did any of you hear of mixin before before that i

always thought it was uh i always thought it was a privacy thing because the word mixin like makes me think of monero but apparently not all right well you know what we will move on because the story does not seem to have much substance beyond the shocking headline. There was another story. We were a little bit late on this one, but there was a story about stoner cats. So stoner cats, if you remember, it was this, what was it? Like Ashton Kutcher and a bunch of celebrities that got together and made this NFT collection of these stoner cats. I think Vitalik did like some cameo in it and they were going to be using the proceeds of these NFT collections to fund a TV show and a bunch of other IP that they were going to do from the stoner cat series. This is very early in the NFT bull market that stoner cats was around. They raised about 8 million selling 10,000 stoner cats in 2021. The SEC recently settled with stoner cats. And had to pay a civil penalty of $1 million and offer a fund to return money to any purchasers who wanted to get a refund, as well as destroy all of the NFTs in their possession. So the SEC basically said, look, StonerCats are securities. Why are they securities? They're securities because StonerCats highlighted the ability to sell them on secondary marketplaces. They had 2.5% royalties, and they encouraged trading of the NFTs in order to collect more royalties. And the phrase they used was, the more successful the show, the more successful your NFT. So the NFTs, the show didn't actually exist. There were six episodes that were produced. It got 4.5 stars on IMDB, which is not, wait, is that out of 10 or is that out of five? That's out of 10. Wow. So not a good show. That's maybe why they got sued yeah okay

a lot of complaints i mean the idea that a high cat is a security is just almost like art it feels like performance art thinking about this entire case i

feel like the the facts of the case actually aren't that bad. Like the show does exist. You can go watch it. It functions as this like NFT gating mechanism. Like it works. And I think in isolation, the idea of selling a pass to watch your show, if it's an NFT, fine. But it was everything they did around that in terms of like marketing these NFTs that just like so many red flags. I mean, they were talking about like you know sweeping uh the stoner cat floor on twitter and talking about yeah they were sort of like encouraging trading of of the nfts themselves and obviously though like the more successful the show the more successful your nfts so i i mean i just feel like they were getting bad legal advice or no legal advice or something but um it's not like they you know promised some game and then they never delivered on

it on the other hand by the way did you see that par Hilton launched some new NFTs? This conversation about celebrities getting a ton of stuff from, you know, a ton of bad stuff happening to them from the last cycle because they like mindlessly endorsed shit that they didn't really think about. Like Trump trading cards? That was the first ever disclosure in a presidential candidacy of Ethereum holding. So let's give it some credit. But the... I didn't know Trump did disclosures. That's news to me. Well, no, he had... I think he had to for...

Yeah, he held the ether and did not dispose of it.

But yeah, Paris Hilton has a new one. So I was like, that was the first sign of light I saw on the bear market of like a celebrity trying to make a thing. Or

just Paris hilton is kind of desperate i don't know like this i don't know that that's a i take that as a bull

market sign that paris hilton has launched more fts i mean the fact that she's doing it is i don't know i mean are they selling i have no clue but the point is i would have thought the stoner cat settlement would have scared the shit out of every celebrity. That

seems like a sign that Paris Hilton is kind of desperate to make some money and hasn't gotten the memo that NFTs aren't selling anymore. She's

a smart businesswoman. I don't think like she's actually quite capable. And this actually is, to me, a bright sign.

Okay, well, Tarun, I would recommend that you start copy trading Paris Hilton if you really believe that. She

has copy traded me before. Is that right? How's

that?

Well, she joined PleaserDAO much later at a much higher price. Okay. Very good. Okay. So hold on. Go back to the story. She copy traded me and Robert. Robert and I both were copy traded by Paris Hilton.

Okay. So look, if StarterCats a security, like, yeah, okay, they said, you know, oh, you should trade the thing, and oh, you know, we're making a show. You could argue, like, well, okay, they're making a show, they're raising money to, like, do some outside thing, and, like, that really looks like fundraising. It still feels like, look, if Stoner Cats is a security, then, like, everything is, I mean, what besides CryptoPunks is not a security?

Yeah, Roblox would be a security i mean like this goes to the fact that like i believe two out of the five commissioners wrote a pretty scathing you know rebuke of this is that it's a very tenuous line between a stoner cat nft and like most other art and like most other art on a blockchain and like things that you know a couple years ago you would have laughed if someone said that that was security and that it also implies most things off chain could potentially be securities that no one expects are. And so it seems like a pretty, you know, stretched interpretation that was settled. It never went to court. Who knows how it would have turned out but you know i don't know if in 10 years we're going to say like oh yeah stoner cat nft like that's you know very clearly you know the security's trying to say why yeah

you guys watch uh richie torres's grilling of gensler yesterday about

read about mon

card pokemon cards i

i feel like that what exactly happened representative

torres from new York basically said like, hey, do you think of Pokemon cards are secure? Like Gensler was doing this hearing yesterday and he said, hey, do you think of Pokemon cards security? And Gensler's like, no. And they said, do you think a tokenized version of Pokemon card security says maybe I'm not sure. And it was kind of like, but he caught him. He caught him in a way where Gensler looked kind of like a fucking moron when he responded. And it was like quite, quite elegant. It was like a very elegant line of questioning. Yeah, but these are the things that like defy the public's expectations and

like logic and like common sense. We're like, if you asked a random person on the street, you know, if a Pokemon card was a security, they would say, absolutely not. What are you talking about? Like, it's like-

