Day after day, especially during the pandemic, the gaming industry grows significantly and becomes more prominent than ever. Emma-Jane MacKinnon-Lee jumped into this thriving ecosystem and founded DIGITALAX, the first digital fashion NFT protocol and marketplace for eSports and gaming. Joining Eathan Janney, Jeff Kelley, and Josh Kriger, she explains how providing outfits to gamers give them a unique experience and opportunities to build brand and increase monetization. She also explains their role in reducing waste in the ever-growing clothing sector and building a community empowering indie creators. Emma-Jane and the hosts also dive deep with how the Disaster Girl meme NFT sells for half a million dollars, how NFT impacts real estate acquisitions, and thoughts about investment thesis. They even explore how animals find themselves in the realm of NFT with the rise of the Bored Ape Yacht Club and digital horse racing.
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Emma-Jane MacKinnon-Lee: The Thriving Digital Fashion For Gamers In NFT, Plus – Bored Ape Yacht Club, Disaster Girl NFT, Digital Race Horses, 1st NFT-House Combo, And More
We aim to bring you not only the top 1% of what’s going on with NFTs, but it also will stand the test of time. We explore the nuts and bolts in the business side and also the human element of how NFTs are changing the way we interact with the things we love. This show is for the futurist and dreamers, the disruptors and creators, the fans and connectors and the makers and doers that are pumped about this ecosystem and driving where it goes next.
This episode features guest, Emma-Jane MacKinnon-Lee, Founder and CEO of DIGITALAX, the first digital fashion NFT protocol and marketplace for gaming and eSports. DIGITALAX is building native Web 3.0 infrastructure for supporting the entire digital-only fashion, digi-physical fashion supply chain, incentivized ecosystems for designers, developers, players to earn new livelihoods through casual eSports. Also, developing the first truly interoperable 3D file transfer format using native crypto and NFT incentive models for enabling a flourishing open-source developer bazaar, a dynamic cross-platform format for the metaverse. Emma-Jane has worked in the deepest corners of crypto from options trading and crypto hedge funds to being appointed by the Dubai government to develop blockchain use cases across the financial, transportation, trade and logistic tourism and real estate sectors. It’s great to have you on the program.
Digital Fashion: You cannot build ecosystems of incentives that program customizable value to different stakeholders. But within crypto, that is possible.
Thank you for inviting me on.
We have to start here with your college years. You were literally studying to be a rocket scientist and building race cars in college, and you’re like, “This stuff’s too boring. Let me go disrupt the entire world of blockchain instead.”
I was studying Space Engineering. I’ve always loved the space. You grew up with this aura about the space. I’ve always wanted to and I still do want to go to space and be an astronaut in whatever form that looks like. I started with that. That was in Australia at the University of Sydney. I was also part of the FSAE team, which is the Engineering F1 team. It’s a university-college competition. It’s global. You build an F1 car and then it’s raced against all the other colleges worldwide. I’m the first female engineer to be chosen for that. I was doing some interesting stuff but my personality is someone that I’m not a status quo or someone that likes to be put in a framework or a system.
I knew that although there’s great stuff that you can learn at school and college is different from the real world and what I wanted to achieve in my life, which is always having this much bigger mission of how I can bring value to millions of people and what does that look like. When I came across web 3.0 and blockchain and crypto, I saw that this is the future and this is where stocks are going. I need to do something in it and build in this space. It wasn’t an easy decision because I had a lot going on, but it was an inevitable thing. I don’t think I ever thought that I would be finishing my college years, much to my parent’s dismay.
Where did the name of your business come from? Why did you decide on that name? Does it have significance or did it just sound great? What are your thoughts on that?
I was in Dubai when I started DIGITALAX in a sense and bringing everything together. I wouldn’t say that there’s a huge backstory to it, but I wanted something that sounded cool and this hybrid digital in the sense and it had that as a cool component. The AXA, I can’t remember too much of the story. I remember I was sitting in the office where I was in Dubai and thinking of different names and wanting to have that digital part to it and then I was like, “X is really cool.” Having it as this digital X is a bit not right or it’s too common in a sense, so I put in the A and then I was like, “That’s it now.” I’m stuck with it because I’m talking to people about it and it stuck.
It’s taken on a life of its own.
How did your educational background prepare you for building what you’re building now and how did you address the gaps in knowledge that you needed with direct education and the types of folks that you needed to bring together to create this venture?
I never accept the frame that’s given to me and I’ve always loved being a female as well and loving Math and Physics. It’s quite rare, because usually, even in engineering school was heavily male-dominated. Even when I went into Space Engineering, I was told that because of the subjects that I chose in high school in Australia, that they would never accept me and that I would never be able to get in. I took that and I said, “No way. I know exactly what I’m capable of and I’m going to prove you all wrong.” That’s what I did. It’s a process where you have to get accepted.
You don’t just go in. You’ve got to achieve certain marks in difficult subjects. I went in and then I gave it my all. I proved them all wrong and I got accepted. Taking that same framework when I was putting DIGITALAX, it’s not so much about, what are the gaps or what do I don’t know, but it’s how they look at the situation differently and break everything down into basic principles, because that’s what I find when I talk to a lot of people. It’s always that thing of how do I get in? Even NFTs, how do I get into space when I don’t have this or I’m not sure about that?
Every day I have problems put in front of me where I’m like, “I’ve never experienced it before.” There’s no textbook that I can go to and read off and say, “Let’s take this formula and apply it here and then we’ll get Y as our outcome.” It’s never been like that. It’s more making sure to have an approach of an open mind. I know it sounds cliché, but it is the truth that if you go in with the mindset of, “I’ve been put in this box or because I studied this or someone else in society has framed me as being good at this but not as that, then I should accept that frame.” If you go in and you think, “At the end of the day, it’s just a problem, a puzzle.” If you can break down and identify what are the pieces and then slowly start putting it together, then it can be solved.
