Latest / The Paul Barron Crypto Show / GTA 6 A.I. Agents Coming!🚨Virtuals Gaming Bull-Run🔥Yat Siu INTERVIEW

Transcript

GTA 6 A.I. Agents Coming!🚨Virtuals Gaming Bull-Run🔥Yat Siu INTERVIEW · The Paul Barron Crypto Show

0:06
Speaker 1: Today we're going to be diving into AI agents and
0:08
Speaker 1: why this may be the biggest thing to happen to
0:10
Speaker 1: crypto and the blockchain space in a long time. My
0:14
Speaker 1: name is Paul Barren. Welcome back into tech Path today.
0:16
Speaker 1: We wanted to get in I would say the world's
0:18
Speaker 1: most renowned expert on this area and topic, and that
0:21
Speaker 1: is of course Yacht Sue coming in from Animoka Brands.
0:24
Speaker 1: How are you yet?
0:26
Speaker 2: Very good? Thank you for having me again. It's been
0:28
Speaker 2: certainly a very interesting start of the year, so I think.
0:32
Speaker 1: No kidding, no kidding, we have got some crazy stuff
0:36
Speaker 1: going on. I want to jump to a tweet that
0:39
Speaker 1: you put out and this was interesting virtuals protocol and
0:42
Speaker 1: Animoka Brands now partnering to invest in AI gaming. Explain this,
0:47
Speaker 1: What are you up to? Where do you see this going?
0:49
Speaker 2: Well, I mean, I think AI, as we know has
0:53
Speaker 2: been all to talk for really the last twelve to
0:55
Speaker 2: eighteen months, but really the potential in AI and gaming
0:59
Speaker 2: has not yet been fully explored. And as you may recall,
1:02
Speaker 2: we spoke a lot about how gaming and AI will
1:05
Speaker 2: not just revolutionized production. That's where most of the effort
1:07
Speaker 2: has been. Oh, you can make a game cheaper, or
1:10
Speaker 2: you can reduce production costs, And it's very true that
1:12
Speaker 2: with our own studios as well as with our portfolio.
1:15
Speaker 2: In some cases production sort of elements have been reduced
1:18
Speaker 2: by up to eighty percent depending on the topic. So
1:20
Speaker 2: that's obviously efficient. But what we haven't really seen yet
1:23
Speaker 2: is the rise of actually what is more natural, which
1:26
Speaker 2: is that the consumers engaging with AI, not just in
1:28
Speaker 2: terms of you know, creating sort of new worlds and environments,
1:31
Speaker 2: but you know, basically with NPCs. So when you think
1:34
Speaker 2: about the number of people that are interacting and engaging
1:36
Speaker 2: with MPCs today as a form of dumb AI, that's
1:39
Speaker 2: actually more people engaging with it than open AI for instance. Right,
1:43
Speaker 2: there's actually billions of people on a daily basis playing
1:47
Speaker 2: games dealing with some kind of you know, basically quasi
1:50
Speaker 2: AI agent. But the quality of that AI is very low.
1:53
Speaker 2: But there's a couple of reasons why the quality of
1:55
Speaker 2: the AI is very low. The first one is that
1:57
Speaker 2: the cost of running AI is actually still very very expensive. Right,
2:01
Speaker 2: So if you're a game and you have to basically
2:03
Speaker 2: and I think I tweeted about this, right, I was
2:05
Speaker 2: just sharing that you know, if you have tens of
2:07
Speaker 2: millions of users and you actually create sort of a
2:09
Speaker 2: full fledged sort of you know, traditional LM on top
2:12
Speaker 2: of it, and then actually what happens is you're going
2:14
Speaker 2: to run the cost into the tens of millions of
2:16
Speaker 2: dollars extra depending on the size of the game, which
2:19
Speaker 2: you know makes it untenable. So that's why the AI
2:22
Speaker 2: is very very simple. But you know, with things like
2:23
Speaker 2: deep Seak for instance, some of the innovations around that
2:26
Speaker 2: where they are able to sort of really sort of
2:28
Speaker 2: reduce the cost of running AI, we're going to see
2:31
Speaker 2: a lot of explosion in those areas where they can
2:32
Speaker 2: straight create very specialized AI, but also one that will
2:35
Speaker 2: feel basically the same like what you can get from
2:38
Speaker 2: a full fledged LEM, except you know, for a fraction
2:40
Speaker 2: of a cost in terms of the subject area. And
2:43
Speaker 2: this means that billions of people are going to be
2:44
Speaker 2: onboarded with this engagement of an AI that actually they're
2:48
Speaker 2: already dealing with. But that's just just much more smarter
2:50
Speaker 2: and more intelligent and frankly feels more you know, like
2:53
Speaker 2: people today already talk to chat GPT as if they
2:56
Speaker 2: were their friend, Right, that's something that a lot of
2:57
Speaker 2: people are talking about. But can you imagine what that
3:00
Speaker 2: like when you're actually dealing with an AI character that
3:02
Speaker 2: you're engaging every day anyway inside a game, which you
3:05
Speaker 2: have an emotional attachment of connection to. I mean, how
3:07
Speaker 2: many people today still remember their childhood gaming characters which
3:12
Speaker 2: have actually formed some kind of emotional connection with Because
3:15
Speaker 2: it's not just a text, but actually it's something visual.
3:17
Speaker 2: It's an avatar, but within the context of the story
3:19
Speaker 2: that makes it so we think it's going to be
3:21
Speaker 2: really revolutionary. And the reason why this is so big
3:24
Speaker 2: for crypto is because, of course the currency and the
3:26
Speaker 2: mechanism is going to be crypto rails because AI agents
3:30
Speaker 2: can actually you know, own and create value, you know
3:33
Speaker 2: through tokenization, which wasn't really possible before. In Web two.
3:36
Speaker 2: At the end of the day, you can talk to
3:37
Speaker 2: a fun AI agent, but they can't actually sort of
3:40
Speaker 2: do business with you. But here, you know, they can
3:43
Speaker 2: actually do that, and that gives an AI agent actually power.
