Episode 13 of PatSnap's Frontier3 podcast
Social Tokens and Creator Communities with Brian Mark at Rally
About the Frontier3 Podcast
Welcome to Frontier3 by PatSnap!
This series is dedicated to unpacking the innovation ecosystem of Web3. Featuring our Co-Founder, Ray Chohan, and various industry experts, Frontier3 explores how Web3 will fundamentally change how we live, work, and play.
Subscribe to Frontier3:
In This Episode of Frontier3
Ray is joined by Brian Mark, Director and Content Educator at Rally, a platform for creators to build their own independent digital economies. Mark started his Web3 journey working with the Adidas leadership team to stake a claim in the metaverse. Now Mark works with Rally to educate creators about Web3 and make the transition easier and more attractive.
- Learn how to launch, manage, and grow digital economies on Rally
- Hear why Rally allows creators to keep more value in their own micro-economy
- Learn about the benefits of operating a sidechain including improved speed and security
- Hear why Web3 organizations experiencing exponential growth have the strongest user interface and user experience
- How to stake your subscription, interact more efficiently, and keep money in your wallet while supporting your favorite artists
- The future of social tokens and why growth is on the horizon
Director and Content Educator at Rally
Brian Mark is Director and Content Educator at Rally. The company empowers creators to launch, manage, and grow digital economies.
Connect with Brian Mark
Co-Founder & VP New Ventures at PatSnap
Ray started PatSnap’s western operation from his apartment in 2012, helping grow the team to 400+ by 2020. PatSnap now serves 15,000 companies worldwide – supporting R&D, Innovation & IP teams with market and technology intelligence research. Their SaaS-based platform helps Deep Tech innovators connect the dots between technology, markets, and people. PatSnap officially became a Unicorn in 2021 and now has over 1,100 employees and 15,000 companies using its software across EMEA, North America & Asia. The ultimate mission is to provide intelligence that improves R&D and Innovation productivity to help innovators bring their ideas successfully to market. Ray also works closely with Blockchain & Web3 community and is a passionate angel investor in this space.
Ray Chohan: Brian, welcome.
Brian Mark: Thank you.
Ray Chohan: Really excited to have you on the show today; big fan of yourself and Rally and what you guys are building. It’ll be cool to lay the table out really, in terms of your background in your journey into Web3, because we are meeting a lot of Web2 execs who have made that transition, you definitely have. It’ll be great to get your background story, and how you ended up at Friends With Benefits, and then at Rally.
Brian Mark: Yeah, you bet, and thanks for having me Ray, glad to be here. My path is a bit of an unusual one, but it’s been quite a bit of fun. I went full time into Web3 November of this past year. Started working at Rally, where I lead content and education for the team, and also I work on the digital event side for Friends With Benefits.
Prior to that, I was at Adidas for five years, where I worked on a team that supported retailers in going to market with Adidas products, supporting mostly mall and fashion retailers in building their plans. That was Omnichannel Marketing. We were thinking about social, paid media, live events, in-store events, in-store marketing fixtures, CRM staff; really the full suite on working with marketing execs from retailers to help build programs and plans that drove sell through for Adidas products.
Prior to that, my background is in the cycling industry. Started out in bikes, got really into bikes in college, and used that as a way to get into sales, and then marketing, and here I am today. The shift into Web3 for me, started with some exposure that I received at Adidas. The leadership team had put out a call for submissions early 2021, looking for ideas as to how Adidas could stake claim in the metaverse, and in Web3 in interesting and fast ways. Adidas does a great job of open sourcing great ideas, both from inside the organization, and from outside.
I teamed up with a couple other people from Adidas, North America, and we put up a couple plans, one of which ended up being selected and is some of what you’ll see from Adidas today in the metaverse and Web3 pace came from that same work stream. I was lucky enough to be able to work on that while I was at Adidas up until as I left. The big NFT project launched about two weeks after I left the brand, so it was sad to have missed the coming home of it all, but more fun to see there, and more to go as well.
Ray Chohan: Yeah. We’ve had Diego Borgo on
Brian Mark: Oh, I do, yeah.
Ray Chohan: … Episode one, so I know they got a great team there, and I think Ben Mayor White. Yeah.
… Also part of the team there. Yeah, I observed that, and congrats to that team, and Adidas for having the foresight. I hear there’s a story that one of the big names in this space was messaging one of the team there. I caught it, who’s the name of the guy? He’s huge in the NFT community. His name slips my mind now.
Brian Mark: I know that the team from people, the artist people, they were talking with him at one point and just having some pretty wild conversations.
Ray Chohan: Yeah. I think it was someone from the community who was messaging Adidas.
Brian Mark: Yeah.
Ray Chohan: Messaging someone from there, but I think this, oh, God, I’ve got his name completely slips from my mind, but he’s a huge figure in NFT. One of the OGs in this space.
Brian Mark: Yeah.
Ray Chohan: He mentioned, I was pinging Adidas, I was surprised they were engaged, but literally for the first five weeks, I didn’t know if it was an intern…
Brian Mark: Yeah.
Ray Chohan: … Or a exec, literally. I was just going back and forth and just going with it.
Brian Mark: Yeah.
Ray Chohan: The story is, he was in Europe and they popped down to the office and I hear the story starts there. Kudos to Adidas, and all you guys, for picking that up. It seems you guys are one of the big brands to really lean in and get the community excited.
Brian Mark: Yeah. They don’t really do anything halfway, and I think this is a good example of it. Something that I think is maybe not talked about enough with the team that brought that over the line, is that out of the entire project, the actual full-time employees working on that, it was only one or two people whose whole job was working on that metaverse, and the NFT project. It was really skunkworks ad hoc projects for everyone else. It was, basically, just people from the Adidas community, the employee community, who raised their hands and said, “This is interesting work. This is something I want to be a part of,” and that’s how I got involved. I still had my day job while we were working on that. It was essentially just bonus work for no additional reward beyond the work itself, which I quite enjoyed, though.