I’ve always had that mindset. It’s been great because it hasn’t been this blockage of stopping me where I think, “Because I didn’t study that specific thing or I don’t know that topic well,” which is even in an engineering side, DIGITALAX is focused on and also the engineering. How do we innovate from not just a business or commercial perspective, but from the engineering side? We have an amazing internal engineering team where we’re pioneering and pushing new open-source code out there every day. I don’t have a direct coding background in Solidity or React and these Web 3.0-based languages, but it’s going in more and knowing there are different ways that you can look at it and solve the problem. If you surround yourself with the right people as well, there’s always a solution that can come out of that.
It’s a massive undertaking that you’re building here. We gave some background on it for our readers, but we’d love to know where your current vision for the company stands.
It’s a big vision. How I like to describe it is we’re building out an ecosystem. A lot of projects, when they come into this space, they think, “I’m going to focus on this niche area and hone in on that and then deploy products or services or whatever around that area.” Coming in from the perspective of knowing what the space is at the moment and where it needs to go, it’s what did DIGITALAX is focused on. It’s how do we build out the infrastructure layer? How do we build out the low-level core protocol layer? Instead of it being from a perspective of we are coming in and how do we generate value for ourselves, but rather how can we create an ecosystem that eventually anyone can plug into and start creating value.
That’s always been the mindset. It’s the old Uber model is how I like to describe it. The reason why Uber was such a success, people can look at it and they can say, “It’s a great U/X on the app.” You go a layer deeper, you could say, “It’s super convenient. I can log in and I can get to a destination anywhere in the world within a couple of minutes.” If you go a step deeper why Uber was so successful, was because what it allowed is it gave people freedom. They sold freedom in a sense where if you were a driver, immediately you could get gain access to a live market in value anytime. You didn’t have to conform to these schedules or go to a 9:00 to 5:00 job. It’s the same from the consumer point of view. You also allowed freedom and convenience and you’re matching this whole marketplace together.
I know Uber has changed very much now and there’s a lot of caveats. It’s not as simple as that, but breaking it down into that base was what I wanted to transfer into DIGITALAX. It’s what Web 3.0 and Ethereum and the whole crypto ecosystem are all about as well. It’s about breaking down walls and barriers to have more savvy doorways into opportunities that can suit each of us best. We’re focused on doing that from the fashion, gaming and eSports sector. That itself encompasses when we think about metaverse. Its players and creators and how do we create a player-creator economy. We started with our marketplace built on Ethereum. That was all about looking at how do we even create distribution channels for digital fashion? What does it look like to back value behind digital fashion goods?
Before then, there wasn’t anyone doing anything in this space from looking at it from the perspective of how you build the industry. It was more advertising or used within specific points of vacate creators design process with the 3D modeling point of view. We looked at it more from, if there is going to be a whole global supply chain for digital fashion or even hybrid digital-physical, then there needs to be a way to track that and then also back value behind it transparently. NFTs having my background in Web 3.0 made the absolute most sense and this hugely scalable distribution channel. We started with the marketplace partnering with over 30 digital fashion designers globally. Some were based from the US and ex-Nike designers in Portland, others in Europe, Rwanda and Australia.
They created these cool designs. They listed them on our marketplace and then we sold them at auction as digital fashion NFTs. They also had DeFi and staking functionalities as well. That was how we started and also doing interesting things from a supply chain point of view when it comes to how do you break down and modularize the composability components of NFTs and allow designers to issue patterns and materials and textures as ERC-1155 tokens. Other designers can create or use these patterns in their master garment and issue an ERC-721 but on-chain, that can be trapped from the minute level where a 721 is able to own balances of the patterns of materials and textures in the 1155 tokens. That brings completely new monetization and royalty distributions for the artists. We started looking at that side and then we moved into the game integration because I’m much a believer that the cosmetic side, particularly in fashion, it’s not enough.
There has to be utility and a way to interact with the product. At the moment, gaming, VR and these massive 3D environments are where that exists. We launched our ESPA, which is the first Indian modern eSports platform, allowing our players, designers and developers to plugin and use our outfits. Digital fashion designs are this whole authentication system within the gaming environments that they go into to engage in casual eSports battles where the players can start earning a livelihood and an income for themselves as well as they engage in these kinds of gaming environments. I’ll stop there because I know that was an extremely long tangent. That’s the broad overview.
You’re literally talking about people being able to buy digital fashion, any outfit, your shirt or something that maybe is even branded potentially and then not just be able to own that and hold that as an NFT, but also be able to use that in a gaming environment, for example. How do you connect the portability of that from your side, on the DIGITALAX side or the marketplace where you purchase it so that it can be used in that gaming environment? Is there a common format that people are using that would enable that or is it something you’re developing?
There are two parts to that. When people talk about interoperability and being able to take assets or content cross-platform, when we think about metaverse, we always think about it being the seamless digital experience. From a technical point of view at the moment, that is not solved. That comes down to the file formats themselves, that you can’t build a gamut or anything in one 3D application, say Houdini or Maya, and then take that into a game engine like Unity or Unreal and drag and drop it and have it work or take something from Fortnite into GTA. It doesn’t work at the moment. DIGITALAX is approaching that problem in two ways. Number one, we are building out our own 3D file format that is based on having dynamic interoperability across different 3D application environments.
I can go into more details about how we’re doing that, but it’s a whole engineering process where it’s about how do you take the logical information from the output environment or the final location of where a 3D object is going to be deployed. How could a 3D object know that it’s going into an environment like Fortnite and then be able to be dynamically transformed so that the key information retained is then compatible to that Fortnite environment even if it’s coming originally from an environment like GTA? We’re building out that whole system. It’s an engineering process. It needs to be built. There needs to be R&D around it. It’s what we’re focused on at the moment.
In the meantime, how we’re tackling these interoperability problems or how do you take them across that point, we are building out our own whole SDK and within experts or our SDK where there’s this user authentication. They get their assets bond into the game and we have APIs and full integration on that side, but that’s not enough by itself because we all know that you can’t go to a game and knock on the door and say, “Accept my content.” A lot of these larger studios as well, they’ll tell you, “Sorry, that doesn’t fit within us at the moment.”
