"The Trick With Personal Tokens is People Want me to be Popular, Not Necessarily Succesful:" Alex Masmej
The first man to ICO himself talks to The Defiant about the rise and future of personal tokens, and how his experiment is playing out.
In this week’s episode I speak with Alex Masmej. Alex is part of a global cohort of young DeFi natives, who have found a way to live and thrive purely off of Etheruem experiments such as decentralized organizations, bounties and hackathons. Alex is best known for being the first person to raise money by selling tokens not linked to any project, but linked to himself, in a sort of self-IPO. Much like shareholders taking dividends, Alex token holders can have a share of the entrepreneur’s future earnings. The money raised has helped him cover living expenses as he plans to move from Paris to San Francisco and start a tech company.
He’s willing to try almost anything and see what sticks. In one of his experiments, he let ALEX holders vote on his daily habits, which is how he came to run 5km almost daily. Most recently, he announced a liquidity mining program for his token. We talk about how to better align token holders’ incentives with his own, what mainstream personal tokens may look like, and the Black Mirrorish quality of it all.
ALEX is part of a growing trend of personal tokens. They’re being used as a way to incentivize community building and for creators to exchange for products and services. Alex says personal tokens will become a tool for entrepreneurs from all over the world to raise funds and for creators in the passion economy to more easily monetize their work.
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Alex Masmej: I spent zero to 18 years old in Paris, then I did three years degree in business management in Manchester in the UK. It didn’t interest me too much and so this is why after three years, I decided that the best thing I should do in my life is to be a technology entrepreneur and do venture scale startups.
I tried just after that, doing 3D printing platform, which didn't really work out. Then I connected with people and created a fellowship of young entrepreneurs and we started looking at what are the biggest technological breakthrough that will happen this decade and some with low barriers to entry, because as a young person, it's very hard to get into augmented reality or virtual reality because you have to raise billions of dollars. I needed a technology that's an open field that's still unexplored where I could influence and I chose crypto.
After briefly seeing 2017, I saw the start of the bull market, it really fascinated me but didn't do much until mid-2019, where I just started tweeting about crypto. I'm in San Francisco at the time because I was learning computer science briefly, but I dropped out very quickly and I'm not the best coder. This was mid-July, like just one year ago during blockchain week, I tweeted, “If I had unlimited funds, I would love to go to Berlin” and an unknown person called Peter Pan wires me the funds straight away and I just had talked to him once in my life. This tweet completely changed my career trajectory.
“I tweeted, ‘If I had unlimited funds, I would love to go to Berlin,’ and an unknown person called Peter Pan wires me the funds straightaway… This tweet completely changed my career trajectory.”
I meet MetaCartel. MetaCartel is like my family in the space and there's also Cooper and other people that were born of this kind of ecosystem. From there I cofounded MarketingDAO, which is a DAO for marketing Ethereum. Then I cofounded Rocket, which uses NFT as collateral for loans. More recently, I create the token ALEX.
I think the common theme of what I've done in the past year and a half in crypto, is that I am trying all of the different applications possible on Ethereum. I see four primitives NFTs, DAOs, DeFi and personal tokens and I've done all four so far. I'm really enjoying seeing all the combinations possible. I've ventured a lot and now I’m going back to my roots of I want to be a founder of a venture-scale startup. Now that I've explored a lot, it's time for me to move further with startups.
Camila Russo: Wow, what an interesting story. I just want to pause on just this crazy idea of tweeting something out and like one community member out of nowhere sending you funds. This interesting community of young entrepreneurs and developers distributed all over, coalescing with MetaCartel. Can you describe more about that movement? What are you guys working on? Is it like an organized group or do you help each other out with the specific projects? Because I love this idea of like, young Ethereans trying things out, building things, breaking things.
AM: Totally. This is true, because usually when you start into an industry, you go to the biggest companies and in crypto, that path does exist. If you start at Coinbase or ConsenSys, it's a common way of getting to the space and having a great network and things. But for the few outliers that do not fit the boxes; I'm not the best coder, I'm not sure I am employable —now I am a bit more and I'm getting job offers— but like before at the time, nobody knew me, I had no skills to work but I was just super passionate.
“I'm not the best coder, I'm not sure I am employable, now I am a bit more and I'm getting job offers, but like before at the time, like nobody knew me, like I had no skills to work and I was just super passionate.”
