teams are very approachable.
00:24:41.070 --> 00:24:42.856
The information is all out there.
00:24:42.856 --> 00:24:48.976
It's just how do you distill and filter that information to be able to create actionable insights from them.
00:24:48.976 --> 00:24:57.962
That's one of the things where there's resources like DeFi Lama and Dune Analytics and Token Terminal and others that make it easier to use.
00:24:57.962 --> 00:25:11.441
But often the most alpha can be found just digging really deep into some of these early protocols, where maybe the data is not a standardized but it's out there, and just knowing to look for it and staying on top of things.
00:25:11.441 --> 00:25:23.598
That necessitates being on top of things seven days a week, but I think most of the people in crypto crypto is both their job and their main hobby, so it's a lot easier if it's what you love to do as well.
00:25:23.710 --> 00:25:35.099
Yeah, I think the other one that you didn't mention is just GitHub repos, because those things are open source so you can like, if there's something on the product roadmap, you can see how many commits, how active that repo is, who's contributing.
00:25:35.099 --> 00:25:47.942
Crypto really relies on community so much and it's community of both users but also contributors, and so you can kind of see like a cache is like really interesting in the sense that they've been like radically open source.
00:25:47.942 --> 00:25:51.400
I think they're probably the most open source, like radically open project.
00:25:51.400 --> 00:25:52.654
I'll give this example.
00:25:52.654 --> 00:26:02.596
I really don't think Greg would mind, but I found like a couple typos on this blog that they posted a couple days ago and I messaged Greg I was like, hey, just so you know, like not a big deal.
00:26:02.596 --> 00:26:07.119
But I found these typos and he sent me the GitHub repo and he's like hey, you mind making, making commit?
00:26:07.119 --> 00:26:14.538
I'm not a software developer, so I'd never actually made an open source commit and I got to like I found it because I'm an open source nerd.
00:26:14.538 --> 00:26:18.250
I found that like awesome, like I was able to like make the fee.
00:26:18.250 --> 00:26:23.942
It was just like literally like four words that I had to fix and I made a pull request and he pushed it up and so you can't get that.
00:26:23.942 --> 00:26:25.068
You can't get that kind of access.
00:26:25.309 --> 00:26:32.611
And then the other thing is, like good founders in this space build and engage community and that's like their lifeblood, like.
00:26:32.611 --> 00:26:52.150
Two really great examples of this are Vibhu Norbi, who's been on the show before and founder of drip, and he is just on it with his Twitter game, like engaging the community and putting out great transparent content about how everything he's thinking is like right on X or Twitter, whatever you want to call it.
00:26:52.150 --> 00:26:59.450
And then the same thing with the founders of Jupiter, like now is out on there all day like posting, and he's in his discord too, super active.
00:26:59.450 --> 00:27:00.795
I don't know how those guys do it.
00:27:00.795 --> 00:27:04.288
Like the 20 like again 24 seven.
00:27:04.288 --> 00:27:09.201
Engaging with the community is so hard for somebody like you who's like analyzing all this stuff.
00:27:09.201 --> 00:27:13.595
You can go in there and see like what is the vibe of the community, what are their plans.
00:27:13.595 --> 00:27:18.789
It's literally right there, and so you don't even have to have like a private conversation with the founders that are really good at this.
00:27:18.789 --> 00:27:20.083
They're already out there.
00:27:20.446 --> 00:27:20.710
Totally.
00:27:20.710 --> 00:27:57.989
And then also, on top of that, even as a non developer, just a community member, you have the ability to influence the direction, or at least inform the direction, of a project by voting with your tokens, participating in the DAO, helping communicate on some of these he checks for different proposals and participating in these open forums, because users provide the most valuable feedback and most of the people that own tokens of a given protocol are likely users of that protocol as well, and they're really, really powerful in helping push forward the direction of the project in ways that make the most sense.
00:27:57.989 --> 00:27:58.089
Yeah.
00:27:58.471 --> 00:28:02.470
I can't think of another industry where this happens, like Jupiter, for example.
00:28:02.470 --> 00:28:15.589
If you look at the message they put off Twitter in the last like two and a half three months, they have really involved the community, and how the token will be allocated and how it will be airdropped and what's required to even like benefit from it.
00:28:15.589 --> 00:28:16.217
That's kind of amazing.
