Is This The Next Bitcoin? (Uncut) 03-25-2025

the biggest innovation in you know web 3 gaming isn’t the fact that you can I mean it’s ownership yes but it’s actually the fact that it’s enabled millions of gamers in places like the Philippines to have a bank account or essentially a crypto wallet for the very first time to be able to then have something of value and then suddenly be interested in investing or in money that they really didn’t understand before but through gaming they were able to i’m pleased to be joined by Yatsu co-founder and chairman of Animoka Brands a

globally recognized company specializing in blockchain gaming NFTTS digital property rights tokenization Hong Kong based company uh we’re going to be talking about crypto trends and uh Animoka’s latest uh developments and investments and the opportunities that Yat sees in the space welcome to the show Yat honor hosting you thank you for joining us thank you for having me it’s a great pleasure to be here uh a lot of our audience members would probably recognize a lot of the uh um products and um and NFTTS that perhaps your

company has helped establish but we’ll get to that later let’s start by talking about who is Yatsu what is Animoka Brands let’s introduce your work to our audience first yeah so happy to do so and Brands is you know Hong Kong headquartered but we’re really a globally sort of sort of recognized company we’re actually an Australian corporation funnily enough uh for those who who may not actually know the background uh we were once a public company uh that was listed on the Australian stock exchange uh we as a

business have over 540 portfolio investments some people think of us as an investment company we do have a large portfolio but we really have sort of um three pillars of business one of them is what we call a digital asset advisory business that’s focused heavily on launching projects and and products so you know whether it’s things like you know you’ve heard of in our portfolio companies like you know yoga labs with board apes or the sandbox or open campus or you know basically pixels or axi infinity these are all or even openc

magic eden these are all companies that we were either investors or involved in we help sort of launch um uh the projects and products in many cases and then the other one is the operating business where we’re actually operating our own products such as the mochiverse open campus or in this case of course was the sandbox and of course our investor ment management investment portfolio which interesting enough primarily comes out of our own balance sheet so we don’t have a classic fund in the way that you think of it like say

like an A16Z or something uh we’re investing primarily out of our balance sheet and to give you kind of a scale of the business uh last year uh and this is publicly available info as a public corporation we do have to disclose these financials you know we had uh over $314 million in sort of um bookings/revenues and about a $95 million U or $97 million EBIDA so you know despite the fact that last year was a little bit of a choppy year and between what we describe as both you know on and off balance sheet assets um

over over sort of um 44 billion worth of basic assets primarily in tokens uh cash as in this case stable coins and so forth um so so as a business uh I would say we’re sometimes viewed as a little bit of a as an index of basically what’s happening in web 3 outside of Bitcoin and exchanges uh although of course we’re much wider than that you know we have investments in AI we obviously do stuff with RWA most recently we announced a sort of joint venture between Standard Chartered ourselves and Hong Kong Telecom on a stable coin a

Hong Kong dollar stable coin uh and what’s really interesting here is that this is actually a licensed stable coin by the HKMA uh which is the Hong Kong Monitor Authority which is the equivalent of our basically central banker if you if you will right the central bank and that basically makes it the very first stable coin in the world to be a central bank licensed stable coin and other stable coins typically have sort of you know payments and sort of maybe um custody licenses and so on so it’s a bit sort of a a mixture of

things although the US will quickly catch up to that as well uh but either way it’s uh it’s uh that’s the business um we’re over a thousand people worldwide uh with offices all over uh and to some extent you know and and to the extent that uh you have a US audience we may not be as well known in the US as we are in Asia or or perhaps the Middle East and that’s primarily because you know over the last couple of years uh because of the sort of climate in the US we’ve been staying away because it wasn’t very sort of sort of

friendly towards crypto which has completely changed uh obviously over the last several months so we are looking to sort of create more of a presence in the US um invest there and grow basically um our footprint so that’s kind of sort of a little bit of a highlight of Animoka brands and our mission is uh digital property rights really i mean everything we’re building is towards sort of establishing a world and we’re digital property rights isn’t just a thing it becomes essentially the way in which we

can access the very networks that we help participate in the theory is in our mind uh the thesis is that the most valuable thing in the world today is essentially are you know the network effects that we get to own and store in these sort of let’s call it digital assets represented through tokenization so the simple example would be you know there is a network effect embedded in the social networks we use whether this is Instagram or Facebook or Tik Tok or whatever you want to call it uh and right now in the classic sort of um sort

of investment structure we only really get to participate it not in owning the network effect but in owning let’s say equity in a company that can derive some value from the ownership of these network effects kind of like the rent that they would receive right you know which is usually in the form of advertising or service fees right that’s basically the way that we think of it traditionally but in web 3 actually the uh user of a network has the ability to actually own a piece of that network right so for instance if you own