Peter Pan has a thesis of really betting on people. The movement that he created from a working group in MetaTransactions, which is like a new term for a technological problem that is being solved right now. He made a group of just people who wanted to fund small projects and betting on people on a philanthropic basis. MetaCartel basically invested a few thousand dollars in startups.
I was one of the early members of MetaCartel DAO, which is the DAO that does this. Now, MetaCartel is a venture fund DAO and it's really impressive. Peter Pan is just like a really impressive person, I’m super grateful for his help so early on in my short career in Ethereum. It does represent diversity in crypto, geographical diversity. MetaCartel is incorporated on Ethereum. It's not anywhere else and has people from New Zealand, Australia, Germany, the US, France. Really awesome that anyone can really join if you're passionate enough and you want to reach out.
CR: Has MetaCartel been helping you with funding as you explored different Ethereum ventures?
Support from MetaCartel
AM: They did help me for Rocket, yes, as soon as I started. The short story of Rocket is that basically, I realized that there was no under-collateralized DeFi on Ethereum. It was just over-collateralization with Maker and I did an article with you back then. It made a bit of a noise in the space and we're all figuring out ideas and now it actually is much more concrete, because there's Union Finance, Terra Finance and all these new protocols for doing loans on DeFi, but at the time there was none —crypto just goes so fast. I decided, why not take NFT, it's something that's not directly monetary and this could help create new value out of nothing and I found this pretty fascinating. As soon as I got this idea, in 24 hours, I was being wired from the DAO $2,000. That's just a huge proof of support from MetaCartel and yes, so they did help me and that was pretty nice.
CR: I'm going chronologically, you got into space through MetaCartel and then you founded Rocket, so how did Rocket develop, are you still working on that, did it work out or not?
AM: What happened with Rocket is that it was a very smooth narrative. I saw that there’s no undercollateralized loans in DeFi, then I realized that NFT is underutilized as a monetary asset. Then there's three or four people starting to help out and I'm starting to pay them small amounts of money. At the time, there were a few investors reaching out to me saying, do you want to raise a seed round, we could help you.
But I went back to my startups roots, and decided I want to build something that's extremely big and that can have the biggest impact. The intersection between DeFi and NFT is still extremely tiny. There are companies overlapping with the Rocket vision which are Centrifuge, which does fungible NFTs from the real world and then there is NIFTech which fungibilizes NFTs from the digital worlds and so I'm super bullish on those. I didn't want to further down explore Rocket and I thought there will be a bigger market elsewhere and this is what I've been exploring. I just wanted to do something bigger. But I guess, Rocket could have been a great business, but probably not something that would go on to have hyper-growth.
CR: Then you saw these other projects emerging and they should be the ones to take that?
AM: Exactly. I knew Centrifuge early on and they told me that they had this NFT vaults kind of like the CDP for MakerDAO and I'm super bullish on those two teams. They definitely took the same Rocket vision, but it's much more scalable, it's trustless and it has all the properties that we seek in crypto. Super bullish on those two companies.
CR: Then how was your road down the personal token path, did that come right after deciding to drop Rocket?
AM: Yes. Technically, I started doing a personal token as soon as I got into the space because Peter Pan, basically sent me $1,500 and he was like, I want to tokenize your debt this is going to be very fun and I will be paid straight away and you would not have to pay because we have to pay the person who buys the debt. So I created Alex Masmej Loan 2019. It was a very fun, short stunt and this personal token isn’t known at all.
But basically, the Roll team reached out, and they issue personal token as a business and told me “Wow, we're spending days convincing people to do this and you've done this by yourself. That's crazy. Do you want to do a generalized personal token?” I said yes. And this was September last year; but at the time, there was no real use case I could think of.
After Rocket, I decided that I would not spend too much time on Rocket because this is not the best way to spend my time. Then COVID-19 happens, I got cut from marketing contracts and I'm like, “okay, maybe it's time to leverage the only primitive in crypto that I overlooked so far” and that was just a week before ECC, the conference, and I was tasked to do a talk on personal tokens on the mainstage. I was like, “Wow, this is now the time or never to raise $20,000 in an announcement to the Ethereans” This is how it came, very spontaneously. The reception was really great, the feedback was really great and a month later, I did it and it worked well. The start was my $20,000 token sale called the “Initial ALEX Offering.”
CR: Can you explain the mechanics of this? You're rausing $20,000 from anyone who wants to buy your ALEX token and then you're sending them ALEX in exchange for their crypto basically, is how it works?