That was going to be one of my next questions, is how the industry is responding to your big adventures and how are gamers responding? You have a marketplace situation, so you have multiple customers. In Twitch, you got to wonder what they’re thinking too, in terms of what they’re going to do in this space versus where they want to integrate. You decided to start with something simple and straightforward.
Digital Fashion: Through digital fashion, gamers are able to own their content, allowing them to attach moments and time to it.
The whole thing comes down to incentives. How do you direct incentives or how do you create an ecosystem that incentivizes the right stakeholders. This is why we built native to Web 3.0 and Ethereum as well because with Web 2.0 you cannot build ecosystems of incentives that program customizable value to the different stakeholders. It doesn’t work. Within crypto, you can. We have our token, MONA token. Within our ecosystem, that’s what it’s about. It’s about directing incentives. How it works within ESPA is a player can come into our marketplace, purchase these digital fashion items that are designed by different designers as NFTs, and take them into this different gaming or content environments.
The NFT itself in that digital fashion item is spawned in under their character. As they’re playing, they’re getting scored on a leaderboard and they’re being able to get paid out and get income streams from engaging in these casual eSports battles. It’s a whole different sector as well that we’re tackling, is how do you allow a gamer or a player to go from amateur to pro. You mentioned platforms like Twitch. It’s incredibly hard for these streamers to make a proper livelihood and career. We’re also about breaking that down, is how do you democratize access for players into the industry to create value after engaging in play? From a profit distribution side, how that works is the profits from the sales of the NFTs on the marketplace. They get split between the designers creating the garments and then also the developers as well that are accepting these content pieces or these fashion pieces into their games.
The unique part about that is we’re not intruding on a developer’s current in-game economy, so they still are encapsulating the value there. What we are providing is a Layer 2 utility for them. That is where the eSports utility comes in and it’s a well-defined use case where it’s an additional novelty for the players and providing a different roadmap for a player base when it’s that whole purpose of going from amateur to pro and how do they level up their careers. That’s how we’ve navigated it.
Have you talked to any of the big eSports leagues or organizations like FaZe Clan about what you’re doing? Can you give us a little sense of how they’ve responded or maybe hints of the strategic partnerships you’ve got cooking up?
We went about it in two ways. Number one, I’m very much someone that pioneers the underdogs. That’s why the NFT industry is so unique in a sense because it’s all about how you give direct value to undervalued creators, how do you give a voice back to them. This is what we focused on here at ESPA as well, is focusing on the indie community when it comes to the game development side and then also the modern community because they’re a huge backbone to the industry that is overlooked. A lot of people don’t even know about the modern community or how the biggest players in a sense and biggest player basis are all part of that whole ecosystem.
We focused on that side to start with to give that voice there. Also, it’s part of our messaging and story that we want to have as the backbone. It’s not about giving the keys back to the legacy leaders in the space or the legacy industries that create all these walled gardens, because we want to break that down. That’s the purpose of how we give it back and distribute the value to the other core backbones in the industry, which is very much the morning on the indie side. When it comes to the eSports side, we’re focused on the average player and how they can come in. Not just on the professional players now who already have the value, but how can we allow a player sitting in his basement to go from amateur to pro? How do we give them a tool in their hand to have access to that rather than them thinking, “This is impossible. I’ve either got to slave away on Twitch for 24 hours and hope to get picked up?” That’s a lottery ticket or I give up and I get it an adult or normal job.
It was about that side. As we’ve been growing, we’ve been getting more traction and a lot of reach out from some of these eSports teams and players that are seeing the value there because they’re also understanding that within that current situation, it’s like the music industry in a sense. They’re taken under an agency that slaves away for hours in a day and then they’re shipped out and new players come in. They’re losing that love and that passion of what they originally had for gaming and why they into it for the first place. That’s also what ESPA is about. It’s about providing them another opportunity where they can start creating value and they don’t have to have that middleman walled garden or lock point or chokepoint there. As we’ve grown, it’s being a big hustle on our side and getting our name out there and getting under these player bases. We’ve been starting to pick up a lot between the modern communities and the other core active player bases and eSports players as well. Along with that, because we were doing integrations with CSGO and their mods. They have a huge professional player base as well. That’s been something exciting within all of this.
What’s your game of choice? You have a race car background. Are you a racing-style gamer? Are we going to see some rocking racing uniform that you’re wearing in the metaverse playing a game on this portal that you’re creating? What the real deal here?
I love 2D or 3D platforms, even Sonic. I’ve always loved that. I am more of a Sonic than a Mario person. Games like Rocket League, we’ve been in touch with some of them in their team. That’s a huge base when you think about things. You will be seeing race car eSports battles or casual eSports battles under our platform as well. That will be coming.
I played Sonic the Hedgehog quite a lot. I don’t know, Jeff or Eathan, if you guys were into that game.
A little bit. It sounds like you were more so than me.
I’ll get wiped the floor by Emma-Jane for sure. It’s interesting, you mentioned, for the average player, essentially to become their own sponsor, if they do something great performance-wise or so often happens, did say something cool during a live stream and people latch onto that. It becomes. It sounds like there’s then an opportunity there for them to sell maybe an item that they purchased that they were wearing, or their character was wearing during that moment. I was curious, how does beyond the ability to sell what they’ve purchased for maybe an increased price? Are there royalties that potentially players would have access to as well?
This is where why, as well, digital fashion is so core to all of this. It’s because it’s not just from the self-expression side of it, how does a player have this online or digital identity and how can they express that through that digital garments, with their clothing, but more than that, the functionality side comes down to it. This is what we’re focused on. To break more down how fashion fits into this whole ecosystem from more of an intrinsic level and at that core, it’s not the players who take the outfits and wear them in-game. They are able to own that content, which means that they can attach moments in time to it or their best plays to that fashion item as well and then sell that off, which is something incredibly interesting when thinking about what blockchain is in gaming. How does that intersect or being able to attach yet key moments in a game or key historical memory to an NFT or to an item?
