"We've Been Creating Value for Instagram and TikTok With Very Little Actually Accruing to Us:" Trevor McFedries
What if we try a different model? asks Trevor, co-founder of Brud and Lil Miquela.
This week’s interview is with Trevor McFedries, who is behind Lil Miquela, a 19-year-old aspiring pop star with almost 3M Instagram followers, striking deals with Clavin Klein and Prada. But what’s more surprising is that she’s not actually human. She’s a computer-generated character. The company that Trevor co-founded, called Brud, created her image and life story. It’s only fitting then that Lil Miquela, who lives in a digital world, will start to leverage digital tokens.
We talked about how Lil Miquela will start to use crypto and web3 tools to connect with her fans and continue monetizing the value she has created. The first step will be to create secondary markets on open, blockchain exchanges for images associated with her. The first such drop will be on SuperRare.
[Note: Trevor says in the interview the drop would happen on Oct. 30 or 31, but they’ve since changed the date to Nov. 17. So you’re still on time to participate.]
In the future, even things like follows and likes can be sold in these open markets, and there can also be a governance model, where her fans could vote on her narrative based on how much of her tokens they own.
Trevor also talked about how he’s leveraging crypto himself, with his Friends with Benefits token, which allows access into a community of token holders who provide value to each other. He says that in the future, communities like these can become avenues for brands and companies to connect with audiences without going through platforms like Facebook and Google.
The pieces are coming together so that in the future, we’ll all be avatars interacting in the metaverse, he says.
🎙Listen to the interview in this week’s podcast episode here:
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Camila Russo: Before we get into all the craziness of the intersection of crypto and culture and media, I want to talk a little bit more about your background, which is really remarkable. Before founding Brud, you're also known as Yung Skeeter and worked as a DJ and producer with superstars like Katy Perry, Steve Aoki, you performed at Lollapalooza, Coachella, I mean, pretty amazing stuff. So how did that transition happen from being at the pinnacle of the music industry and then founding Brud and Lil Miquela?
TM: That's a great question. I mean, I think it probably requires giving some background on who I am, my journey, and I'll try to do it with much brevity as possible. But I grew up in Davenport, Iowa, a relatively small town in the Midwest, and I moved to LA when I was 16. When I was living in Iowa, I was writing code, playing in bands, doing things that kids do as hobbies, but in Iowa, that wasn't a career.
When I moved to LA, I met these friends whose parents owned companies and were thinking about technology or thinking about media and fashion design, whatever it was, and I recognized I personally do those things, and I want to do those things. In Iowa, I was playing sports, and I got recruited out of high school to play sports in college, and I ended up doing a couple of years and I quit. When I moved back to LA, I was basically doing web design, I was a web dev, and doing software stuff for a living. Then nights and weekends, I was DJing and making beats for rappers around town and making house music stuff, just for fun.
Out of nowhere, got signed to Interscope Records, basically ended up time at Jimmy Iovine’s label. When Interscope was changing quite a bit, the record industry was getting eaten alive by the internet. Because I knew a little bit about the internet, I started getting pulled into rooms and getting asked questions. The first time, I tried to establish myself as this conduit between media and technology, really music and technology, and that was probably 2008-2009. I end up leaving that band, and producing music and DJing. While I was doing that, I was building growth tools for artists.
Long story short, I opened for Katy Perry in 2010-11 on the California Dreams tour, and while I was there, I got approached by Spotify to come join and help launch this thing from Sweden into the US. Working with Spotify, I really fell in love with lean startup, and how different that was and what I had known in the music business. I think my experience in music was like spend five years and $5 million, making a thing and just push it off a cliff and hope people like it, versus software, making this product shipping and talking to customers, iterating into a thing people love.
The dream for me was to say okay, is there a way to integrate that software-based approach of shipping product into what I was doing with music. Then in parallel, I was really thinking a lot about media and the way it shaped people's hearts and minds and then fell in love with his television program Will & Grace here in the States, and seeing all this data around Will & Grace being largely responsible for gay marriage in the US, and then all this data on the Jeffersons and the work that they had done for the way black people are viewed in America.
“The dream for me was to say okay, is there a way to integrate that software-based approach of shipping product into what I was doing with music.”
In my head, this kind of skipping ahead quite a bit, I started thinking about, wouldn't it be great if you could use the power of narrative, the power of celebrity and fan relationships with the power of software, and its scalability and trying to create these narratives that could really outcompete Trump narratives or Kardashian narratives, whatever is dominating the mindset of young people and try to create these narratives as compelling as entertaining, but also imbue moral themes, these things that I think could build a more tolerant or empathetic world. That was kind of the pipe dream. It started looking like a modern Marvel or Disney. You know, here we are few years later, like with these characters telling stories and can hang out on cool podcasts like yours.