Ethereum or if you own Bitcoin you’re not actually owning an instrument sort of a yield bearing instrument that gives you a certain kind of profit and you get a P multiple that’s just not how it works you’re actually owning a piece of a network that grows through network participation and as that network grows so do the network effects so does that val so does the value right and we believe that everything in every business is around network effects but we haven’t really been able to represent the value of these network effects until

tokenization whether this is things like RWAs with sort of you know um real world assets uh or even things like stable coins or whether this is in games that are launching a token that want to share and grow these network effects that they have to a wider audience where the participation isn’t purely on do I would like to play the game but can I sort of access and avail myself to the benefits of the network effects within the game right so that’s kind of how we how we think of tokenization and we think the

whole world uh will will will sort of leverage that because it is the feel really the only pathway in which we can sort of provide essentially sort of property rights to everyone uh our own experience as a public company we have about 3,000 shareholders and it’s a heck of a nightmare to be sending out prospectuses and updates to companies around you know making shareholder votes on critical matters right we’re all common shares so basically that means everyone has an equal vote but we can really you know the most we could ever

do is probably have votes on stuff every two months and that’s because of the sort of legacy systems in place but through tokenization like with Dows uh the decentralized autonomous organizations that essentially run on chain you could actually I mean right now we have Dows that operate on weekly basis or maybe um sort of bi-weekly basis but you could if you wanted to even have a sort of daily participation um if you had an audience uh that was willing to participate that way the point being is that you could have a

million or a billion token holders of a network that can participate in that and then have governance and ownership but you can’t have a billion shareholders that simply doesn’t work in the current construct so in the future where we want to give ownership in um sort of the shared participation of the networks that we construct what’s the most efficient way of doing that and we think that’s tokenization you know um from a corporate construct standpoint you look at companies like Uber right you know

obviously successful and creating revenues and all that stuff but all the people who are driving Uber cars actually don’t have a share in the Uber network and so when Uber goes and starts to sort of make all these drivers redundant which they’ve basically announced by creating sort of you know self-driving cars that will drive people around all the people who helped build Uber which are basically the taxi drivers car drivers and so forth essentially get put to the side and and and shafted as opposed to having been

contributed and almost like receiving a quasi sort of ESO this almost like imagine if they all received some kind of you know sort of stock option in Uber for having been an Uber driver for I don’t know x number of years then you know they would be taken care of but also they would have part fair participation in the very networks that they helped create to essentially uh sort of uh then partake in better value and I think it creates a much more healthier ecosystem and a much more sort of a better framework for you know

capitalism which we describe as a kind of stakeholder capitalism or all participants have a stake versus the kind of shareholder capitalism that we see today where only a very small number get to benefit and everyone else gets put to the side and you know I can give you countless examples of companies whether this is Apple or Microsoft or Google where we have all these same kind of problems but so wealth gets concentrated to a small number of people when the ones who add value to these networks actually don’t receive anything

and in tokenization uh you can actually distribute that far better uh but not do so in a socialist manner which is essentially the sort of let’s call it redistribution of that value but in a capitalist banner because everyone has a form of property rights over that network through tokenization but that’s a probably a long-winded way to explain sort of our thesis and and the company as a Before we continue with the video let me tell you about a very serious problem that’s affecting a lot of people

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leave a link to Animoka Brands uh in the description down below so you can learn more but that was a very good and thorough interview thank you very much yeah I want to come back to some of the investments that you made it says in your uh perspectives well actually not your perspectives but your financial statements in Q4 2024 you’ve invested in 12 new projects we’ll talk about some of the themes about these projects and whether or not you’re still you know bullish in some of these ideas but uh

let’s go back i want to come back to the stable coins that you mentioned with the Hong Kong Monetary Authority um it sounds a little bit like a CBDC maybe it’s not can you just explain in more detail what that is it’s not a CBDC no just because it’s uh just because there’s a license from the HKMA doesn’t mean that it’s a CBDC because you know it’s it’s it’s uh it’s still as a stable coin it’s backed against in this case the Hong Kong dollar um the difference here is that the issuer is a bank which

is standard chartered bank and for those who you know may may not know because u maybe standard charter isn’t known so much as a consumer bank in the US you know it’s one of the largest banks in the world um quite forward in crypto and particularly well known here in this part of the world it is one of the note issuers in Hong Kong right so in Hong Kong you have HSBC you have bank of China and you have standard charter basically issuing notes so when you get a sort of Hong Kong dollar on it it says

issued by which bank in this case it will be Standard Chartered Bank so you why is it a big deal well outside of it being essentially licensed officially licensed which you know we think that framework will start to come in the US as well hong Kong has kind of sort of sort of leapt ahead a little bit here which is which is great to see is that it also gives consumer confidence because consumer confidence from a web 3 adoption standpoint is a little bit like even though you know we know we we know

that Tether has very very very sort of um sort of um large reserves and you know credible as an organization and we obviously know circle and so on but but we’re in the industry right if you’re outside of the industry and you say hey you should be taking a sort of token of or currency that is backed on you know in this case US dollars you need to trust that organization and within crypto they have the trust but outside of crypto it’s very hard for people to understand how does a private corporation have that right so if a bank