Ray Chohan: Brilliant. It was that journey with Adidas that sparked the interest, and from a fundamental standpoint, what caught the imagination, because it’s a big ecosystem? What, in particular, made you think, “I’m going to take my career, all in, in this space?”
Brian Mark: Yeah, for me, I’ve spent my career helping connect people and products. What’s fascinating about the world of Web3 today, is we barely have products and there’s not a lot of folks really focused on that connection, that true consumer mentality, or consumer mindset. Today there’s a lot of people in the space who are here because of the technology. They’re excited for what the technology is, and what it can do. The next generation of adopters in Web3 are going to be people who care less about the fact that the technology is the technology, and more about what it can do for them.
For me, the open door of the possibilities, that blockchain technology, and just a rethinking of the traditional paradigms of value creation and value exchange that it unlocks, are really exciting for me. That’s really where, for me, jumping in headlong came from, is a desire to be on the train that I see leaving the station.
Ray Chohan: Yeah. Rally… On to Rally. What do they do? I know they’re in the social token space. The mission for Rally, and I know definitely people, will be like, “What are social tokens?”
Brian Mark: Yeah, totally. Yeah. Let's dig into Rally. Rally is a platform that allows creators, and communities, to own more of the value that they create. The way that we do that is essentially through tokens.
The two kinds of tokens that we use are social tokens, and NFTs. NFTs, a lot of people have talked about, but an NFT is essentially a one of one. If you have a unique digital object, that’s an NFT. Social tokens, though, think of them essentially as un-unique objects. Any one social token in a batch could be replaced with any other. Sometimes we’ll refer to the tokens as non-fungible tokens, which is an NFT, and fungible tokens; fungible just literally meaning interchangeable.
Thinking about a social token, you could think of them, essentially, as tiny micro-economies of their own cryptocurrency, and that’s how we think about them with our creators, is we’re essentially allowing creators to launch, manage, and grow their own digital economies on the Rally sidechain, through the platform as it stands today.
Ray Chohan: Okay, makes sense. Looking at it from a macro standpoint, what inspired that vision at Rally? Are there some big macro tailwinds where you think right time, right place, and Rally will really capture this vision of social tokens?
Brian Mark: That’s a great question. Rally launched a little over a year ago. It was December 2020 that it first came online, and the founding team, which was also the founding team of the RLY ecosystem, which Rally is a part of a larger group of companies and orgs that are all based on the RLY sidechain. The founding vision was really centered around this idea of helping creators keep more of the value that they create.
If you look today at the dominant Web2 ways that creators connect with their fans, those vehicles tend to be pretty extractive. The best example that I point towards is something like Instagram, where today, if you’re a creator who uses Instagram, you have no way to directly monetize your audience, your fan base, on the Instagram platform. Instagram is making all of the money off of you using their platform and tools.
Another example that I think has been in the news a lot lately is Spotify. The amount of revenue that artists are able to generate from Spotify is pretty paltry, given how much work those artists are typically putting in, in order to make and distribute their music to even get people to listen to it. Then, to be rewarded with, a third of a penny per listen; pretty tough to make a living there.
What we see the opportunity as, I’ll throw out a $2 word here, but to disintermediate those corporations that have been so focused on extracting value, and to instead allow creators to connect more directly with their fans, and to collectively own more of the value that can be exchanged there. The easiest primitives to point back towards, and this is something we spend a lot of time talking about internally, is thinking about how to frame this in the context of things that already exist in the world.
One that comes to mind pretty readily is fan clubs. You could think about something like Patreon, or a product even something like Kickstarter, or a traditional fan club, where people are able to buy in and directly support the creators and artists that they love. I would say that, similar to a fan club, too, a lot of the creators we’ve seen find success on Rally, have focused the platform on supporting and connecting with their top hundred fans, or their top thousand fans. This really becomes a place where your most loyal, and most connected fans, can come to connect and exchange additional value with you as a creator in a more direct way than they might be able to through traditional platforms.
Another good analog is thinking about rewards points or reward systems; something that’s different about a token economy, as opposed to maybe a traditional point system on a platform like Twitch or something like that, that is, the rewards can go both ways. We’ve seen creators who reward their fan base for specific actions for joining their discord server, or for retweeting something that they’ve shared. They can reward their fan base with some of their social token, and they can also then give that same fan base opportunities to spend that social token for rewards, or benefits, that fan base might like or enjoy.
We’re able to create economies that, rather than just driving value from out of fans’ wallets through big corporations, and then into creator’s wallets, we’re able to create economies that essentially have their own closed sphere; their own little economy that can operate within a community. For Rally, their big focus out of the gate has been specifically, communities that center around one creator.
Ray Chohan: Wow. It really elevates the creator to a … it’s a quantum leap in effect, isn’t it, in terms of the direct nature they have with their fans from literally day one, especially if it’s an early artist.
Brian Mark: It really is.
Ray Chohan: That’s fascinating. You mentioned, Web2 was definitely evolved into maximizing extraction, for sure. They were quite open initially, if you recall back in the day?
Brian Mark: Oh yeah.
Ray Chohan: Then rug pulled so many great companies, we know all the stories, right? It just wasn’t a good look. From what you share, it looks like, just culturally, a lot of people have been bitten in the past, and wow, this seems an interesting solution. Evolving into, say, a forward looking lens, this all makes sense, Brian, where you basically have potentially a million micro economies, right? An artist basically has their own sovereignty, to a certain extent, around their art, which is great.
Where do you see it evolving? I know how people, artists, can reward fans with more tokens, or tokens for doing X, Y, and Z. Is it just constantly evolving into special gated access, special privileges, also the online flexing for having X number of tokens for fans? It also becomes a flex, which it’s sad but that’s a part of the community, right? We all do it for thousands of years. So is it a mixture of that, which makes social tokens a compelling capability?