“Wouldn't it be great if you could use the power of celebrity and fan relationships with the power of software (…) to create these narratives as compelling and entertaining as Trump or Kardashian narratives but also imbue moral themes thatccould build a more tolerant or empathetic world.”
CR: So the genesis of Miquela was this idea of creating compelling narratives for people to consume and which would have, hopefully, some positive impact in the world, right?
CR: If you can introduce Miquela to my listeners, who actually is she?
TM: That's a good question. If you're listening at home, it's probably more fun as a visual experience and you can right away go to Instagram or Tiktok and type in Lil Miquela. What you'll see is a CGI character who has this narrative backstory. She's a sentient robot, navigating Los Angeles. She's programmed to be 19 forever. She has these dreams and ambitions of becoming a global pop star and sharing her story and her journey, really this journey of otherness with the world.
It started years ago where it was just her. Now there are other characters in the universe. There's an evil henchman who's tried to kind of manipulate her and originally created her. It really has all the trappings of a Marvel universe or Disney universe, just instead of being told in film or in comic books, it's kind of told primarily on those platforms.
Image source: Lil Miquela’s Instagram
CR: So how does it work? Did you initially sketch this character out and did you write out the whole story of Miquela and now you're basically executing it? Or is it more like, free form, sometimes you introduce new characters and new storylines? Also, I've seen, she's very much a fashion influencer. So how does that play into all this narrative as well?
TM: There are so many good questions there. We say our characters are more like characters, and less like influencers, you get that language a lot. I think of Miquela as like Carrie from Sex in the City or something. Where like, Manolo Blahniks are kind of secondary to the story, but it is really important, I suppose in the grand scheme of things. Always to say yes, there's the narrative arc that we're seeing ourselves through. Very early on, I was lucky to have J.J. Abrams, of the Bad Robot team, bring us into the fold and be great champions. In talking with them, exploring ideas of how television programs over the years have come to pass, and how narratives come to pass.
You want to be able to be agile because there are situations where a guest star, everyone will love and may become the main star and someone you think is the main star might not be as well received and will kind of become more of a tertiary character or something. What we try to do is think about what are the major themes and lines you want to talk about. Then we basically also create space to be reactive about things happening in the world.
That's part of a more macro shift in entertainment that I'm a believer in this idea of we had a more broadcast world where you have writers hand lines to someone, and they deliver those lines, and that's how it made them famous. Now we have this world where there are characters or personalities or public figures whose real skill set is being dynamic and being interactive. If you talk shit to Cardi B, she's going to talk shit right back in a very real and not very contrived way. I think the authenticity comes through and allows people to feel like they're a part of who she is. We know who she is, and that's what we try to convey as well.
“Now we have this world where there are characters or personalities or public figures whose real skill set is being dynamic and being interactive.”
CR: It really shows because I was checking out her Instagram just now and saw that she has Black Lives Matter on the bio, so is that how you’re blurring the boundary between fiction and reality?
Taking a Stand
TM: We think about that. You know the way the X-Men are kind of Marvel characters, they were having this commentary on the Cold War, these like socio-political issues that are very relevant to their time. One of the great things about Miquela, is she's been an advocator for Black Lives Matter for four years now, and I think, really took a position that was unpopular with some fans. In doing so, I think we've got a lot of respect from other artists who have seen a lot of artists shy away from taking those kind of polarizing positions traditionally. I'm actually quite thankful that this year has forced a lot of people to come forward and really express where they stand on issues that really matter and really affect people.
CR: So the idea for Miquela is to really have an opinion and to be like out there with those opinions?
TM: I will say like, there's been a lot of really interesting perks to having this interconnected world. But I think one of the challenges is that when everyone can talk to everyone in real-time, artists who oftentimes are sensitive and kind of feel deeply, aren't as interested in the confrontation that maybe taking a position that is unpopular, maybe directly impacts some of the other artists’ lives.
“…one of the challenges is that when everyone can talk to everyone in real-time, artists who oftentimes are sensitive and kind of feel deeply, aren't as interested in the confrontation that maybe taking a position that is unpopular maybe directly impacts some of the other artists’ lives…”
I always kind of joke that, like, Miquela doesn't need to run into Taylor Swift for the VMAs, so she could have a really strong opinion about Taylor Swift. But that applies to the world as well. You know, she's taking positions on a lot of topics that I think a lot of artists wouldn't because of brand concerns or whatever else and that’s a position that we want to take as an organization. Because this is a look at a mission-based organization and we have some goals and outcomes we want to create versus just sitting on the sidelines trying to cash checks or whatever.
