As the digital world evolves, NFTs become an ever more serious investment option within a decentralized online community. This savvy community craves open-source solutions that are fast and accurate. Enter Avalanche, the first decentralized smart contacts platform built for the scale of global finance with near-instant transaction finality. Avalanche‘s John Nahas and Jay Kurahashi-Sofue join Jeff Kelley, Eathan Janney, and Josh Kriger to talk about the various projects they are working on, especially their collaboration with Topps Baseball Cards. John and Jay delve into their mission to make NFTs more accessible through incentive programs. They also discuss various hot topics, from TikTok’s messy NFT gambit to the latest developments in NFT rentals.
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John Nahas and Jay Kurahashi-Sofue of Avalanche, Plus: TikTok’s Messy NFT Gambit, FTX Solana-NFTs, NFT Rentals, And More…
This episode features John Nahas and Jay Kurahashi-Sofue of Avalanche, the blazingly fast, low-cost, eco-friendly smart contracts platform. John is the VP of Business Development for Ava Labs. In Ava Labs, John’s mandates include growing the Avalanche ecosystem through the adoption of wallets, assets and applications. Additionally, he focuses on key infrastructure to enable developers and DeFi users to utilize Avalanche. He also oversees enterprise partnerships, the adoption of Avalanche strategic investments, and growing the ecosystem.
Jay is the VP of Marketing at Ava Labs. In Ava Labs, his mandates include maintaining Avalanche’s social media presence and partnership marketing. Prior to Ava Labs, Jay was the Head of Marketing at a blockchain organization in Brooklyn called Fluidity. Avalanche is an open-source platform for launching decentralized applications and enterprise blockchain deployments in one interoperable, highly scalable ecosystem. Avalanche is the first decentralized smart contracts platform built for the scale of global finance with near instant transaction finality. Ethereum developers can quickly build on Avalanche as Solidity works out-of-the-box. Jay and John, it’s a pleasure to have you on the show. Welcome.
Thanks for having us.
This has been a little while in the making. You have been busy cooking up a lot of fun stuff. There may be some puns throughout this show because I’ve been playing around in the Avalanche network and it is super fast. It’s a wonderland of sorts. That’s a little hint there. I have a new Trader Joe’s that I shop at now. Thanks to Avalanche. No more puns. How did you all connect with Avalanche originally? You have done some stuff in this space. How did this come about?
I joined Ava Labs in May 2020. A few years ago, I was working at Fluidity and that was where we focused on two things, decentralized exchange and security token capability. We got acquired by ConsenSys and that was the decision where I was saying, “Do I want to move over to ConsenSys or do I want to start something else?” The natural next step was, “Maybe there’s something interesting to be done with other things beyond Ethereum.” It was definitely a risk but that’s how I came about with the project.
I’ve been a serial entrepreneur my whole life. I worked in startups ranging from new media to international trade. I got bit by a blockchain bug in 2015, 2016 but got started in 2017 as a founding team for a company called TokenVault. That got acquired by Franklin Templeton at the end of 2019. I stuck around until the beginning of 2020. Big enterprise isn’t the ideal place for continued innovation and fast-paced stuff. I took a little bit of time off with COVID and everything and then started to jump back in. I was talking to different players that got connected. Once I started doing a little diligence on the team and Avalanche itself, I was sold. I joined two weeks before we went live on Mainnet around the BD team center.
We’ve been feeding you along the way. Jeff and I started Territory. That was cool to hear that you’ve been a consumer of ours.
It’s been a pivotal year for NFTs. It hit the mainstream in a massive way. What were your individual first exposures to them? When did it stick that this was going to be big? Let’s start with Jay.
It was honestly one of the earlier projects that were out. I used to say it was the first one but I don’t know if it’s true. It was CryptoKitties. CryptoKitties started clogging the Ethereum network. It was spring or wintertime if I recall correctly. I was very much in the finance sector of blockchain before it was called DeFi. We were pushing through these trading applications and some of these were more complex primitives that we know. They’re much bigger now.
Everyone started to say, “Why the hell are these cats clogging the Ethereum blockchain? I thought this was for finance, not for these collectible cute little cats.” From there I was thinking, “This is an interesting thing,” but it’s hard to tether it to something that makes me want to say, “This is the future.” It wasn’t quite yet. It was like how Bitcoin was that bug for most people in blockchain. I feel like CryptoKitties was that bug for NFT collectors, users and professionals.
As you started to go along, a lot of different brands started to capture it like it’s capturing it now. MLB tried their hand at NFTs at that same thing. I own the first NFT from the collaboration. It was MLB and Lucid Sight or some company named something like that. I checked and it has absolutely no value and no one cares about it. The point is it was a step in the right direction.
Not until about a year after that timeline, to keep it in sync with the roadmap I’m laying out, I was trading OTC with a bunch of synthetics traders. A lot of them had CryptoPunks on their profile picture. I was like, “This is interesting.” I only know these people through their Punks. Some of them are anonymous. Some of them just don’t want to necessarily show their identity and are not necessarily anonymous online. All of a sudden, they were $0.5 ETH, and at the time, it might have been a couple of hundred dollars. Even then I was like, “A couple of hundred bucks for a profile picture. I don’t know about that.”
I’m still kicking myself about the Florida Yacht Club and $1,500 seemed like, “That’s a lot.”
It’s the same thing. That was luckily how I got into the collection side of things. I started to collect some Punks here and there. There were some other smaller projects. Some of them were big and some of them don’t exist anymore. It’s trial and error and fast forward, I’m very much involved in it now. That’s how I got into the NFT space.
My advice, Jay, is as you continue to do public speaking space, you keep mentioning that MLB drop. Eventually, people will realize that that’s a Legacy drop.
That’s what I’m doing. I’m going to keep saying, “I’ve got the first one.”
That was Jay’s plan from the start here.
“See you later.”
“Mission accomplished.” John, how about you? What’s your first exposure?
I’m a converted skeptic. When I first started hearing and seeing about stuff way back, I was like, “This is silly and expensive. These are JPEGs.” I was like everybody else who’s a skeptic because I personally didn’t have any exposure to it. As I started to see things pop up on Avalanche, I’m like, “I’ll buy a couple here and there.”