is the issue of that and that is licensed by essentially a government entity it brings more confidence and brings a lot more people into the space you know we have to bear in mind that the majority of people that are in crypto aren’t users of it just yet they’re actually um sort of holding it for investment purposes like I want to hold Bitcoin as maybe as a hedge or I want to own tokens and that’s why most of the activity happens inside exchanges but really what we’re about is the onchain activity essentially taking your

sort of crypto and your tokens outside of the exchanges and start using them and things like games and activities and transactions now sort of some examples you know why is a stable coin so important well if you talk about crossber payments you know with swift you have all these transaction fees with a token you basically just send it over in one instant right uh And in these economies over here particularly in Southeast Asia you know there’s so many people that are transferring value back and forth from places like the

Philippines or Indonesia or India or so on um which essentially gets sort of um you know with with people by the way on the other end who don’t necessarily have even even have a bank account like in the Philippines right and that sort of you know remittance crossber payment essentially gets has really high charges which essentially with crypto can be reduced to near nothing which basically benefits everyone’s idea ecosystem except of course the middleman but I mean that’s basically the whole point

about advancing technologies is that you basically share value more specifically to the people who benefit from it than necessarily just from the middlemen who offer a valuable service but uh once they start to concentrate that power start to become too extractive which is kind of what we’re seeing in many places in the world most of the projects that you’ve invested in Q4 um are they still uh relevant for you today in other words have you shifted your investment priorities given recent market trends

especially with regards to recent market downturns um in not just cryptos but also risk assets like equities US equities in particular um and of course Bitcoin as you know and other cryptos follow the NASDAQ quite closely bitcoin as as we’re talking today is down to below $80,000 um which is a significant drop since Q4 2024 so uh general question is yeah new general question yeah yeah so you know we’re long-term investors so we’re not particularly sort of bothered by the durations of sort of short-term markets

like if you were sort of you know if we’re trading crypto um on a on a sort of sort of daily basis that’s a different story of course where we have to start to sort of um you know we use essentially a crypto reserve and assets as as essentially collateral for activities but we’re not actually sort of you know we’re not you know we’re not day traders or anything like this we do have long-term views about stuff So we’re not bothered about the fact that Bitcoin is down to sort of you know um down from its all-time highs u certainly

you know because when you look at it from the the lens of say exactly a year and a half ago or even two years ago right you know just when you when you zoom out of the space you can actually see that broadly speaking the space has sort of increased over time it’s become much more stable in a relative sense uh and has also expanded both in consumer participation institutional adoption uh in user growth and of course in in in TVL and all these activities and all these sort of um signals that show that

the market has overall increased right uh now the thematics that we’re heavily focused on you know there’s obviously AI AI agents you know we really like education um deepen which is decentralized infrastructure effectively right basically for decentralized compute uh and of course uh sort of gaming and what people used to describe as the metaverse which is still relevant And although we call it the open metverse you know we think gaming is still a big thematic of the 540 portfolio investments that we’ve done

over 160 of them are actually in gaming right and we also launch a whole bunch of these titles ourselves um and I think you know the reason we we did those investments is because we very much believe in the general uh sort of narrative of crypto adoption and gamers broadly speaking particularly in Asia uh sort of already view their digital time inside games as valuable right if you ask your children what do you want for Christmas they’re not they’re going to want something virtual they want to have

items inside their game right and they show them off inside of their friends their their digital status comes in the form of these gaming entertainment and While there’s obviously a world of a difference between tokens and virtual currency in a game uh they’re actually from our perspective virtual currency in a game is the training ground for essentially it’s under people’s understanding around tokenization and digital value right so you’ve had essentially over 3 billion people sort of trained around essentially what

digital value is in a much more sort of let’s call it virtual feeling kind of way u because you know a lot of people talk about it in the form of data and the network effects derived from data like for instance when you share a photo on Instagram you’re actually delivering value to the platform but do you get paid for it no you don’t that’s because we don’t and that’s because we don’t understand what that means but the reality is that every person who’s sharing photos and content on Instagram is actually working for free for

Instagram right that’s actually what’s happening right and then they derive the value and they make money in advertising they give you nothing uh and you can have some fun right it’s it’s almost like a it’s almost like um sort of um um a modern a modern form of sort of um sort of slavery I would say it’s just a digital form of slavery so you ought to get paid for that which you can do in crypto but you can’t really do that properly in in web 3 and so gaming we think is the natural rails for that but

gaming has been depressed but it’s not been depressed and this is the thing if you look about crypto crypto uh trends to us is very much uh almost like a a sort of um prediction market as to where um trends not just go but where trends are right so when people talk about meme coins you know um they are a joke and they are often sort of nonsense but they also show the trends as to what where people’s mind share is whether this is a 5 minute 15 minute 1 month or years long trend uh they essentially um sort of the

mimemetic nature of it shows that there is something that people are paying attention to and caring about just in a financial manner right so when the macro markets are down then obviously bitcoin goes down as well because they’re now they’re sort of much more closely correlated uh but when the thematic becomes really really big then actually crypto sort of indicates that early on and we think gaming is going to be a really big year this year uh primarily because of um Nintendo Switch 2 and GTA