Initial Alex Offering
AM: Yes. This was only for 1 million ALEX tokens, there are 10 million in total. In March, I said, I'm going to sell 1 million tokens for $20,000, it will be at a premium versus a secondary market because it will carry this income claim that I'm trying to fulfill. It will be 50% of my income disbursed quarterly in the next three years. There are 30 investors in total and it's mostly people in the space, I mean, it's just people in the space, investors, founders, community members and just Twitter followers that I don't really know. This is how it happened. I sold them and so they have the ALEX and if they don't sell the ALEX, they have the claim on the ISA. I guess they're going to hold for three years.
“This is how it happened. I sold them and so they have the ALEX and if they don't sell the ALEX, they have the claim on the ISA. I guess they're going to hold for three years.”
CR: Only the people who have bought ALEX tokens from that primary sale, the 30 initial investors, they're the ones who can have the claim to your future income, not just anyone who buys ALEX on Uniswap?
AM: Yes, exactly. Correct. If you buy ALEX on Uniswap, you have access to all the experiments that I can expand on, and I've done many, but you don't have any income claim. No.
Image source: Uniswap
CR: How is that income claim? Is there a contract, how do you verify the investors?
AM: I had like a Google form to get everyone's details, name and things and so I guess, technically, I could KYC them. I know who they are as people. I have all their names, their wallet address, the amount that they pledged, on a Google spreadsheet pretty much. I just airdrop my income claim every three months, so I've done the first disbursement last week.
CR: Oh really?
AM: Yes. So, that was cool. Actually, funnily enough, I thought I would distribute my income in USDC and basically, my holders told me no, we are long ALEX. What they actually wanted is Uniswap V2 LP shares, and so I increased ALEX liquidity and I've also done a liquidity mining experiment recently, these both contributed to the spike in liquidity, which was fun because usually, personal tokens are not really liquid, they're not as famous of course as DeFi protocols. It's an interesting experiment.
“I thought I would distribute my income in USDC and basically, my holders told me no, we are long ALEX. What they actually wanted is Uniswap V2 LP shares.”
CR: They wanted Uniswap LP tokens, like shares representing liquidity in the ALEX pool?
AM: Yes. In the ALEX pool. They got shared of the ALEX-ETH pool, which is 50% of ALEX, 50% ETH. They’re basically, long ALEX and ETH, I guess at the same time.
CR: They'll get the fees generated from the pool as well?
AM: Yes. They will get the fees generated from Uniswap. And since I introduced liquidity mining, they are de facto also, going to get the ALEX rewards at the end of the month.
CR: Oh wow, so they're super long. Can you say how much you disbursed?
AM: I disbursed $1,800 and yeah, that was 15% of my income in the past few months, so people can do the calculation.
CR: Wow, that's amazing. Obviously, there's an elephant in the room, which is like regulations. Is ALEX on security, how are you thinking about that? You're in San Francisco right now?
AM: I'm not, I'm in Paris right now. I don’t really stay in the US.
CR: But I guess, you do have US investors?
AM: I guess so, yeah.
CR: Are you worried about that? Have you talked to lawyers? What's your thinking around regulations?
Elephant in the Room
AM: I briefly talked just before the token sale to two lawyers, and they told me it's a very gray area, but yes, there might be an element of security for my $20,000 token sale. I just don't know as of yet. We don't know as a space. I would say the remainings, like 90% of the supply is totally, in my opinion, not a security. This is just like other isn't personal tokens like Jamm, Kerman and the others. If there is no income claim whatsoever, it's a community token. It's investing in your community, which is the Roll value proposition.
“I briefly talked just before the token sale to two lawyers, and they told me it's a very gray area, but yes, there might be an element of security for my $20,000 token sale (…) I would say the remainings, like 90% of the supply is totally, in my opinion, not a security.”
I think it should be fine. I just don't have anything to comment on it. There’s been many, many questions, and we don't know. I think it's a very reasonable amount and we are doing it very, very reasonably, all the personal tokens. It's nowhere near the craze of the ICOs and some of them got away with loads of way bigger amounts than expected and things like this. So far, I have been repaying as well.
Yes, sure, it's not trustless and we should have better mechanisms. I can't comment too much on the legal side, I'm not a lawyer. I do have some help from lawyers from the Roll team. For me, it's more like crowdfunding, especially if I give Alex LP shares and things like this. It's not a wire to a bank account or things like this. I did a lot of disclaimers when I announced my token sale. But I can’t comment as I am not qualified or educated in this. We'll see.