CR: That brings me to the question of what actually is the business model of Brud and Miquela? Are you taking sponsorships from brands or how does it work?
TM: I mean, Brud is going to joke that like, we're one part Marvel one part CAA [Creative Artists Agency], that's not entirely inaccurate in that we've got this talent really in Miquela, who speaks Mandarin, Portuguese, English, Spanish, that you can do photoshoots in like London, Shanghai, in New York at the same time, and so we definitely explore opportunities. But Miquela has done deals with Prada, which is part of their fashion show stuff, Samsung campaigns, Calvin Klein stuff. So, really, even Miquela’s business and our business right now is not entirely different than you would if you were working with RAC or like other artists.
But the dream is really to build out a talent that can do things traditional talent never dreamed of. We've had times where Miquela is chatting with like, thousands of people concurrently. I can imagine that can be hundreds of thousands, if not million eventually. The business model is tell compelling stories, create characters people love and find ways to provide joy to those fans, by selling them things from our working partners.
“Miquela’s business and our business right now is not entirely different than you would if you were working with RAC or like other artists. But the dream is really to build out a talent that can do things traditional talent never dreamed of.”
CR: Looking forward, how does Miquela start to leverage other technologies, like crypto and blockchain?
Open Secondary Markets
TM: I spend a lot of my waking hours thinking about how to build a better world for creative people. We live in this 21 economy, where a lot of people are coming with these ideas, and one of the values being captured people that are kind of fast following and emulating what they're doing. You know, I've got a good group chat going with Dre, and a lot of others talking about how crypto can enable, especially musicians and artists to capture some of the value that otherwise is leaking out into middleman or rent-seeking folks.
Miquela is an opportunity. I've always been interested in carving out and establishing what we're doing, almost like a platform such that creative people can have, effectively a heat shield, or kind of like an intermediary between them and the public. Have you ever seen a really interesting Vanity Fair series where they interview Billy Eilish every year as she kind of first got a little bit of fame. I think she's 15 for the first one, then 16 and 17.
That's kind of the best-case scenario for an artist. It's like a young artist and their family member making songs in their bedroom having truly outsized success. Still, you see the amount of like just the burden of fame, and all this pressure puts on a young person. So the idea that you can create things and you can put them into the world and have kind of this intermediary look like a character or what my friend Toby would call a headless brand, that for me, is really intriguing.
Crypto also allows for you to create this entity, like Miquela, build all this value and build a fan base around it and think about how you could create secondary markets for places that are probably atypical or non-traditional. So, we're talking with Super Rare about monetizing the imagery and we're interested in allowing fans to collect images that we care so much about as a team.
“Crypto also allows for you to create this entity, like Miquela, build all this value and build a fan base around it and think about how you could create secondary markets for places that are probably atypical or non-traditional.”
We're also interested in thinking about creating secondary markets for follows, or likes, or all of these things that seem to be appreciating value as more and more our meatspace value shifts in this kind of virtual ethereal stuff. We're just starting to make sense of this. But that's kind of why our company exists, to go kick open doors, try new things, and try to create playbooks for creators and artists and innovators.
CR: So the way that you can leverage crypto and blockchain technology with Miquela is to use these open markets as a way to distribute her stuff like her swag, clothes she wears, and even things like follows, so you see using an open market as Super Rare to do that?
TM: The options are endless. You can think about some of these personal tokens versus social tokens. You can imagine a world where Miquela tokens are being used to drive her narrative, right? Where we can effectively propose almost like a governance model, where these narrative twists and turns are going to go and fans could go and vote based on how much stake they have.
“You can imagine a world where Miquela tokens are being used to drive her narrative.”
The options are somewhat endless. We're exploring immediately, there are things that are probably more literal comps for more traditional human artists, because we think it actually is important to expand all these mechanics and all these interesting new tools to people outside of just the virtual artists’ space. We're going to start there. But man, we can go nuts. I think about this every day. Miquela is doing incredibly well in Audius and got a really nice share of tokens that they dropped. We're thinking about now how we can use those in clever ways to incentivize people to join the platform. So it really goes on and on and on.
CR: You talked about bringing in non-crypto artists into this. How exactly are you planning on doing it?