6 So for most people who aren’t really active in the gaming industry one of the biggest games in the industry uh will be launching this year after heavy delays which is Grand Theft Auto’s GTA 6 due in September could be delayed but generally this year uh and the gaming market broadly has had seen a slump postco so gaming has been a little bit of a victim of sort of co success and co let’s call it stagnation uh at least not decline i mean it didn’t go the way of Zoom and Pelaton right which is totally the

opposite direction but it did go towards uh flat so since co gaming industry has been flat console sales have not accelerated but GTA 6 is going to push two particular boundaries in the gaming space the first one is it’s going to drive people to buy more consoles because if you want to play GTA 6 you’re going to have to buy the latest hardware to buy the latest hardware you’re going to have to go buy you know so that would be the trigger it’s kind of like oh I want to play this game i need to have

this console for that’s kind of one trigger and the second one which I think is um very very important for the industry and this affects web 2 and web 3 uh is price points so I don’t know whether you have bought any games recently uh but the price point of buying a game today is roughly the same as it was 5 6 7 8 years ago and we kind of know what happened to the money supply over that period of time so in real money terms gaming revenue even though it’s been $200 billion plus has actually uh on the net basis declined in

value overall so while salaries and costs increase on making games AI aside right actually the revenue they’re generating from the content have largely stayed the same because u you know gamers have been unwilling to pay more per game and the industry has not sort of found a new price point just just on that note are you are you surprised gaming never followed like a Netflix model where you subscribe pay 10 bucks a month and you get infinite number of games not infinite but you know a catalog of games cuz right now on Steam

for example you still have to pay per game i’m just using that as an example correct uh that has to do with the distribution models uh and the reason and actually I think the gaming model is much healthier and uh and the reason why I think the gaming model is healthier is because it’s not centralized by Netflix or by Amazon Prime so um so who from a studio standpoint who is your customer so in gaming the consumer is your customer and Apple and Steam even though they take a large cut 30% they’re

basically the distribution vector for you to reach your customers right the customer relationship still is one where hey I’m playing this game I have a relationship with that studio in Netflix actually the relationship is uh both with the studio and with the consumer is ultimately Netflix is not just the mediator is the owner so Netflix is the one that’s funding the games oh so sorry in this case funding the the the TV series and the movies or buying them for distribution inside their platform and

the customers are Netflix’s customers uh effectively um and and so it’s a very different it’s a very different model I would say uh and I prefer the gaming model because it actually creates much more sort of it’s more decentralized it’s more distributed in fact it’s it creates a more sort of sort of market environment as opposed to where you have basically a couple of monopolies that are basically competing at that level i mean I think music for instance with Spotify is a great example of how the

music industry from an artist and creator perspective got somewhat wrecked because essentially it became so centralized by a single entity versus if musicians could actually decide their price points individually to the re sort of range of customers uh you might have a much more vibrant sort of creative economy as opposed to one that was so centralized at least that’s that’s the that’s um how we think of it and that’s what we think web 3 can can really help solve um the other thing of course is

the the model in and of itself you know um movies and and and and sort of TV series are typically one-time consumption events and that’s what gaming used to be right you buy a game and some of the games still do that right they’re episodic in nature you basically uh sort of consume the content once you’re done you’re done right is that experience worth 50 bucks 20 bucks part of a $19 monthly subscription doesn’t matter right you’re just going through that but uh open worlds in gaming um is really players creating the

content themselves for instance when you’re playing something like Fortnite or Roblox it may seem that it’s a game environment for the outsider but when you’re inside the game what is the entertainment the fact that you’re competing with another player that’s the entertainment right the fact that I’m actually challenging myself against you know thousands of other players or millions of other players to be at the top of the leaderboard that’s the entertainment the game itself provides the mechanic and the rules around it but

I’m not there because I just want to enjoy the game i’m there for social reasons and for and and for the fact that it’s it’s basically like a social network do you think traditional gaming companies will eventually adopt blockchain and paytoplay models yeah so um just to be clear um pay-to-play models has been always prevalent inside gaming anyway uh whether it’s even in freeto play in the sense that if you pay money particularly in Asian game companies um you know and which is why also they’re much more sort of open to

blockchain than many of their western uh sort of counterparts is that if you you know they’re more than willing to sort of pay money for a better or upgraded experience as it were right it’s kind of how capitalism works in real life so so so that’s actually something that uh people are much more comfortable whereas in the west um a lot of the game studios in particular a subset of their vocal customers and also the people designing these games have a different construction around sort of um how the