CR: It is kind of a risk, right? Because even when I also issued my own CAMI tokens and I did ask lawyers in this space. With me, the way I'm thinking about it, yeah, it's an experiment. I'm using it to kind of in incentivize people in my community and trading it for concrete things, a subscription to The Defiant and I'm rewarding sharing The Defiant or sharing reviews of my book stuff that. But I guess, when it becomes tricky is when you're promising future income. I guess if nobody is complaining, if your investors are fine, maybe that will protect you, but yeah, we'll see.
Just an Experiment
AM: Also, one point is that I just didn't expect this to work. When I did this in March, I thought, I'm just going to try this, this is an experiment. I was in no mindset of convincing lawyers and paying lawyer fees, that would be like huge percentage of the token sale anyway. Yes, if I was to do a platform around on personal tokens, I would definitely look way further into this, if I had to raise way bigger amounts. But I know that some people would say, this is not an excuse, you know, you're kind of bypassing the elephant in the room, etc. We’ll see. But it does seem to me that it is reasonable, this was a risk that I'm willing to take.
CR: Then tell us about all the experiments you've done with this, because it seems like you've tried absolutely everything. I guess like the first I heard about, was your “vote on my life.” Can you describe how that happened?
Voting on Alex’s Life
AM: It was really funny. Austin Griffith was interested in personal tokens and he saw that he could enable personal token voting and he published an article saying, people just sign because the gas prices are really high right now and so it would be free for holders to do so. I saw this and I was like, “Wow, I have to use this, like otherwise, who will. This is a really cool new feature.”
I did a front end and web page in like a day and I thought, what could people vote on? At first it was like, “What city should I move to?” Because there's a lot of debate on San Francisco, people are saying this is not a good choice for my life. I could kind of ride this kind of drama around the city. But I would not comply, I would still go to San Francisco anyway, so I probably should not do that.
I did something very light weight which was “my daily July habit.” There was four choices. One was stop eating red meat, live solely off Bitcoin, run five kilometers every day and the fifth one was wake up at 6:00am. I did this and it was quite successful. It made some press and I think it excited people and scared some, because it sounds a bit like Black Mirrorish scenario.
“I did this and it was quite successful. It made some press and I think it excited people and scared some, because it sounds a bit like Black Mirrorish scenario.”
There was 1 million-plus tokens who were signed and there’s 4 million roughly circulating supply, so the participation rate is 25% which is much higher than some DAOs or protocols. I thought this was funny.
I did run five kilometers and so, the trust mechanism is that on Strava the running app, I just shared it to my permissioned Telegram group. The ALEX Telegram group has a bot checking whether you have ALEX or not. The holders could also verify that I was running five times a week, which was pretty fun. I called it, “Control My Life”, a cheeky headline, but of course, I decided what I wanted. All is good.
Image source: https://voteonalex.surge.sh/
CR: But this is kind of bring to light what the actual utility of token-voting with personal tokens can be. Because I think, if you're promising that token holders will have a participation of your future income, they might be able to vote and influence your decisions to maximize income. I think maybe like starting off with this experiment where they voted on your running five kilometers, but do you think it could evolve into more meaningful decisions that can have a bigger impact on what income you make?
AM: Probably, maybe that's a stretch, but definitely it helped me be healthy, I guess. Well, it was very lightweight and fun. Maybe in the future, I would ask a question that would be directly helpful to my business or something, like what company should I partner with. Maybe that's kind of market research embedded in my token and so, the governance part could be really useful. I think this is really awesome that people are incentivized. I think family is genetic equity and for me, giving equity to a community of people, which are now incentivized to help me live, that's pretty awesome.
“I think family is genetic equity and for me, giving equity to a community of people, which are now incentivized to help me live, that's pretty awesome.”
CR: That's true. That's a good way to look at it. In general, most people, if they have a good relationship with their family, they would ask their family and closest friends about their important life decisions. And they're incentivized to help you, because they just genuinely care for you. But with tokens, you add incentive for people who don't know you to also make better decisions.
AM: Exactly. And also, one thing is, decentralizing opportunities, making opportunities everywhere and I think this is where Kerman and I agree on, is that we are not from Silicon Valley. I have friends in Silicon Valley who are offered like $100,000 very early on in their career so that they can be super successful and they can directly work on the most impactful thing. But we don't have this opportunity in Europe. There's no Thiel fellowship in Europe. It doesn't really scale this kind of fellowship of young people entrepreneur that just gets money very early on in their lives. Being able to do this is really amazing.