That accrues more value over time for the players who are able to interact with that content and then gain value from that afterward. Within our system as well, the rarity level of the content also affects how the player’s longevity lasts within a whole eSports platform. From a common to a semi-rare to an exclusive one of one item, it’s not a pay to win at all because we don’t believe in that, but it’s more than the actual rarity level affects how often maybe a player needs to recharge the outfit within our systems, then be eligible for more battles.
Depending on how they’ve leveled themselves up on a leaderboard or a winning streak, they might need to go back and complete other tasks within the system for more of a game-based to then recharge their outfit or go back to the marketplace and swap it out for something else. We have all of that functionality within that as well. That adds more value into the NFTs and what it’s being used for, which is not just that cosmetic side. It’s about bridging that. Also, our NFTs have staking in and defy functionality as well, where a player can take this and then stake it and earn our token on our staking contract, so they’re able to gain even additional value within the ecosystem.
One of the things we’ve been super excited about and we’re watching a few different companies work on is the fractionalization of NFTs. It occurs to me that an outfit that somebody has on at a certain moment could have tremendous value and could have a lot of people interested in it. I think about the Jimmy Hendrix moment where he’s smashing his guitar and people want to own pieces of that guitar. It’s the same thing here. If somebody does something cool in a moment and that particular outfit is popular, people would want, potentially, to own pieces of that garment. Is fractionalization of NFTs something you guys have looked at on the roadmap or anything in that realm?
We haven’t done anything yet when it comes to what people think about and it is the shooting of the NFTs, and it’s breaking even down to ERC-20 representations of different parts of it. What we did pioneer is the time of fractionalized garment ownership. How that works is what I’m describing before, where design is able to come on and issue these 1155 materials, patterns and textures that are then open source into our digital libraries on-chain and another designer can come and use those within the creation of the master garment. That creates an ERC-998 standard. It’s a variant of that on-chain where the 721 owns a collection of the 1155 fractional components. That’s not royalties from the other side, but when that’s transferred to the buyer, they’re able also to own those different fractional components as well.
Potentially they could also sell off the same individual pattern as part of the garment. This is interesting. Another part that we’re bridging in which is the digital passion sponsorship side, which is what you were talking about before, is what’s another way that a player on an income stream or living through this like in any professional traditional physical sports industry. A lot of players, get their main income and support through sponsorships from brands. The same thing we’re bringing into ESPA where players are able to level themselves up and then get sponsorships from the larger fashion brands that we’re onboarding into the ecosystem as well. There are huge other monetization models there, which adds more value within a moment. It could be a Gucci top or even a Gucci pattern as part of a board outfit that the player is able to sell off or gain support from.
Digital fashion grew from the world of sustainability and all the massive waste, which most people don’t know in textiles. How does that guide your thinking day-in and day-out or does it have a major influence?
There are a lot of controversy around NFTs and sustainability for the environment. I know that there have been masses of articles released and Twitter wars where certain people are taking stands and saying Ethereum’s Proof-of-Work consensus algorithm goes against the pursuit as well as a broader economy that we reached greater sustainability. It’s a hard situation because of digital fashion, that’s where its main origins came out. It was, “How do you bring more sensibility to fashion because fashion is the second most wasteful industry in the world after oil.” That says a lot. It’s horrendous when you look at some of the numbers particularly the supply chain point of view, the waste in fabrics, dying of materials and how these kinds of industry of fast fashion, which Zara very much turns over way too much waste.
There are two parts to this. Number one, it’s about what we can do now. What we have done, we’ve migrated everything all about the ecosystem to Matic Network. That’s a layer 2 solution for Ethereum and that runs on previous state consensus, so it’s 99% more energy-efficient and less wasteful than Ethereum. That’s where we’re at now. We also see it from the point of view that you can’t stop the growth of an entire economy and ecosystem and the value that it is bringing to creators globally. You shut that down and say, “Because NFTs and the minting of it might be giving some contribution to the energy waste within the environment, which does industries out there that contribute way more in terms of wastefulness and they have been for hundreds of years.” We haven’t solved that yet.
We’ve also got to weigh it up and say, “We can’t stop the growth of something.” It comes with the growing pains of being on the bleeding edge of an industry that you can’t solve everything at once. It wouldn’t have made sense if we said, “When Henry Ford invented the car, let’s stop all of that and let’s stop global transportation and travel and invention of propulsion engines because this is affecting something else.” It doesn’t make sense. Now, we can see that and with Tesla, for example, that’s completely pioneering sustainable travel. That’s an amazing new industry that’s come out of all this.
With passionate NFTs, we are pioneering the sustainability point of view and how digital fashion can solve those core problems within the fashion industry and how can we do our part, which is integrations with Matic Network, which we’re pioneering engineering on that side. We released the first-ever multitask bridge between Matic and Ethereum, which allows people that buy NFTs with this ERC-998 variant to bridge them between the networks, which is a huge engineering feat for the entire ecosystem. We understand that there might be some growing pains with the use of NFTs at the moment, but it is so integral to what we’re pioneering that we can’t completely suppress that for the broader pursuit.
Let’s say I’m a digital artist or eSports player or somebody who wants to support the company, what are the ways that people get involved? What’s the first step? Is there a link to click or a place to go or a thing to sign up for? How does onboarding work?
There are a few ways. If you’re a designer or you’re an artist, the first thing is we do have a global designer network where we’re onboarding new designers all the time to come in and be part of our design network. We are creating these digital fashion designs and we’ve been comprehensive in the way that we’ve onboarded artists because when not super rare where it lets anyone come in and increase the supply. We’ve always been trying to do it in a way that makes sure that these artists, when they do come on board or these designers, there’s that core market that we’re building up. It started with more of the NFT collectible side, and now it’s moving into the player base as we bring in more utility. That’s one side. We have different signups on our websites. In that way, designers can come on and be part of it.
