Like the broader markets, crypto has seen a great deal of tumult lately. But unlike the big downturn in 2018, it feels as though there's still tons of momentum and interest in the space, regardless of near-term price swings. So what's going on behind the scenes? On the latest episode of the podcast, we spoke with Eva Beylin, a director at The Graph Foundation (which makes infrastructure for decentralized applications) and a member of the amorphous investing collective eGirl Capital. She gave us insight into what it's like investing and buiding in the space right now.
Joe Weisenthal:
Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.
Tracy Alloway:
And I'm Tracy Alloway.
Joe:
So Tracy, I guess it's kind of a cliché. Like every time we do a crypto episode, we're like, “oh, crypto markets have been pretty volatile lately.” but actually right now they have been extremely volatile. So it's not just a cliché right now.
Tracy:
Yeah. People are talking about crypto winter. So I guess a redux of what we saw back in 2018, where we had the big fall and then it took a very, very long time for people to get excited and interested in crypto again. But that said, I do feel like this period of time is it feels a little bit different cuz even though the spot prices of a bunch of different things are falling, it seems like there is still a ton of money flooding into the space and maybe that'll change even. But for the time being, it feels like there's still a lot of interest.
Joe:
Yeah. I think that's a hundred percent true. It also feels like there's, you know, 2018, 2019, it felt like it was the only thing that people really talked about with crypto was the price. And I still think like the price of the coins is still like the part that captures people's attention the most. But I guess there is this idea of like, okay, like there's some new Web3, that's getting built out and it's being built towards something. And I don't think anyone is that great at describing what it's going to look like or what this new version of the internet is. But I think it's sufficiently captured people's imagination enough that even if the price were to stay depressed, people want to keep building it out and turning it into something a little bit more tangible beyond a speculation.
Tracy:
Well, this is one of the remarkable things about crypto. I feel like it's almost like every time you turn around, there's a new use case that gets invented and you're right. It is weird to think that a few years ago we weren't talking about Web3.0, we weren't talking about defi at all. We were just talking about Bitcoin mostly as a unit, a payment, maybe an inflation hedge, digital goal, that sort of thing. And already in the space of a few years, the narrative changes so quickly.
Joe:
Yeah. The narrative change is super fast. I sometimes go back and forth whether that's a good sign or whether it's just like, oh, here's our new thing because the last thing didn't materialize, but nonetheless, it's ongoing, you know, you mentioned in the beginning and I think this is really key is that yes, there is this decline in prices that we've seen. But on the flip side, it feels like there an intense amount of investment in building and money pouring into like creating new things. And so I really want to explore this tension more by talk about like, what's really going on between the price and then, you know, the sort of like actual activity yeah. In this space, cuz they really are two different things.
Tracy:
Yeah, absolutely. Let's do it.
Joe:
Oh wait. So wait. There's one more thing I wanted to say. You know what, one thing that's really weird about talking about crypto is...
Tracy:
You’re gonna have to narrow it down.
Joe:
There are many weird things there. But one more is that so many of the best people in this space are pseudonymous. Like I don't know who they are. There's like all like these like incredible like experts that I've learned a ton from over the years. And I literally have no idea who they are. Pseudonymous teams, pseudonymous founders, pseudonymous investors, people are just an avatar, you know, maybe a frog, maybe an anime character, maybe something like that could be like these really important voices to listen to of the space. Yeah.
Tracy:
It's always interesting when you're, you're getting really good crypto information from like a like digital picture of an ape or something like that.
Joe:
Ape or something like that. Yeah. A drawing of a monkey. Yeah. Yeah, exactly. Right. All right. Well today we are not going to be speaking to a frog, but we are gonna be speaking to a, maybe a colleague of them. I am very excited. We are going to bring speaking to Eva Beylin. She is the Director at the Graph Foundation and she is an E girl at eGirl capital, an amorphous crypto investment collective who's a, uh, members include various handles that people might see at crypto Twitter, like at loom dart and at Degen Spartan and at crypto cat VC, I'm just looking at their website and Eva who is not pseudonymous. So Eva, thank you very much for coming on Odd Lots.
Eva Beylin:
Thank you so much for having me excited to chat.
Joe:
So wait, first of all, I used to be in some Discord that was like the eGirl Ccapital discord, and now I'm not in it anymore. Did I get kicked out or did it disappear? Like what happened?