Being able to raise even a small amount like $20,000 is nothing compared to some startups. But it was kind of life-changing for me, because I don't need to do any other job, I can directly focus on crypto and what I know best. This is really awesome, not just for me, I'm the first anecdote of that primitive, but it would be awesome if anyone in the world could raise funds very easily that way.
“I'm the first anecdote of that primitive, but it would be awesome if anyone in the world could raise funds very easily that way.”
CR: I agree. How is your initial plan going? Because you raised $20,000 to create a startup in San Francisco. How is that going? When are you planning to move, or did you put that on hold because of Coronavirus?
AM: I did put that on hold. I'm still going I guess Q1 2021. The $20,000 helped me pay the lawyers fee because I'm doing a Green Card right now to immigrate to the United States. It just helps me in life. I don't think $20,000 really are for my startup expenses, it's more for my living expenses during the next few months as I work on my new projects.
CR: Then I guess the next big experiment you've done with ALEX is the yield farming, or liquidity mining, whatever you want to call it. I really want to hear more about that.
AM: Sure. Personal tokens and community tokens —so what Brian Flynn did with Jamm or Evan did with his newsletter— all of those tokens and mine are not liquid at all. That's fine for the early hype. But then it's not really a long-term value prop that's sustainable. Unlike the other personal tokens, my token is a bit older. I have already given away many ALEX and so, I cannot really play the scarcity game because there's a lot of ALEX out there already.
I thought to myself, instead of trying to play the scarcity, illiquid, game that I can't do, because it's kind of too old that it was diluted already, why not incentivize holders to put liquidity in ALEX, telling them I will continue to sustain that token, meaning I will continue to do experiments and to do announcements around my token. More recently, I announced that Cooper, who is also a writer contributing to The Defiant, but also, a talent manager with artists, will be my manager for my personal tokens. We will find a way to make token sustainable.
Knowing this, we wanted to reduce slippage and pricing impact and make it so that people could enter many bigger positions in my personal tokens. And so yeah, we wanted to incentivize liquidity and I think it was a great idea, because now there's more liquidity and so you can trade ALEX at larger prices. It's better for the future. If you want to exit your position or enter your position, it's much, much better that way now and so I'm happy how it turned out.
For one month, people have to hold their ALEX-ETH Uniswap V2 liquidity pool. And the liquidity went from $20,000 to $60,000 or $65,000 right now and the price went really up, because people just buy before pooling, of course. I think it's a win-win for everyone. So now, I still have to deliver, right, and whatever projects and things like this, it's still speculative on my future, but super happy with how it turned out. Liquidity has been incentivized. It's been working well so far.
“Liquidity went from $20,000 to $60,000 or $65,000 and the price went really up.”
CR: How does it work though. You said, you're telling people who put ALEX and ETH on the Uniswap pool that you will give them more ALEX in the future?
AM: The first experiment that I'm starting is for one month, I want people to have ALEX-ETH Uniswap V2 liquidity to increase price discovery, slippage etc. I will do a snapshot tomorrow, I will do a snapshot in one month and then I will distribute proportionally to their holdings, 100,000 ALEX.
100,000 ALEX is quite a lot, it's 20% of the entire pool. This is great because Uniswap suffers from impermanent loss, meaning that ALEX went up recently quite a lot and so it was really important for them to cover the loss of ALEX due to people buying ALEX with ETH.
I think it's an awesome way, because liquidity is a hard problem. If it's too liquid, the price will go down. If I incentivize people to put more liquidity, maybe impermanent loss will occur and they will lose some ALEX, but I'm giving ALEX back. What will happen in one month hopefully, is that there's more liquidity, the price went up and pretty much it's a win-win for everyone involved.
CR: What's your view on now that you're doing liquidity mining yourself or your own token, what do you think that about the system potentially just driving speculation for the sake of it, just people holding on ALEX, because we know you're doing this incentive and not because they're actually bullish on the token itself? What's the risk of that happening and if that's happening, how sustainable are our incentives like this?
Popular Vs. Succesfull
AM: Yes. This is very true. I do think incentives are much harder than people say, theoretically. I think if I deliver, if I’m an entrepreneur, this should drive the price forward, because they will believe that my experiments will go well and there will be more people participating.