Brian Mark: Yeah, I think what’s most exciting about social tokens, and about the potential applications, is that the applications are in essence limited only by the desires of the creators, and the creativity of the engineers who they employ to help figure out how to make the smart money, or smart objects, do what they want it to, which is a real paradigm shift. It means that essentially, the platform that we’ve built today has been turned into different applications, or different products, by the community. What we see is, thanks to the rich developer network that we have built around the Rally ecosystem, we’ve got people who come up with a great idea that they want to see for their community, and then go out and build that application. Often, then, the application that’s been built is something that’s shared with other creators. They’re able to then implement the same thing if they’re interested in an application there.
Some good examples of this. There is a creator on our platform who has a coin called play coin. He spun up an online arcade full of little in-browser games for people to play, and he allows other creators to use that same platform for their fans. Essentially, there’s a gamification side where you can reward the fans who get the top score in a given game, on a given day, with a bonus of tokens, or a special NFT prize. He built all of this for himself, because it’s something that he wanted to see exist, and has now opened access to it to the rest of the creator network. Other people are now able to use the same.
We also have a really strong network of developers who we put out bounties for, and we’re able to say to the community, look, this is a feature, or utility, we’re looking for. Things like the ability to gate a WordPress site, or the ability to gate a Shopify store with your social token, or with an NFT. Those are bounties that we’ve put out to the community that then developers pick up and help us solve for. Those are utilities that, for us, our focus on NFTs and on social tokens is really on creating abundant utility. We want to make sure that there’s as many ways to use this as there are demands from creators for that utility.
The long answer is, as we look to the future, I expect to see this], and this is essential to the Web3 mentality today, just more broadly, is around composability; the ability to build out of component pieces something that does what you need, or solves a particular problem you have. I believe that we’re going to see that push towards abundance continue to go, and continue to become a center point in social tokens, and in NFT utility, as well.
Ray Chohan: In essence, is Rally really going after a platform play, you guys are trying to be the picks and shovels for anyone who wants to build a social token capability into their creative art or their passion?
Capability into their creative art or their passion.
Brian Mark: It’s a good question. I think from our end, just having the picks and shovels today, I think the longterm answer is yes. I think for right now though, in order to prove the utility of the picks and shovels, the analogy that I use a lot is thinking about building a city. Right now, we’ve got really great roads. We’ve got really great tunnels. We’ve got really great infrastructure that underlies it.
What we’re focused on today now is helping people understand what it takes to build a house on the platform, and how to successfully launch and grow a project. The first few are for sure the hardest. I think today we’re just under 300 creators on the platform, and this is essentially a new way of building for creators and a new approach. The ways that we found creators reach success are as diverse as those creators and their communities.
I think over time, the goal is for us to build enough clear ramps and clear processes, that more people, especially people who aren’t here for the technology as much as they are for the utility or the benefit from the tech, we want to create simpler, smoother on-ramps for Web2 creators to make the transition to Web3.
Because I think today we’re able to articulate the benefits. We have some of the features, but I think that building a really clear one, two, three is really the next big step for us, is helping people really understand what the steps are that they need to take, to bring their community from say Twitter or Instagram or Facebook, wherever their community lives, to bring that community to Rally is the next big leap for us, helping educate that next generation of creator.
Ray Chohan: So this blending of features, what’s the Web2 analog, if you could use one, on where it’s going?
Brian Mark: It’s a good question. I think that blending of features, I would think about composable apps that exist online today. I would say that some of those are actually the earliest versions of a decentralized ethos that we have. I’m thinking specifically about Slack and all of the Slack plugins that exist. I’m thinking about WordPress sites and the number of integrations that exist there. Discord is a really great example with how reliant they are on bots for added utility on Discord servers.
I think what all of these have in common is that the core team has done a really great job of building stellar products that feel like a cohesive thing. It’s clear what the inherent utility is, but then they’ve partnered with externals and given really a big stack of resources, as well as keys to the API, keys to the back end, to be able to empower the developer community to build what the community dreams of, to build what the community wants for that platform.
I think that WordPress is actually probably the most pervasive example. The amount of integrations and how reliant most WordPress sites, WordPress shops are on external integrations, is to me a good indication of how ready consumers are and how easily many people are beginning to understand how we can do Lego building of processes and products.
It’s no longer I think that the age of the beautiful super slick one-stop shop tech product. An analogy that we use internally and I like it personally is, we’re not growing a tree here. We’re not building one big, massive thing. What we’re doing is we’re helping foster like a mycelium network, a mushroom network that grows in a distributed way.
We want to be that thin layer that then can allow multiple mushrooms to pop up where they need to, essentially building a wide and flat structure, rather than something that’s really tall and massive.
Ray Chohan: That makes sense. And so in terms of where you guys are heading, so it seems like you’re at this phase, I think Chris Dixon from a16z, done a really good essay a couple of years ago, where he’s mentioned everything looks like a toy, and it’s a toy which people play with on a weekend. And that becomes the next big industry or the next technology primitive.
Are you guys at that phase now where you’ve got 300 creators, but you’re still trying to find that one or two killer use case where then you get mass adoption, where people go, “Look, I get it. I get Rally. I’m going to Rally for these two capabilities. I’m launching my social token because I can very quickly and very easily get this incredible utility.” Is that the current journey you’re on?
Brian Mark: We’re at a really interesting spot along that journey. I think today, the people who’ve found the most success on the platform are the ones who’ve cracked open the product, are essentially hacking their way through it. And for some people that’s really fun and the rewards are there. As a platform, Rally distributes over $2 million a week in rewards to people who hold the tokens. It’s massive. It’s an incredible sum of cash. These are rewards being delivered back to people who are holding tokens and the creators that they’re supporting.
Thinking about, and with just 300 creators on the platform, there’s a lot of centralization, a lot of opportunity there for people to find growth. I think what’s interesting that you pointed at is that idea of, what’s that one killer use case that’s really easy to understand, easy to onboard for and feels well packaged?