3:47
Speaker 2: And you know, today when you look at the investing agents,
3:50
Speaker 2: you know, like all of the taos, whether it's like
3:52
Speaker 2: a sort of what used to be a sixty z
3:54
Speaker 2: Eliza or you know virtuals or you know even things
3:57
Speaker 2: like A Monica for instance. What's interesting but those ones
4:00
Speaker 2: is that actually people start working for them, right, Just
4:03
Speaker 2: think about it. You know how people used to think
4:05
Speaker 2: of an AIS something that is a tool for me,
4:07
Speaker 2: but actually now people are, you know, whether they understand
4:11
Speaker 2: it or not, actually kind of working for an AI
4:13
Speaker 2: because the AI as a protocol can give you tokens,
4:16
Speaker 2: can give you value, and that's actually really fascinating as well.
4:20
Speaker 1: Well, you mentioned AI Monica right here the announcement they're
4:24
Speaker 1: officially joining as a strategic partner there. So to your point,
4:28
Speaker 1: we've started to see a lot of that. I've had
4:30
Speaker 1: several guests on talking about Argentic AI and what we're
4:34
Speaker 1: going to see. Talk to me about AI Monica. What
4:36
Speaker 1: are you trying to do here? I was also following
4:38
Speaker 1: the even the portfolio of what's happening here? Explain this
4:42
Speaker 1: a little bit more.
4:43
Speaker 2: What'd your cluse? Yeah? So, so first, you know, A
4:46
Speaker 2: Monica is not a project that we launched, and we
4:49
Speaker 2: really started working with them actually post launch. And clearly
4:52
Speaker 2: this was an inspiration of you know, what used to
4:55
Speaker 2: be A sixteen's sort of z before they had to
4:58
Speaker 2: rebrand to Elizos. Because you know, I guess because of
5:01
Speaker 2: some maybe possible requests from from and recent Horowitz, but
5:05
Speaker 2: the way that we think of aim from our let's
5:08
Speaker 2: call it more philosophical lenses, that I actually think that
5:10
Speaker 2: this is the next evolution of essentially mashup culture in uguc.
5:14
Speaker 2: You know, how do brands proliferate today? Right? They proliferate
5:17
Speaker 2: very different from where they proliferated thirty years ago, which was,
5:21
Speaker 2: you know, I have an IP, right, and I basically
5:23
Speaker 2: publish it, and I marketed, and I'm in control of
5:26
Speaker 2: the advertising, I'm in control of the messaging, and really
5:29
Speaker 2: the consumer really had very little control over the brand, right,
5:32
Speaker 2: They were just really consumers of the brand. They really
5:35
Speaker 2: didn't have any kind of ownership or ability to mash
5:37
Speaker 2: it up. Then came something like YouTube, right or now
5:41
Speaker 2: you know, of course TikTok and those type of platforms,
5:44
Speaker 2: and what do people do? They mash up culture every
5:46
Speaker 2: single day? Right? If you remember when YouTube first came out,
5:49
Speaker 2: they were sort of you know, creating mashup of like
5:52
Speaker 2: you know, trailers of like movies and stuff like that,
5:54
Speaker 2: or maybe even the existing TV series, and people started
5:56
Speaker 2: watching that more than they were perhaps watching the actual show.
6:00
Speaker 2: In the beginning, the studios said, hey, this is a threat.
6:02
Speaker 2: We don't like that. We've got to stop that, right,
6:04
Speaker 2: And then eventually they o caved and said, you know what,
6:06
Speaker 2: it's actually much better to actually adopt it. And so
6:09
Speaker 2: today there's no Hollywood movie that can be released without
6:12
Speaker 2: user generated content on YouTube and on TikTok and so on.
6:15
Speaker 2: So we look at the sort of space very similarly.
6:18
Speaker 2: Let's just to say, if someone's going to go out
6:20
Speaker 2: and sort of create sort of a clearly and Animoka
6:23
Speaker 2: inspired IP, right, we have two choices. One is we've
6:28
Speaker 2: rejected and we say we don't like that, or we say,
6:31
Speaker 2: you know what, how can we work with you and
6:33
Speaker 2: sort of, you know, make something happening, Because if you
6:35
Speaker 2: believe in UGC, and if we believe in this kind
6:38
Speaker 2: of collaborative spirit, which is what animoka is all about,
6:41
Speaker 2: then wouldn't it be kind of sort of hypocritical for
6:43
Speaker 2: us to say, please shut that down, we don't want
6:45
Speaker 2: you to do anything with it, right, Yeah, And if
6:48
Speaker 2: we're right about this, which is that sort of AI
6:50
Speaker 2: is essentially that sort of supercharging tool for a lot
6:52
Speaker 2: more sort of user generated content that is now created
6:55
Speaker 2: much more organically and maybe automatically and maybe in the
6:58
Speaker 2: much more ergentic fashion then and you know, we should
7:01
Speaker 2: basically sort of show the way in terms of how
7:03
Speaker 2: brands should interact with it. And I completely imagine in
7:05
Speaker 2: the future there'll be many many spin offs and many
7:08
Speaker 2: sort of brand mashups and working with them and gaining
7:11
Speaker 2: value and corporating what it would be probably better. Maybe
7:15
Speaker 2: in another way, if AA Monica does really really well,
7:18
Speaker 2: does that look better or worse for animal ca? And
7:20
Speaker 2: we would say, even though it's not related to us,
7:22
Speaker 2: it's gonna look better for us, in the same way
7:24
Speaker 2: that if a video from I don't know, like a
7:26
Speaker 2: Gucci or a Nike or Adidas, not created by them,
7:29
Speaker 2: suddenly has one hundred million views on whatever platform out there,
7:32
Speaker 2: is that a good or bad thing? Most of the
7:34
Speaker 2: time it's a pretty good thing unless it's some kind
7:36
Speaker 2: of scandal, right, So that's kind of how I view it.
7:39
Speaker 2: There was a yah Ai that came out right you
7:42
Speaker 2: basically sort of emulating myself and then creating some funny
7:47
Speaker 2: videos and stuff. And again, you know, I can take
7:48
Speaker 2: two approaches. I can say I don't like that because
7:51
Speaker 2: you know, I look weird and this is not my brand,
7:53
Speaker 2: or I can say, you know what, you know, I'm
7:54
Speaker 2: just gonna have fun with it, and you know, I
7:56
Speaker 2: think I think that's that's really the path forward.