One trick here is that maybe people do not necessarily want me to become successful in life, they just want me to become popular and that might not be the same outcome. I agree maybe there's going to be a little misalignments. This is why I think the personal token agency by Cooper is going to be a great idea, because what happened in the past few months is that I've been trying to focus on a new startup, but I've been a little bit distracted by my token ALEX because I want to sustain the holders, make them happy and not feel like I just left the project, etc.
“One trick here is that maybe people do not necessarily want me to become successful in life, they just want me to become popular and that might not be the same outcome.”
Knowing that now someone will take care about sustaining the experiments it will be better, I think for my long-term future. They can come for the speculation. I think that is the goal of yield farming. But yes, yield farming is not sustainable if there's no product-market fit at the start. If I do not fulfill my ambition of being a successful founder and entrepreneur and if I don't engage with the ALEX tokens anymore, it's probably going to, I guess, decrease in price if my perceived community reputation decreases in the future. We'll see.
For now, it's reasonable amounts. I think, maybe I'll cut it out on Twitter when I think that this is going a bit crazy, like “how we earned it,” Vitalik tweet in 2017. Maybe I'll do that.
But for now, I guess the valuations of personal are really reasonable. It's starting to speculate a little bit now because of the bull market. For me, it's more like the macro trend of the bull market rather than just by specific case. Everyone is speculating right now.
CR: True. Maybe the hope is that people will come for the speculation and yield farming, but they will stay because of ALEX.
People on Price Charts
AM: Exactly, that’ll be really cool. I think that's what's happening with older protocols, like people are coming with referrals for Uber, PayPal, like the way companies did marketing back then. Then this is another form of marketing and you're even more incentivized to root for the product or services that you're using. I hope that yeah, if this could help me convert investors or network or whatever, I think that's beneficial for my carrier. That's great.
CR: I think it was a really interesting point that you made about these personal tokens incentivizing popularity and not necessarily success or happiness or however you measure success. I think it's a really interesting point. I don't know. What else have you thought about it? What would be a way to so that these tokens are in so aligned with popularity?
AM: Maybe if I do, let's say, I release a product, my holders get a discount on my next startup product, that could align both of the incentives. It's like, okay, well, if people buy ALEX, it's to get a discount on my product, meaning that it will make my company successful, meaning that nowadays, seems a bit better aligned. But it is true that what I'm seeing so far around the price action of ALEX is that every time I announce something on Twitter, the price goes up. It does seem very tied to my popularity, but I guess it's not just a specifically for personal tokens, like any big announcement from any entity in crypto does influence the price, etc.
CR: Is it weird, do you think it'll be so strange in the future just watching the price for yourself go up and down? Because you get a sense of do people like me or not?
CR: But now you can actually see it on a chart. How does that feel?
AM: To be honest, because I am not thinking about my tokens that I hold as liquid, I'm not really emotionally attached to the price. First of all, it's not enough liquid for me to step away from ALEX and I think it would be a really bad move if people saw that I was dumping my own token to the community.
For many of these reasons, I am not incentivized to sell, thus the price action isn't really influencing me too much. Maybe if in the bull market it goes completely crazy, I will start to feel a bit weird emotionally. So far, it doesn't really change. It's a nice indicator of how well my experiments are doing. It's a very flawed one as well, because of illiquidity, and like someone just buying a few hundred dollars can already make the price spike up. I'm not actually too worried. This is not as emotionally stressful, I guess as probably traders or people who like really care about the financial value of an asset is.
CR: Makes sense. Going forward, what are kind of the next experiments you're planning for ALEX and what do you have an idea for the startup that you want to found in once you move to San Francisco or maybe you're already starting it?
Paris —> San Francisco
AM: Sure. First of all, I guess, I will probably continue liquidity mining. I have a small community on Twitter and some companies basically pay me tokens to do marketing. I think one great way would be to distribute some of those tokens to my token holders. It would be a way for me to incentivize people to hold ALEX and for the companies to get extra exposure, because I would add up those tokens. I think this will be the experiment in the next coming month would be now I'm not just giving you ALEX, but I'm giving you tokens that companies want you to use as an incentive to use their products.
“I think this will be the experiment in the next coming month would be now I'm not just giving you ALEX, but I'm giving you tokens that companies want you to use as an incentive to use their products.”
This probably will be an evolution of ALEX yield farming experiment. I'm not sure about other experiments going forward, but there are countless ideas. And as you said, I'm kind of trying to do everything I find interesting. The good thing is, I have a very tight feedback loop, meaning that I can try out something straight away, I do this in a very MVP bare-bones way and so I can start delivering very quickly.