I think that that’s really the moment that we’re in, is an exciting one in that we have killer infrastructure, we’ve got those great roads, bridges, tunnels. Now it’s a matter of figuring out how to make really clear to people, what are some specific use cases that we can build the right tooling for, from an engineering side, and can also build just a stellar stack of education and on-ramp tools for people who might not be already in the Web3 space?
And with my role in content and education, I end up being the tires of our car. I spend a lot of time thinking about how we can end up… At the end of the day, whatever we build, we have to be able to explain it to people who may not give a hoot about the underlying technology. What they’re interested in as people, as creators, as business people, is what it can do for them.
I think that relentless focus from a product perspective on utility and on clarity and utility is the infection point that we’re at today. We’re really focused on figuring out how to package and clearly communicate stellar utility for specific smaller target audiences.
I’d encourage, if folks are interested in more about where Rally is heading this year, on the Rally Association Forum, our CEO Bremner Morris put up earlier this year, a really great vision doc that points at where we're heading in 2022. And it centers a lot of what we’re talking about here, just with regards to utility, specifically around expanding utility for creators, but also on that idea of getting just sharper and cleaner on how we communicate the utility that we’re building towards.
Ray Chohan: Definitely. It’s great you guys are building out the education framework. I think that’s key in terms of what you’re doing and packaging it and make it really clean and simple. Because I think we’re getting to a phase, I know we’re really early, but you see a couple of folks getting really itchy on, “Just show me the outcome. I’m not really here for the tech. But if I used to use YouTube, I am on Spotify, but if you show me this wow outcome, I’m all in.”
But to your earlier point, this is fascinating, and congratulations to you and the team. So you mentioned you’re doing $2 million in awards per week of 300 artists. So could you unpack, is that just the actual appreciation of tokens that fans hold or is that additional kickbacks they’re getting for doing X, Y and Z for the creator? What does that look like?
Brian Mark: We as a company are incentivizing our creators and their fans to join the platform through a program that we call Rally Rewards. And there’s a very long white paper on the site as to how the rewards work and are calculated. It’s complex, but at its core, we essentially have a growth fund that we are empowered to use, to help drive additional people into the ecosystem and to reward the kinds of behavior that we want to see.
And so the kinds of behavior that are rewarded are the sorts of things that are positive for a micro economy. We want to see people using the token, so exchanging value with each other. We want to see people holding the token, locking up essentially and keeping money in the ecosystem. We want to see growth. We want to see people adding additional wallets and additional holders to their community.
And so in exchange for helping us grow the platform, we’re able to reward the community with those incentive funds.
Ray Chohan: But it’s a great way to get over bootstrap the… Well, not bootstrap, fund that classic cold start problem.
Brian Mark: You’ve got it. And it’s a huge difference between Rally and other social token platforms. There’s a lot of services today. You and I, while we sit on the phone, we could pull up a site and mint a social token. You can mint it on mainnet. You can mint it on a sidechain and then you have your token.
I think the challenge for a lot of creators is, how do you put any liquidity behind it? How do you make it worth something, is essentially the core question. Some creators, if you mint on a service on mainnet, the services, well, they’ll give you instructions and basically say, “Look, if you put 50 or 100K in lockup behind this, you’re going to make each of your tokens worth a penny or two.”
What launching a token on Rally does is we use an automatic market maker called a token bonding curve that essentially allows us to have immediate value and permanent liquidity in tokens. As a creator launches their economy, the token is worth something from day one. That’s great. It’s great for the creator because it means that there’s immediate value for them. It’s great for their fans, because it means that if they come in, there’s the opportunity for fans to come in early and really invest or to bring money into the ecosystem at a lower cost to the fan.
Essentially, being early is its own reward. If you come in and support a creator early on, you may be able to buy that token at a lower price than it ends up at later on, which is great.
Ray Chohan: What do you mean the bonding curve? It’s tethered to another digital asset, thus, accruing value. Uniswaps are big AMA out there, in terms of the defi space. Are you guys coming over that cold start problem on bringing liquidity by composing in some form of very micro form factor of defi?
Brian Mark: That’s right. There’s a good connection there to it. Rally operates on a sidechain, and being on the sidechain has a few benefits, speed of transaction, security. The carbon impact is a lot lower as well. One Rally transaction is about the same as one tweet, which is great.
But for us, on that sidechain, when creator coins are purchased, essentially the underlying value is RLY. It's the RLY token. And that RLY token is traded on mainnet. It’s also now listed on Solana. You can get it there too. And that RLY token, essentially buying a creator token locks up a proportionate amount of RLY.
So from our side, there’s essentially an underlying asset in RLY that we can use to provide value for the economies as they grow and grow.
Ray Chohan: So that RLY token then can be used in OTC markets, just as confusing nuanced defi world-
Brian Mark: That’s right.
Ray Chohan: Where you’ve got the money markets, but then that, a tiny fraction of that can then accrue back directly to the fan token, to come over that cold start problem. And say to a fan, “Look, off the bat, your token’s are already worth
Brian Mark: Something. They’re worth something which is great. And it gives people some things-
Ray Chohan: It’s amazing. This is ecosystem so… It’s amazing. Isn’t it?
Brian Mark: It’s just wild.
Ray Chohan: You can do this unique financial engineering with linking into the world of defi and the AMA markets, which God, they’re confusing to everyone, aren’t they, what happens on the back end.
Brian Mark: It really is. Our white paper for it is fantastic. I think it’s about 30 pages long of how the token bonding curve works, and our head of product the other day was like, “All right, can you help me get this into something that’s about 30 seconds? Can you help me get a good 30 second explanation of how our token bonding curve works?” And my immediate question back was, “Can you tell me in 30 seconds how it works?” And the answer was no.
I think that this does though point to some of the challenges is that, some of the challenges in Web3 and in communicating what we’re building and what we’re doing, there are a lot of people who are curious about the space. I think that because of how transparent so much of what’s being built is in Web3, if you click in one or two clicks down from the homepage of most websites into their white papers, into the back end, there’s a lot there. A lot of it’s really complex.