You start to feel this connection to these things that you’re collecting. I come in from an emotional way. For me, it’s like when I was a kid, whether it was physical cards, Pogs, or whatever it was we were collecting during our youth, it brings back that nostalgia and feeling. I started buying it on drops. Even then I’m still like, “Maybe,” on these things because I’m very much a tangible person. I can’t read anything electronic. I like books. I like hardcover. I’m still stuck in that old world.
The pivotal moment for me truly was when I was at an event. There was a silent auction and they had this super cool USC thing. I’m a two-time Trojan alumni so I fight on for that and I wanted to buy this thing. I was dying to buy it. I called my wife and said, “It’s a really big thing.” She’s like, “You can buy it. It’ll go under the bed.”
Organically, on my own, I was like, “I wish this was an NFT. I’m not going to have a room in my house where I’m going to store collectibles, chotskies or things that mean something to me but I will never show.” That shift for me was an emotional shift because I was like, “I don’t have a wall to put this huge thing on. I wish this was an NFT.” That’s when it clicked for me. That’s when I started noticing, more so with our partnerships with Topps and everything else.
During COVID, that accelerated everything for us and for me. I have two kids. I’m not going to take them to the store to buy this or that.” They can buy it online. They can sell it and trade it globally. They don’t have to go to a corner of their elementary school during lunchtime and swap Pogs like I used to or do things like that. Through time and personal circumstances, I’ve come around to be like, “This makes sense.”
It’s more of a gradual adoption curve for you on that. That’s amazing.
You took us all the way from first exposure to why we can all see that there’s such a strong foundation here. I’d love to start talking about NFTs integrated with Avalanche and some of the projects that we can see that you are working on like Kalao and AVAX Apes. Would anybody volunteer to start off with that and take that question?
I’ll jump in. I love how we see the NFT space on Avalanche mature. There are three buckets. One, we call the digital collectibles or licensed products. That’s Topps who has their Topps NFTs on us. That’s from Bazooka Joe, MLB Inception, MLB Series 2, Bundesliga, Godzilla and much more to come. On the back of that, we have multiple other platforms that are similar. Those are enterprises or companies that are selling licensed products.
The second is the artist vertical. You see a lot of artists that aren’t launching NFTs on Ethereum because they have an ethos with sustainability that doesn’t mesh with proof-of-work chains. Jason Peterson just launched a one-on-one mural. It’s a 200-foot physical mural in Chicago. The ownership of that mural is tied to an NFT. He’s also dropping some of his iconic photographs both of celebrities and cityscapes. We’re seeing a lot of interest from artists to come on to Avalanche.
The third and final one would be what we call headless art. That’s community-driven projects. No one person or brand is behind it. The community and the project itself is the brand. That’s AVAX Apes and AVAX Treez. There are many new things popping up every day, AVAX Bridge Apes and the AVAX Ski Team are coming. There are so many of these organic community projects that are growing on us. That’s great.
In terms of infrastructure, the Topps side and license side, there are things that Ava Labs is working to build Web 3 functionality to bridge fiat and crypto. More so than that, NFT trade is a marketplace that’s live. Kalao is launching on the first week of November 2021. That’s going to be one of the largest marketplaces on us. They’re going to have an NFT marketplace that has Metaverse and AI functionality. There’s a lot going on. It’s hard to keep up.
I love this meta. It appears to me in my imagination like one of those giant mirror infinities and the idea of Apes projects. It goes on and on. Jay, do you have any thoughts on what’s going on with NFTs in Avalanche or did John pretty much cover it?
John covered probably a good portion of at least the projects. I won’t go into that. The main thing that’s interesting to me with Avalanche is what’s next? What’s the stuff that we’re seeing through the deal flow? What’s stuff we’re seeing when people are saying, “We’re looking to launch? We need help on marketing, BD, and even products all across those verticals. The next step is some of the more complex products and applications. There is gaming.
With Avalanche, what’s exciting for people like John and myself is you’re seeing the speed come through. I know, Josh, you were saying that it’s fast and fun to use. It’s something that is new. It’s like when you use the internet and you use dial-up and you had to deal with all those pains. The dial-up is like having MetaMask on a slow chain and all of a sudden, you’re strapped into some broadband or something even faster. It’s like, “We don’t actually have to have this type of experience. We get to have something that’s better.”
Also, the complexities of these games can grow. One company or one product that is based out of South Asia are creating this game like an Axie where there are pieces that are NFTs, and there are components of the game that involve those pieces. If you think about how games work, they’re not always turn-by-turn or not all super slow.
Imagine what you could do if the finality is you can put up thousands of transactions per second, then you could have regular Web 2 games that exist on Web 3 infrastructure. That’s what’s interesting to me. Hopefully, there are more that I don’t even know of that are going to come onto our laps in terms of deals or projects on our radar and stuff that I’m excited about in the next few years.
We follow this very closely and there are a few projects that we didn’t hear about. You mentioned the NFT space. I have a little bit of FOMO. On that note, how do people stay on top of the games and NFTs that are dropping on your platform?
That is the million-dollar question. Everyone’s trying to seek out the game and be there as early as possible. There are a bunch of different angles, at least externally facing. The main one is doing more research than the other person. I know that’s an annoying answer but that’s the game. There’s always going to be someone in the world that’s going to spend more time to figure out what is the next big thing.
If you’re not at least competitive to that person or that group of people, you’re going to be late after the product is deployed, the tokens and things like that. To give a tangible answer, I don’t think this is necessary. This is a pretty solid one. They call it RugDoc. It’s the third-party project that helps evaluate different risks and provides scores for these decentralized apps. What’s interesting to me is from their use cases, I was like, “Have you thought of a way to create a function to sort the evaluations by the time the contracts are deployed?” At least then, people can say, “All right.”
It’s the early projects, you’re not going to look at the high-risk ones. You might, but most people probably want to look at the stuff that’s middle-of-the-road risky or even very risk-averse. From there, you can at least minimize the pool to something that’s at least palatable and say, “I’m going to evaluate these instead of trying to boil the whole ocean.” They have this function through a calendar. The calendar shows different product updates. I told them, “This could be an insanely fruitful tool for early adopters to use.” They’re leading it into that.