Regarding my startup right now, so basically, after my personal tokens, I've had a lot of people reach out to say, “This is your competitive advantage as an entrepreneur.” If you start something around personal tokens, you would have an edge because you are one of the pioneers and you could dogfood your application, etc. I thought about this for the next few months, but then I decided to pivot a little bit more towards financial products and not DeFi. I would probably use DeFi to build banking services for consumers, my passion is really consumers and building a consumer products.
Right now I'm in the early stages of building a DeFi first neo bank, but it's a very start right now. There are so many people starting neo banks and all these new generations of banks, whether in crypto like Dharma or others or even Revolut in the traditional finance space, maybe a differentiator could be my personal tokens and communities tokens. I will share more details soon.
CR: That's interesting. You're thinking of something that is in like the traditional fintech space, but it's linked to DeFi in some ways?
AM: Yes, it probably will be a DeFi startup. There might be a, I'm kind of revealing a lot right now, but whatever. It probably will be also like a debit card or like a way for people to spend their money in the legacy world but using DeFi and I mean, it's not a new idea. Bitcoin is doing this for years now, but I think I can add a twist to it.
CR: Interesting. Maybe like spending your personal tokens or something.
AM: That will be cool.
CR: About San Francisco, I'm also wondering why you're so keen on moving there?
AM: I was born in Paris and I've discussed this a lot with entrepreneurs and founders and investors in Paris. It's really hard to find talent to build venture scale companies in Paris and in France in general. I feel like I probably would need to move in. I know that argument is, but remote work is booming and you don't need anything. You can be a digital nomad or whatever. I don't really buy this for a cofounding team.
The short story is that in San Francisco in the Bay Area, there are more capital and talents there. Yes, we said crypto is decentralized and it can be started from anywhere in the world. But if we look at the two biggest protocols, Maker and Compound, they were funded by Andreessen Horowitz. They are closer to startups, at least at the start and then you can do the playbook on decentralization. But it does feel to me that, it's the best.
Then it's not just about I picked this kind of like as a robot. Silicon Valley, this is what influenced me as a teenagers and I would just love to live there anyway. First, I need to move from Paris, it's not the best place to be an entrepreneur. There's some cool interesting startups in the crypto space in Paris like Multis which is a wallet using DeFi and it's very interesting. But I feel like I want to move and I don't know I just like traveling. It's not that this on France or Europe, is just I really love this place, it happens to be a great place for startups and technology and that's even better. I have a lot of people there that I know which are already cool. I just really move there.
CR: No, makes sense. I was just curious, because I also had kind of this same debate with myself, like is it still worth living in New York or not? I'm also and I'm thinking of The Defiant also as a startup, so same thing. I keep coming to the decision to stay here because of the networks and talent and all of that.
AM: New York is awesome for I guess journalism, finance, so it seems like the best place for you to be.
CR: It's a good fit. Great. Okay. I just want to get your opinion and views on DeFi in like broadly. Where do you see this space going?
Healthier Than ICO Boom
AM: I think right now the yield farming experiment, as it was said, I think on Token Daily is probably the circulation of existing money, so we are just recycling the same DeFi money. But a great counter-argument, though, is that it's not just dogfooding in the space, because these numbers that are going to attract outsiders to the Ethereum community. We are probably going to be with retail investors, traditional investors, hedge funds from the offices.
The trend that we're seeing right now is going to attract a lot of funding. If this goes like 2017, it's going to be a lot of more talent, a lot more startups, a lot of more jobs created and community will just grow. Also, it does feel like this trend is much, much healthier than the ICO boom.
We all agree on this, because it's not paying for service in a coin. It's using a service and getting a coin. It's much better, because it does incentivize people using a crypto product and this is what we need the most, I think. I'm super bullish on the next 12 months of the crypto space and super happy that this is happening.
“It's not paying for service in a coin. It's using a service and getting a coin.It's much better, because it does incentivize people using a crypto product and this is what we need the most.”
CR: Same here. I agree, covering ICOs back in 2017 and covering this space now, it's nothing like it was back then. It’s a lot like, grounded in reality and not just hype. And what about kind of the future of personal tokens? I don't know, like 20 years from now or, I don't know, 10 years from now, let's say it goes, who knows? How do you see that space evolving?