7:58
Speaker 1: Speaking of how this starts to affect gaming, you were
8:02
Speaker 1: on record talking about the potential of the g t
8:05
Speaker 1: A six rollout eventually triggering an AI gaming bull run.
8:10
Speaker 1: So I wanted to play a clip for you. This
8:13
Speaker 1: is Aiden Ross and then I want to get your
8:14
Speaker 1: opinion on this.
8:15
Speaker 2: Take a look.
8:16
Speaker 3: Well right now I'm gonna touch show really quick. Out
8:19
Speaker 3: is when GTA six jobs me Ricky, are gonna make
8:21
Speaker 3: the biggest server together. We're gonna do the best shit ever,
8:23
Speaker 3: and I promise you it's gonna be completely crypto, everything
8:26
Speaker 3: pro crypto about it. I'll have the best and biggest server,
8:28
Speaker 3: I promise you ill will, and we're gonna.
8:29
Speaker 2: Put a lot of money into that. I promise all
8:31
Speaker 2: of you. This is my passion.
8:32
Speaker 3: We started SSBO, you found me from g t A.
8:35
Speaker 3: I'm gonna get it very clear to everybody right now,
8:37
Speaker 3: You're gonna get paid to play my game.
8:38
Speaker 2: I promise you. I promise you you walk right. I
8:40
Speaker 2: realize that like if you go and create a fucking
8:41
Speaker 2: restaurant or a brand.
8:43
Speaker 3: Potentially you're gonna be able to convert that that money,
8:46
Speaker 3: those winnings into real life games. Me and Ricky are
8:49
Speaker 3: gonna start working on the GTA six servers, so we
8:51
Speaker 3: possibly can Who's not gonna want to play my world
8:53
Speaker 3: when you can make money playing it?
8:54
Speaker 2: Even if I got to come out of my.
8:55
Speaker 3: Own pocket to pay people, I'm gonna do it.
8:57
Speaker 2: Wait, what's your thoughts on g t A six. They
8:59
Speaker 2: need to put me in that motherfucker. I'm in it.
9:02
Speaker 2: Uh foruria they put me in it.
9:04
Speaker 3: I can't speak on it, sign a bunch of documents,
9:06
Speaker 3: but I'm in it. Man.
9:08
Speaker 2: I feel left out man.
9:09
Speaker 1: Okay, So that's Aidan Ross. Of course, I think one
9:11
Speaker 1: of the culture icons right now when you think about
9:14
Speaker 1: what he's doing in gaming now, he's kind of edging
9:17
Speaker 1: the boundary here a little bit. I mean, because Rockstar
9:19
Speaker 1: could end up getting into a scenario where they block
9:22
Speaker 1: this or ban it. But will they?
9:25
Speaker 2: Is my question?
9:26
Speaker 1: Back to your point, because you're hitting on some very
9:28
Speaker 1: key things. Brand Ip starting to transition maybe into this
9:33
Speaker 1: next level. This was coming back from twenty twenty two
9:36
Speaker 1: talking about ourp servers. And when you look at that
9:40
Speaker 1: and the impact that someone like Aiden Ross could bring
9:42
Speaker 1: to this, do you think they'll let this fly?
9:45
Speaker 2: What are your thoughts? So, first of all, we have
9:48
Speaker 2: to consider where the world is today, right, Take two
9:52
Speaker 2: is an American company. Guess who's president of America at
9:55
Speaker 2: the moment in time. Guess what people are doing right now? Right,
9:58
Speaker 2: no doubt. So one can argue that the last couple
10:01
Speaker 2: of years, and you may recall that, you know, when
10:03
Speaker 2: NFT has really started to become super hot in twenty one,
10:07
Speaker 2: every gaming executive was talking about the potential of NFTs, right,
10:11
Speaker 2: They weren't actually sort of dissing it. It was both
10:14
Speaker 2: the combination of the backlash what happened with FTX Tara Luna,
10:16
Speaker 2: and of course the political climate in the US. It
10:19
Speaker 2: very much sort of created this sort of mass rejection
10:21
Speaker 2: of let's not go there. The consumer obviously was being spooked.
10:24
Speaker 2: They didn't know what was going on. Right, Oh that's
10:26
Speaker 2: going to change, right, And GT six is due to
10:29
Speaker 2: be released in September. Knock on wood, because you know
10:31
Speaker 2: it's been delayed forever, so you know it might be
10:34
Speaker 2: a little bit delayed more, but who knows. The point
10:36
Speaker 2: is it's closer towards the end of the year, and
10:39
Speaker 2: you know, a lot is going to change. And what
10:40
Speaker 2: we do know, if you know, if we're if we
10:43
Speaker 2: were a betting man, and in this case, I think
10:45
Speaker 2: most of us are, in terms of making a direction,
10:47
Speaker 2: we would say Crypto is just going to get better
10:50
Speaker 2: for the world over the next nine months, not worse, right, Right,
10:53
Speaker 2: So what that means is is that you're going to
10:55
Speaker 2: have a more friendly climate. People are going to integrate stuff, right,
10:58
Speaker 2: You're not going to have a situation where, you know,
11:00
Speaker 2: like Minecraft says all we want a band Crypto that
11:02
Speaker 2: kind of thing. I think I think they'll take a
11:04
Speaker 2: more or less a fair approach, we believe now even
11:07
Speaker 2: if they don't, it's going to create the kind of
11:10
Speaker 2: sort of negative backlash that I think they may have
11:13
Speaker 2: to reconsider, especially because there's potential political implications that come
11:17
Speaker 2: with it as well. Right, So, so I think you know,
11:20
Speaker 2: if you wanted to be and and and the other
11:22
Speaker 2: thing is, you know, I would argue GTA is of
11:25
Speaker 2: course an edgy game. Let's just let's just face right,
11:28
Speaker 2: it's not. It's not a game that's supposed to be
11:30
Speaker 2: sort of you know, conformist, it doesn't follow. I mean,
11:33
Speaker 2: if you can, if you can run over a grandma
11:36
Speaker 2: inside the game, then you know you can certainly you
11:38
Speaker 2: can certainly you know, have a game that supports crypto
11:41
Speaker 2: like I would imagine so and and and without actually
11:45
Speaker 2: and you know, we're not here to endorse what is
11:46
Speaker 2: good and what is bad. And I think that's the
11:48
Speaker 2: whole point. And that's why people love GTA, the fact
11:50
Speaker 2: that people can basically just do whatever they want, right
11:54
Speaker 2: and and that this open world sort of live out
11:57
Speaker 2: your life and sort of you know and set in
12:01
Speaker 2: sort of pretty aggressive ways in some ways. It's actually
12:03
Speaker 2: what is part of the appeal of that game. And
12:06
Speaker 2: and I would say thematically fits quite well, you know,
12:09
Speaker 2: with this whole sort of freedom and liberty perspective. So
12:11
Speaker 2: I would believe that they'd be okay with it. But
12:13
Speaker 2: I don't think Take two is going to be sort
12:15
Speaker 2: of going and saying, hey, we embrace it. I don't
12:17
Speaker 2: think they need to. But if they let people do
12:19
Speaker 2: stuff with it and mash it up, that's actually sort
12:23
Speaker 2: of where that culture keeps sort of getting appropriated and
12:26
Speaker 2: actually becomes more powerful and bigger. And you know, GTA six.