I’m on their website. That’s a good tip. Let’s go again to some of those projects a little bit more. Mainly, the Topps one is a huge collaboration. There’s a classic collectible play there. Can you tell us a little bit more of what we can expect from that partnership?
I’ll jump in here. Topps is a very important partner to us. We saw a huge opportunity there to bring NFTs with some history to it, especially in the digital collectibles and the licensed products space. When we started talking to them, they understood the need to move into the future as well. They have a huge portfolio of properties, content and IP. In terms of what’s coming, there’s a lot still, hopefully. We’re excited for all the things they have and all the things that they’re talking to bring into the fold as well.
The biggest point with Topps that we want to touch on is when we started working with them, we wanted to have something different. The total crypto stuff, Web 3 MetaMask, connect the wallet and buy crypto. That’s not a mass market. Something like Top Shot and SuperWEB2 is great and very easy to use, but we wanted a hybrid and they wanted a hybrid too where you can click on every NFT and see it on-chain and the Explorer. Go to your name, your profile, click on your wallet, and see what’s in your wallet.
Open-Source Platform: Always do your research about NFTs so that you can always be updated on what is the next big thing.
The most important part of all this is that that platform is going to grow. Now, it’s custodial but eventually, it will be noncustodial. You will be able to withdraw your NFTs in the future. You’re paying with fiat so it’s credit, debit and balance for primary and secondary. Crypto payments are going to be coming there too. It made more sense to start with retail because a crypto native person can use a credit and debit card than the other way around.
The platform as it grows is intended to also bring along a new generation of users and customers to the Web 3 experience, to NFTs, and to crypto. They’ll be like, “What is a wallet? What is a transaction hash? How do I find that on-chain?” There’ll be a learning experience along with that. The crypto user can know how to use all this stuff but to bring the traditional collector who’s always been a fan of the Topps or whatever it is over to Web 3 experience and bring them along the way is a key aspect of that platform.
They should look for a podcast that they could listen to along the way to onboarding.
There are a lot of companies out there that fit a similar profile like massive movers and trade on. Nostalgia as well is new content. What other big enterprises are out there that are either on the platform or if they’re not on the platform, what should they know about working with Avalanche?
The most important thing is on the technological side. It’s a novel, new consensus protocol. It’s the third-ever consensus protocol after classical consensus and Nakamoto consensus. Avalanche is only the third-ever novel consensus protocol. Every other chain has used one or the other in the past or made some minor tweaks. Why that matters is because it creates the primary network. That network has a flexible architecture.
I like to sometimes say, you have your enterprise chains, DeFi chains, NFT chains and supply chain chains. The benefit of Avalanche is it’s truly decentralized and has over 1,050 validators within a year. It has a fast throughput at 4,500 transactions per second and near-instant sub-second finality. As you were saying earlier, it’s easy to use. It just clicks. The more things come on, the more they become interoperable.
When we do talk to enterprises, whether it’s for NFTs, payments, supply chain or X, Y and Z, they realize that building on Avalanche allows them to have access to all these other things. Certain parts of the platform are complementary to other parts. You can run smart contracts, you can do payments, you can connect one aspect to another. It’s a flexible architecture. It’s kind of, “What do you want to build? Come and build it and the platform will scale with you.” It’s familiar particularly for the EVM aspect. Our C-Chain is EVM-compatible and runs on Solidity.
We see a lot of people that initially built something for Ethereum and have said, “It’s too expensive for us to do this certain product. The margins are too small for what we want to build. We’re going to port it. We’re going to launch it on you instead.” Conversely, we’ve had people build on us and deploy on both. We see ourselves as a complement to Ethereum. Ethereum paved the way with the EVM. Build on us, deploy on both, and then let the market decide. Let people decide where they prefer to use it. We’re seeing adoption across the board from numerous different players.
Awareness is also going through the roof also on many different fronts. All the partnerships and activities are shouting from the rooftops about what Avalanche is and what it can be for people.
Thank God for the new update to MetaMask because converting over to Binance Smart Chain and any other chains used to be a real pain in the butt. To the sites that connect with Avalanche, if you are using your MetaMask, in one click, it automatically configures everything and you’re good to go.
That’s obviously a great step in the right direction but still not perfect by any means. There’s so much left to go, which will then help enable perhaps the next wave of adoption.
It sounds like you are thinking about credit card on-ramps for projects that have a more mainstream audience. Is there anything you can share there?
On the payment side specifically or just in general?
On what you are thinking about in terms of on-ramping users with credit cards and in more traditional payment processing.
We already have an existing relationship with a couple of providers such as Wyre and Nash. If you go to Pangolin, which is a DEX, you can put your credit card in, swoop right in, and buy a token using a debit or credit card. We’re working with these partners as well as forthcoming on-ramps and fiat payment providers to integrate them into other wallets that are native to Avalanche or that support Avalanche. You could buy AVAX straight into your wallet or any other tokens, as well as NFTs.
If you want to go on a site and have a Web 3 application, buy it, price it and denominate it in AVAX. You’ll be able to use a credit or debit card and they’ll do that swap for you. Ava Labs, on the other side of that, has done the conversion payment relayer technology for what you see on the top side. Everything is credit, debit. You can hold a balance in a wallet and then the conversion happens to settle anything that needs to settle on-chain in terms of payment there and unlocking or minting the NFT.
The focus though for the crypto native person is how do we get to that next 1 million, 10 million, 50 million users, not just of Avalanche but of crypto in general. The more adoption expands across the ecosystem for any platform or project, the better it is for everybody. The more users, the more we all benefit. At the end of the day, it’s abstracting that crypto complexity.
Crypto people love that sometimes because it’s like a club or our own group that we only understand, know and practice with. If you want the space to mature, grow and achieve the maturity and trajectory that we all know it will, you need to bring a lot more people on board. Abstracting away those difficulties is the easiest and best way to do so.
We make a lot of analogies between the evolution of the internet, websites, and what’s going on in crypto compared to the late ’90s and early 2000s. You do see nowadays that people can grab some JavaScript code or HTML code, and they can copy and paste. The general public can do stuff like that. At the same time, they’re not going to be hard-coding websites. Even the best of web developers aren’t even doing that. It looks like that’s where we’re headed with cryptocurrencies.