game should be i I sometimes sort of uh make this sort of um slightly sort of cheeky point but I do think it’s somewhat true is that many of the game developers and game designers in the west actually are very socialist leaning versus the game designers in the east are actually much more uh capitalistleaning um and and so when you talk to a western game designer they’re much more focused around uh their perspective of let’s call it fairness and equity right and so their perspective is much more driven around

well is this fair for this play or this type of structure and you know I should pay you know it’s a it’s a different mindset and so that it’s not to say that you know one is right versus the other it just attracts a certain type of audience that’s out there and we can see this split in essentially the politics of the world as well which is that you know um one of the reasons why in the west a lot of gamers didn’t like NFTs and crypto inside the game is because they didn’t like capitalism they didn’t

like the fact you know capitalism was bad in the real world to them or at least what they think of and therefore introducing digital capitalism inside their games uh would feel like like a betrayal of why they’re actually playing it what about the other way around like the gamify play to earn model uh that was popular a couple years ago and then after the bare market a lot of that went away actually yet as you know um but when I play let’s say I don’t know a major western mainstream game World of

Warcraft or Starcraft or you know Call of Duty or any of the very popular games I don’t earn any tokens if I you know beat a quest right why is that so first of all uh you are earning something when you beat a quest you’re receiving gold you’re not receiving crypto game and What can you buy in that gold or that experience that you’re getting you So what is experience inside a game it’s status right i level up hey you’re you’re level 50 i’m level 10 ooh level 50 i mean you like it’s it’s obviously it’s obviously status how do I

get that level by spending money how do I earn that money by basically creating these quests and grinding the game so that I’m able to sort of upgrade and have these items and so you know um we spend a hundred billion dollars a year in gaming on virtual goods that we don’t own purely for status reasons right you buy a skin on Fortnite or you buy an item in another game that doesn’t give you any sort of additional benefits other than to look good right uh and to sort of denote that you’ve basically

achieved something how is that different from a Birkin bag or Rolex watch or Lamborghini right depending on sort of which lens you take it out they’re basically virtual status goods the only difference is that they’re captive meaning that now that I own this item um I can only use it inside the game so I don’t really own it i’m actually renting it versus with crypto the real benefit of blockchain isn’t play to earn that’s one element of of it it’s the fact that you now have ownership and how does that

expand well if you have ownership you know what most people focus on is oh I can trade and sell it sure that’s one aspect of it but ownership is also your reputation so you know I used to be play you know I used to play World of Warcraft but I actually one of the games I used to play a lot cuz you know I’m a little older was Ultima Online and Ultimate Online was one of the OG MMO games of that time but I don’t have any of that status I used to um sort of enjoy and generate during that time because the game shut down i don’t own

it whereas if I own them as NFTts I could transfer that now a few things happened imagine if I had ownership of these assets that I either purchased or used which shows that I have a connection to it now I can target you hey you used to play Ultima online i can give you you know an upgrade or a benefit or an airdrop or value as a customer acquisition cost to go somewhere else the example I often give is imagine if Fortnite skins were NFTTS the real value isn’t that you can trade them necessarily the real value is that

another company can now say “Oh let me take those skins and make another game that attracts a Fortnite customer to play it.” So you could open up something like Fortnite Fashion Week and every person who owns a Fortnite um skin can now join that game uh and of course they get customer acquisition but there’s value derived from this and utility from these assets and the entire ecosystem grows and you essentially create an economy right that’s what happens when you have property rights of any form and

this is just being digital okay so tell us about the future of web 3 gaming this trend uh what the future of gaming overall is going to look like and bringing it back to investors um some of the projects or types of projects or uh uh cryptos that could benefit from this trend right so there’s a couple things that we’re heavily focused on um the big thing and this goes beyond gaming but you know I’ll touch on gaming as in the context of that is digital reputation so we think digital reputation is a really

really big deal um we already have that right whether this is in the forms of sort of status inside a game or whether this is the number of likes you have on Instagram or the followers you have on X right these are actually forms of digital reputation but they’re not portable right so with uh you know one of the projects that we’re we’re heavily backing is is Mochaverse u you know and and the mocha token and moverse is around digital reputation uh we’re essentially through our portfolio and our network of companies we’re basically

testing reputation value across essentially all of um sort of the users that are using it and this then goes into the the user then receives benefits in the form of these airdrops now just to give context for your audience in the last uh four years somewhere between 37 to4 billion worth of value was distributed in airdrops to users now the cynic might say this this is just free funny virtual sort of you know sort of magic internet money that you just gave everyone i mean that’s one way to think

of it right but actually airdrops is really just marketing and advertising what what what they did was is that they essentially shared a value but they instead of going to paying Apple and Facebook and Google this value they paid it directly to the end user to provide value into the network whether they played the game used the interaction created service created TV whatever it is that they helped build these network effects they received a share in that value in the form of these airdrops right and so you want to be able to

