Social Money is How We Take a Piece of the Trillions in Value Captured by Social Media: Roll Co-Founders

Hello Defiers! This week’s interview is with Bradley Miles and Sid Kalla, the co-founders of Roll, a platform that enables the issuance and distribution of so-called ‘social money.’ Roll is one of those projects building something that just couldn’t be possible without a decentralized network; personal tokens, which can be issued by anyone and used as money-less incentives for others to do what the issuer deems valuable or accepted as payment by the issuer, too. These currencies are portable and can be used to strengthen bonds among communities on different platforms.

Some of the key things we talked about:

• Personal tokens can take some of the value being captured by social media platforms
• Some of the most futuristic use-cases, like staking social tokens to access content
• Their big-name investors, BitMEX CEO Arthur Hayes and Brooklyn Nets player Spencer Dinwiddie
• Their plan to monetize by becoming social money whales
• Some of their activity stats so far; number of wallets and “activations” or times users spend and earn tokens
• The long-term vision of a “social money stack” and personal tokens becoming ubiquitous and composable

This interview has been edited for brevity and I’ve bolded my favorite quotes.

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Bradley Miles: I started out as the founding researcher at CoinDesk. A lot of my job was basically broad market research coming out at the end of every quarter in a product that was known as the State of Blockchain report. I met Sid there and we became very interested in the idea of using Ethereum uniquely to have digital communities completely own their value systems, independent of platforms.

Camila Russo: Sid, were you also a researcher at CoinDesk?

Sid Kalla: Yeah, I was a researcher for several years as well. I'd written for CoinDesk and some other publications. My focus was on diving into the specific crypto economic protocols that were coming up before the ICO world and during that whole boom that happened. A lot of my job was digging into the economics of the token and what makes sense, what doesn't.

I have some technical background as well. I used to be the CTO of a financial company based in New York and London, leading a team of developers. We built out platforms for tracking traditional financial assets and their the ownership across countries. I actually started out my career way back as a programmer at Bloomberg.

CR: Bloomberg connection here! So when did you make the jump from CoinDesk into building Roll full time and what was your very early vision for it?

BM: We launched on main net in August. We see Roll as an Ethereum protocol and web app that allows communities to create, use and distribute social money. We really kept at it and tried to make it as simple as possible and now it's become so easy and so accessible. The communities are now using social money every day on the platforms that they already know and love.

Sid Kall (second left) and Bradley Miles (right), with Roll team members. Image source: CoinDesk.

Ceci N’Est Pas an ICO

CR: This concept of issuing your own token, how much of an influence did ICOs have? Sid, you mentioned you spent some time analyzing that space. What are some of the similarities and differences with what you’re trying to do with Roll?

SK: Yeah, so we both looked pretty deeply into ICOs and we really think that some of the economics and the value systems were inverted. In a traditional ICO the team gets the value first because they're pre-selling most of the tokens. Then it kind of becomes up to the team whether they want to build a product or not. And unfortunately we have seen many teams raise money and then not fulfill their promises. So there are some fundamental differences with social money. One of the things we do is we always vest tokens over time. What we absolutely want to ensure is that the majority of the value is captured by the community in the future as that evens out some of the speculative aspects of things.

The other thing is that Roll doesn't raise money from the presale of tokens. There's no underlying Roll token in this. We want to make sure that the economics are aligned so that the users of Roll and Roll itself as a company succeed and fail together.

CR: So the way I understand what you do is, creating an ERC20 token and turning it into social money is difficult to do. I tried to do a Cami Coin before and it was just difficult and I didn’t know how to distribute it and create uses for it and a market. So is it right to think of Roll as an interface that makes this easier for anyone to do?

BM: Exactly. Roll basically becomes a platform layer that sits on top of folks' existing social web and pretty seamlessly does the things your community already wants on the places your community already exists. So we're starting to really see social money as the unbundling of social capital across those platforms.

Social tokens on Roll. There are 60 in total. Image source: Roll

How Social Media Can Become Social Capital

We really see it as this enormous market. We want to bring decentralized finance to social capital to really unlock that value for the first time. So you can do things like trade some of the social money on a Uniswap front end, and we have imagined things down the line like taking out a loan and using social money as collateral. So we can potentially plug into a protocol to do that. We seen social money as a payment method for tasks or digital cash for communities, as a loyalty reward system or even as a store of value for these digital communities that sit on top of all these platforms.

Some of the most amazing things we've seen with sort of a specific Web3 use cases is things like Paul [Berg] and what he's doing with Sablier and social money streaming. That was an awesome article on The Defiant. And more recently folks at Kickback integrated social money for social staking. So staking social money to gain access to events.