Yeah, random person on the street does not even know what a security is. And what is a Pokemon card? I will say, you know, speaking of Pokemon cards, I mean, this is a total aside, but I did not realize how popular Pokemon cards still are. Like, especially in Asia, you find Pokemon cards everywhere. Like every 7-eleven they're just they're just sitting there right by the cash register

what's the fdv of pokemon cards that

is a good question i don't know also there's so many pokemon now i feel like the card game must be impossible that

is an insane inflation rate if you think about it

it's true yeah we need to we need some more disclosures we need some you, you know, supply schedule. We need FDV. Traditionally, like,

what if they actually did security disclosures, right? Like, here are the risk factors for Pokemon cards. Instead, like, look, we know what we need. We need, like, the inflation schedule. We need the team allocation. We know how to do this. I mean, to that point,

like, the reality is, if you're buying Pokemon cards with an expectation of profit, right? You have no idea what the Pokemon company is going to do. The Pokemon company could change the rarity, change the supply, you know, ban prior cards, you know, make new ones, add Pokemons, you know, take away Pokemons. Maybe Charizard's no longer in

the cannon. why we need the sec to protect us to make sure that that can't happen without without proper without proper registration and uh and disclosures so thank you daddy gensler i

highly recommend watching the interrogation of gensler yesterday by torres and then emmer uh they were just very funny like it just for the comedic value of like i feel like gensler is, is, like, clearly someone who gets ruffled by, or seemingly someone who gets ruffled by, like, very aggressive question asking. You would think he would be, like, used to it by now, but clearly he's not. And, like, the Pokemon one, like, was, like,

dagger. It was, like, very funny.

Tom, tell us about what is happening in

the Miladyverse we must know. There's a lawsuit between two of the Remilio co-founders one Charlotte is suing the other for misappropriating proceeds from these Bonkler sales sort of like the Milady Noun's equivalent where they have this auction and you can buy them and and they said stole a million dollars and now they're counter-suing and say no you know actually you were the one who stole the funds and stole the ip and i think it kind of goes maybe there's a kind of broader story or idea here around like sort of the extra protocol off-chain ongoings of um of nfts are really interesting right now like pudgy penguins are in uh wal they announced they're doing like plushy sales. So they're selling these in Walmart across the country now. But it's like, very just orthogonal to what's actually happening with the NFTs themselves and sort of like the proceeds from those. And so I think overall, NFTs are an empty collections are kind of in this soul searching phase where, you know, okay, royalties are kind of dead, primaries are kind of dead. Like, you're not really generating the revenue you thought we're going to be generating. And so everyone is kind of trying to look for the next thing. And it's not really clear what that is yet. And so you get these sort of weird off-chain shenanigans or like they did some collab with BoredApe and they got panned very aggressively on social media, just like universally. They're like, no one wants this crap. And so, you know, everyone's trying to figure out what the next business model is for these

things. And it's like really...

What would be your advice to a struggling NFT founder who's going through the valley of darkness right now? Everyone

here has to give one cone of wisdom. Each person. One

cone of wisdom? Yes. One

molecule of wisdom? There's not enough brain cells that exist in NFT buyers. So we don't have that much to give.

Okay. All right. Tom, you're up first. Give us your advice. I

mean, obviously, a lot of NFT founders are

looking to become media businesses or, you know, merchandise businesses or fashion businesses or whatever. I think the downside there is that these are not tend to tend to not be amazing businesses based on like multiples or margins. And so, yeah, you can go sell sell plushies, but like, you know, they don't have the same kind of great economics that selling NFTs do. And so I think ultimately, in my mind, like doing primary sales of NFTs and doing mints is like kind of the best business model ever. And everything else is almost sort of a loss leader into doing that, all the events and all the media and all the stuff you do around the community. And so if you can figure out a way to do sort of sustainable primary issuance and mints are actually still reasonably healthy, but they just are not the sort of 10K PFP drops that they used to be. I think that's like an amazing model. I mean, that's kind of the model that like most sort of luxury goods, you know, go down where it's like, yeah, we'll do, you know, some press around our new watch, but ultimately it's about these limited, you know, drops and that's sort of how you make your money. It's like through this scarcity and everything else is just sort of supporting the buy pressure to allow you to do that. So that would be my kernel of wisdom.

Okay. So do more

like Azuki type new drops? I think Azuki had the right idea. I mean, the execution was maybe off. But yeah, I mean, selling $40 million of entities in a bear market, and that's all profit that's incredible. So anything you can do to allow you to keep doing that, I think should be kind of the goal. That's almost like the loss leader

versus the actual business model.

Tarun, what's your advice to a struggling NFT founder?