12:31
Speaker 2: You know, Take two hasn't sort of come up with
12:34
Speaker 2: an update I think, for almost seven or eight years now,
12:37
Speaker 2: and so there's a lot of pent up demand, and
12:39
Speaker 2: I would argue that GTA six is perhaps the largest
12:44
Speaker 2: cultural sort of moment sort of you know, doesn't matter.
12:48
Speaker 2: I mean, it's going to be bigger then, you know,
12:51
Speaker 2: sort of it's like the star Wars or the Marvel
12:53
Speaker 2: Avengers of the same type of thing. Right, that's kind
12:55
Speaker 2: of how we look at it, which means a few things.
12:59
Speaker 2: One of course, Take two has filed a few interesting
13:02
Speaker 2: AI patterns for gaming, so there's gonna be a lot
13:04
Speaker 2: of interesting things that are happening there that one can
13:06
Speaker 2: review and take a look at, which will give sort
13:08
Speaker 2: of I think new sort of sort of let's call
13:12
Speaker 2: it hope, but also sort of opportunity prospecting for what
13:15
Speaker 2: AI and gaming can really do. Right. We've seen a
13:17
Speaker 2: little stuff with pub g ally, but that's kind of
13:19
Speaker 2: more in an companion AI here. I think it's going
13:21
Speaker 2: to be much more on the NPC level, right, just
13:23
Speaker 2: because the whole engagement and open world of MPC is
13:26
Speaker 2: kind of what bigs GTA is so interesting in terms
13:28
Speaker 2: of you know, navigating the world in ten thousand different ways.
13:31
Speaker 2: But the other one, of course, is that in gaming,
13:34
Speaker 2: I think it's going to trigger a general gaming bull run,
13:37
Speaker 2: not just across the industry, but also in Web three
13:40
Speaker 2: in particular. And that's because our space is so narrative driven, Right,
13:44
Speaker 2: So if you think about sort of, you know, what
13:46
Speaker 2: was the big narrative really for our industry last six
13:49
Speaker 2: month was AI? What was really big in the non
13:51
Speaker 2: Web three world AI? Right, And most people might not
13:55
Speaker 2: sort of notice if they're not in the gaming industry,
13:58
Speaker 2: but gaming has actually been largely stagnant post COVID, Right,
14:03
Speaker 2: So the overall revenues in gaming hasn't actually increased over
14:05
Speaker 2: the last three years despite the projections, because so the
14:09
Speaker 2: number US user numbers haven't been growing. And also there's
14:12
Speaker 2: been a lack of new titles and a lack of
14:15
Speaker 2: new sort of hardware. So for instance, when you look
14:17
Speaker 2: at sort of what's the other big thing that's happening
14:20
Speaker 2: this year is Nintendo switch to the Switch to you know,
14:23
Speaker 2: they haven't Nintendo hasn't released a sequel to the Switch
14:27
Speaker 2: in I think also seven or eight years. It's a
14:29
Speaker 2: long time coming, right exactly. But they sold one point
14:33
Speaker 2: three billion units, so one point three billion games were
14:35
Speaker 2: sold you know, through the switch and close to I
14:38
Speaker 2: think it's one hundred and forty six to two hundred
14:40
Speaker 2: and forty seven million console units have been sold, which really,
14:43
Speaker 2: when you think about it in terms of the number
14:44
Speaker 2: of people that played it, that's basically you know, probably
14:47
Speaker 2: like you know, close to a billion, if not more. Right, So,
14:50
Speaker 2: these two triggers are all happening this year, right, so
14:53
Speaker 2: we think this therefore, this this could potentially be you know,
14:56
Speaker 2: the big year because you know what happens when you
14:58
Speaker 2: buy a new console, Yeah, buy new console, you have
15:01
Speaker 2: to buy new games, right, Yeah, your old games work,
15:03
Speaker 2: but you want to buy the games that take advantage
15:05
Speaker 2: of the new you know, the new content and the
15:08
Speaker 2: new hardware for instance, right, and GTA six will do
15:10
Speaker 2: the same probably speaking, So I think these two events
15:13
Speaker 2: are really going to sort of push gaming sort of
15:16
Speaker 2: into into new heights, which I think will affect sort
15:19
Speaker 2: of all projects, including in Web three in terms of
15:21
Speaker 2: very positively.
15:22
Speaker 1: Well, and the thing you have to remember is Aiden Ross.
15:24
Speaker 1: This was the key influencer that helped Donald Trump get elected.
15:29
Speaker 1: When you think about TikTok and the really impact of
15:33
Speaker 1: what his culture and the connection to the generation that
15:37
Speaker 1: he kind of fosters around connected to Donald Trump. So
15:40
Speaker 1: I think there's a very interesting match made in heaven
15:43
Speaker 1: here with a pro crypto president. Influencers are very clearly
15:47
Speaker 1: attached to this president and the companies that most likely
15:51
Speaker 1: could gain from the benefits of all this working together.
15:54
Speaker 2: So I would agree with you.
15:55
Speaker 1: I think you're you're dead.
15:56
Speaker 2: On with it.
15:57
Speaker 1: I want to move over to virtuals for a second.