TM: I mean, I'm obviously like big into crypto and have been for a long time. A lot of that stuff is happening both directly inside the organization and externally. I have this community token called Friends With Benefits, FWB, that's explicitly about pulling folks from the culture industries into crypto, and creating a safe space to ask them questions and figure out how NFT's work or what the real value is. Or like DeFi is moving so fast, is there a place people can ask questions, they can keep up? Outside, I subscribe to your newsletter, listen to the podcast, obviously.
So I think it's kind of twofold, right? So with Miquela, we built a culture in our company, in our organization about exploring frontier ideas in ways that are quite accessible. We're talking about pretty dense concepts. Identity, reality, you can get very Baudrillard very quickly. But if you present it in ways young people can understand, all of a sudden, they can come with you on that ride, and start to explore things in novel ways as well.
We're doing that thing from an economic point of view as well. Even the ability to say, hey, yes, we've created these images that are part of this narrative. You're now going to be able to purchase them in a market, like Super Rare, I think is pretty novel, and shouldn't be. So like, we're going to go out, we're going to test those waters, and if things work out, then like, go and message that to the broader community and say, hey, your fans, your community that can participate in your world in different ways. Here's one of them.
We're also again, really interested in figuring out if some of these behaviors that are so important, like what’s a Miquela follow, and other ways to sell those things, maybe donate some of that money to people who are building on top of Ethereum or whatever. That's the stuff where we can create these interesting flywheels, allow people to build more effective channels for artists and the people that are really innovating.
CR: Do you have a date for the first Miquela super rare drop?
Miquela SuperRare Drop
TM: I wonder if I should announce it on air. I think we are going to do the 31st, I need to double-check, we probably go back and forth on this, my PR team is going to kill me. But Oct 30th or 31st [Editor’s Note: The drop is happening on Nov. 17th, not Oct. 31st]. All that is to say, shortly after us recording this pod, and we'll go out and we'll post some things and I'm sure we’ll amplify on socials.
CR: This whole intersection of an AI-generated or digital character on Instagram using crypto and DeFi, open markets to monetize, and to sell some of these products is just incredible. Then looking forward, this idea of a tokenized way of participating in her storyline, and bringing her fans into that narrative, is so fascinating. It kind of blows my mind where this space is going. It’s really crazy.
TM: It's pretty amazing and also see the proliferation of K-Pop, that's like a really interesting model for creating like, effectively finding people that are talented, and in middle school, and then partnering them with composers, or choreographers, producers, writers, PR folks, media training people, all of a sudden, all the value is accruing in this one vehicle. It'd be great if there were ways to kind of make that vehicle something that could live forever, that's kind of what we're exploring. Then all of a sudden say, okay, if you have this vehicle for all this talent, then turn that into dollars so that group can continue to create and all that's being unpacked right now. It’s really exciting.
CR: Do you have any critics who will come out and say, but this is not real, you're tricking people? What’s kind of the backlash that you get for this?
TM: I mean, we get tons. I think if you're not getting, you know, critics, you're probably not doing anything that matters or doing anything that you should be doing. But I mean, there's tons. I think, there seems to be a real disconnect, and it's something that I love to explore just from a sociological point of view or something. My peers, I'm 34, people that are kind of around my age group and older; and they really struggle to understand like why someone would be a fan of like a virtual character? They also worry that like, it's being inauthentic, it's like we're being deceptive.
What's fun is that the young people, some of them for who their first friends were Roblox players, or Minecraft players, it's very natural to have this relationship. I think beyond that, they actually get to use the narrative as a way of sorting out who is internet native or kind of like a part of their world, who isn’t. Oftentimes I see in Miquela comments, young kids will be like Miquela, I saw you today at the Beverly Center or something like that. Knowing very well that they didn't and other kids are like, oh my God, I saw her there too. Then have some kind of like boomer old person be like, No, you didn't. This is fake. They're like, No, you're fake. I’m just trolling. I'm kind of like baiting people in these conversations. I think it's a lot of fun.
“What's fun is that the young people, some of them for who their first friends were Roblox players, or Minecraft players, it's very natural to have this relationship.’
Other commentary we get a lot, I think is like, virtual influencers, who needs that? I think we've never really been interested in building virtual influencers. That language I have no problem with, but at the same time, we’re interested in telling stories. I think once people get in and discover the fan Wikis and the fan Discord and the communities and people paying attention to these intertwined narratives and then the rest of Lil Miquela’s world. They recognize that this is actually this interesting little narrative universe that's kind of impenetrable to them, because they don't have the kind of understood behaviors of scrolling back from an Instagram feed, or how to navigate a Discord. It's a safe space for young people, because it is built for them.