I guess there's two angles to this that I would say that are worth looking at. The first is, let's consider bernard arnaud so bernard arnaud founder of lvmh we have a ton at hennessy their name already portends where most of the value came from which was aggregating a bunch of luxury brands some struggling some not into one house finding economies of scale for them, and then maximizing distribution. There's a sense in which I wonder if the NFTs are too disaggregated and actually aggregating some of them, merging some of them actually would be able to extract more value distribution-wise, would have a better chance at these media type of engagements. And I kind of think M&A and NFTs land. Someone will be, just as activist investors in public markets are the disaggregators. They always fight for people to split up or to return capital or whatever. There's always the people who are the aggregators in the private markets who like roll up a bunch of things and they're able to create more value. I think there's a huge opportunity and it's pure financial engineering. It's not necessarily making a new thing like maybe it's actually literally just rolling them up together and sharing distribution but i think there's a lot of like p style tactics that are likely successful i guess the second thing i would say is that the line between nft mints and airdrops and games is kind of like getting much more hazy lately so if you think about how people are doing airdrop farming right now, say for like ZK Sync, right, which doesn't have a token yet, people are putting in liquidity, doing actions in the chain because they expect to get airdrop later. And there's obviously the big Celestia airdrop this week, which really rewarded developers who contributed more than just users and one interesting thing about that is like you're sort of making shitty game shitty mobile game dynamics in airdrops where it's like hey there's some metric we're not telling you that we're using to decide what you get and it depends on some number of actions and it's almost like a video game like you have to try to do all those actions in time before the random payout comes out. And the reason I bring this up is NFTs could be useful in this kind of blurred line between complicated airdrop and crappy game. And I think that's another space that people should explore. So just two things. Aggregation, aggregative effects, like some PE roll up stuff and then be kind of um play play with the line between airdrops and games because because the line is getting blurrier so

okay i will say probably of the four of us i am the least nft literate i don't feel like i know very much or spend very much time on this market um but here would be my two cents i would take the opposite side of what tarun is saying is that i i don't think roll up uh like rolling things up or financial engineering is going to save the nft market i think i think that's probably a fast path to nowhere i think if you if you understand what you're selling nfts are on-chain luxury goods and how do you innovate in luxury? The answer is that you have to move with where people are going and with what makes people feel important and special. I think when the market was indexed onto royalties and everybody was trying to encourage more and more trading, that really works when the market is basically speculation. We're no longer in a speculative market. And that means that secondary volumes, trading volumes are down and they're going to stay down because the volatility just is not there to support this being a great way to just flip stuff and make a bunch of money very quickly. Now, in the world of luxury goods, that's pretty normal. If you're buying expensive watches, if you're buying expensive wines, if you're buying expensive paintings, people are not doing it so that they can do quick flips. Some people do it sometimes and there are some assets that do that. But the vast majority of luxury goods, they don't move around as much. Actually, they're largely treated as stores of value. And you can kind of see that in that the floor prices for a lot of these assets for the blue chips, they've gone down, but they have not gone down to zero. They've gone down to thousands of dollars, but there's still thousands of dollars worth of JPEGs. And so I guess what I would encourage you to do is the way you innovate in luxury goods is to keep moving. Keep plumbing new areas, keep having new ideas. And like Tom was saying, you want to really think about this being fundamentally a primary business. You sell the NFT once, but you keep people coming back and you give them a reason to stay part of the club and to keep the club exclusive and exciting and novel and interesting. And maybe it also means that the people that you need to sell to are beyond just the crypto kind of core inner circle, right? It's possible that like, hey, who are the other big spenders who their lives and identities are very much online, but they're maybe not crypto degens, right? Crypto degens just have less money now than they did two years ago. So it may well be that like, look, there are people who spend hundreds of thousands of dollars in mobile games playing something like Genshin Impact or playing, you know, whatever. There are other pockets where people have a lot of money online. So if what you're fundamentally selling are online luxury goods, then I think you maybe have to bet on these people showing up in different places, but still being willing to signal with the kinds of assets and the kind of branding that they get from owning a really cool NFT. That's my two cents. That's it. Robert, I'll give you the last word given that you're probably the deepest on the NFTs. Yeah.

I would just say, don't do what everyone else is. I thought you were going to say, don't do what any of these guys said to do. You know, I, no, no, no. If you're an NFT project, no more 10,000 PFPs, no more generic bullshit. Like if every artist made the same type of art, no artist would have any fame or success. You know, art is all about breaking the mold and doing things that people haven't seen before and trying new things and getting weird with it. So I would say if you're an NFT project, like go wild, have some fun, do something crazy, do something radical, like reinvent yourself. don't do something because you think that there's a playbook to do it. Run away from anything that you think is a playbook.

I like that. I think it's a great note to end on. And if you do, ping Robert, he will be the first in line to mint your radical new NFT.

I'll at least, you know, hover my finger over the button. Great. And if any of our advice was useful to you and you start a company, don't forget to tweet at us.

100%. Okay. We got to wrap. We got a hard stop. Thank you, everybody. See you all next week.