Transparency has its ups and downs. I think one of the upsides is the information’s there if you want to see it. The downside is that we don’t have a lot of those same walls built around information that exist in a lot of traditional tech orgs, where if you ask Facebook, “Facebook, tell us how your algorithm works,” they’re not going to.
And whereas here, if somebody asks, “Hey, tell us how your market maker works,” we’re going to show you the white paper that sits underneath it. I think for people just coming into the space, the amount of information can be really overwhelming. That’s really, in thinking about my role in content and education, it’s figuring out what are great analogies to use? What are great use cases to show? What are great ways to explain complicated concepts in simple and easy to grasp ways?
And then also, this is a really fun one for me as somebody who’s for sure fallen down his own rabbit hole over the last year, what are the opportunities for continuing education for creators and for their fans? If people are interested in going deeper, I think we should encourage that. The next generation of great minds in social tokens and in defi and in Web3 generally, are going to come from people who are coming into the space with a lot of questions and with a lot of experience from outside the space.
I’m really eager to figure out how to smooth the on-ramps for creators and for their fans, because I’m long on the space generally, and think that it’s up to the people who are here today to help figure out how to explain all of the wildness to more people who are coming.
Ray Chohan: You see, Brian, you raise a fascinating topic here, because this whole space and the primitive of the blockchain, it’s open, permissionless by nature. That’s the beauty of it. But when you’re trying to scale a business and trying to attract customers, it’s a double-edged sword. Because you could now have an artist go and download the white paper, get excited, but then back off, because they just literally freak out and go, “Oh, what’s this bonding curve thing? What is the underlying of RLY?” It can then sometimes confuse the situation.
Do you see a time where this is just…
Do you see a time where this is just literally abstracted out, just like this call today, like we’re using this Squadcast app. We could have been using Zoom. We don’t really care what’s happening on the back end, right?
We care about the outcomes, like clean connectivity, clear sound, no breakout. Do you see us getting to that point where customers actually don’t care and even want to know what’s happening backstage, they just want to care about an efficient outcome?
Brian Mark: Yeah, I really do. And I think that it’s one of the challenges that I think we face today is so much of the narrative in the press has been around the kind of big, shiny objects. It’s about apes. It’s about the Ethereum price. It’s about all of that.
money is fun to talk about, especially when people are making a lot of it or losing a lot of it. Because the other narrative that we hear, some of this people getting very rich from crypto stuff, the other is all of the scams and kind of like the negative side of it, which exists as well.
And I think what I’m hopeful on is that over time, the technology itself becomes less of the topic of conversation and sublimates. It kind of falls into the background, the same way like what you’re talking with Squadcast.
There’s for sure a lot happening under the hood here, but what we see is a really beautiful and really smooth user experience. The user experience in Web3 right now, and I think this won’t be news to anyone who has a crypto wallet or who’s purchased an NFT, it’s a little kludgy. I know.
I would go as far as to say that most of it is not consumer grade. And if you look at the organizations who are driving the most growth in the space, they’re actually the ones who’ve built the strongest user interface then the strongest user experience.
I’m thinking about OpenSea. I’m thinking about Coinbase. I’m thinking about Foundation. Some of the bigger NFT platforms have done a great job of productizing something that otherwise is just a sea of contracts and information and makes it shoppable, makes it browsable, makes it feel, frankly, a lot like the Web2 platforms that we’re all used to.
And that comes with its own risks in the sense that there have been some critiques of these larger platforms that they maybe run against the ethos of Web3 and openness and decentralization.
But like with that said, being able to access blockchain technology in a way that feels familiar, safe, and comfortable to more users is a benefit and an end in and of itself, I think.
Ray Chohan: I mean, you can see it. I couldn’t agree more, Brian. I was listening to the VP of product at Coinbase. Everyone knows they're launching their marketplace soon, which will have more curation and a social element to it.
And they’re very much going for payment rails, which are Web2, where you can just buy your NFT from your Visa or debit card and off you go. And they’ll even do the custody for you. You don’t have to have your own wallet.
So you see the big juggernauts, and Coinbase are definitely the granddaddy when it comes to exchanges, they’re actually leaning on some of the principles from Web2 just to enable that big mass adoption and that gentle on-ramp.
Brian Mark: I don’t know that that’s a bad thing. And I think that there are going to be a lot more platforms that maybe push people further out of kind of where they’ve been and bring them into kind of a new mode. But I think that for the time being, the technology still remains very tangible. The technology has not disappeared.
I think what I’m excited for is the moment when we can collectively start talking more about the utility that sits behind NFTs and social tokens than talking about the digital objects themselves. And for me, that aligns really well and it’s part of what I love about Rally is the mentality that Rally has opted for with regards to NFTs is one of abundance rather than scarcity. Today, the dominant narrative on NFTs has been some of these are very rare, so some of them are very expensive.
And it’s been more focused on kind of the commodification of rare items and then the value that that creates than it has been on what people can actually do with those items. And so what I mean by that, if you think about the utility that a digital item could offer, we tend to think about it at Rally in four buckets.
There’s keys, tickets, badges, and collectibles. And each of those, a key lets you into something permanently. A ticket lets you in one time. A badge shows that you were somewhere or did something. And a collectible is just that, it’s something that you want to hold on to.
I think what’s interesting is NFTs can be any of those or all of those or some combination. Because of the composability and the codeability of the objects, you can even change the functionality of digital objects over time.
So something that starts out as a key could be sunset at some point. Let’s say it lets you into a private Discord server. You could at some point turn off that access and then it just becomes a collectible.
But let’s say later on it’s something that people will look back on and say, “Oh, that’s a badge that I was there in season one of Ray’s private Discord.” It’s really interesting to think about how digital objects can kind of change over time.