From the player base, we’re actively onboarding new players all the time. We’re running these casual eSports tournaments also at Discord every day. We have a lot of players coming on board and engaging in these battles and being able to earn value. That’s simple as well. That’s joining our Discord or signing up but being part of our community and being present. We help with the onboarding of the players as well, whether that’s getting them set up with these hybrid Web 2.0, Web 3.0 wallets to streamline a lot of the scariness that comes with coming into NFTs and crypto and thinking like, “What is this? How do I even get involved?” From the developer side as well, we have a strong base within the modern community and indie dev scene as well. There are always new developers that we’re integrating with and coming on board there.
Let’s say I’m a developer and I want to start doing some modding, do you have an API page? How do I access that information?
It’s not at that stage at the moment. It’s about you work with our dev teams. We take on a lot of the integration as well for the developers, particularly at this stage, because it is that hybrid between on-chain and off-chain components. A lot of these modders are not familiar with the on-chain side so we make sure that we’re taking on all that side and they have to have the game system. We’d like their leaderboard scoring set up. How they get involved there, it’s reaching out to us and being in our community and then we get them all set up.
I’m thinking of other people besides you to reach out to. Do people reach out directly? It sounds like it’s almost a stealth mode thing where people can’t jump on like OpenSea where you can trade and sell and no matter who you are. Is it to get in touch with you personally or there are people in these specific domains that people should reach out to like a digital fashion designer? Do they reach out directly to you or do you have the main contact there?
We have a team of fifteen. Any of them are accessible on our Discord, also our Telegram community, and then also on our website, we have sign-up forums in a sense where they can go on and give us some details. It’s across any of our social media, is we have a lot of artists reaching out, even on Instagram, Twitter, but the main one is our Discord community. That’s the heart of everything that we do. If anyone joins, they can have all these steps laid out, but they can contact us directly.
I was looking at your blog and I was perusing the site and I saw the transparency report. I was wondering if you could highlight that a little bit and tell us what that’s about.
We’re aiming to be this and building others the infrastructure and protocol layers with that and being in Web 3.0. It’s also about how we inject the pillars of Web 3.0 itself, which is all about transparency and this more open nature of things into the core of our business. We’re purely a native crypto ecosystem. Every month we release a transparency report, which tells our community exactly how we’re spending the funds in the treasury itself.
When we did our token launch, the team took 0% of the token and it was all distributed 10% to the treasury for maintenance of R&D and then 90% release to the community through our stake and rewards. With that, we release every month an overview telling you, “This is where the resources and the budget was spent this month. This is the core development that we’re looking at in the R&D that we’re building out.” It’s in pursuit of making sure that we do it the right way because in crypto there’s a lot of opportunities for people to be more interesting in the way that they spend the funds and that’s hard for anyone to track, especially when they don’t know about what’s going on.
It’s easy to say, “I used it for this or it got wired to this address.” You can’t prove out certain parts of it. We want to make sure that the way we do it is incredibly transparent in the right way because we’re coming in to build out something that’s much bigger than any member of our team. It’s much bigger than even any member of our community. It’s about pioneering for the greater good of what we want to achieve, what we want to see, which is about the metaverse that everyone keeps talking about. If we don’t instill those values within our own business, we’re not adhering to what we keep preaching.
It’s all too rare and I applaud you for infusing your company and the entire ecosystem with those values.
It feels like a good moment to transition to Edge Quick Hitters.
I can’t imagine what Emma-Jane’s answers are going to be.
As a reminder for our readers, Edge Quick Hitters are a fun, quick way to get to know you a little better. There are ten questions. We’re looking for a short, single word or few word responses, but feel free to expand if you get the urge. What is the first thing you ever purchased in your life?
Digital Fashion: Memes have become an important unit of commination in a natively digital environment for years, and it bleeds into how metadata is defined and what is considered valuable.
It was a surfboard if I’m not wrong because I grew up in Australia. I love the beach. I used to be an avid surfer. I surfed Pipeline in Hawaii when I was sixteen. I saved up when I was maybe 9 or 10 for my first surfboard.
Second, what is the first thing you ever sold in your life?
It was on eBay. It was a vinyl record player because I love music. I used to like vinyl records music. I bought one and then I wanted the other one. I was doing some arbitrage on eBay with different buyers and sellers. I sold that one off to buy a better one.
Number three, what is the most recent thing you purchased?
Ramen noodles. That’s pretty much what I leave up at the moment. It was from Walgreens here in SF.
Number four, what’s the most recent thing you sold?
I live in a shed house here in SF. I’m swapping out rooms with someone else, so I’m “selling” my room through the Central Realty here for another one.
Number five, what is your most prized possession?
I wrote a book when I was five. It’s about the metaverse. It was this whole storybook about someone navigating their way through the metaverse. I still have that. I’m proud of the effort and stuff that I put into that because it’s got whole interactive side and everything. I was trying to get that published when I was about eight, but then I let it go and I went off to another adventure. That’s my most prized possession.
I got to cut in with two side questions. One, you’re a very technical person. Do you believe in reincarnation?
I haven’t looked too much into that because it goes down a whole another rabbit hole of many other things. I can’t answer that too much. I don’t have too many views on that.
It’s an interesting explanation for those intuitions and instincts people have at a young age. I don’t believe that myself, but it’s a fascinating topic that a lot of people do. The other thing was, do you still have an original CryptoKitty?
I sold that off last. What I did with that was I’m at the first auction. We did a collaboration with CryptoKitties and Dapper Labs where one of our designers made CryptoKitty purses. The purse was like a cat finder pub that we put in purses. With that, we gave the buyers CryptoKitties with it that were represented in the purses. I gave it away and sorted it off with that.
Number six, if you could buy anything in the world that is currently for sale what would it be?
I love food. I like different foods, so maybe it would have to be a tasty meal. Maybe some good sushi. I love nigiri, so it’s prawn nigiri, I would say. That’s what I would buy.
That’s the answer my girlfriend would probably give as well. Whenever there’s a question about what to eat, the default answer is sushi. You got to come to LA and have some Nobu sometime.