00:28:16.217 --> 00:28:19.742
I mean, in that case it's got to be.
00:28:19.742 --> 00:28:31.489
I can only assume it's going to be like millions and millions of dollars going out to the community, to the thousands of people that have participated in it, and like you don't see Apple doing that, they're not like listening to you and me about like your strategy.
00:28:32.381 --> 00:28:41.308
But Saga is doing that If you have no but I guess not on the strategy side but if you have a Saga phone, you're being rewarded as a user, and I mean that's a whole other topic.
00:28:41.308 --> 00:28:43.505
Maybe we can spend time here.
00:28:43.525 --> 00:28:44.250
Yeah, let's do it, talk about it.
00:28:44.250 --> 00:28:47.190
I think that's fascinating, like that's net new to me.
00:28:47.190 --> 00:28:50.789
I don't think anybody even thought that was going to happen when that was being built.
00:28:50.789 --> 00:28:51.684
It's kind of like NFTs.
00:28:51.684 --> 00:28:58.569
So you saw them sort of around and then all of a sudden this use case exploded around them and you didn't really see it.
00:28:58.569 --> 00:29:02.230
I didn't see it for what it was when I first saw like an NFT company.
00:29:02.230 --> 00:29:04.269
I would love to hear your thoughts on it, yeah.
00:29:05.413 --> 00:29:21.969
I mean, incentive design is just so, so unique in crypto, where you can attract early users to give feedback and get the flywheel going on a given product by incentivizing them with the token to be able to then govern the network.
00:29:21.969 --> 00:29:49.958
And there's so many unique ways that you can approach that incentive design, like what Gito did, for example, with, even before they released the token, having a point system but then driving user behavior in the way that allowed them to grow in the most measured way, where, for example, you got a certain amount of points if you liquid state soul but you got to multiply if you participated in DeFi or through a particular protocol, maybe even a larger multiplier.
00:29:49.958 --> 00:30:02.009
Or what Jupiter is doing, where rewarding those early users and giving them an airdrop of tokens for being early supporters but also continuing to give tokens to later supporters.
00:30:02.009 --> 00:30:05.749
And the SAG-O phone is another great example.
00:30:05.749 --> 00:30:08.069
I have my SAG-O phone here.
00:30:08.069 --> 00:30:09.566
Yeah, I got mine.
00:30:09.586 --> 00:30:10.942
Yeah, I always have it with me.
00:30:10.942 --> 00:30:12.247
I mean, it's an awesome phone.
00:30:12.247 --> 00:30:15.930
It's like iPhone quality, super high quality.
00:30:16.432 --> 00:30:33.777
It's a top level Android phone and you have a mobile experience that's optimized for Web 3 in terms of how the seed phrase is secured or how the seed is secured and also being able to sign transactions with your fingerprint and with biometrics.
00:30:33.777 --> 00:30:40.703
And we're seeing the same sort of thing around incentive design, but not even from the SAG-O phone itself.
00:30:40.703 --> 00:31:01.378
When you bought the SAG-O, you just have a really great Web 3 phone, but then you see other projects like Bonk and Acros and SAG-O monkeys, airdrop tokens or NFTs to those users because they're such an engaged group of 20,000 OG sole users that they know they are going to be really excited to engage then with their protocol.
00:31:01.769 --> 00:31:48.079
So I think it's like 1500 bucks already that SAG-O phone holders the big paradigm shift there for people listening should be like you know, you have the Apple and Google Play Store that take 30% from all the Apple, from all the developers building applications, and I would argue that a lot of the utility for my phone comes from those developers right, the people building apps that I then use, and SAG-O doesn't care about taking fees from developers or consumers and developers are able to instead come up with now, really unique token incentives to acquire users, and that's what this airdrop thing is right, like I totally downloaded the Bonk app to go claim my Bonk and I was like that's a story for another day.
00:31:48.411 --> 00:31:51.038
Yeah, bonk is a very very interesting story.
00:31:51.849 --> 00:31:55.358
I'll be interested to see, like in five years, how that's going, you know.
00:31:55.358 --> 00:32:07.343
But it has the potential to totally disintermediate the app store and I think that's the real interesting thing about this phone and the security features that are built in.
00:32:07.343 --> 00:32:08.391
It's all.
00:32:08.391 --> 00:32:08.932
I'm pretty sure.
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