16:00
Speaker 1: Looking at the virtuals market cap, obviously this may be
16:03
Speaker 1: one of the best bargains out there right now, market
16:05
Speaker 1: cap under a billion, about nine hundred and sixty two million.
16:08
Speaker 1: You look at some of their movement in the overall
16:12
Speaker 1: agent protocol and where the revenue has been going recently
16:16
Speaker 1: now moving more into agent revenue. Do you think that
16:19
Speaker 1: hurts them as a platform or what are your thoughts
16:23
Speaker 1: on that.
16:25
Speaker 2: Why would you say it hurts them because in.
16:27
Speaker 1: The sense of revenue, well, yeah, it does diversify, yeah,
16:30
Speaker 1: of course, but agent revenue versus protocol revenue daily So
16:34
Speaker 1: you can kind of see when this happened at the
16:36
Speaker 1: end of last year. Now it's mostly agent revenue that's
16:39
Speaker 1: being driven here. Now, granted that would be a little
16:42
Speaker 1: less to the protocol. So does that is that a
16:44
Speaker 1: good thing or a bad thing for virtuals?
16:48
Speaker 2: I actually think it's a good thing because I think
16:50
Speaker 2: so if you think about yeah, so let's take a
16:53
Speaker 2: look at sort of what are what's actually the stuff
16:56
Speaker 2: that's going to ultimately drive the you two for virtuals,
17:01
Speaker 2: it's not you know, it comes from the agents, right,
17:05
Speaker 2: So the more agents that are out there, and the
17:07
Speaker 2: more powerful they become, and the more utility is applied
17:10
Speaker 2: to them, then ultimately that will also have the fly
17:12
Speaker 2: effect into the sort of the protocol revenue. Now, there's
17:15
Speaker 2: always an interesting there's always a very interesting tug of
17:18
Speaker 2: war between what's great for a business and what's great
17:23
Speaker 2: for an economy, right, And this is kind of the
17:25
Speaker 2: way to distinguish between how you think about something like
17:27
Speaker 2: an L one, L two or in this case of
17:29
Speaker 2: platform that's called it the protocol versus the product itself. So,
17:33
Speaker 2: for instance, it's great that uniswap makes a lot of
17:36
Speaker 2: money on trading on ethereum, right, and obviously it makes
17:41
Speaker 2: more fees and that's great. However, if the gas fees
17:44
Speaker 2: of Ethereum become too high, which it could. You know, like,
17:47
Speaker 2: if it was higher, it would be great in terms
17:49
Speaker 2: of you know, stakers because they basically make more fees.
17:52
Speaker 2: But would that be better or worse for both ethereum
17:56
Speaker 2: as well as UNISWAP And I think the general answer
17:58
Speaker 2: would be that it's actually worse. Right, So, in other words,
18:01
Speaker 2: in order to sort of fuel the ecosystem and grow
18:04
Speaker 2: that and build strong network events, you have to have
18:06
Speaker 2: that fine balance of course, the sustainable revenue, but also
18:09
Speaker 2: you can't over tax, because that's exactly the point, right
18:12
Speaker 2: you know, when you start to overtax and charge way
18:14
Speaker 2: too much, then actually that's quite the opposite, and you know,
18:17
Speaker 2: revenues decline, utility declines, and all that kind of stuff
18:21
Speaker 2: happening as well. So I would argue that more augentic
18:23
Speaker 2: growth over time is better. It's not that different. It's
18:27
Speaker 2: not that different from you know, when when when when
18:29
Speaker 2: countries and economy start to subsidize activity using taxpayers money
18:33
Speaker 2: for instance, as a way to sort of spur on
18:35
Speaker 2: an economy, and and but then they essentially create more
18:39
Speaker 2: business and then they hire more people, and you know
18:41
Speaker 2: what's going to onboard more people into into the protocol.
18:45
Speaker 2: Clearly it's going to be the agents, not the protocol
18:47
Speaker 2: in and of itself.
18:48
Speaker 1: Yeah, yeah, for sure. Well, and you know they're even
18:51
Speaker 1: kind of touting this this of course, being the one
18:53
Speaker 1: of the team leads over there at VIRTUALS teams launching
18:57
Speaker 1: agents on Salona please wait for us, don't do it
18:59
Speaker 1: anywhere else. Are trying to navigate that transition as they
19:02
Speaker 1: move on to Salana. With all of that, so I
19:05
Speaker 1: would agree with you. I think there's a huge opportunity
19:07
Speaker 1: here for these to kind of move forward. Why do
19:09
Speaker 1: you think we have not seen agents really start to
19:12
Speaker 1: activate within Sandbox? What do you think has been the
19:15
Speaker 1: whole back there?
19:17
Speaker 2: Ah? Yeah, So I think the main reason for Sandbox
19:19
Speaker 2: is the fact that it's still an alpha season, so
19:22
Speaker 2: you know, you hopefully we can expect some activity there,
19:26
Speaker 2: you know, actually pretty soon, I would say so. But
19:29
Speaker 2: right now, you're already you already have AI implementations, you know,
19:32
Speaker 2: in some of the tools that Sandbox has.
19:33
Speaker 1: I want to play this clip because this is Sebastian
19:36
Speaker 1: talking about Virtuals a little bit, so it might help
19:39
Speaker 1: some of you that are kind of looking at this.
19:41
Speaker 1: Let's go to that clip.
19:43
Speaker 4: So we've seen the experiment with Minecraft, where like hundreds
19:46
Speaker 4: of agents are like competing with each older for collecting
19:49
Speaker 4: crafting resource. We're looking at what can be done on
19:52
Speaker 4: Sandbox as well right now, like this virtual virtues, like
19:57
Speaker 4: these AI agent protocol that allows you to launch both
20:02
Speaker 4: an agent for twiteter for YouTube and so on. The
20:07
Speaker 4: format from this type of interaction needs to be simplified.
20:12
Speaker 1: So Sebastian borget you know, ceo O Sandbox, so we
20:18
Speaker 1: for I think most this is the good thing is
20:20
Speaker 1: that Sebastian seems to always be tied into where this
20:22
Speaker 1: is going, so I would agree that it's coming soon.
20:26
Speaker 1: So we'll see how this plays out. I want to
20:28
Speaker 1: jump over to air drops and you look at what's
20:30
Speaker 1: happening right now. Sue is of course doing their sweet
20:33
Speaker 1: play potential air drop. You also have the potential where
20:37
Speaker 1: the Seeker is going to get launched. We're probably going
20:39
Speaker 1: to see some more.