CR: Do you see me Miquela just staying with this age group or will it grow as with its audience as her audience grows?
TM: Miquela was 19 forever and that's part of her narrative. But it's been fun to watch because we’re years in and a lot of the kids have grown with Miquela, some of them have grown up and now and have kind of been more focused on like our company. For instance, they were in the mechanics and our company listening to the narrative as well. But we kind of leave it up to each individual person. I have friends that go to Disneyland when they could every weekend, like they’re real Disney freaks well into their 30s, or like, these gangs at Disneyland and stuff, which I've never necessarily subscribe to. But I'm all for us being able to have some like 50th anniversary with a bunch of like gray hair people hanging out singing Miquela songs.
CR: Have you explored virtual reality as well with this?
TM: So we're really excited about that Metaverse future. I think that's one of the reasons our organization exists is augmented reality, virtual reality, I kind of more broadly call it spatial computing, that really feels like the next wave of computing, the real big shift that's coming and will be a part of those conversations. What we've tried to do is think about what interfaces look like now on mobile or on desktop, and what they're going to look like in the future.
I've always believed that if we move into a more spatial, augmented reality world, where we have some headset display, and we're navigating our lives, the digital layer on top of it, I'd imagine the interface feeling more like a hostess at a restaurant where you walk in and they're like, hey, you can take a seat here. Here are two menus, restrooms are there to help you navigate the space, it's open-ended. I love to kind of start establishing some of those behaviors. If we can create characters that have huge fan bases on the platforms that exist today and are actually built for the platforms tomorrow, then we can help connect those dots again, and bring people across that bridge from TikTok to an open Metaverse of the future.
“If we can create characters that have huge fan bases on the platforms that exist today and are actually built for the platforms tomorrow, then we can help connect those dots again, and bring people across that bridge from TikTok to an open Metaverse of the future.”
CR: I can see perfectly how crypto would fit into that, into this Metaverse where people are actually owners of the digital assets that they're using there.
TM: I think it's really in one of our last pitch decks. In the last Bitcoin pump there was like a CNBC thing asking Pitbull, what his biggest wealth mistake was, and he was like, man, Bitcoin, I never got into Bitcoin. It feels repressing it because he was like most people don't know. But virtual is becoming real, it's more and more virtual every day as we speak and live our lives on Zoom. Crypto obviously, is a big part of that.
I think as we move into these economies that exist in these Metaverses, kind of virtual spaces, having programmable money and being able to create economies around all these things and things we can't even imagine, I mean, it's been very exciting for me, since I first kind of started dipping my toes in the waters.
CR: You mentioned Friends With Benefits, your social token. Can you tell me more about that? How did that come about?
Friends With Benefits
TM: I guess that came to be as kind of this MVP, this proof of concept. It's like a pretty simple idea, right? There's a fixed amount of tokens that exist, Friends With Benefits, FWB. We basically created this social network of sources in a private Discord where it costs a certain amount of tokens to be in this Discord, and basically try to create more demand by adding value to that network by writing articles or sharing your content or inviting good people, then as people bought into join that community, their bags would grow, like the value of their tokens would increase over time.
FWB price chart. Image source: Uniswap.info
It was a pretty simple concept, this idea of like, hey, as creative people, we've been creating all this value for Instagram, TikTok, Facebook, whatever, and very little of it actually accrues to us. What if we just tried to MVP out like a different model and see how it goes? I actually minted a token on Roll quite quickly, got a cloud connection and said, like, hey, friends, come join. Now we've got this really robust community for people from all different walks of life from crypto VC folks, Jesse Walden, and they're holding it down, Matt from Paradigm, and talking about where culture and crypto overlap, and then people who live totally outside of crypto who just have questions.
“It was a pretty simple concept, this idea of like, hey, as creative people, we've been creating all this value for Instagram, TikTok, Facebook, whatever, and very little of it actually accrues to us.What if we just tried to MVP out like a different model and see how it goes?”
Some of my music friends, my friend, Marina Contreras in there, she's a weaver, she went to school to learn how to weave traditional garments and is like, kind of like a luddite, but she was really intrigued on like, how to build a better future for artists and creators and wanted to get in the mix. She figured how to buy Ethereum, and got on Uniswap and traded for FWB. Now she's in there having these conversations that hopefully will create more value that she can participate in down the road, and so it's been a really intriguing thing. If anybody wants to join, fwb.help has all the info you need. You're all probably pretty crypto savvy.
CR: When did you start this?
TM: Oh, man, I feel like time has just been flat for a moment now. But I think we probably should be three months in, it’s a good question. I've just been living at home staring at Zoom screens for what feels like a year.