distribute that value to the people who have a good reputation it’s no different than targeted advertising in targeted advertising you want to reach the customer that you know will buy something right or that will add value to the game or the product whatever you’re selling to but how do I do that so in web two you try to create these target mechanisms to say okay the user who was you know likes this car or this person who lives in this country or in this city has a propensity of maybe buying this product so I target that

that’s kind of a classic old form I think of advertising and and frankly the arbitrage of this is what the advertising platforms have sort of really really sort of benefited from greatly in a rather vast manner but now we can actually go more specific with digital reputation so sort of like a a gaming ID is one way but essentially with Mocha ID you can help build up this digital reputation and there’s a framework around that that that means these users become arguably the most valuable users because you can actually

measure their reputation in certain activities and then reward them directly uh going there right uh but generally gaming trends as a whole many of the games that we’ve seen develop over the last um over the last uh sort of three or four years are now coming out so a lot of people were critical of web 3 games although even Axi Infinity is actually doing quite well it’s just no longer it’s no longer highlighted the way that it used to because the hype isn’t there but the company is doing quite well i mean the Axi token is still

a you know a billion dollar token ronin which is essentially their chain that they expanded is a multi-billion dollar token that’s basically um helped build network effects of other games to partake in in in that in that ecosystem the other one that I would say that’s also important to for the growth of web3 gaming is TON so you know again maybe the US audience isn’t familiar as much because they don’t use Telegram but Telegram has close to a billion users right so so for those of you not using

WhatsApp right uh Telegram essentially is really um you know uh the the largest other messenger that’s out there uh and they’ve opened up essentially their uh sort of infrastructure uh through ton which is basically their blockchain where people have started launching games on them uh obtaining hundreds of millions of users from a distribution standpoint uh and that’s driving that narrative as well so again for game developers and game companies you know don’t just focus on steam and Apple which are charging you 30% you can also

look at things like telegram and ton and just for disclosure we’re of course also investors uh in ton and then of course in Asia we also have kaya which is basically uh the blockchain merger of uh sort of the cacao blockchain which is Clayton and Line again two very dominant messengers in Korea and Japan that have come together to form this right so you’re seeing these alliances come together and this is where blockchain is interesting because what you do when you open up essentially your blockchain uh

layer for your infrastructure which people typically describe as a kind of app chain you’re actually creating an open API framework for people to build on top of it uh but in this case uh it’s just much more composable and free are you uh how are you approaching the um emergence of AI trends in gaming on the one hand my first thought is okay AI integrated into gaming we’re going to get more advanced NPCs non-player characters on the other hand perhaps AI systems could develop their own games right and then we have a very

interesting question as to why we are investing in gaming companies at all if AI can just make their own games anyway how are you approaching this trend okay so multiple questions so one um so we’re very very big on AI as I mentioned earlier you know we have um not only have we made a lot of investments we’ve reduced our cost basically implementing AI for production of content and games that’s an easy one like I think everyone’s kind of doing versions of that right so so that’s one uh we’re particularly excited about sort of the

integration of real AI inside basically NPCs so NPCs for those who you know familiar is non-player characters and really we think the way in which most people engage and interact with gaming today right in terms of AI gaming uh actually that’s probably the largest form of interaction it’s not open AI um it’s actually an NPC it’s just a very dumb AI and or why why is it such a dumb AI because the economics don’t work in running a a reasonable LLM inside inside a gaming um a gaming system because it

costs you know if it’s open if it’s something as large as as as as ChatgT it’s it’s going to run you something like $20 per user if it’s going to be something that you can optimize with Deepseek it might run you$1 or $2 a user but that’s still very very expensive right given the fact that in a gaming industry you have typically a 1.5 to up to 3% conversion rate right which means that the economics of a game is carried by a singledigit percentage and so the vast majority are basically just um are

just basically playing for free they’re part of the entertainment but are they worth you know several dollars or in some cases tens of dollars a month on a free basis probably not right and so the economics hasn’t worked but as the AI costs keep coming down it becomes much more easier to sort of create very high functioning um sort of LLMs without that cost infrastructure so that’s kind of one thing and we’re going to get there and we are investing in this area so we believe that’s going to happen it’s just

it just hasn’t happened yet for that reason right cost has been sort of the big distractor um but the engagement and the connection that happens once you have that is um you know for those games that out there and again I would say GTA 6 will be an interesting indicator for that is going to be explosive um because the other area of course is that you can expect um so why we excited about the tokens that come is that you can feed essentially the AI through tokens right so that means that if you want to engage

kind of just like in real life if you want to engage with someone you know in a in a shop well you have to commercial transaction right the shopkeeper is not going to talk to you unless you’re buying some bread from him or something right there’s a commercial transaction that takes place and you can now basically create essentially these side quests through crypto as a way to create sustainable models around that so that’s kind of one one one one interesting example the other thing of course is