Eva:
Oh no, I'm not sure. Maybe we should talk to our resident discord owner, the cat in the hazmat suit. But we did have a public chat that was just sort of for our community to come around.
Joe:
All right. Well somehow I'm not in it, but the cat is @cl207, but more seriously. Like what is eGirl Capital?
Eva:
Yeah. So first we started off as just, you know, a few anons and we quickly realized that the scope that we were covering in our interests, um, you know, we could do some damage. We could either start to invest or, um, you know, start to get more involved in the way we were already involved in web three, which, you know, as you mentioned, I'm director of the foundation at the Graph, we've got a few members who are leaders of projects.
So, @scupyTrooples as CEO of Alchemix, we've got another guy named DevOps who leads Saddle finance. We've got a few traders, a few security engineers. So we realized that with this breadth of experience, we actually had something are unique to offer that wasn't consistent with typical investment funds in, um, web two or in wall street. And not even consistent with web three where we don't have any LPs, um, and we operate quite independently. So, even every deal, you know, not every member participates in and we actually, you know, only agree to, you know, take on an eGirl deal if we're all kind of in consensus.
Tracy:
I have a bunch of questions already, but maybe just to begin with could you maybe describe your membership a little bit more and I, I guess who are the types of people that would join something like eGirl versus going down the route of traditional crypto investment and what is it that they get out of this particular organization versus again, more traditional forms of investment. And I guess my overarching question is also how do you actually decide what to invest in and coordinate given that you're dealing with a group of disparate people, some of whom as Joe pointed out in the intro are anonymous.
Eva:
To answer your first question, you know, the way we came together was again, very kind of organic and a lot of us have full-time jobs that are different. So you know, I have a full-time job as a builder. Others might be trading or running other investments. For us it was like, how can we come together in this way that is organic. We don't have some quota or some expectations from LPs, but still provide value. And so for us then it's much more of a choice. We aren't sort of beholden to any expectations and even our investments, you know, aren't again meeting some kind of quota per year.
We've been around for about a year now and we've made 2 million dollars worth of investments, um, across 10 different projects. And really our priority is to invest in critical decentralized primitives of Web3, um, and kind of, you know, the metaverse meets DeFi.
A lot of our projects, um, you know, are actually NFTs based something like YATs, um, or, you know, investing in art or Unisocks as you, you, you know, might have seen, we strongly believe in Veblen goods and the ability that, you know, for goods representing early DeFI like Unisocks you know to increase in value long term.
We're also investing in a lot of really critical protocols that are gonna fundamentally change technology and innovation. So things like Connext, which is a Layer-2 protocol that connects literally connects between different layer twos on Ethereum or Radicle, which is sort of a GitHub replacement, um, a way to have open source code collaboration. So really we are motivated by what are the best projects, what would make the most impact and what's most aligned with web three. I just
Tracy:
I just wanted to ask about the coordination portion of it. Like, how do you actually go about identifying and evaluating potential investments?
Eva:
Yeah, so all of us are in different sub communities. So typically, you know, there might be one or two members of Eagle that are kind of leading that deal. Maybe it was, um, you know, a project they'd already been working with or got connected with, and then we'll start doing our own internal due diligence. Um, I'm excited to say, we now have a few interns. We didn't have that a year ago. Um, but they often will help us do research, whether that's looking at on chain metrics, maybe comparing against other projects. Um, and again, because we're so deep in the space, a lot of us have, um, expertise, whether it's, you know, security or smart contracts or business that we can kind of bring to, to each deal. Um, but I wouldn't say it's, you know, quite the most traditional due diligence process as hedge funds that you're used to seeing,
Joe:
Is there a pooled capital element of it? Like, is there a pot that you and your fellow members have put money into? And I'm just curious are they anonymous to you as well to them?
Eva:
So first question, we don't have a pot. Um, although we have been considering growing into a Dow formally on chain, um, where right now, the way we behave is per deal. So, you know, we kind of bring it to the group, anyone who wants to participate, you know, gets a cut or, you know, depending on kind of the breakdown or interest. And we typically will, um, know, bring it on as an equal deal, if there's enough interest, um, from the group, if there isn't enough interest, you know, again, we have our own statures in the community. So often someone will do an angel investment or maybe even go work with the project directly. Um, what was your second question again?
Joe:
Do you mostly know your colleagues as anons? Do you know who they are?