CR: Oh, interesting. But those are pretty advanced use cases. Can we take a step back and if you could just explain to me the very basic, general concept?

SK: The way you can think of social money is it lets you make your social capital real. In a practical sense, you can incentivize your community towards things that you deem valuable.

CR: Right. And can you explain what you mean by social capital?

SK: So if I have people who really like my writing, who follow me on Twitter or Instagram or any of the traditional social media platforms, the value is real and we know the value is real because cumulatively these platforms are literally worth trillions of dollars right now. But a lot of that value gets captured at the platform layer and not at the individual there. You have tens of thousands of Twitter followers, which says that people find value in what your tweet. But guess who's mostly capturing the value --it's going to be the underlying platform. Communities generally understand that there is value in what they're doing, but it's also a very hard problem to capture that value.

CR: And your goal is for social money to help individuals capture the value that they’re leaving on these platforms?

Portable Communities

SK: Yeah. Something like that. Individuals, and also communities in general. The other advantage of tying this to Ethereum and tying it to your personal brand is that the platform then becomes less important. You can take your community from Twitter to Discord to TicToc tomorrow. Your community becomes portable and you can pour it over across the platforms.

CR: So it’s the token issuer and token holders what makes a community and not the website itself, not Twitter or Instagram.

BM: Right. We generally see communities as having a network value. Similar to a lot of the protocols that we follow, except in this instance, the value flows directly through the people responsible for generating that value in the first place. So it's not only the creator of the social money, it's also the community as well.

Better Than the Greenback

CR: So how is this better than just using dollars?

SK: Actually in several ways. One is you can bootstrap value. There are several tasks that are socially much easier to facilitate from a community based money. Let's say someone provided a nice review for your art. Would it make more sense to send that person a hundred Hue or say, ‘Hey, give me your PayPal address and I'll send you 2 cents.’ It's just not behavior that we see anywhere and it's not native to people.

CR: Right, and I think it’s really interesting that it can really facilitate the interaction in global communities.

SK: That’s very exciting. Some of our artists are in the U S but a lot of their fans are abroad and social money is just such a seamless way for them to interact with the people they follow. It completely dissolves any geographical boundaries for them.

Social Streaming to Social Staking

CR: Can you dive deeper into the different ways that you're seeing people already using social money?

BM: The thing that received the most attention was when we forked the Uniswap protocol. That allowed the trading of social money. It was the very first time that people could literally see the value of social money on an exchange. A few marketplaces have actually reached out and we've started to list some of the social money that folks are trading. From there a lot of attention started to come from different parties, but when we made contact with Paul, this idea of literally exchanging services based on your social money through Sablier became a natural fit, and was super exciting for us. Kickback was exciting for us as well.

I think the concept of social staking is going to be very big in the next five years. You could imagine this idea that staking a social token may get you access to various forms of social content. You can imagine plugging into various protocols, whether it's Unlock or anything else that may come out, literally redefining what a subscription could be in the future. That's really part of the vision of what, what role is.

Building a Social Money Stack

CR: And with this as a starting point, what’s your bigger vision for the future?

BM: Because of how fast things are moving and what we're seeing, we do think it's inevitable that a social money stack for the web will start to emerge. This will open up an entirely new feature set for millions of digital communities. And the goal of Roll is really to introduce this stack. Today, right now we're building for communities. Tomorrow we're building for developers to really continue opening up this stack and have social money live on all these platforms. So right now, every day we're seeing communities become digital assets through social money. The next step for Roll is really building out the stack to take that to the next level.

CR: What do you mean exactly by social money stack? Like different platforms and tools for social money?

SK: Yeah. So the way we see this is at the very base layer is the idea of communities as digital assets. And we are seeing that value become real in many different ways. The next layer is actually seeing the value tangibly in an exchange. Once you have established that value, what are the things you can do on top of that? The Roll app is just one example. We make it very easy for you to distribute social money on the platforms you already use.

So if you're a Discord user and someone let's say, makes fan art for you, you can say, ‘Hey, this is amazing. Here's 100 CAMI for you.’ And that's like a super easy thing to do. They don't need MetaMask or Ethereum, the connection is with you and the community. That's just one application. Distribution of social money is a solution to one problem that our app is doing. We will never say ours is the only way to do this. Ultimately you want to give that power to the communities.

The other thing is also because communities are so different in their needs, us as a centralized company can never do everything that every community needs and what we really want to do is give the tools to those developers so they can build the tools on social money that are useful to them, whether that's distribution, whether that's staking or whether that's even something that we have never even thought about.

CR: Wanted to talk more about Roll the company. How big is it team?

BM: Right now there's about nine to 10 folks that work at Roll and we're sort of dispersed all over the world, but our headquarters right now are in New York City.