CR: It's hard to tell the time right now.
TM: At some point in that, we got that going, but probably about three months in now.
CR: How many people are in there?
TM Just take a look, I think it's close to 300. Now, it's probably a real core group of like 160 that are pretty active. Again, it's been amazing to watch different people come together, often music producers, Calvin is very good friend, head of strategy at Compound is in there. Obviously, Dre, RAC is in there, Boys’ Noise. We've got a good group, we're really like contributing in really, I think unique ways to the crypto space.
CR: How do you manage to keep all these different people engaged with the Discord? Can tell me more about your experience in community building, because it's a little bit different from what you were doing before?
Running a “Nightclub”
TM: It feels probably more like running a nightclub that I have never ever done in my life, which I never really did. But we've been pretty intentional, like, we didn't go very wide very quickly, and kept it pretty slow. We tried to create a tone and kind of a culture. We even have a situation in there, unlike most discords, where most people put their real name as their nickname, and they put in a little like dash and then a Twitter username. So there's a sense of identity and kind of community that like, okay, I know this person, they can be held accountable, they're not going to be trolling.
Beyond that, what we really try to do is just listen to people, try to figure out people can be interesting and try to create value accordingly. We've got a little area called rough drafts, where we basically go and engage our favorite writers and say, hey, there isn't really a thing that exists between like a blog post and a tweet. But I actually wanted to create a space where people could go, and they could just pour out an idea.
In rough draft, we have this format where writing has to kind of start and end in less than an hour, and it could be an unfinished thought. Everyone in the community approaches that unfinished thought in good faith, but interrogates it. So this idea that you can be like, hey, you know, I feel like crypto really isn't as democratic or meritocratic as I would like, and here's the reason X, Y, or Z, push it out into the group and that people kind of poke at it and help battle test your ideas, and then go live somewhere else in a proper Substack post or a blog.
CR: Oh, very cool. That's like an easy way to get feedback on your writing?
Communal Thought Projects
TM: A lot of that's just talking to friends. Ethan is a dev in our group, a solidity dev and he's been working on a thing that's basically going to allow for us to go and basically aggregate who got the most upvotes. We have a FWD kind of like community upvote, and then distribute free FWB weekly to people who are contributing the most of the group. So just trying to figure out mechanics to pass value back to the people that are doing good things and, I'm sure will fall on our face and get it wrong a lot. But so far, it's been a really, really positive force.
CR: You mentioned these different tools and mechanics that you have inside the Discord, technically, how are you doing this? Are you using a special software, do you have a developer working with you?
TM: So what's funny is it's a bunch of friends kind of like noodling. A lot of them, even rough drafts, that's like just pretty manual, we just created a private little group, probably a channel and people are in there, and we're commissioning stuff pretty manually. As things like that start to gain traction, to think about how can we automate them? The upvoting thing is really a conversation which we’e had amongst us. Then Ethan, I don’t know if he wants me to, like shout out too hard, but it's really incredible. Like nights and weekends just hacking away at things like, non-trivial stuff, a lot of these ideas. I was like, yeah, it'll be easy to get into it and you're like, oh, oh, yeah, that, that's going to be tricky to solve for. So he's been hacking away, and is extremely talented. I think that kind of speaks to community the thing that we all want to see exist.
So we're figuring out different ways to contribute a lot music producers sharing music production tips, like a lot of options in crypto trading for people that have never done that stuff, so hand-holding there and that's a great way to provide value. I mean, it's kind of room for everybody to come in, and like, share their expertise and share their feelings about whatever's happening in the world.
“We're figuring out different ways to contribute, a lot of music producers sharing music production tips, a lot of options in crypto trading for people that have never done that stuff on a hand holding there and that's a great way to provide value.”
CR: You mentioned that you were also planning to use FWB as a way to reward different creators. Is that happening? How does that work?
$FWB Creator Rewards
TM: Immediately, we're already using it to like pay for rough drafts or like when people want to contribute and do things like that there's a tipping functionality in there as of like today, which is cool. But I think a really simple way is to explore, I think what like I would love to do is like, okay, if you're posting great stuff, you're going to get upvoted a lot. But the community has a certain allotment of tokens that we're going to give away weekly, and you can then go and basically claim your chunk of them based on what rank you are, and who's added the most value that week. It has already a fair amount of liquidity, which is awesome. So it’s a path to this being a space for people who can spend their waking hours contributing, and adding value to this community and seeing their bags increase week to week.
CR: You haven't been doing this for too long, but what sort of lessons are you getting from having your own social tokens? How do you think creators can leverage this tool?