Eva:
Oh, no. They're fully anon to me. I’ve met a few of them in person. I know a few of their first names, but otherwise, you know I don't know very much about them and, and that's kind of the beauty of it, you know, part of the web three and crypto vision is how do we actually utilize pseudonymity in a more productive way? So, you know, DJs have been doing this for years, you know… almost every DJ has their own alias or alter ego. And they get to then create that sub-community or sub-brand.
And so similarly with crypto, you know, you can participate in a sort of gig economy style. And why do you need that to be tied to your birth identity? When actually you can start to create your own alter ego on chain that my might be associated with a cat or a monkey. And maybe you're only, you know, participating in this one protocol and then maybe you have another identity for a different one.
Tracy:
I'm thinking about David Solomon and DJ D-sol...
Joe:
He might be an eGirl
Tracy:
Yeah. Who knows? Well, okay. So again, this is one of those conversations that is just throwing up more and more questions, but two things, one Y E girl, and I guess it's a really stupid question. Are most of your members female, or was there a desire there to get more females on board with crypto? And then secondly, what's the benefit of pseudonymity? Because when I think of do and Bitcoin, I always think, well, this is sort of a tension at the heart of crypto. On the one hand it's transparent and traceable, and you can see all the transactions on a blockchain and things like that. But on the other hand, it's not necessarily tied to a single identity. And so you are able to do anonymous transactions. So I, I guess I'm getting at is what's the benefit of preserving that pseudonymity of investors?
Eva:
The meme of eGirl, I believe came out of more anime and hentai culture. As I'm sure you've seen, you know, things like Vtubing where people, um, are literally creating cartoon images of their faces and then going on YouTube and, you know, doing a show, um, has become extremely popular or even streaming.
And so we kind of tapped into this idea of, you know, anime and cartoon characters, you know, should also be taken seriously as much as suits. And in a sense, we kind of present at this anti-suit culture or anti-suit meme. And I really personally related to that because I used to be a management consultant in New York and, you know, being forced into sort of this box. And it, it was very clear to me that Web3 and crypto are the antithesis of that where you really can still be taken seriously for your bottom line or for, you know, the insightful tweets or whatever you might be investing in.
You don't need to be wearing a suit. You could be wearing a hazmat suit.
I guess, on your second question. So the, the biggest misconception to me that I see is people think that pseudonymity or anonymity means that you don't have reputation when actually it's quite the opposite that if you want to be known, and if you wanna have a community or, you know, have a job, you have to make much more effort to develop that reputation than otherwise, you know, KYC people. So, you know, I'm one of the only doxxed members and, you know, technically speaking, I've been developing my reputation since I was born and, you know, that's Googleable, but anyone who chooses to take on a different personality is starting from scratch. Um, and so there's this misconception in that, you know, of course, maybe you can't always trust anons. Maybe there's some degree of risk, but at the same time, they've taken on a significant amount of risk too, that if they wanted to rebuild that identity or reputation, it would take much longer than for everyone else.
Joe:
So I'm curious, you know, I'm looking at your portfolio on your website. I'm very amused by the Unisocks investment for one thing that was, uh, for those who don't remember if we had Mike Demarais on in December, and he was involved in that, which is basically by an NFT that's associated with a literal pair of socks, but some of these projects I think there's like other like, well known, I guess you would call them doxxed or just sort of like established VC firms in them. And then the announcement will like, you know, it'll be like some name that you've heard of from Silicon valley capital is part of the round do legacy VCs. What do they think about being part of a deal where you guys are listed on the round?
Eva:
You know, I don't know. And to be honest, I don't really care. I think part of what we're trying to bring here is like, we're a group of highly capable, you know, folks that have been in this space for, between, you know, three to 10 years, um, you know, some started early on in Bitcoin and we're bringing a lot of value to the table that may be untraditional, but, um, you know, we're still here. We still were able to get a seat, you know, the project believed in our value that we could bring to them. Um, so I think it's really exciting and it's, you know, breaking down that barrier that, you know, you don't have to be wearing suits. You don't even have to have an identity that's public really, to do well.