People may be able to engage a little bit with some of the technical information but in the end, we want to keep it out of their way. I had a question here about this huge raise that Avalanche announced of $230 million in September 2021. I would love to know more about what Avalanche is working on, near-term projects and partnerships on the roadmap. One example I know is you completed the Avalanche Rush, DeFi incentive program, and the integration of Curve and Aave. Can you tell us about the investment and where it’s going?
The moment in time that we’re in, at least within the Avalanche ecosystem, is about bootstrapping the growth as quickly and aggressively as possible. In this ecosystem and market conditions that we’re in, everyone’s racing. It’s like I said before about trying to be ahead of that one person who’s doing more research than you are. It’s the same thing. It’s very much saying that if you don’t put in the time to put in all of the pieces to help facilitate that growth, then another project will do that.
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You’re seeing that with incentives. Avalanche Rush is not the only incentive program that exists. There are plenty of other ones as well. In drilling down to the basics, it’s about user experience. It seems to be the theme around this discussion. It’s the theme around most discussions these days. Avalanche blockchain in general as a wider category is still complex. How do we make that as easy as possible? With Avalanche, you can make it easy on the protocol level.
How can we make it so people don’t have to deal with the complexities of understanding which chain does what? You just simply use it and that’s how it works. That’s how it should be. That’s how email and internet protocols work, and any of the protocols that we take for granted. That’s how it’s been programmed and set as a default for you.
On the other hand, there are also ways to run in parallel to those efforts. That work is a little bit more challenging than maybe most people tend to want to believe so it has a longer time to market. Effectively distributing systems and upgrading them is hard, plain and simple. The other side I always like to mention, and this is still related to engineering and product mostly, would be the infrastructure.
What I mean by that is explorers, wallets, and maybe there are DApp browsers. Those seem to have disappeared after the 2017, 2018 era but I thought it was a good direction. For some reason, people haven’t innovated as much on that. Effectively with Avalanche, we’ve identified the situation where we’re saying, “A lot of these items are still fragmented.”
When a user comes into the blockchain ecosystem, physically, they’re the hero, which isn’t necessarily the right way to do it if you want mass adoption because you’re giving them the burden of choice and research and saying, “You entered blockchain. What’s next?” I could pick a wallet, an exchange, or an explorer. There are clearly better choices to pick first to get onto that path to potentially using or purchasing NFT. It’s this thing that’s a little bit random in nature.
With the product team, it’s multifunctional. All of us, on John’s side, my side, engineering and product as well, we’re all coming together and saying, “What’s the feedback that’s coming externally? What are the thoughts that we have internally as people that have been around the block within crypto but also other major enterprises and brands? How could we make sure that people don’t have to think about the decision?”
One of the exciting things that we’re pushing through is this all-encompassing, internally, we’re calling it this OS. It’s effectively this concept of having wallets being easily accessible once you’re in the wallet and you have funds deposited, it’s an easy process too. You could then go and explore the wide ecosystem of Avalanche. You don’t have to say, “I want to use an AMM. I want to use an NFT marketplace.” You just look at it and it should say, “These are the choices, here are the quick snippets as to what you can do, and here’s how you can use it.” Hopefully, there’s also educational material around it.
That’s the first step. The next step is TBA but you can see where it’s going. It’s about fine-tuning that experience, listening to the product feedback, and then also making sure that we’re implementing it at pace. Effectively, all the things that you were mentioning, Eathan, with rush and raises, all of those things are basically to help out bring the attention towards these new innovations or initiatives that we’re trying to push through. That’s all it is. Altogether, it’s going to be very nice. That’s the stuff that we’re most excited about because we’re still just scratching the surface.
It’s like a community agile development on steroids.
To add to what Jay is saying, the foundation raised that money. That’s great because that’s going to throw jet fuel onto this fire that we’ve started. Whether it’s investing in teams, developers, projects, products, and infrastructure pieces that make it easy on the product side. The biggest star of the Rush program is the Avalanche Bridge.
There’s time and expense that goes into developing these things. The Avalanche Bridge has become a meme on crypto Twitter with good bridging. People are taking pictures in front of bridges. The reason is because it made it easy to move from Ethereum to us. That bridge is going to continue to expand to add other networks as well and create this interoperability with other blockchains for value to transfer easily without this difficulty that we’re used to in the current system.
These cornerstone pieces take time, effort, internal and external teams to build. The funds are going to help incentivize developers, teams, projects, creators and artists on the NFT side to come and build, deploy and use Avalanche. The Rush program is a way to tell people, “Come try us.” The funny part is we announced the thing with only a little bit of incentive.
Before Aave and Curve went live, you saw a huge influx before the formal launch of Rush happened because of the ease of use with that bridge. It was like, “Avalanche, let’s go give it a chance before the incentives are here.” People realize how quick and easy it is to use relative to what they’re used to. Rush will continue to go on for a while. It’s not meant to be a quick shot in the arm to get it going.
It’s to kick-start but then to continually grow by bringing blue-chip ETH projects like Aave, Curve, Sushi and Kyber. You’ve seen a dozen or two other native ETH projects come over because they want our users to have access and they want Ethereum users to try. Most importantly, it’s bootstrapping and getting an excitement within the developer community to say, “If they are coming over, and they are coming over, and people love using it on Avalanche, then let’s build on Avalanche.” Back to the point initially, build on us, deploy on both, do whatever you want but continue to incentivize the builders, dreamers, and users to use them.
One thing I’ll say is there was this narrative in 2020 about who’s going to kill Ethereum and who’s going to win. That narrative has shifted to, “How do we rise together?” It’s been particularly strong in the NFT community. We feel that energy all the time but it’s carried over to the DeFi and protocol world as well. I don’t think it’s about picking one horse anymore. It’s about gathering a stable and winning together. It’s pretty awesome. One more quick question before we take a step back. Can you tell us a little bit more about the Avalanche subnets?
The subnets are this function. The way I would describe it is you have the primary network like John was alluding to. That’s the core stack as it exists. It’s all of the chains that people that use Avalanche are interacting with or interacting with that primary network. In the near-term future, it’s likely the end of 2021, early 2022 or sometime in that general ballpark, we are going to have this concept called subnets.