Big-Name Seed Round

CR: Roll had a $1.7 million seed round last year led by some pretty big names, can you talk about your investors and funding?

BM: I love how our funding came together because it's a mix of traditional folks in the space as well as folks that see the potential of what Roll could be. So Arthur Hayes from BitMEX led our round. We had a few traditional funds and angels along with some pretty well known, influential people in this space, but also outside of the space. Gary Vaynerchuk, the CEO of VaynerMedia was a part of our round, Spencer Dinwiddie, who you've wrote about from the Brooklyn Nets, also joined our round. You could really see this narrative emerging of Roll becoming bigger these tools being used by figures like this in the near future.

CR: I was surprised to hear that Arthur Hayes led the round. He just didn’t strike me as someone who would back an Ethereum project.

BM: He's very interested in trading and new value systems, so he immediately saw this as a value system that's inevitable. And he thinks it's time that something like this exists and he got excited about it and it was the biggest check he's ever written so far. So yeah, we're super excited to have him on board, obviously really helpful as we start to grow and think about markets in Asia.

CR: With Spencer Dinwiddie as an investor, should we expect to see him or another big name issue social money?

BM: I don't think we can talk about the timeline or pipeline for that yet, but yeah some very well known people have reached out and we're waiting for the timeline to work with them in the future. We think it's inevitable that people of a certain size will start to issue their own currency. This is like online video or any other primitive. Anyone who wants to issue their own social money will do so. And we hope that we're the simplest solution to do that at the time.

Social Money Whales

CR: How do you plan to monetize this?

SK: Because we do want to make sure that our incentives of the company are aligned with those of our creators and communities who are on Roll, we take 12 percent of all social money that's issued on Roll.

CR: So for everyone that issues social money on Roll, you take 12 percent of whatever they issued.

SK: Yes. We use those tokens for a bunch of different things including getting people introduced to the space and also providing markets for them.

CR: And then your vision with this is that with time all the social currencies will gain in value and that's how you will make a profit.

BM: Yeah. Right now there's about a little over 60 communities on Roll. In four years we see that becoming over 10,000. So the communities living on Patreon, Twitch —we already have over two dozen video game streamers. And the value of these communities will grow over time and Roll is long on all of these communities. If they succeed, we'll succeed as well.

CR: About regulation, where does social money fall?

BM: The first thing that we did before we launched, way back in early 2019, was we talked with a pretty well known law firm and a few of the few of the partners were formally at Bittrex and they gave guidance on what to list on that exchange and how and why. We worked with them and formed this memorandum or framework for what social money will be. And the conclusion there was, as long as there's formal utility, which is a part of issuing on Roll, it's a very similar framework to an airline mile and this is the sort of area we stay in. So, generally if people say, 'Hey, I want to issue and form this investment contract, that's out of the spectrum of what we see Roll doing.

3,000 Roll Wallets

CR: Can you tell me a bit more about the different type of user you have, and also the activity you’ve seen on Roll so far?

BM: There's about 60 communities, and we also count activations, which is any time someone spends or earns social money and that's happened over 20,000 times since launch. There's about 3,000 wallets on Roll alone, which hold social money.

The split of the 60 is about two dozen digital artists from the NFT space, about 20 video game streamers, and then there's about 15 or 20, I'd probably call them builders or community leaders, folks like yourself, podcasters, entrepreneurs. And then there's the emerging categories happening all the time. Recently this Chinese street-wear brand just launched SWAG.

CR: Have you been able to calculate total market cap of all these tokens and maybe volume traded?

SK: I think we're a bit early for that. Not all social money is traded and some doesn't have enough volume. So that's not at the stage that we are at right now. I think what we really want to do is first prove out this concept and show people that social money is inherently valuable.

Ubiquitous and Composable

CR: To wrap up, interested in your thoughts on the space more broadly. What are you most excited about?

SK: We're super bullish on all these new ideas and primitives emerging. What we're most excited about are things that are uniquely possible through Ethereum. Things like social money where like you are ultimately the owner of your assets. Concepts like DAOs, where you're trying to solve some very complicated social coordination problems. Those things are super interesting because those are things that don't really have a traditional parallel in the traditional financial world as opposed to say, tokenizing stocks. That's great and obviously we want to see that happen as well. But it's more or less something that's more similar to what's happening in the traditional world.

BM: We’re obviously super excited about what we’re doing. We see social money becoming ubiquitous. We see The Late Show having its own social money or a channel on television or your favorite sports team. But you may see this in a pretty composable way. There may be a book that has its social money. There, there may be a specific episode that's really well known and that may exist between multiple standards that we're seeing. Demand to make things more composable will only increase over time.

The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money.

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.