Tracy:
Can we talk a little bit about The Graph, which is your day job? And I would love to get your summary of what exactly it does, but the other thing I want to ask you is it has to do with Ethereum. It's not like a Bitcoin based application or protocol. And I guess I'm wondering, you know, excitement over Ethereum seems to be one thing that a lot of the VCs share. So the institutional capital is much more excited over Ethereum and applications and Defi type stuff that you can build on that versus basic Bitcoin, which is seen as not being as well suited to those types of applications. So I, I guess my question is why Ethereum and not something else, and doesn't mean that you sort of share something in common with VCs and institutional money.
Eva:
So The Graph is a decentralized protocol for organizing and retrieving on chain data. And what that means is every application that you see that is running on a blockchain or a query smart contract, they have to retrieve that data from a blockchain somehow. And it's actually really difficult for developers to do that. They would have to run their own node. They would have to become experts in that blockchain. It's essentially a backend job. And so with the does is we have a standardized layer or a standardized API called a sub graph that allows developers to, you know, develop, you know, an organization style or figure out exactly what information they want from the blockchain and just, you know, play around with that sub graph. Meanwhile, the actual indexing and processing of that data goes on in the backend on a network of index. So we're really decentralizing the server or the backend, um, of what otherwise would be, you know, database indexing infrastructure, that is serving data to users. So we often like to call ourselves the Google of blockchains. Hmm. So as Google is a search engine and also the backend indexing of all of the Internet's data currently, the graph protocol is the indexing bit. And so we're trying to enable other applications like search engines and just DS in general, to be able to retrieve that data as efficiently as possible. Hmm.
Tracy:
And why Ethereum...
Eva:
Our ethos as The Graph has always been decentralized and, you know, to enable the best security, you know, we really believe you can't have a dapp if it's not decentralized, meaning all components are. And in our history of just assessing blockchains and, you know, having been around for a few years Ethereum was the one that stayed true to that mission. And we're even seeing that today in, you know, what some people call Ethereum taking its time with a roadmap is actually Ethereum being very thoughtful with its roadmap to not do things too quickly.
And you know, you see other problems on newer chains that, you know, Ethereum also experienced earlier on, but Ethereum is just added a more mature state and, you know, our goal, although the graph network is built on Ethereum, our goal is actually to index all of the world's data, meaning any blockchain. So our hosted service currently supports 27 chains, including many of the Layer-2s on Ethereum and soon all those chains will also be supported on the network itself.
Joe:
And you mentioned that other layer ones, other chains have had issues were recording this January 24th and the last few days Solana. One of the chains that we've talked about in the past that is arguably an Ethereum competitor has seen some pretty big delays and slowdowns. So a lot of kinks still being worked out, you just raised at the Graph $50 million, it was led by tiger global. What is the plan for this money and what do you need to build?
Eva:
So over the last year we've been pioneering this new strategy that we call decentralized M&A. So we realized really early on that the mission of The Graph was so ambitious, so vast, it couldn't be done by one team. And nor was that the goal, um, you know, part of decent is also decentralizing the contributors. So over the last year, we've had four new teams join us. Full-time that specialize in anything from backend infrastructure to cryptography to GraphQL APIs and bring them to act basically as full-time core developers on the protocol. So we, aren't no longer, you know, one team that, you know, initially launch the protocol we're five. And we raise this round basically to continue moving along this strategy. Um, we have a goal of bringing on another three to five teams in the next two years, um, and that might be to help with current roadmap elements, such as, um, you know, improving the efficiency of the infrastructure. We also are, you know, working, um, and doubling down on cryptography to make sure that the data that is actually being, you know, queried by apps is verifiable. So we've got quite a complex roadmap. Um, and we're looking to use that 50 million as ammunition, um, to basically continue building on our vision. So
Joe:
You've talked in the idea of like this is going to be the Google of blockchains and decentralized or making it easy for any dappso query the chain. That sounds obviously very cool. Can you give a little bit more, I guess, some concrete examples of what kind of apps or what specifically would be involved in that? I think this is where, when people, at least for me, maybe I'm projecting, but at least for me, like I sort of get trading and how the automated market makers work. I sort of get NFTs, but still when I think about like, well, what is a web three application? What is a true like blockchain application? Can you talk a little bit about specifically how applications are using your infrastructure?
Eva:
So in my opinion, a true dapp would be one that is open, permissionless and decentralized, meaning that it would be very difficult or nearly impossible to take down and users have the right to exit, meaning that the app or the platform itself isn't locking the user in, but because everything is on a blockchain and other protocols, um, they can swap their data and assets between those. Um, so, you know, one really great example is ENS, Ethereum, name service.