I also recommend Peru if you haven’t been there. There are lots of new and interesting cuisine to try out. It was in Lima, Peru, somebody had done a special meal where each of the courses that you ate, they ascended in terms of sea level. You would eat some animal that was on the low sea floor and that was one of the first things you eat the way up to birds at the end or the plants that lived in those various areas, whether you’re vegetarian or not.
I went to Cusco. I didn’t ever go to Lima. I was doing some volunteering there. It’s an orphanage, but it’s more of a school with a lot of the children there educating in English. I did some stuff there. I had some interesting meals. I got food poisoning a number of times.
Let’s shift gears a little bit then for question seven. If you could pass on one personality trait of yours to the next generation, what would it be?
It’s a cliche one, ambition and drive. A lot of people in the current generations have the society frameworks that they accept, “I can’t do this because of that.” Seeing more people not accept that because I know the amount of stuff out there that can be achieved and can be created for the better. It’s about a mindset change.
On the flip side of that, if you could eliminate one personality trait of yours from the next generation, what would that be?
I’m sometimes a little bit too wanting to adhere to certain things or get things out, whether that’s deadlines or that, more flexibility around that. Maybe a bit more chill. Not that I’m not chill, but sometimes I’m more, “Let’s get this done, and let’s hit this.”
Based on what you’ve accomplished already and what your plans are, it may be a double-edged sword. Question number nine, what did you do just before joining us on the show?
I had a call with one of my other team members. We’re releasing the first metaverse-focused magazine, which is exciting. We’re bringing together all these voices and content in the space and featuring it like a Times Magazine for the metaverse. I was speaking to one of my team members about the final coordination pieces.
Could you share the name or where we can find it?
It hasn’t been released yet. It’s going to be called Digi-Fizzy. It’s all about these hybrid digital-physicals and focusing on information about NFTs, Web 3.0, art, music, fashion and everything within the space because onboarding is such a huge issue. When you type in on Google search anything about these different components, often the quality of information, it’s hard to sort through. We’re trying to help by having this concentrated place with high-quality content across all these different areas and then some cool visual interaction as well with that. We’ll be doing official announcements and everything so people can navigate where to go to view that.
The last question, question ten. What are you going to do next after the show?
I’m going back to working on the magazine itself. I’m designing a lot of the pages myself. The developers are going and building it out by doing a whole custom U/X and experience. I’ll dive, head back into that and putting the final pieces together.
That’s Edge Quick Hitters. Thanks so much for indulging us. Are you guys ready to hit some hot topics?
Let’s get into it. There’s a lot going on as usual.
The first hot topic on our list here. Disaster Girl NFT sells for nearly $500,000. Gold rush, classic viral images are selling as NFTs for thousands of dollars. What experience do you guys have with this one?
What’s interesting is this photo came out when she was a young girl and now, she’s in college. She paid for college tuition with one NFT. It’s a moment in time that she was famous for, people have called her Disaster Girl for years. She built a secret brand. She was able to monetize that brand in a cool way. That one’s a great example of a high-ticket purchase of an NFT personally. What do you think Emma-Jane?
The other part of this is memes and how the memes or meme culture fits into NFTs and broader crypto. The memes themselves, when people talk about the metaverse and where it is at, it’s already here. Even the smallest units of communication like memes, this is how we’ve been communicating in a natively digital environment for years. It does bleed into, “How do we define the metaverse? What is considered valuable?” This girl had this digital identity that was consistent for years and it didn’t mean anything, but now through NFTs, we’re able to back value behind that.
I had seen this photo before. I didn’t know that’s what it was known as. What we see is that’s a picture of a fire and a girl looking slightly at the camera almost as if she lit it. That’s the meme. You’ve probably seen it, but you might not connect it with the name. The next thing on our list is world’s first NFT-House combo for sale in California. We’ve talked about the $500,000 digital-only house, but now we’re talking about someone who’s getting an NFT along with their house. Jeff, you’re in real estate. What are your thoughts about this?
This one was so interesting to me. Like so many things, people are trying to figure out how to leverage NFTs to make sales or draw interest. In this one, the deal was a normal home for sale for around $1 million or so in Southern California. They had an artist create an entirely digital representation of their own of that home as well. They’re selling those two things together. One of the thousands or probably an infinite number of possibilities for bridging the physical and digital divide. This is one real-world example of it. It hasn’t quite sold yet. I don’t know if that’s the use case that people will be carrying forward. For folks that want to be on the edge of technology or the edge of NFTs, this is the thing that’s going to spark some interest. It’s way better than giving away a free color TV.
A lot of custom homes are pieces of art. You know them when you see them and you go in there. Architecture is one of those professions where not everyone gets to enjoy the art. Maybe you do and the folks that you invite to your home. Some homes are featured on the news or on different television shows. There’s something interesting in the idea of taking this form of art and making it available for display and sharing with folks.
It’s all of the pieces. With the house, is it just the house that’s an NFT or is it everything in the house is also being sold, or even, its separate NFT?
In this case, it’s a rendering of the home, the artist’s interpretation of it. It’s something in conjunction with the home. I like where you’re going with that thought process.
Emma’s living on a whole different level. If this is her house, she would have a way more complicated and probably more valuable and fun structure going on there.
It’s layered on top of the SuperWorld in addition.
With programmable fashion shows that go through the house on a monthly basis.
There are a couple of things I want to share. One, I just bought a house. We did one of those letters. You send a letter to the seller if you’re trying to end the negotiation process, try to get the price or whatever you want. We said we had this little family, we are the perfect family to live in this house, added all these different things. I attached a scan of a photo that my three-year-old drew. That whole package saved us $9,000. I considered selling my three-year-old’s drawing as an NFT because it’s already worth $9,000. Imagine where it can go from here.