TM: I mean, there are so many ways creators can leverage this tool. It's been pretty inspiring to watch people approach it from different points of view. I think my advice in this space is to figure out a novel way where you can really explore some of your strengths. I recognized early on that the crypto chats that I was having just personally were very different than a lot of like the Telegrams or like WhatsApp or whatever that I was in. Most of those were a lot of heavy DeFi talk, and people that have come from technology or finance.
Then, one on one, it was people saying, like, hey, I have been able to work for 6-7 months. I hear you talking about yield farming, like what is that? Is there any way I could do something like that for my craft and my art? So that was my dream, let's find a place for culture and crypto to collide.
The biggest learning for me is, I think, in any of these things, is governance and figuring out how to scale community is going to be the hardest part. I'm sure it's the same thing that a lot of these protocol level folks are navigating, is like, yeah, it's really hard to try to build something that's going to solve everyone's problems. I think instead communicating really effectively early on, like, this is what the space exists for. We're not going to be able to solve for all these other secondary things, but we're really going to focus hard on this thing. If you're into that, like come get in. It's been, I think, a boon for us thus far.
“The biggest learning for me is, I think, in any of these things, is governance and figuring out how to scale community is going to be the hardest part.”
CR: You mentioned governance and scaling, do you see your Discord channel becoming something bigger that kind of requires this?
Exclusive Crypto Club
TM: I think the dream for us is to figure out ways to look at all of our social graphs, and all the things that we care about, and figure out ways to support our friends. As cliché as it sounds, to be friends with benefits. I've got lots of peers who are building technology businesses and SAAS software, is there a world where you can offer them with your Metamask wallet, and if you're holding 150 FWB, you get discounts or you get access to their content, or whatever it is? Absolutely, and then in some ways, it becomes the Soho House of sorts, right, where there's all this value in a private member's club that accrues to these people who have been believers, and it's probably most cost-effective to get it now versus down the road.
We'll see again, because then you have, like you get to a place where you need X amount of dollars to get in the space when can have these nightclub dynamics where all these cheese balls, bottleservice, right, and you want to maintain some of the clarity in the community in the values. This is sort of constantly juggling, and we're new to it. We're falling on our face and learning and trying to make it as good as it can be.
CR: That's an interesting and a hard balance to strike. Because it's like the only thing that's the barrier to entry to these channels is just a token price, then if this thing grows enough, then anyone that has the money can go in. So how do you make sure that the group keeps its culture, its voice, that it doesn't get too big and too noisy?
Values and Rules
TM: I think the important thing here is establishing values and rules, right, where it's like, if you're not aligned with these values and rules, there's a low barrier to entry, there's a lower barrier to getting kicked out. I think you’ve got to be pretty thoughtful about pruning the community and making sure that bad actors get handled and don't create some insidious cancer that can make the players no one wants to be. The first side of that is thinking about how to maintain that culture by getting the right bodies in there one way or another and the right minds in one way or another.
“The first side of that is like thinking about how to maintain that culture by getting the right bodies in there one way or another and the right minds in one way or another.”
So we've been doing some lectures, some like audio lectures of people coming in the voice chat, and we're granting them tokens to get them in there, because those are opinions that we want, and trying to create some diversity, both thought and even democratically, people in different parts of the world would be great. That's all the stuff that we definitely don’t have all the answers to, but things that we're going to be brainstorming and riffing on and trying to figure out.
CR: Bringing specific people that you want in the group on, and also weeding the trolls out as well.
TM: That's the idea. I think if anybody had community figured out, we wouldn't be staring at all these think pieces about how toxic social media is. We're going to do our damnedest to keep it a sacred space.
CR :Another point, that's super interesting that you mentioned is how this creates this group of people that can be identified because of the token and then other groups can maybe tip this group. I mean, if you're a company, or a project, and you want to have access to the Friends With Benefits group, then you can just airdrop NFT's or tokens to them. I've heard this concept before, and it's just mind-blowing that it really turns advertising on its head; it really provides is a direct link of companies to audiences without having to have a Facebook in between.
A Pretty Weird, Awesome Future
TM: Agreed. We really try to operate from like a pretty simple first principles world where it's like, okay, how do we create value in this community in the most simple ways? Usually, it's like, via content, because most of us are creators. But I get really excited about that stuff. I remember a friend of mine, Joe created a company called Klout back in the day.