that because of blockchain and AI generally these sort of AI agents um AI agents have for the first time true power so what’s the difference between a blockchain layer giving you tokens or an AI agent giving you tokens actually none right not really uh much of a difference so what will happen and what’s already happening is that people are working for AI agents by giving them data or doing stuff because they’re giving them a token the token may or may uh not have market value because it may not have

liquidity but they’re now able to generate an asset or an item of some sort that they can give to you that may or may not have value this is this is novel right we I think most people in web 2 are thinking of AI as a tool they’re not necessarily thinking of an AI that has true agency because they never really have true power but when an AI agent has the ability to essentially trade and generate value in the form of crypto that is power right so so there are some very interesting advancements and developments there that are

happening in terms of AI making games in and of itself why should you invest in game companies i mean I think I think of it uh less around sort of um investing in sort of the studio the way that we used to i think we still invest in studios or in game companies to make projects because at the end of the day you’re serving a human purpose right it’s for the delight of a human experience right i mean maybe we’ll get to a point where AI agents are our customers but we’re not quite there yet right and so you you you need company

you know individual companies creators that can help focus on that and the AI tools will help them accelerate that what it means though is that with a smaller team you can do a lot more and so I would argue that actually if you find the right formula around it actually becomes a much bigger uh sort of investment return because you can basically do much more because the one thing that remains scarce regardless of the fact that AI creates certain form of content production abundance is sort of you know basically sort of a creative

genius is still still scarce right and I think is probably um uh you know perhaps the most um the most scarce resource um in the world interesting let’s talk about um the uh the emergence or I guess the trend of the metaverse uh something that again was popular a couple years ago is that still a theme that you’re watching for is that or is that something just the uh mag seven stocks you know Meta Google Microsoft are are exclusively developing and you’re not looking into that no no we’re definitely

looking at that but I would say that the difference is how we define the metaverse versus what um sort of meta defines a metaverse and I think one of the reasons why you know I gave a TED talk back in 2013 at the height of the bare market and that market was way way worse than what we we’re seeing today right uh and uh a lot of people there uh were they conflated the metaverse with Meta because when Facebook renamed themselves to Meta they actually captured that mind share so when people think metaverse they think they think of

Facebook/ Meta today right uh and and that I sort of um sort of heard essentially the definition of it because what we describe as the open metaverse is a framework around own digital property rights and everything around it we think of goggles sort of VR goggles spatial computing are interfaces into the metaverse we don’t think of it as um the metaverse in and of itself right you know and to have sort of uh real meaning in the metaverse we need to have ownership of that and that’s basically what blockchain enables uh and the you

know in a number of countries around the world u you know we already spend more than our waking hours online you know um I think the average is around 7 hours a day but in some countries is 10 to 11 12 hours a day right meaning that we’re already essentially um spending more time online than we’re spending time physical as it were um but who owns that time right and essentially that’s basically what we what we talk about the open metaverse uh but I think we do have a terminology issue which is that when

people talk about the metaverse um it means a thousand things to to a thousand different people and so it’s been hard to sort of create sort of the uh so so do we still believe in the metaverse absolutely do we think it’s going to be big thing very much so but it’s going to take um it may find it may have to find a new term for it to be really sort of uh sort of distinct uh from it being separated from things like Facebook Meta which is really is only an aspect of the metaverse from our perspective rather

than the metaverse in and of itself closing thoughts um if we were to revisit this conversation in let’s say 5 years what do you think may have changed with your priorities well so first of all um five years is a long time out so if you just look at the last five years oh my goodness well but generally speaking you know um we’re big believers in essentially uh digital property rights and assets through tokenization so that’s basically uh an area that we are uh continue to focus on and we think hopefully you know

our asset base which is today about 4 billion uh sort of uh plus will increase over time so that’s obviously what we’re hoping to achieve um but I would say as a business and obviously we remain influential in the space and so forth uh you know I think of web 3 very much like the early days of the internet it’s kind of like um sort of the internet back in 2000 2001 2002 um and if you can play it that way um and sort of take opportunity sort of take advantage of what’s happening in the space then you know 5

years down the road you know we could basically hopefully have um um the kind of impact but make it better than than the way that the internet sort of developed um as we see today uh we think a lot more people are going to be I think most of the world will be tokenized in one form the or the other um you know RWA’s extending beyond stable coins i mean we didn’t get get into it but you know um you know um uh you know like the tokenization of of a stratavaris violin or the tokenization of real estate or the tokenization of

all sorts of other assets because it become gets more liquidity you can sort of share the network effects more broadly and it opens up more specifically just just on that note of value this is uh I don’t mean to interrupt you interrupt you but just add to what you say Black Rockck’s $10 trillion tokenization vision you’ve probably read this already uh what does this mean for not just investors but for the average person what does it I mean how does the tokenization of real world assets to this scale that is