20:39
Speaker 2: Air drops there.
20:41
Speaker 1: You look at that and do you feel like this
20:44
Speaker 1: aligns with what's happening with the AI agents and all
20:49
Speaker 1: the AI narrative as a whole, with these two new
20:51
Speaker 1: devices possibly hitting the market.
20:53
Speaker 2: So I don't think it's just specifically to these two devices.
20:57
Speaker 2: Right now, when it comes to devices, where still at
21:00
Speaker 2: the early innings. And also you have to think about
21:03
Speaker 2: the utility of the items of these hardware, because most
21:06
Speaker 2: of them are using the hardware really as a marketing
21:10
Speaker 2: acquisition type of tool rather than and then hopefully converting
21:14
Speaker 2: that I mean the same mechanism with air drops to it.
21:16
Speaker 2: You know, for work three games or protocols, you it
21:18
Speaker 2: ties people to basically use a product, and then you
21:21
Speaker 2: know a significant number will stay and build a network
21:26
Speaker 2: from there, and then you know, network effects proliferate. The
21:29
Speaker 2: utility of the phone wasn't quite what wasn't really better
21:33
Speaker 2: than your Samsung for instance, right, and so the distinguishing
21:36
Speaker 2: aspects weren't there outside of oh, I can get some
21:39
Speaker 2: air drops, and how many people ended up buying the
21:41
Speaker 2: phone because of the air drops versus because they wanted
21:44
Speaker 2: to use the phone? Right now? That's but again it's
21:46
Speaker 2: the marketing side to bring attention to it, and then
21:48
Speaker 2: how do you build the network from it? And so
21:50
Speaker 2: for instance, what you see in things like sort of
21:52
Speaker 2: Google and with Apple, really that network effect was built
21:55
Speaker 2: with things like the app store or Google Play, right,
21:58
Speaker 2: and that actually created essentially an system around that. So
22:00
Speaker 2: building that ecosystem framework around that is really important. And
22:04
Speaker 2: it's early days. You know, we do expect a lot
22:06
Speaker 2: of specific hardware to come out of the area, but
22:08
Speaker 2: I would say we haven't yet found the one that
22:11
Speaker 2: is super Web three native in the traditional sense, in
22:14
Speaker 2: the way that you would think of something that you
22:16
Speaker 2: could only do that in Web three just yet. But
22:18
Speaker 2: you know, we're looking forward to that. Well.
22:20
Speaker 1: I think the Seeker could end up being something similar
22:23
Speaker 1: to that. We'll see how you know, what it looks
22:25
Speaker 1: like when it launches. But to reflect, remember that when
22:29
Speaker 1: you look at Solana and the Saga I think were
22:32
Speaker 1: the initial catalyst for the bull Run to launch. You
22:36
Speaker 1: had bogged the air drop essentially, I think saved the
22:39
Speaker 1: Saga phone itself and possibly put a relationship between hardware
22:45
Speaker 1: and air drops and marketing and loyalty into the landscape
22:49
Speaker 1: for almost every major brand out there. So it's going
22:52
Speaker 1: to be very intriguing to watch. I want to leap
22:55
Speaker 1: over to ar and deep In because this could be
22:59
Speaker 1: another hype cycle that's getting ready to roll out. And
23:02
Speaker 1: one of the things that we've talked about here on
23:04
Speaker 1: the channel is the partnership with of course over and Natix,
23:08
Speaker 1: which is getting into spatial computing the Internet of cameras.
23:12
Speaker 1: I guess now is the the theme.
23:14
Speaker 2: But I want to.
23:14
Speaker 1: Play a clip for you and get your opinion on this.
23:16
Speaker 1: Take a look.
23:44
Speaker 2: I'm talking with a lot of these guys, and the
23:47
Speaker 2: common denominator is two problems, compute and real world data.
23:52
Speaker 4: For compute, they have NVIDIA, they'll say it.
23:54
Speaker 2: Actually they have NVDA on the cap table on all
23:56
Speaker 2: of them. That's how they're trying to address compute. For
23:59
Speaker 2: real world data, they're still struggling.
24:02
Speaker 4: And this is where I think Deepen is the solution.
24:05
Speaker 1: All right, So what do you think? Yeah, so is
24:07
Speaker 1: deepend the solution, especially when you look at this kind
24:10
Speaker 1: of integration coming Well, So, first of all.
24:13
Speaker 2: You know, Animalica is very bolish on deep and broadly
24:15
Speaker 2: we've done probably, I don't know, is it maybe twenty
24:18
Speaker 2: twenty five investments in Deepen now sort of over the
24:22
Speaker 2: course of our sort of portfolio. Most of it has
24:25
Speaker 2: been in the area of compute, right, you know, and
24:29
Speaker 2: and also access and also to your location type of stuff, right,
24:32
Speaker 2: So I do think it makes you know, what are
24:34
Speaker 2: the interesting things about Deepen though, which is very different
24:38
Speaker 2: from a lot of the let's call it, I guess
24:41
Speaker 2: other web through narratives, is it actually generates revenue very quickly.
24:46
Speaker 2: So it's a it's a much more sort of let's
24:50
Speaker 2: call it, sort of traditional model because it's less about
24:52
Speaker 2: the branding space as much then it is about sort
24:56
Speaker 2: of the fact that there's a utility attached to it. Right,
24:58
Speaker 2: So very bolish on this one. To me, I personally
25:01
Speaker 2: feel like, you know, owning pieces in the network ensures essentially,
25:06
Speaker 2: especially the more decentralized it becomes, ensures that the independence
25:10
Speaker 2: of that network. Right, how do you ensure that AI
25:12
Speaker 2: compute isn't controlled by just you know a few big companies,
25:16
Speaker 2: Because even if the model is decentralized, if the compute
25:19
Speaker 2: is owned by you know, one giant company or a
25:21
Speaker 2: few of them, then you're kind of dead in the
25:23
Speaker 2: water in terms of whole decentralization's thesis. Right. But of course,
25:26
Speaker 2: because of technology, lower cost probation, run being able to
25:29
Speaker 2: run this in your own home or run it in
25:31
Speaker 2: a decentralized manner and some form or fashion where you
25:33
Speaker 2: get benefits and value from this. You know, you're now
25:36
Speaker 2: a stakeholder. And if you're stakeholder. You don't want to
25:38
Speaker 2: give that up, so very polishing. This is a very
25:40
Speaker 2: important part of our decentralization thesis in terms of the
25:43
Speaker 2: future of the web. You know, obviously most of it
25:46
Speaker 2: in areas of compute file storage, but extends beyond that,
25:50
Speaker 2: and of course the mashup of these things as well,
25:53
Speaker 2: and also you know, you know, in the in the
25:55
Speaker 2: future in some ways, you know, just you know, when
25:58
Speaker 2: you think of mincraft servers, you think of gaming servers,
26:01
Speaker 2: they're actually kind of early versions of Deepen without being
26:04
Speaker 2: called Deepen exactly.