Investing in People
AM: For me, there's two different kinds of personal tokens. One is for the utility aspect. Maybe like your CAMI use, which is like subsidizing, maybe Defiant subscriptions or maybe a discount in your book or getting some exclusive perks from your community, but that is not investment as a speculation or like a sole monetary asset. This is what Zora and Foundation are doing and this is a really awesome experiment. I think it will scale because we're seeing with the emergence of the passion economy where people want to be writers or they want to do their own podcasts and all these kind of new content are really booming right now. They will need better monetization schemes, because right now it's really hard to monetize.
The first utility part is going to be huge for the passion economy and creators. Then the other one, which is also very interesting and was featured of CoinList or YCombinator, which could be a security with income claims or another mechanism, but this will really be like a stock where people invest early on in artists, athletes, entrepreneurs, politicians and it would give funding to a whole branch of people who are not connected, maybe to the wealthiest investor, but they have a really big community. I think with what's happening all the time in crypto, community is extremely important and I think this will be even more true in the future.
“But this will really be like a stock where people invest early on in artists, athletes, entrepreneurs, politicians”
Even at my scale, I don't have a really big community, but the monetization that I've accomplished with my token is enormous compared to my community. What about people who have bigger followings than me in other non-crypto spaces if they could have the same monetization mechanisms, that would be a net positive for all of those people. Whether it's utility investing or like straight up funding experiments.
CR: Super interesting. You said the monetization you've reached with ALEX has been huge, how do you measure that?
AM: I did my $20,000 token sale, then I have done a few OTC deals. So, people buying ALEX off the market reduce the Uniswap slippage. This just ended up being a considerable amount of money compared to what I thought. I feel like I am experiencing next-generation angel investing and this is huge because I don't think anyone else in the world is doing this and I want more people to do this.
It's kind of like Justin Kan, which was a crazy person who was filming himself, and then he became the CEO of Twitch and now everyone is streaming themselves on video. Now, I'm that weird person, again, where I'm monetizing myself and no one else is doing it. But hopefully in 10 years, 15 years time, a new platform would be built so that anyone could be able to do that.
“Now, I'm that weird person, again, where I'm monetizing myself and no one else is doing it. But hopefully in 10 years, 15 years time, a new platform would be built so that anyone could be able to do that.”
CR: You're experiencing the next generation angel investment and it's funding an actual person not a startup. It's a huge shift in mentality.
AM: Exactly. This is kind of like next-generation also ISA income sharing agreement as I have done sharing my income. I guess this might be reserved for people who are kind of young, because soon, I already have potential cofounders right now and I will soon have a team and a startup. Very early on in your life when you don't have a network yet and you're educated and you are mingling with people to start of business, well, I think it's really awesome to have personal tokens.
Maybe you have personal tokens for a company that you release or something, I think it will be very prevalent in the future. Maybe not to build with teams, but usually, creators are like a one-person team. Like Camila Russo, like you are the head of The Defiant and the writer, so like it makes sense that you have a token for yourself for instance.
CR: It's so interesting. Just to clarify, why do you think these tokens are better than just straight up cash? I mean, why is that different?
Cash vs Crypto
AM: I would have not been able to raise my $20,000 token sale if it wasn't in crypto. Because I had people invested in so many different countries in a very short period of time. It was faster it was cheaper. I don't think it would have been possible money-wise to wire all of those different transfers from different countries. This is one thing.
“It was faster it was cheaper. I don't think it would have been possible money-wise to wire all of those different transfers from different countries.”
I cannot say the trustless aspects much because, as many people noted, I can still technically run away with the cash, there is no mechanism stopping me from this. But I guess hopefully, this will be important in the future. I was so early that it was not really possible, there was no infrastructure for this. For now, the aspect is just global money that is transferable instantly and that's why it’s a huge win.
I spoke with this person who wants to tokenize themselves, but they didn't know about crypto. But that person’s origins was international and so that person just couldn't do anything, because it would have been too hard to concede all the payments processing and it would just be much.
I'm very fortunate that my origins is of course, crypto people, so this is what made this possible. It's like everyone understands Metamask. Actually, Metamask lead is also token holder, so where I’m like super bullish on Metamask, I guess.
CR: No, these are great points. It would be crazy to see a feature where everyone has kind of their personal tokens and this just becomes something as common as like streaming yourself or being a YouTuber, you also have your token.
AM: Exactly. Not everyone is doing video streaming or writing a newsletter, but there's a lot of people. This could be same for personal tokens in the future, it will be mainstream. Not everyone will have token, but a lot of people could do it.