But I think to really point back at that idea of abundance over scarcity, I think that in the future, we’re not going to have one or five or ten NFTs. I have a feeling that NFTs will become everywhere. Any digital object that’s permanent and is bound to us will likely be something that that gets brought on chain.
And I think that over time, we just won’t talk about it as much. There are some really great examples of the potential here in things like Ticketmaster, thinking about the ability to send and receive tickets securely online, it feels like a place where it could happen already.
And even if you think about digital goods as they exist, the fact is companies like Ticketmaster are likely using some sort of a database that would look an awful lot like a blockchain, it’s just not public.
The only people who could edit that Ticketmaster database are Ticketmaster themselves. And so I think really, people talk about cryptocurrencies or blockchain technologies as though it’s magical. And in reality, it’s simply a public ledger.
And so any data set that’s currently held by a private entity could potentially be made public and validated and secured the same way that blockchains are in order to allow additional utility to emerge.
This is all kind of a very long way of saying I think that we’re going to end up in a place where NFTs and social tokens become a more pervasive part of our daily lives, whether we know it or not. The technology has utility that extends beyond the current thinking around scarcity.
Ray Chohan: Yeah. I love the way you break that. It’s what you are doing there with content and education, Brian, which makes a massive difference, where you use the analog of tickets, collectibles, badges. That makes sense to people instantly, right? “Oh, I get it. I’ve used that many a time.”
I think what people will have to learn slowly is, well, what I actually own digitally can actually change. So it was a key, now it’s a badge, or it’s a key to even more access than I originally purchased.
Brian Mark: Totally.
Ray Chohan: I think digital assets will now enable humans for the first time to own something which actually morphs while they’re owning it, which is quite a unique feeling.
Brian Mark: It’s really wild. Yeah.
Ray Chohan: It’s wild, right? I bought this in one way. Now I’ve got keys to this kingdom. Wow. Who would’ve thought that two years ago?
Brian Mark: I mean, an example that’s definitely of the moment is the launch of the Bored Ape Yacht Club ApeCoin.
Ray Chohan: Yeah. All over the news today.
Just to speak all over the news. That’s actually something that we at Rally have been talking about a lot is that we think that we’re going to see a swell of NFT projects embrace their own social tokens and embrace their own coins.
Because frankly, now the social token that more people have heard of than any other social token is ApeCoin. It’s a coin that started from a place of community and a place of connection rather than starting as its own blockchain or its own kind of new native L1. It is a social token.
It’s a token that was granted to members who held specific NFTs. Also some of it was made available for public sale. Something that we’ve talked about a lot is the idea that NFTs are great at being objects of permanence and objects that can hold value.
They can be of value themselves, but that value isn’t exchangeable. There’s no liquidity in an ape. You could have a Bored Ape in your wallet today. You could maybe find somebody who would lend you money based on you holding it, but you can’t give somebody 1/1000th of your ape, at least not easily.
What layering on a fungible token, a social token on top of it does is it gives that community now the ability to exchange value in a native currency and to build incremental value in that project and in that token.
So all of a sudden you’ve got a project that there’s a ton of value in the Bored Ape community. And we see even with the price of that token, that token is inherently worth $0, but it’s today trading, up over $12 a coin because people collectively believe in and want to hold something that’s a fractional part of this bigger project. It’s wild.
Ray Chohan: Yeah, it is wild. So in this microcosm, your NFT becomes your store of value. You don’t want to trade it. You could fractionize it or lend it. And the actual social token becomes your medium of exchange.
Brian Mark: Totally.
Ray Chohan: So you’ve actually got the analog of gold, and dare I say it, dirty word for this, fiat currency.
Brian Mark: Totally. The analogy that we use a lot is it’s digital goods and digital money, but it is kind of that same idea of, what’s the thing that maybe has some more permanent or intrinsic value or utility? And what’s the thing that you use to exchange parts of that utility or to purchase incremental utility? And that’s where the means of exchange or the social token can come in. It’s really stellar. Yeah.
Ray Chohan: The way you frame that is brilliant. But I still think there’s loads of people saying, “Okay, Brian, I get it. It makes sense to me,” especially folks who are already in Web3. Look, where do you see the real utility?
Because I’m sensing people are going to be itching for that wow moment soon. So I know Bored Ape have launched their coin today and they’re doing some brand pieces, but it’s still speculative at the moment. It’s like Uber speculative.
And nothing wrong with the Bored Ape community. I think it’s interesting what they’re doing. But I did watch their I think original founders talk on YouTube. I turned off in 40 seconds. I didn’t know what was going. There was no context.
It was all just broad words, but no meaningful meat to the conversation. So I couldn’t watch it anymore. I just couldn’t handle it. Because I was like, “There’s no point here.” It was becoming cringeworthy. You could see the comments afterward. I don’t know. It wasn’t presented well.
I felt they could have done a lot sharper job. Other communities have represented better. Because you mentioned obviously Rally, you guys are doing a great job. 300 artists. Kudos. $2 million a week in terms of activity on the platform.
But you mentioned earlier, people are trading, like you’re seeing that velocity in the market. A, what’s happening at Rally? What are they going back and forth on? What are they purchasing? But in a big macro context, what do we need in terms of utility to have that wow moment? What’s coming soon?
Brian Mark: That’s a good question. I think regarding utility today on Rally, the best examples that we’re seeing are ultimately it’s creators giving their communities additional access to what they’re interested in already, essentially allowing us to help capture and connect the love that fans already feel for the things that they’re fans of.
So the best example is we’ve got an analog synth musician named Colin Benders. He has VCA coin on our platform. And he token gates an archive of longer cuts than he offers on YouTube of sound banks that his members are free to use. And essentially, if you hold X number of his tokens, you’re able to get more of what you already love. So I think that’s a really great one and that’s probably the most common is essentially just rewarding fans with more of what they’re already into.