Subnets can do at least two main functions that we think are likely but there’s potentially a lot more. I’ve read a lot of discussions with the community and people are suggesting cool ideas. I’m like, “I haven’t thought of that.” That’s what’s cool about our space. It’s the mind-melding of people that are all across the world with many different perspectives.
The two cases that we feel are likely would be one is to have permission subnets or permission blockchains that effectively connect to the permissionless primary network and are able to benefit from that but also not necessarily have to lift up their walled garden if you will. If you have an enterprise or institution that wants to benefit from blockchain technology, then they would deploy their private subnet and that’s how they would do it.
The subnet on that side could be programmed with KYC and AML capabilities and other things that could be programmed on-chain. That’s that angle. On the other side, you also have this concept where subnets can then extend Avalanche’s capabilities to other blockchains. What I mean by that is you can have something like Ethereum. With the case that we have now, we have the Ethereum Virtual Machine running on Avalanche.
Simply put, you have Ethereum powered by Avalanche consensus. It’s that powerful consensus mechanism that John was talking about earlier. This is the proof of concept for subnets being able to scale other chains effectively. You can horizontally scale that concept across any chain that has scalability issues as long as they’re wrapped in EVM.
That’s where you can then have this ecosystem of all these different blockchains that then can benefit. Hopefully, if you design it correctly then composability also won’t be an issue either, which seems to be something that’s becoming more of an issue as this is a million and one wrapped asset. It’s not quite clear as to where this is going to end. Those are the two functions I’d line up for subnets.
To build on what Jay’s saying with subnets, this is huge both on the DeFi side but also on the enterprise side. Imagine if you’re a bank or an enterprise, you can have jurisdictional subnets. You can have a chain for the US, the EU, for credited investors, and for GDPR restrictions. Those can separately work together and communicate with one another and to the primary chain. It’s like the internet of blockchains. There’s a ton there.
Open-Source Platform: If you’re not competitive with other people, you will be late to do something after the product is deployed.
I want to go back to something real quick, Josh, that you’ve mentioned. It drives me crazy. That silly term of ETH killer that people love to say about us and a million other of our competitor chains. That drives me absolutely nuts only because it’s such a concocted crypto-Twitter and crypto media term. Just like with our politics in the US, you put people on one corner, you put them in another, and then you let them fight it out. It creates tension and that creates eyeballs and people love that.
It’s like for us. People say our NFT is a bubble. These questions are so binary. They don’t make sense.
Generally, though, the way we see ourselves, granted that doesn’t mean that you can’t think that what you’re doing is better. Have healthy competition and debate the facts and the merits of the technology or whatever it may be. Ultimately, for people who are in crypto or NFTs, we see this as the entire universe because it’s our day. Day in, day out, this is all we know. We talk to other people and they’re completely unfamiliar with what we’re doing. You have to come to realize that we are still so incredibly early.
People are arguing and fighting over such small crumbs that there’s an infinitely large pie for everybody to have way too much to do with. Maximalism exists with multiple chains and diehard fans. Community is an amazing thing but when that community becomes like, “We’re better. No, we’re better. You suck.” That doesn’t help. It doesn’t help us collectively, as an ecosystem and a market, to grow and mature.
Tune in for a grudge match between John Nahas and Vitalik Buterin on the next episode.
I can’t fight Vitalik. I don’t have the technical chops to even have a conversation.
Fortunately, that narrative is starting to change, which was my point.
There is something to the community orientation in the world of NFTs and in particular, the collaborations and partnerships that are happening there. It’s a little bit different from what we’ve experienced in crypto previously. Maybe the tide is shifting. Speaking of a shifting tide, we’ve covered a ton of amazing stuff about Avalanche, Ava Labs and all the projects you have been working on.
We want to take a step back and look at some things from your personal perspectives. We have this segment that we call Edge Quick Hitters. It’s a fun and quick way to get to know you a little bit better. It’s ten questions looking for short, single-word or few-word answers but feel free to expand if you get the urge. John, let’s start with you. What’s the first thing you remember ever purchasing in your life?
It’s a piggy bank.
Have you bought it with your money?
My mom bought it for me. I had no money but I was at a store with her and she’s like, “What do you want?” I was like, “I want that.” It was actually a train that is like a piggy bank.
Jay, how about you?
It’s probably Pokémon cards.
Question number two. Jay, we’ll start with you. What is the first thing you remember ever selling in your life?
This is a controversial thing. It’s the earliest thing. I sold homework to my peers in middle school.
You’re the guy I’ve heard about in the news or whatever.
It was, back in the day.
John, how about you?
I had a lemonade stand when I was 3 or 4 and I thought I knew what I was doing. Do you remember those catalogs when you were kids and they send them home with you and you have to sell junk to your family?
What did you sell?
A wreath, a chocolate basket and things like that. I’d go to all my aunts and uncles and be like, “Buy something from me,” and they buy $50 worth of junk.
Question three, John, what is the most recent thing you purchased?
I buy all this stuff, to the dismay of my wife. I don’t know what it’s called but it’s a thing you plug into airplanes so that you can use your AirPods or your headphones. I don’t have to use their silly headphones that don’t work. I can use my headphones. It’s like a Bluetooth thing.
How about you, Jay?
I bought brand new sneakers.
Is there anything fancy we should know about?
I’m definitely into sneakers. This was a middle-of-the-road, but a limited Adidas, the new Boosts, the 4Ds. It’s 3D-printed and I’m pretty sure they say it’s made out of recycled material. I don’t know if that’s just marketing or not but I definitely fell for it.
Jay, what’s the most recent thing you sold?
I got the new iPhone. I own the old one so I sold the older iPhone.
To one of the sites that take it back or to a third party?
I did it through eBay. I’m a big eBayer. I’ve been doing it since the early days. I’ve stuck with it.
When they get into NFTs, there’s something for you to scope out.
How about you, John? What’s the most recent thing you sold?
I don’t sell many things, to the dismay of my wife. They just disappear from my life. She sells them I think. It was a couple of NFTs.
Is there anything you can disclose?
I bought a bunch of projects. I had a bunch of random ones. I was like, “I’m going to unload these.”
We won’t hurt her feelings.
I sold them for what I bought them before.
Since you do have a lot of things, John, what is your most prized possession?