26:06
Speaker 1: Yeah, yeah, I totally agree. I want to leap over
26:09
Speaker 1: to education for a second. And I know you guys
26:11
Speaker 1: are active in I know you're passionate about this. But
26:13
Speaker 1: Trump is getting ready to set an executive order to
26:15
Speaker 1: potentially shut down the Education Department. So this could happen
26:20
Speaker 1: and the likelihood of AI being a big role in
26:23
Speaker 1: the future could be real. I was looking at this
26:25
Speaker 1: tweet right here. Obviously you see it, but hockey stick
26:28
Speaker 1: mode on the amount of potential AI integration into education.
26:34
Speaker 1: Could this timing be perfect for possibly the proliferation of
26:39
Speaker 1: AI injected education in the future, which could change education
26:44
Speaker 1: as a whole what are your thoughts?
26:46
Speaker 2: No, absolutely so if you take a look at I
26:48
Speaker 2: mean you just shared sort of the I think the
26:50
Speaker 2: gelata common in terms of the growth of du chain,
26:52
Speaker 2: you know, going to one hundred and fifty million dollar
26:54
Speaker 2: TVL incredible number of transactions. So let's just do some
26:57
Speaker 2: macro on education. Right, is about a five past trillion
27:01
Speaker 2: dollars space today and it's one of those unhyped spaces
27:05
Speaker 2: because it's somewhat un sexy but ins a ton of revenue.
27:08
Speaker 2: And the reason why is because that's what we all
27:10
Speaker 2: have to do in order to advance in life. Right,
27:13
Speaker 2: AI agents can sort of create more tutoring. So we
27:15
Speaker 2: took at some of the new products that tiny tap
27:17
Speaker 2: has created, you know, and again because using box chain,
27:21
Speaker 2: this actually areas how do you pay the teacher, how
27:23
Speaker 2: do you pay the content creator? How do you share value?
27:25
Speaker 2: That's really exciting. But then also you know what what
27:28
Speaker 2: open campus if you or one of their sort of
27:33
Speaker 2: one of their sort of incubated projects you know from
27:35
Speaker 2: from the accelerator is now looking to solve student loans
27:38
Speaker 2: with DeFi And again that's a really interesting paradigm here.
27:41
Speaker 2: It's not just about sort of you know, education in itself,
27:44
Speaker 2: So how do you onboard people into crypto? And if
27:46
Speaker 2: you get a student and he gets you know, some
27:48
Speaker 2: of his student loans financed through crypto, he's he's he's
27:52
Speaker 2: onboarded for life and perhaps the most meaningful manner as well.
27:56
Speaker 2: And also when you think about sort of talking to
27:58
Speaker 2: skeptical people and scale politicians around the world, you know
28:01
Speaker 2: what a is scriptore good for the appoint to mean
28:03
Speaker 2: coins and point of gaming and the way you have
28:05
Speaker 2: to DeFi. But actually when you talk about you know, education,
28:09
Speaker 2: nobody can argue that that's a bad thing, right, So
28:12
Speaker 2: that's very positive now in terms of you know, Trump
28:14
Speaker 2: saying you know, and how this affects education. So first,
28:19
Speaker 2: you know, education nationally still is of course an ideological
28:24
Speaker 2: thing as well, because what you teach the next generation
28:27
Speaker 2: or your children is very much how you think about
28:29
Speaker 2: sort of you know, your your value system as well, right,
28:31
Speaker 2: the whole sort of sort of nurture side of things.
28:33
Speaker 2: So there's definitely a political agenda attached, so we have
28:37
Speaker 2: to bear that in your mind. That said, right, you know,
28:41
Speaker 2: in a government that is looking to have a generally
28:44
Speaker 2: less government, interventionist perspective, which is what this administration is
28:48
Speaker 2: definitely sort of on side for basically less government, you
28:52
Speaker 2: do your more your own thing. It does mean that
28:54
Speaker 2: a lot of that will become more outsourced, essentially towards
28:57
Speaker 2: private institutions and individuals themselves. So they will need tools
29:01
Speaker 2: to do that right outside of let me go to
29:04
Speaker 2: the school, let me go to that school, and so
29:05
Speaker 2: AA is very critical, and of course blockchain is very
29:09
Speaker 2: critical as well in terms of how do you deal
29:10
Speaker 2: with rights and how do you deal with creditation and
29:12
Speaker 2: how do you deal with this stuff in a truly
29:13
Speaker 2: decentralized manner, bringing in the millions of teachers as well
29:16
Speaker 2: in the space that actually are not really sort of
29:20
Speaker 2: if you think about it, don't really have a good
29:22
Speaker 2: mechanism out of the institution of the sort of government
29:27
Speaker 2: education system. So now you know, what kind of private
29:30
Speaker 2: setup can you actually coalesce people into this system where
29:34
Speaker 2: they can actually make a living and create value on
29:37
Speaker 2: chain And that's actually you know what we believe EEDU
29:40
Speaker 2: chain will be. It's still it's the only one that's
29:42
Speaker 2: doing it, which is the other crazy thing. But then
29:44
Speaker 2: you know, when we started doing gaming in twenty eighteen,
29:47
Speaker 2: and twenty nineteen. We're almost the only ones doing gaming
29:50
Speaker 2: as well back then until it became mainstream in terms
29:53
Speaker 2: of Web three, and we think education will be just
29:55
Speaker 2: the same. So we're very bullish on this one.