They would look at your social graph, and try to determine where you get influence and then brands could interface with you and give you free pop chips or tickets to a game or whatever it was. There probably is a world where brands, communities, whatever, are vying for these different groups, and able to engage with them via these wallet addresses such that they can just airdrop NFT of some past some event or whatever it is. That's the thing with crypto, it's so vast, there's so endless that can be kind of mind numbing, because you don't know where to start or where we kick things off. But you're absolutely right, the options are endless, and it's going to be a pretty weird, awesome future.
“There probably is a world where brands, communities, whatever, are vying for these different groups, and able to engage with them via these wallet addresses such that they can just airdrop NFT of some past some event or whatever it is.”
CR: I agree. I wanted to briefly touch on your own crypto investments. I read that you invested in Zora and in other social tokens, so I wanted to see what drove those investments, and what else is looking interesting to you in the crypto world?
Betting on People
TM: I think what drove those investments is kind of this same thing where I wake up every morning thinking about how to better support people who are truly innovating and creating new things. I met Jacob and we're talking for a bit and it became clear that these folks were doing really interesting stuff, and I wanted to bet on them and try to be helpful, especially in my kind of connecting them to artists outside of crypto and outside of their immediate community. That's where I can add a lot of value.
I've been talking to a lot of different folks in the space and like Super Rare folks are able to make an investment, which is awesome. Really, I feel like I was like DeFi-pilled early on, I got to ride that wave in the middle of the NFT craze, and so I've been like playing catch up and trying to learn as much as I can in that space. Outside of that, I do a lot of tech investing as well, traditional consumer and enterprise stuff. Just little angel checks because I think it's important to support founders. I've been very lucky to raise capital from some great investors and it's been really meaningful for me to pass that back onto people and take risks and bet on people who I think are smart and have crazy ideas, especially but then play it quite safe investing.
I also just like trading shitcoins, and in groups and I love participating in the space because it's moving so fast that the soap operas unfold in these ways that are really engaging from a narrative point of view, but also have these larger implications in this economic and feature of this space point of view. It's really fun, every day is exciting.
Institutions Dipping Their Toes
CR: I agree. Looking at the future of this intersection between crypto and culture, what is the big trend that you're seeing unfold? Say, in the next year or so, where do you think this is going?
TM: Well, it's a good question. I mean, I feel like there's a lot of talk about institutional money coming in years ago, but it certainly feels like institutional money is starting to pour in. The more validation I think Bitcoin, and then Ethereum gets from these greybeards, and older folks is going to allow for, I would say, like keynote organizations, like from more traditional FinTech or consumer applications, and tech world to take risks and make that to the person that like Jack Dorsey is making.
I'm actually really intrigued as to see some of this Layer 2 stuff gets to solve for, and we get like the throughputs and applications need to introduce it to the average end consumer, like, what spaces move on at first. But, I'm a believer that you're going to see some kind of like curveball startup folks take some risks, like maybe it's a way to unwind some of the network effects that have trapped us in the larger social media players for a long time. I think being able to partner network effects with the real value piece is going to allow for a shakeup. I probably shouldn't talk too much about what my friend Dennis is building, but he's live tweeting about Mirror, and I forget, I think he's @literature on Twitter. But I would definitely check that out and follow along, I think he's doing something really meaningful something is going to shake things up quite a bit.
CR: So really kind of bigger, more mainstream companies, maybe adopting some of these tools, more institutional money coming in, and just hopefully seeing more mainstream people leveraging all this which could really be very empowering, right, for artists and creators?
TM: I think, I'm probably on the other end of the spectrum of most crypto folks, and I think it's going to take some real time. But I'm really excited to watch institutional players, people come in and dip their toes in the water and get burned or screw up or figure some things out. Then just basically allow senior executives and organizations to make mistakes.
Because I think a lot of these places are still kind of like, dominated by fear, you don't want to take risks and get fired. But if other people are taking those risks, you kind of have this strength in numbers, where you can't all get fired, because everybody was doing it. That's the kind of thing I'm probably most excited about in the immediate future. PayPal, that's so exciting. People sticking their neck out and saying, hey, we're going to try this thing probably get roasted for not allowing people own their keys or whatever, but that's this journey, people will figure it out.
CR: What's that saying? Suddenly and then all at once?
TM: No, exactly that right is we're going to move quite slow. Now listen, I feel like it's just going to come pouring in which, I think you always said that for a long time now, but I'm still a believer.
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 founder and editor: Camila Russo is the author of The Infinite Machine, the first book on the history of Ethereum, and was previously a Bloomberg News markets reporter based in New York, Madrid and Buenos Aires. She has extensively covered crypto and finance, and now is diving into DeFi, the intersection of the two.