The other thing that I find interesting too, one of these real estate shows on TV, was a woman who dealt in a lot of high-end real estate. The point that she made was that she had a lot of these clients who had these homes and they didn’t even live there. They were super valuable. They would probably maintain their value. Somebody else would buy it coming up. It’s an asset in a lot of cases for some people or a work of art that they want to hold. The interesting thing to me that I like about NFTs is that they’re both ownable and shareable.
One thing that I get frustrated with, it’s human nature. We all have it. We do have this sense of ownership that we want to have things and keep them, “This is mine and nobody else can have it.” Sometimes it doesn’t even make sense. We’re all like that when we were little kids and then to varying degrees, as we grew up, we’re willing to share things. One of the beautiful things about NFTs is you can, at the same time, own it and allow other people to appreciate it and be a part of it. That’s not something you can always do with that house that’s cool and has all these things in it that you own as an artifact, but that’s not shareable.
Maybe that’s where having different parts of the house even broken up into different access points or something. It all leads to that in that more share-ability.
I love being us all being able to share. It’s way better for everyone. The next thing on the list is fascinating, especially from the perspective of someone who’s been in the biology world. Digital horses are the talk of the crypto world. Instead of real horses, we’re breeding digital horses and racing them and owning them. This is a site called Zed.Run where you can go over there and own a digital horse like you can own a real horse. Are you familiar with the project?
I was on Clubhouse scrolling through my members using Zed.Run everywhere. That was one of the first races. I don’t know the details and the mechanics, but I know it’s something that it’s breeding and then betting on digital horse races.
These horses could use some digital fashion, maybe a cool saddle that we could put on, stirrups and all these different things.
If you’re doing these competitions among gamers, in addition to people auctioning off attire, is there a competitive opportunity where you could win attire by winning a competition and you could have different tiers of competition where essentially you earn your sponsorship? You earn the partnership with Nike for this custom attire that you’re featuring on your website because you won some tournaments with 5,000 players.
Digital Fashion: One of the beautiful things about NFTs is giving you ownership over something and allowing other people to appreciate and be a part of it.
That’s very much what we’re doing. It’s all about how do you have different levels in a sense within the system? As a player levels up through winning different tournaments or gaining winning streaks, it’s not in a way that it’s that massive insurmountable obstacle, which is what the industry is about now, but how can you have more democratize access where they can come in in different avenues. That’s exactly what we’re doing. When you reach different levels, then you’re able to access more content or more opportunity, whether that’s having a prize in a sense based on the winning or that’s access to more NFT content that they can sell off or broader sponsorships or whatever that looks like in a specific form that it’s that player.
That’s why it is the amazing thing with NFTs, is that not only can you bring in these different business and monetization models that they do have composability around it, but that can all be trapped on-chain down to the most micro level when it comes to different splits of royalties or profits or winnings across all the different stakeholders involved. It’s part of what we’re bridging completely into this whole ecosystem is how do you have those different layers of opportunities and different doorways for people to come in and then start generating value for themselves.
I’ve got a business idea for you. If you don’t have enough on your plate, you got to find someone on your team that gets into Zed Run and then you got to have a Zed Run horse called DIGITALAX that you guys start racing to cross-pollinate awareness of what you’re doing.
I’ll speak with my team about that because the whole eSports, in a sense, that’s even what this Zed Run is. Not exactly, but you could classify that as eSports. It’s people betting and racing and breeding these horses. It’s a whole gamified system. I’ll take you up on that.
I want to see the real horse, DIGITALAX, run the Kentucky Derby, and then in post-production, I want him to be rocking the meta jacket.
Horse fashion, that’s what we’re getting to here because there’s something in that. Don’t limit yourself to humans. You think big. We got to make sure that the horses are stylish too.
We can go one step out, zoo fashion, even. Something like this. You’re assessing all animals and that’s cool.
All animals deserve clothes.
This is a perfect transition. We have a couple more. We might as well address them on our little list of interesting topics. The Bored Ape Yacht Club, which maybe you could talk about ape fashion. In addition to that, Jeff and I heard about this from a friend who was completely baffled by what’s going on there. Have you heard of this, Emma-Jane, The Bored Ape Yacht Club?
All we know is our friend was at Clubhouse. There are all these rooms with all these people with their profiles set as apes talking about apes that they want or apes that they liked that other people earned. These four artists that are anonymous created 10,000 different apes of different rarities. Some have gold, some are more your basic average apes. People bought them up on OpenSea at now they’re selling for 0.5 Eth. What’s fun about it is if you go to the Yacht Club website, you can only get in the bathroom if you have an ape. You don’t get into the private VIP area. This is the beginning of what they’re doing, but these things sold out in a flash. Now there are all these mix-ups of the apes. There’s The Stoned Ape Yacht Club, The Bored Ape Yacht Club and The Ghost Ape Yacht Club. OpenSea, if you go there over the next few days, you’ll see a lot of apes.
I did see some of them. I didn’t know the specifics of the project, but I have seen those ape NFT profile photos as well going around. It’s interesting because even it was Lava Labs, they had their sale in a sense for the continuation of CryptoPunks to their new project. All of this idea of people being able to have an individual identity even if that’s a form of an ape and a picture of an ape, it’s something interesting, which then bleeds into how people want to have self-expression or neighborhood self-expression in the metaverse or in digital environment. Those projects where it’s a one of one identity for someone, they seem to be taking off. You can do access things and all of these other kinds of mechanics on top of that.
The last piece of news here from Blockchain News Center, crypto investing and wealth tips from world’s largest NFT fund that spends $250,000 a week on their investments. They’re giving four main tips here, which include narratives that will stand the test of time, artists and platforms that take the conversation rather than amplify the existing conversation, The Bored Apes would be amplifying existing conversation, anti-patterns, and then strong business models for enterprises. If we did get Charlie Munger involved in crypto, it would be on the strong business models for enterprises thesis of investing. Maybe Emma-Jane can explain to us the tail-risk of options trading and we could all get a handle on that first here. I don’t think it’s that easy. Any other thoughts on investment thesis? Are you investing heavily besides in your personal project? Are you buying up a lot of things or is it mostly with your own project?