Ray Chohan: So just pausing on that one, Web2 has that equivalent, right? So I’m a member of say a couple of intelligent services and they’re always saying, “Ray, upgrade with premium. We’ll give you more content because I can see already what you joined.” So it is a version of that, like premium access. Is there anything different?
Brian Mark: Two pieces there. I think one is a subscription model’s really different than a hold-to-access model. You’re giving them money and that money leaves your wallet and goes away. The difference is to access the content that Colin or others are sharing, you just need to hold the tokens.
And holding those tokens could potentially, if the token is earning those rewards that we generate, could earn you additional tokens that you’re then able to hold onto or do something else with.
The token price can also move. Token price can go up. Token price can go down. But you’re essentially rather than buying a subscription, you’re staking a subscription is I think a good way to think about it.
You’re keeping money in your wallet that gives you access to things. So if at some point you decided to walk, you’d walk with what was still in your wallet afterwards. Nothing being spent essentially is a big difference.
Ray Chohan: Makes sense. Yes. Staking as a service is something we’ve looked at. I find that fascinating that evolution from subscription as a service.
Brian Mark: I really do too. And if you want to think about proof of enthusiasm, for me as a fan it’s really important. I would I think be more willing to put $100 into an account and leave it there in perpetuity in order to kind of show my fandom for someone than I would be to write them a check for $100.
That feels like it’s an interesting flip. And I would potentially lock up more of that kind of staking funds against creators who I love than I maybe would sign up for a subscription service. So I think there’s something to that.
The other one is the exchangeability, the ability for creators and fans to exchange value, not just in one direction, but to move that money around. So we’ve got some really great communities where the community managers…
Let’s say you’re a streamer. A lot of our strongest creators are streamers on Twitch. And Twitch gaming streaming platform, a lot of the communities there, they’ll hang out in the Twitch chat, but Discord servers are really popular for people who game.
And there’s Discord servers. They can get a little wild. There’s a few things that rallied us to help gel communities together. One is you can use your tokens to gate special neighborhoods of that Discord so that only certain people can kind of come in based on their token holder status.
You could do it with NFTs or with the fungible tokens. You could also though within Discord gift other members tokens. So you’d be able to kind of exchange value with members within the community via a bot that we’ve built specifically for Discord.
You could also, and we have some creators who are doing this, pay your Discord moderators. Let’s say you bring one or two community mods on. You could pay those community managers in your native token.
The ability to reward people who are fans for behavior that benefits your community in a token that benefits your community, it’s essentially creating closed loop or circular economies where people are able to, as new value comes into that, keep that value within the ecosystem rather than it leaving or becoming kind of part of a subscription or part of something that’s extractive.
I think a lot of our creators are thinking about what they’re building on Rally as something for the long haul, rather than a way to kind of pull money from their fans. It’s not a Patreon or a Kickstarter analog. It’s much more building something in tandem with their community rather than a vehicle for extracting additional value. I think that’s probably the biggest shift in thinking about what this does for the creator economy. It allows creators to own more of that value they can create for the long term, rather than for the immediate.
Ray Chohan: This is fascinating, Brian, because what you’ve described there is the base layer of staking as a service as a concept, just having skin in the game and being vested, which is why human nature encourages typically healthy habits or thinking long term. But also if you look at big picture, I’m getting a bit wild here, but this is an exciting vision for Rally, say you’ve got a mega artist scaling on Rally from day one. They’ve built a large community. They’ve got X-number of followers, X-liquidity in their micro economy, you then actually have the mega fans who are big holders, or even the medium fans who are medium holders, potentially building a career within that micro-fan community by recruiting community managers, encouraging good behaviors, encouraging more building of capability. A mega fan who’s early and the community scales have huge opportunity for themselves while being passionate of the original artist.
Brian Mark: You’re dead on. I think that it connects to something that we talk about a lot, which is that the creators who live in this space, they are good at what they are good at. If you’re a gaming streamer, you’re a gamer and you’re somebody who connects with your community. People are there not because you’re a great Discord moderator or because you’re a great graphic designer or because you’re a great email marketer, they’re there because of you are the product. In order to be successful with that product with your community, you likely need a little village around you. I think giving people a shared incentive way to compensate or to collectively build is a real unlock in this and a really different approach from, I think, the traditional approach to building in the creator economy.
Ray Chohan: I mean, this takes the game to another level because in a way, the artist is the original canonical. I think there’s a project called Loot you do this with NFTs where it’s just an original narrative, which could be just two chapters, and people build on top of that and it takes on a life of its own. You could have an artist who’s doing great content, and probably always doing great content, but then doesn’t mind that community evolving into something that we can’t even imagine because you’ve got all these smart people who have got their own superpowers, who also love the artists, but building on top of it, around it, and that could evolve into something else. In a way, software’s eating into fandom.
Brian Mark: Yeah, absolutely. I think that idea of co-creating with your community is the other unlock because I think it’s easy to talk about it in the financialized terms of like, “Oh, we’re sharing value from a token perspective,” but in reality, it’s the ability for your fans to elevate what they want to see from you and for you to respond and for you to say to your community, “Here’s what I want to see from you, my community,” and to let them respond in kind. I think there’s just the massive opportunity for exchange of information and exchange of ideas, in addition to the value that these communities can create collectively.
Ray Chohan: It makes sense. God, I mean, the design, the surface area for this, Brian, is crazy.
Brian Mark: It is crazy.
Ray Chohan: What are some of the wild things? We’re having a bit of fun part of it because at PatSnap, we’re all about innovation. A lot of our customers, our world, they’re all working on breakthrough innovation, be it life sciences, be it aerospace defense, be it building things in space, literally manufacturing things in space. We’re in that world as a business. What are some of the kind of blue sky things, which make you think crazy, but I think it could happen?