My late father had a ring that he always wore. He wore it in lieu of a wedding ring. He would always tell my mom, “This is his wedding ring.” After he passed, I got to keep that around all the time.
Jay, how about you?
I have a similar answer. My great grandfather on my mom’s side used to be the Ambassador to Morocco in America. He’s Japanese. He was part of the NAFTA Agreement. He has cufflinks from the time they signed that deal and so I have cuff links from there. I always wear it, at least formally.
Open-Source Platform: If you don’t put in the time to facilitate growth for your NFT project, another person will definitely do that.
Jay and I have international roots. I have two of my dad’s cuff links right here in my drawer. When he said cuff links, I had to pull them up.
Jay, question six to you. If you could buy anything in the world, digital, physical, service and experience that’s currently for sale, what would that be?
I don’t know if it’s too long an answer but I’ll try and keep it short. I’ve always thought of this like the billionaire’s question that is similar to this. I would get a house somewhere, probably in Colorado. I’m going to fit the basement with an incredible sound system. If you know the sound, there’s a company called Funktion-One. They make incredible speakers. They’re in most of the big clubs. I’d fit in with that and have a proper comfortable chair like an Eames chair, and that type of vibe. It’ll just be like a sound room. I’m super into music. I would invite everybody. We’d have a great time. I’d like to have a room in the middle of nowhere, Ex Machina style.
We got to talk because our friend Elliot is in Miami, debuting these chairs that have sound, sense, and movement incorporated into them. We got to add some layers to your vision there. We’re talking about making these chairs also mine some crypto in their free time.
I want an invite to that room, that’s for sure. John, how about you?
I’ve been saying the same thing for years. Unfortunately, now it’s a cliché in the news. I would love to go to space. I would pay for a trip to space.
The timing’s not as good.
The timing sucks but I’m willing to throw myself to the wolves here. It would probably be the most incredible experience to see Earth from space. It’d be nuts.
I read about them. There are ten-minute expeditions or whatever. I think in our lifetime, we’ll see something more accessible and longer. John, question seven. If you could pass on one of your personality traits to the next generation, what would that be?
Inquisitiveness. I always ask, “Why or how come?” I want to learn as much as I can. I don’t think anyone can ever stop learning. There’s a great part in Nassim Taleb’s book about Umberto’s library and how a person’s knowledge is defined by all the things they don’t know. I’m always trying to learn more and read more so I would hope that would continue, especially nowadays. They think they know everything.
Jay, how about you?
That’s definitely a good one, John. It’s something similar. Flexibility or open-mindedness. A quick anecdote there’s like, “If you don’t always dismiss something as stupid or something that’s beneath you, you’re going to have much more opportunity.” Hence why we all probably did that with crypto a little bit and said, “This is maybe a little bit esoteric but I’m not going to brush it off. I’m going to dig deeper.” That’s the type of mentality. This is very much similar to inquisitive but at least it’s like overlapping circles. That would be mine.
Let’s flip it on its head then. If you could eliminate one of your personality traits from the next generation, what would that be?
I’ve definitely gotten better but I have a twin sister, so I’ve always been super competitive. Growing up, I knew that being stubborn was something a trait that was “negative.” I’ve always been working on that. It’s a progress of life. If you could eliminate that early on, that would be my answer.
It’s those double-edged sword ones, for sure. John, how about you?
Hopefully, they won’t be as talkative as me. It’s taking a lot of time for me to learn to listen more and talk less. I’m still battling that.
Question number nine is a little easier. What did you do before joining us on the show? John, we’ll start with you.
I ate lunch.
This is the last one. Jay, question ten to you. What are you going to do next after the show?
John, I and eight other colleagues from Ava Labs are gearing up for Lisbon Blockchain Week 2021. We have an incredible activation called Avalanche House. It’s a nod to the topic we were talking about earlier. We’re trying to make it open. In engagement, we have projects from all across the ecosystem, not just Avalanche. That’s probably the minority segment. There are a lot of different chains that are going to be present. It’s going to be a cool environment where we’re going to meet a lot of people and have that wall taken down in the spirit of connectivity, having fun and being human. Hopefully, that’ll be successful. I’m excited about it. John is as well, I believe.
John, how about you? What are you doing next?
I’m taking a call with a partner. All the day, every day. It’s amazing to be talking to many great partners that we have and potential partners, and then you have to Jay’s point, finishing up as much work, emails, and docs as I can before we head off to Lisbon.
Thanks so much for rolling through Edge Quick Hitters with us. We appreciate it. We had a few Hot Topics to cover as well and some interesting news. What do you say, Eathan?
Let’s hit it. The first one up to bat is TikTok’s ‘Messy’ NFT Gambit Is Spooking Its Biggest Artists. “At end of September, TikTok trumpeted a pair of milestones. First, announcing it had over a billion monthly active users worldwide. Second, it was preparing its first-ever NFT collection, which was widely covered in the media. However, last Wednesday, when TikTok’s first NFT collaboration with Lil Nas X and the artist Rudy Willingham was supposed to arrive, it was nowhere to be found. The NFT was still MIA on Monday and a source close to the situation now tells Rolling Stone the release won’t be coming out at all. Three people with knowledge of TikTok’s NFT rollout described it as a challenge, a mess, and a complete joke. It may not be coming out at all.” That’s terribly embarrassing.
Every big drop we’ve seen has run into difficulty. It’s pretty much new to everybody. You can bring a great team together and curate the right subject matter experts but it’s freaking brand new and it’s tough. That’s an indication. TikTok’s got a lot of resources. They’re an entrepreneurial crew from what I can tell. They iterate, release products quickly, and respond to their customer feedback. Even an organization that big with that many resources still is going to run into difficulties.
What’s cool is comparing this with the success of some of these NFT profile pic projects where it’s just a ragtag group of ambitious artists and creators. They pull it off.
It’s the right team, chemistry and scope but there’s an element of randomness. There have been projects I’ve been a believer in. I’ve seen the floor drop by 50% in the snap of a finger, but then they come running back. You never know even after the launch what’s actually going to happen.