I didn’t have time, because an investment if you’d go into it right, you can’t put five minutes a day. It’s going to be done more comprehensively. My background for the tail-risk side, is more of a trading in financial scope. That’s how I first came into crypto more strongly. It was being part of the hedge fund and then I became a cofounder. We were based in Sydney and Dubai. I worked with one of the top tail-risk hedge fund traders in the world. It’s Bruno Iksil used to hedge the books at JPMorgan. Throughout the whole financial crisis, he was part of the CIO office and he hedged all of the trades in their books.
There was this whole scandal. He’s known as the London Whale. You guys might have heard of him. He’s brilliant. He’s based in France now. He focuses on tail-risk hedging, which is all about you don’t earn money in a profit in a sense within a bull market or when the market is consistent, but as soon as there’s these big black swan events or spikes, that’s where you have your most value coming in. There are only about 2 or 3 tail-risk hedge funds in the world. We were the only crypto one at the time when I was a part of that fund there. The other one is based in Florida, Universal Fund and in 2020, the crash, Mark Spitznagel is the Head Investment Officer there.
It was 4,000% on that $10 billion fund because of that huge crash, March or April 2020, because of COVID. It’s crazy stuff like this, but it’s more the mindset that I love with tail-risk, which is about going against the crowd in a sense when everyone’s thinking, “It’s always going to be this way, or nothing can happen.” You’re putting in trades or investments that hedge against and provide this huge convexity within these bigger spikes. I know that there was someone talking to me, they were going to be doing high-frequency trading on open NFTs. I’ve heard crazy stuff that I don’t even know what that would consist of. Probably some algorithm peaking up, even the apes, they probably don’t even pick that up. The tail-risk side then bleeds into options contracts and that second type of trade strategy and a type of contract that you can hedge against where you believe a price of a derivative is going in a sense.
This is similar or the same as what Nassim Taleb talks about.
He’s the one that pioneered, particularly on the literature side, of tail-risk hedging of options, of black swan events and that inevitable market. It’s incredibly interesting. Myself, when you ask about doing the investment side, my brain doesn’t work well from a day traders’ perspective. I’m not good at it. I could never sit there and be able to say, “Buy here, sell here. It’s going to be like this.” I would fail but I do have more of a mindset of being able to set up these strategies that are purely around tail risks. How do you look at all these different components in the market, particularly in options contracts, that heavy mathematical side, which I love setting up high convexity trades? You have a lot of risk on the line, but it’s a more logical risk when you take a step back.
The probability has been investigated. You may lose every day for many days, but then win big one day, but probabilistically, you knew that was going to happen, you just didn’t know when. It all works out.
That’s the thing as well. No matter what anyone says, you cannot predict where the price is going. You can put all the kinds of strategies in the world and all the indicators.
Tell us, what’s going to be the price of Bitcoin in December 2021?
I can’t tell you that exactly. All I can say is I believe 100% is what most of these cryptocurrencies stand for and what they’re pioneering. The world is becoming more and more attuned to what that is and what it’s about, which is breaking down the walled gardens and being able to have these points of value exchange in the hands of anyone with a web-enabled device rather than behind some locked central provider. With that said, it does have a good upward trajectory that will continue upward, but there will be this cross or short-term volatility.
Speaking of investments, if folks want to support the project, is there an opportunity to purchase a token? Do you guys have a token?
Yes. We have it trading on Uniswap and then also QuickSwap at the moment. If someone wants to invest, we didn’t do any traditional investments with the team. We didn’t take any allocation. There were no VCs or backers behind it. It was crypto-native to have that strong community basis as well. If anyone wants to support or be more part of it, it’s going on Uniswap or QuickSwap and then buying up some of the token, which also has governance utility within our ecosystem as well.
What’s the name of the token?
It’s MONA.
Before we close out the show, we’d love to let folks know how to follow the project and yourself. Are there particular social handles that they should follow for the latest and greatest?
DIGITALAX.xyz, that’s our site. On there, we have a list of all our socials. Within that, our Discord is our most active community. It’s where we make a lot of our announcements. We also do full updates across our blog or our Medium posts, which that’s DIGITALAX.Medium.com. It’s some subdomain along with that. We also have our Twitter, which is @DIGITALAX_, and then also Instagram, Reddit, Twitch, even YouTube socials as well, which they’re all on our website.
This has been an extraordinary conversation. We went in a number of different directions. You’re working on so much. We cannot wait to see where you take things from here. That is a wrap for us. We’ve reached the outer limits of NFTs. Thanks for exploring with us. We’ve got space for more adventures on this starship. Invite your friends and recruit some cool strangers that will make this journey all so much better. Go to iTunes right now, rate us, say something cool and then go to EdgeOfNFT.com to dive further down the rabbit hole. Thanks again, Emma.
Thank you so much guys for having me. It’s fun.
Important Links:
- DIGITALAX
- Zed.Run
- Bored Ape Yacht Club
- Uniswap
- QuickSwap
- Discord – DIGITALAX
- @DIGITALAX_ – Twitter
- Instagram – DIGITALAX
- Reddit – DIGITALAX
- Twitch – DIGITALAX
- YouTube – DIGITALAX
- iTunes – Edge of NFT Podcast
About Emma-Jane MacKinnon-Lee
Emma-Jane MacKinnon-Lee is the founder of DIGITALAX—the first digital fashion NFT protocol and marketplace for gaming and esports.
DIGITALAX is building native web3 infrastructure for supporting the entire digital-only fashion, digi-physical fashion supply chain, incentivized ecosystems for designers, developers, players to earn new livelihoods through casual esports and also developing the first truly interoperable 3D file transfer format using native crypto and NFT incentive models for enabling a flourishing open source developer bazaar—a dynamic cross-platform format for the metaverse.
Emma-Jane has worked in the deepest corners of crypto, from options trading and crypto hedge funds, to being appointed by the Dubai government to develop blockchain use cases across the financial, transportation, trade and logistics, tourism and real estate sectors.
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