unprecedented affect the average person the average person has the ability to now participate and invest in areas that they couldn’t do before um that’s kind of the the macro way that we think of it so just think about um what percentage of the world is actually financial literate in the west never mind talking about places like uh that are so-called underdeveloped right it’s actually very very small right I mean how many people still you know um sort of regularly um trade stocks or make investments still a

very small number and so we have this conflict in the world where we’re sort of divided between sort of really a capitalist society uh where capital value has been growing much more substantially than labor value which has been flat to declining But labor is you know we still talk about sort of labor as you know the ultimate form of value in many cases right or um you know we celebrate it in a way uh which is fair except that the value you generate from the labor without integrating it with capital as

in the form of investments and ownership actually uh starts to diminish right it’s like the musicians the musicians who own their own property the intellectual property be it Michael Jackson or Taylor Swift for instance you know financially far more successful and and therefore had more of control over their destiny than the ones who essentially basically just gave it all away and and never really owned it um so so so simple example of that now how do I participate in this and one of the thesis theories that we have is that to

create more financial literacy it’s not possible to do it by just teaching people economics i mean yes we can do that but but the problem is is that you know like you you know it’s it’s for many people it might be one year out and and sort of one year in one year out because they they’re not interested in it and it’s not because um they’re not interested in making money it’s that the subject matter of it is fairly dry and difficult it’s kind of like teaching people you know um who are not interested in science science right or

teach people who are not interested in philosophy philosophy i mean you get all sorts of people that have a have have something that they’re interested in or passionate about versus others that they’re not but what blockchain and tokenization does it creates a financial layer into everything right which is both what makes it controversial because a lot of people dislike that particularly in the west that there’s a financification layer that goes into the areas of so-called interest um but it opens up financial literacy because now

you’re able to f sort of have um a financial interest in something that you care about right and so we see this in collectibles like I mean who knew that baseball cards would basically you become valuable as a financial instrument right and how many people learned about finance and trade and value through baseball cards or Pokémon cards today i mean Pokémon cards were not designed to be anything like this but they created a financial layer because there was a market that was developed and from that people started

to learn about money and how many people who started trading Pokemon cards and made some money started thinking about maybe what what’s a stock what’s equity and what’s investment right it’s that field of interest that basically puts you into that area so the biggest innovation in you know web 3 gaming isn’t the fact that you can I mean it’s ownership yes but it’s actually the fact that it’s enabled millions of gamers in places like the Philippines to have a bank account or essentially a crypto

wallet for the very first time to be able to then have something of value and then suddenly be interested in investing or in money that they really didn’t understand before but through gaming they were able to because they’re they love gaming or they’re interested in it and then they learn something from from that you know um even as You talk about the fact that people aren’t creating sort of able to share value in in in web two games you know go search on eBay how many people are trying to sell their

accounts or trade their skins of some form even though it’s in a black market way it’s actually uh quite a few of them that are trying to sort of you know you know millions of dollars are being traded uh that that in that way because they’re trying to sort of monetize essentially their digital time one from the other so so that’s just the expansion of that and so when and and and the other big field is intellectual property rights so you know we’re for instance doing this with education and teachers with open campus with edu but

you can expand every form of intellectual property right through tokenization as something that you can now have ownership over and therefore create a capital uh formation effect and therefore capital value from this you know the the closing thought is imagine what the music industry would have been like if there was no intellectual property protection right there would be no Taylor Swift there would be no Beatles none of that would be possible there would be no music industry and we would all be poor from it not from a

money standpoint but from a creative expression from an industry standpoint we wouldn’t be listening to music and have these kind of shows that we’re having because uh we would we didn’t have essentially a property rights effect in music and music is a virtual property right it’s not physical i can’t touch and hold it it’s not a building it’s protected through a legal framework that says you made this music and you own it that’s entirely virtual that’s basically what tokenization and blockchain uh can enable with RWAs but

across every asset and just to add to the AI agents we talked about earlier people have to remember how powerful this could be outside of gaming as well i mean the principle of of interacting with an AI NPC you talk to it and then talks back to you that same technology can be applied to a home um service bot or let’s say a a nurse at a hospital a digital doctor or whatever right uh a pharmacist so uh the implications are huge but um that that’s that’s a trend so uh yeah let’s uh great well thank you

for uh coming on the show where where can we learn more from you Yat and Animoka Brands so I mean you can go to our website anokabbrands.com but I would say you know I post a fair of my stuff on X so you can go to u my uh Twitter handle um Ysiu uh I sometimes also post on medium and um you know um again under under sort of my handle yes you but generally speaking I you know just just you can follow me there and you can learn stuff i do post educational content on Instagram uh and a little bit on Tik Tok too so you can find me there

as well uh that’s more sort of um I guess broad general stuff as opposed to um sort of more industry specific stuff if you want to go deeper into stuff you’ll probably find it on my ex account great well we’ll put the links down below so we can follow uh Yat and Animoka brands there thank you very much Yat it was great meeting you and uh best of luck we’ll speak again soon thank you for having me thank you for watching don’t forget to like and subscribe