With the smaller projects, especially with the PFPs, you basically have hyper-evangelized professionals at 3, 4 or 5 at max, honestly. That’s to their advantage so they can work around the clock. They believe in the same vision so that you no longer have to do that cultural alignment. With NFTs and TikTok, I can only imagine TikTok’s main mission is to drive content on their application. It’s not to drop NFTs. All of a sudden, you have probably a handful of subject matter experts that now have to convince all these different stakeholders.
Some of these stakeholders think it’s just a matter of uploading a JPEG and calling it a day. Others might have stronger opinions than other sites. That’s what’s making it complex. Perhaps their PR and marketing department also overestimated how complex the situation is. They’re like, “This is like a product drop. We did this before. We’re going to have a roadshow where it will tease the announcement.” I bet you what happened was the engineering and the product department were like, “This is nowhere close to being done. It’s not going to work.” Maybe that’s how they scrambled and scrapped it.
I don’t mess with TikTok much. What I would expect and what I have seen firsthand, to your point, there’s a small group of people. They have a mission in mind, launch something, and evangelize it. When you’re dealing with bigger companies, that becomes multiple stakeholders, multiple opinions, and something would call scope creep, “Add this feature. We need to do this too,” and then this guy puts his two cents in because he wants his department to be represented, “We’ll do this feature too.”
Everybody starts adding these things and they think it’s easy. You can’t patch it together because once you do, things happen. Also, you might try something new. When you try something new, there are always inevitably going to be issues and roadblocks. It’s how you fix them. You iterate, support it and make it better. Some of these people are too big to do that in an efficient or timely manner. If they turn something on and it doesn’t work, they scrap it. They’re not going to go back and put the time in to fix it.
I’m curious if there’s any role in this of a developer mentality. I’ve gotten the sense that there is a large handful of people who are developers, they’re folks that are excited about Solidity, cryptocurrencies, NFTs, and they’re diving in to do this work. A lot of people learn web development and programming because they want a nice stable job that pays well. Those folks are still stuck in the world and learning the coding skills that are needed to fulfill those jobs. They might be in a shortage when it comes to fulfilling the needs of a project like this. I don’t know if that’s the case. I don’t know if you have any thoughts on that but I’m wondering if that’s part of what’s going on here.
It’s definitely culturally very distinctive when you think of the developer mentality.
From what I hear all the time is business people, myself included, say, “Why don’t we do this?” It’s because it sounds easy. What I’ve learned from my product team and our Head of Product is if it sounds easy, it’s because it’s actually hard. Making things with technology easy is hard. There’s no such thing as something’s easy. Business people or executives sometimes are like, “We’ll do this little thing. It’s easy or it’s small.” To make technology easy is a lot of work. They will trip on themselves. Developers are told, “We’ll do this,” and it won’t work.
Those are the words that we had a lot in our territory.
On top of being easy, it might appear to be inexpensive as well. Let’s hit the next hot topic here. It’s going to be an interesting one. FTX.US Launches Collectibles Arm in Boost To Solana-Based NFTs. “On Monday, the US wing of Sam Bankman-Fried’s crypto empire said its new marketplace, FTX NFTs will allow you to trade, mint, auction and authenticate Solana-based NFTs. It plans to soon support NFTs on the Ethereum blockchain. The prioritization of Solana may highlight two realities. Bankman-Fried is heavily invested in the Solana ecosystem, and that ecosystem, while host to a handful of so-called blue-chip projects, doesn’t yet have a juggernaut marketplace for NFT trading.” It’s very interesting. They’re trying to boost an ecosystem that’s in existence by highlighting it in any project.
More marketplaces are coming from big platforms. It’s expected that OpenSea won’t process 98% of all NFT transactions forever. It makes sense that people would try to incorporate and vertically integrate where they can have massive followings, communities, and what it’s all about. Let’s say the Binance community is a bit different from the community of people that support a particular musician. It’s a different dynamic but still a massive community and access to them. When you have that, you can launch almost anything and test it across that community very quickly. I’m not surprised at all that FTX is jamming on all kinds of fronts.
The Solana art user interface is not bad. No offense to those people but FTX knows how to crush UI/UX in a way that’s very special. With a lower price plus their UX team behind this, I’m pretty bummed.
Have you used the platform or is it not out yet?
I don’t think it’s out yet. I have not used it if it is out. I’m just saying that fundamentally, it makes sense. I’m sure they’ll do a good job.
I’m a big fan of the exchange.
I’m also curious looking back here. I haven’t done the research or tried to extrapolate here but as we talk about various platforms, OpenSea was one among several that seemed to be on the tip of people’s tongues. I’m curious what their market share was a few years ago. Have they always been 90%? Did they rapidly gain that market share over 2020? How quickly has it happened? Has that been long-standing?
What’s funny is we were going head to head with OpenSea in 2017 or trying to at AirSwap. AirSwap was mostly geared towards the ERC-20s but ERC-721s were getting bigger content with how we led off with podcasts with the CryptoKitties story. OpenSea was only focusing on NFTs when no one else was focusing on it at all. That was already an upper hand. I remember even thinking, “What is the point of this OpenSea thing?” It was just these low-value PFPs at the time. There were Metaverse items. Gods Unchained was a big project at that age. I still thought it was a good idea. I checked. They haven’t done too much with it or at least haven’t gotten too much traction.
Open-Source Platform: People are fighting over small crumbs even though there’s an infinitely large pie for everybody to have way too much to do with.
They had a bunch of these PFPs. What ended up happening was since they already had the whole market, not that many other marketplaces existed, once activities started picking up, all the crypto native people would be like, “Go to OpenSea.” As the mainstream people came in 2020, with the huge rush that we had with NFTs in late 2020, the natural thing was the people that can figure out how to configure MetaMask and the ETH on their wallet, and things like that, they’re going to be able to play in this market. The people that can’t, can’t.
That margin has narrowed a little bit as we move along. Effectively, you had a bunch of other marketplaces like Rarible. Things like that start to focus on certain things like UX or UI even. A different community, Nifty, is also another big one. That’s how they started to lose it a little bit. They had more if I had to totally guess without any metrics in my mind, and then they started to lose that traction. It’s not negative by any means. It’s just that the pool is getting wider and the percentage is getting lower.
Thanks for that, Jay. You had a lot of answers to my question. I appreciate that.