Brian Mark: Oh, I mean, I think that the sky really is the limit here. What gets me excited in this space is so right now where Rally’s been building, and I think where the social token economy is today, has been centered around individuals or around kind of single projects, single people. I’m interested in what happens if we start to build, or start to see the emergence of, headless token communities. Communities where you can take some of the thinking around DAOs, decentralized autonomous organizations, and layer that into the social token economy. Essentially thinking what happens if we have a community who pull together because of a shared interest, shared value, shared beliefs and allowing them to kind of co-build around a token? It shifts it from there being someone in the middle of this circular economy to instead the people who move to the center organically becoming that nucleus, becoming that core. There’s wild, wild opportunity there that feels pretty blue sky to me.
I think the other one though is just continuing to expand on composable utility and NFTs and thinking through what the next generation of NFT technology is going to look like from a coding perspective. The ability to send and receive non-transferrable tokens at some point, the ability to send somebody in NFT that can’t leave their wallet, the ability to send NFTs that engage with smart contracts based on timeframes or based on external constraints, imagine something that changes based on an external reference. Something happens in the stock market or something happens in the world and something you hold automatically adjusts or changes.
Ray Chohan: There’s a business call, I think, Athena.ai, which are talking about building in machine learning and computer vision capability into the NFT primitive. Then-
Brian Mark: Wow. That to me is really there’s another level coming there, for sure.
Ray Chohan: That’s another game because-
… then you’re sleeping at night and your NFTs on X Protocol, but it’s finding data or connecting with other communities to build value. It’s off the chart. I mean, I think we’re embarking, obviously, we’ve definitely been orange-pilled, blue-pilled, quite what have you, on this call, but I think we’re believers. But I think some of the early signals, I know we’re thinking very wacky and just having fun with it, and that’s what it’s about, letting the imagination roam free. That’s where all great things start. I think the design space is massive.
There’s one project actually, which I think is an indirect competitor for you guys, but went about it completely different, BitClout, who just were this, it seemed like an annymized community tethered a famous name to your coin and then allowed people to claim their profile. Is that a similar kind of concept of social tokens, but just going about it in a different way to Rally in a nutshell?
Brian Mark: Yeah, I think it’s a pretty wild one. I think that it’s probably, while they might be neighbors to us, it feels like we built our houses differently. I think we built ours from the foundation up, which is I think the right way to build a house. From our side, that the focus is on individual creators and allowing them to really shape and build their economy. I think the BitClout story, it's an interesting one. I think it’s a really different approach to take though.
Ray Chohan: Yeah, a different approach. They just kind of threw it out there and then kind of people, peer pressure claimed it.
Brian Mark: Totally, yeah, yeah, totally.
Ray Chohan: Because it is an interesting one, but, I mean, in terms of final points, Brian, bull case for this year, where do you think we’re heading in this space? When do you think social tokens, ApeCoin was out today. I think that will get in the zeitgeist. That’s going to be great for Rally, I personally think-
Brian Mark: Agreed.
Ray Chohan: … in terms of this phenomenal news. Do you think this is the summer, we are approaching summer soon, for the social token? Last year was all about NFTs and NBA Top Shots, I think hit the trigger and the rest is history. Do you think this is the year of social tokens?
Brian Mark: Yeah, I’m long on social tokens, perhaps for obvious reasons, but I think the best bull case that I can see for social tokens becoming part of the dominant narrative in Web3, kind of in this narrow world, is the rise of things like ApeCoin and that desire for fungibility and the desire for collective value creation within, specifically, the flagship NFT projects. I can just about guarantee that what we’re seeing with ApeCoin will not be the last of kind of the blue chip or bigger and brighter NFT projects who mint their own social token this year.
I also think that the social token phenomenon, it’ll likely be a slower burn than something like NFTs. Where with an NFT, the value can be really apparent for, especially based on the buying and flipping and kind of the commodification of it for a lot of people, I think that’s part of why it hits so fast this year is that gamified, or almost gambling, impulse that it connects to. Social tokens tap into a similar desire, kind of a basic human want, but it’s a different one. I think that desire is one of belonging and one of collective ownership. It’s a really unique feeling to join a community and to own part of something that you’re building with other people.
It’s something that I’ve experienced a few times over the last year in the Web3 space. It’s a really powerful feeling. Collective ownership is pretty magical. I think that it’ll be something that once people get a taste of, and once we see a few kind of big projects like ApeCoin, but also potentially like other creators who are higher profile picking up in the space, I think we’ll continue to see people build appetite to be a part of something larger.
Ray Chohan: Do you need that little kickstart now, a big name, joining like a Rally, like a Drake, for example, saying, “You know what? I’m in. I’m going to do this on Rally.”? Is that a moment that would be helpful just to get it going in terms of massness?
Brian Mark: It’s really interesting. I think there’s, for sure, merit on kind of both ends of the creator spectrum of having somebody come in who is huge name, huge fan base, huge audience. I think it would drive a ton of sign-ups. It would drive a ton of new onboards and people who are new to the space too, which ultimately is something I’m really passionate about. I think that the creators who we see find the most success with Rally do tend to be those who are really leaned in and focused on making this the centerpiece of their economy. As a result, for a bigger creator to find kind of bold success on the platform, I think we would want to see them really commit to making this a centerpiece of their economy.
We’ve got some bigger profile names on the platform who are using social token holding as a gate for early access to tour tickets. That, to me, feels like a really good sign. If we were talking to a larger musician and they were willing to say that, “Hey, if you hold our token, you’ll get first shot at concert tickets,” that feels like a pretty good read to me that they’re leaned in.
Ray Chohan: I think Gary Vee has done that with VeeFriends. You’ve got X commitment, three years to the VeeConference. I think stuff like that’s really meaningful on the event side. But, Brian, I mean, we could go on for ages. This has been fascinating. Thank you so much. I think you’ve really enabled our audience to get their arms around this new world. It will be great to do part two maybe in Q4 and see where we are.
Brian Mark: I’d love to. It’s been a pleasure. Thanks for having me.
Ray Chohan: Nice one, Brian. Take care.
Brian Mark: Hey, take care. Bye-bye.