29:57
Speaker 1: I know you're running short on time, so I just
29:59
Speaker 1: wanted to get last statement on this, and that is
30:02
Speaker 1: Web two point five. So Web two point five quit
30:05
Speaker 1: of course out of game, off the sideline now and
30:09
Speaker 1: in the locker room. So what do you think this
30:12
Speaker 1: means for Web two point five? Is this is this
30:15
Speaker 1: kind of the last stand.
30:17
Speaker 2: Or so let me know. Yeah, so first let me
30:21
Speaker 2: comment on QUIT. So quid is actually transitioning, so that
30:26
Speaker 2: means that the assets and so on are actually going
30:29
Speaker 2: on to a partnership that we have. I think that
30:32
Speaker 2: messaging can end up becoming somewhat premature in the sense
30:35
Speaker 2: that people were like, oh, what's happening, But the reality
30:37
Speaker 2: is that the assets are moving on, they continue to
30:40
Speaker 2: be around. QUIT will just have a new version of itself.
30:42
Speaker 2: It probably won't quit in itself in a collectible fashion now,
30:46
Speaker 2: because you know, there are people who are have collected,
30:48
Speaker 2: who have spent money and don't Obviously we want to
30:50
Speaker 2: respect that in the spirit of digital property. Right, So
30:52
Speaker 2: that's kind of just just one point to clarify. But
30:55
Speaker 2: the second point in terms of Web two point five,
30:57
Speaker 2: I guess generally you may have heard me say on
30:59
Speaker 2: the show a couple times that I'm somewhat of a
31:01
Speaker 2: critic of Web two point five. Not because Web two
31:03
Speaker 2: point five, as this idea isn't sort of relevant. I
31:07
Speaker 2: think it's important. It's the fact that you know which
31:10
Speaker 2: side of the Web two point five are you on,
31:11
Speaker 2: and how do you help onboard people? And the thesis
31:13
Speaker 2: was that you know, you want to make a blockchain
31:16
Speaker 2: sort of you know, somewhat invisible and sort of someonet,
31:20
Speaker 2: you know, and in the back end you end up
31:21
Speaker 2: basically sort of using it, but you don't really use it,
31:23
Speaker 2: kind of like the whole sort of you know, like
31:25
Speaker 2: you don't need to know it's called EP three when
31:27
Speaker 2: you're listening to digital music type of thing. Right. However,
31:30
Speaker 2: what we found, you know in Web three is that
31:34
Speaker 2: actually you need to have some enough knowledge so that
31:38
Speaker 2: you can partake in the general network effects of Web three.
31:41
Speaker 2: So meaning that you know the power of a Web
31:43
Speaker 2: three game, for instance, isn't the fact that you can
31:46
Speaker 2: trade your items inside the game. You don't need Web
31:47
Speaker 2: three for that. It's the fact that you have defive
31:50
Speaker 2: that has billions of dollars of liquidity. It's the fact
31:52
Speaker 2: that you could trade it not in inside your own game,
31:54
Speaker 2: in those assets, but outside of your game as well. Right,
31:57
Speaker 2: So it's an entire ecosystem. And I would say the
31:59
Speaker 2: criticism Web two point five that I have generally speaking,
32:02
Speaker 2: which is sort of really a twenty one twenty two narrative,
32:05
Speaker 2: has been mostly around building ultimately a walled garden that
32:10
Speaker 2: has crypto rails, right, using blockchain technology, but wasn't actually
32:15
Speaker 2: truly interoperable. And now when you think about things like
32:18
Speaker 2: Layer zero, and when you think about sort of new
32:20
Speaker 2: implementations out there in terms of cross bridging and tropability,
32:24
Speaker 2: you know, actually that's you know, for instance, you know,
32:26
Speaker 2: we were you know, you know, as you know, we're
32:29
Speaker 2: also in in Pudgie penguins, you know, And this was
32:33
Speaker 2: a perfect example of how you address both in the
32:36
Speaker 2: Ethereum and Solana community. And you can do that and
32:38
Speaker 2: create a kind of dropability between that, right and in
32:42
Speaker 2: the traditional Web two point five sort of structure that's
32:45
Speaker 2: not contemplated because the Web three experience isn't front and center.
32:50
Speaker 2: It's actually front and center is the Web two experience, right,
32:54
Speaker 2: And I think you know, we ourselves also had to
32:57
Speaker 2: go through sort of this experience and lessons as well.
33:00
Speaker 2: You know, back in twenty eighteen, twenty nineteen, you know,
33:03
Speaker 2: if you look at many of our games, they were
33:05
Speaker 2: actually also kind of Web two point five ish, right,
33:08
Speaker 2: and then we've transitioned a lot into games that are
33:11
Speaker 2: really sort of sort of much more native in Web three.
33:14
Speaker 2: And of course things that you see with ton and
33:16
Speaker 2: Telegram as well, the whole air drop mechanism, you know,
33:18
Speaker 2: that's actually quite Web three native, right, it's not hidden
33:22
Speaker 2: at all. You need to have a wallet, and you
33:24
Speaker 2: need to build TVL or you need to put in
33:26
Speaker 2: liquidity and know all that kind of stuff.
33:28
Speaker 1: Man, I tell you, I think this is We are
33:30
Speaker 1: in for a very interesting twenty twenty five and on
33:34
Speaker 1: as especially the evolution of where blockchain is going. So yeah,
33:37
Speaker 1: to always enjoy having you on the show. Thank you
33:39
Speaker 1: so much for coming in today. We appreciate it.
33:42
Speaker 2: Thank you for having me.
33:43
Speaker 1: You bet all right, you guys, if you are not
33:45
Speaker 1: in the Diamond circle, get in now. It's our own
33:47
Speaker 1: private group. We also have a Telegram group that you
33:49
Speaker 1: can join. Just click the link down below, it's going
33:51
Speaker 1: to get you in there. I actually go into that
33:53
Speaker 1: Telegram group daily communicate with a lot of our audience.
33:56
Speaker 1: So I love to kind of hear what you guys
33:58
Speaker 1: are doing. That's the way you talk to me. And
34:00
Speaker 1: of course if you want to reach me out there
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Speaker 1: on exits at Paul Baron, we'll catch you next time
34:03
Speaker 1: right here on Techpath