As someone who watched it happen and slip away from my fingers, I know a bit about it.
We’ve got one more topic, Eathan.
Let’s do it. NFT Rentals: Why VCs Are Backing a Puzzling New Project. “Lenders can send the NFTs they want to rent out to a smart contract after determining the daily rental price and maximum rental period. Borrowers then input how long they want to “own” the NFT, paying for the rental cost plus a collateral amount equivalent to the price of the NFT, which they get back once the NFT is returned. reNFT is the project. They see the future of its lending protocol extending into the Metaverse, where users could rent out their play-to-earn items, IP, and even digital real estate.” We’ve been talking about this already on the show. What’s the value of holding some of these NFTs long-term that you may not be able to utilize all the utility of because you still hold and do them? It’s almost like real estate or property rentals in a sense.
What’s funny about reNFT is they won the first hackathon that we threw. It was MoneyDance. I’m glad that they’re making waves. They came up with the concept and it was cool. It’s still cool. I’m glad to see that happening. It’s an interesting concept. It’s the open-mindedness point that I made earlier about that trait that I want to pass down but also that comment with OpenSea. Initially, you want to say like, “Rental NFTs sound a little silly,” but maybe from my perspective at least, I want to be a little bit more open-minded about it, especially as it seems like it has a lot bigger reach, so that’s a cool idea.
It makes perfect sense. If you can fragment NFTs and if they’re bigger, you can buy more but then you might end up buying ten NFTs when you really just want one, and then it goes up in value. You want to have some liquidity in the short term, which is what’s beautiful about blockchain. We talked to another team that’s launching another liquidity platform for NFTs. We might have it as a Hot Topics soon. This is inevitable and it’s a good value-add for the NFT industry.
That’s big. For me, I look at it as these major inflection points that happen and have happened in the evolution of NFTs like ERC-721, ERC-1155, and all these different steps. This idea and how it forms to me is one of those inflection points because it taps into what can be possible with utility-based NFTs. Being able to rent that utility to somebody else is pretty interesting. It’s pretty important.
It’s like if you have a VeeFriends and you can go to the 1st and 3rd VeeCon but you can’t make it to the 2nd, you could rent that to somebody. They could use it, attend that conference, and you could still get the value from it, and then have that returned to you. For me, my mind starts racing and I’m thinking about all the different utilities where that would be interesting to be able to rent.
I’ll take it a step further. Aside from what we’re thinking about NFTs, borrowing against them, loaning them out, or earning revenue. I think of NFTs as a potential mortgage. Your mortgage could be an NFT. Instead of having to go to a bank to get a home equity line, you can rent out the part of your mortgage, deed or car ownership. Instead of a pink slip, you have an NFT. If you need a quick loan, you’re going to use your car as collateral.
Open-Source Platform: The real-world implications of NFTs are more so than just collectibles or digital art. Eventually, its impact will be seen on mortgages, car ownership, loans, and more.
The real-world implications are more so than just the collectibles or digital art side. We’re doing something with a company for invoice factoring. If you’re a company and you have 30-day payment terms, you can go sell that invoice to someone else for $0.90 on the dollar, that person can wait and redeem it for the full $1 or sell it for $0.95. There’s so much to do.
As you said, some of it isn’t the sexiest stuff. You don’t hear about it that much in the press but it’s all the stuff that’s going to be part of our lives and we may not even know it. That’s Hot Topics. This has been amazing. I know we’ve gone on even longer than we normally do here. There’s so much to cover. It is amazing to know all about everything you got going on at Avalanche and Ava Labs. I wanted to let our readers know where they can go to follow all of these amazing exploits. What’s the best place to track you?
I would suggest Twitter @AvalancheAVAX. That’s the handle. If someone’s not necessarily looking for social channels and is more looking for DApps that they want to use, I would say Ecosystem.AVAX.Network. Those two resources are excellent if you want to keep an eye out. It goes without saying but reach out to anyone of us on the Ava Labs team. We’re happy to chat. Having more perspectives is the best as we move along this strange path of Web 3.
We talked about doing a little giveaway or something. Are there any details that you want to share?
The giveaway we came up with was five AVAX for two winners apiece. I don’t know how you run those though. Maybe you can clue me in on that.
We’ll do a cool little Gleam campaign and share across our respective ecosystems around folks reading to this and learning more about Avalanche and all the cool stuff you are doing.
That’s amazing and very generous. We appreciate it. Keep an eye on our socials for that, everybody. We’ve reached the outer limit at the Edge of NFTs. Thanks for exploring with us. We’ve got space for more adventures on this starship so invite your friends and recruit some cool strangers that will make this journey all so much better. How? Go to iTunes, rate us and say something awesome. Go to EdgeOfNFT.com to dive further down the rabbit hole.
Want to help co-create Edge of NFT with us? Got guests you want to see in an episode? Questions for hosts or guests or an NFT you’d like us to review? Drop us a line at Contact@EdgeOfNFT.com or tweet us at @EdgeOfNFT to get in the mix. Lastly, be sure to tune in next time for more great NFT content. Thanks again for sharing this time with us.
Important links:
- Avalanche
- Fluidity
- RugDoc
- Topps
- TikTok’s ‘Messy’ NFT Gambit Is Spooking Its Biggest Artists
- FTX.US Launches Collectibles Arm in Boost To Solana-Based NFTs.
- NFT Rentals: Why VCs Are Backing a Puzzling New Project.” “
- @AvalancheAVAX – Twitter
- Ecosystem.AVAX.Network
- iTunes – Edge of NFT
- Contact@EdgeOfNFT.com
- @EdgeOfNFT – Twitter
About John Nahas
FinTech Executive and Start-Up company builder with over 11+ years of experience growing and developing ideas to generate growth.
Proven track record with results and accomplishments at leading companies like tokenvault, Engeocom, and Invicta Petroleum, and Mic.com.
Extensive experience spanning across FinTech, Digital Assets, blockchain, startups, institutional leadership and management, marketing, international trade and finance, business strategy, partnerships, investor relations and negotiation to drive company growth.
I believe every great business development team is comprised of passionate and inventive individuals who clearly communicate value propositions to all parties
About Jay Kurahashi-Sofue
VP of Marketing at Ava Labs building Avalanche
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