So this is, you know, Ethereum domains. And this means that any application could essentially query data about your Ethereum name, Joe or Tracy, and use information on any website. So instead of using a Google magic link, like we use today, we could use Ethereum name service. And that means that any application that wants to get data from your ENS name, so maybe that's your wallet and your activity, they could query a sub graph.
So that's an ENS API. So any information on, you know, that that's from the blockchain, whether it's trade volumes or pricing or assets needs to be queried from a blockchain and sub graphs, make it much easier since developers don't need to rebuild their own API. So, you know, anyone building on, let's say the Uniswap protocol can just use the exact same Uniswap API because it's open source.
They can also fork it, rebuild it, maintain it if they want to, um, you know, the end goal, being that all of these, how graphs are public goods and they're even maintained by the community or a do itself. And that really enables much more, you know, innovation time, you know, maybe even cost savings for the team because they don't need to hire a full-time engineer to manage that database. And it really enables composability so many teams can collaborate on either the same API or, you know, the same protocol without to do, the same work again.
Tracy:
So I really like that definition of right to exit, because it jives really nicely with the, the wallet idea. We were talking with Mike Demarais about this, about how if you have a wallet, you know, say meta mask or something, it's easy to port that onto something like rainbow and you're not dependent on the platform in order to access your information and your data and your assets. So that makes a lot of sense to me. But one thing I'm wondering is, you know, you've mentioned decentralization a number of times in this conversation and you've even talked about a decentralized way to invest in decentralization. Why is it so important beyond a better user experience? Because people talk about web 3.0 as almost creating a better world, right? It seems to have all these philosophical attachments and moral values attached to it. What is it about decentralization that makes it so in your view and, and presumably so great.
Eva:
I think there's a few things that we're starting to see even play out in crypto. So one is censorship, you know, the very common use case and we're starting to even see folks that just recently entered the NFT space realize that, oh, you know, if the NFT isn't fully decentralized, meaning the API, the server and where that NFT metadata is stored, then, you know, is that NFT really real? Can I have the right to exit that platform?
So, you know, that's one, one use case the second would be, you know, servers get taken down all the time. Google goes down, Facebook goes down and they've been around for decades. And when we think about scaling to a global network, you know, whether that's transactions or NFTs, you really wanna make sure your app doesn't go down. So one really great anecdote for us was ConstitutionDAO so I'm not sure if you heard of ConstitutionDAO, they got millions of dollars collected from the community, right.
At the peak of its excitement the app went down because the API went down. And so they actually transitioned to using a sub Graph that was on the decentralized network to make sure that they could continue staying up during the auction. So that's a great example of we're already seeing that today that, you know, things go down all the time, but furthermore, like why would you want adapt team to be the team also managing the node and doing all the complexities?
So ne thing the Graph and other decentralized protocols allow for is unbundling of what were otherwise centralized services or tasks that were managed by the project team originally. But now we can actually completely fragment that. So, whereas a team might have been the one that deployed the smart contract. They might not be the team managing the UI. They also might not be the team managing the API. And that's fine because at the end of the day, we're all building on top of each other's open source, tooling and protocols.
Tracy:
So just on that note, I mean, this is something that people who are critical of the web 3.0 idea will, will often go after this idea that you're just gonna have people, you know, a community sort of maintaining these databases or being responsible for individual components of something that all fits together. And maybe they argue that, well, they don't have an actual self-interest in keeping these up to date in the same way that a company like a Google or a Facebook, even though, you know, you might be and gets evil, at least it has a reason to kind of keep things going. So the decentralized processes might not be as reliable as a more traditional or centralized, um, process. What's your response to that sort of criticism?
Eva:
I definitely hear that centralized coordination has its efficiency gain, but the benefit of blockchains and cryptocurrency is that we have this new incentive system. So whereas maybe Google had to be the one managing their servers because they owned all their equity and they also owned the rights to their server. We now have a world where anyone can buy a token at time, a utility token. Anyone can use that in the network. So in the graphs case, that would be staking as an indexer or a delegator. Um, and you can then earn rewards from, you know, that network and the productivity and value that it creates for the world. So I actually think we're, you know, solving some scalability issues where typically the only people that really care about the product are the people inside the company, you know, often shareholders, 20 even care. Um, but with tokens you allow anyone to, you know, contribute and take ownership in the graph or whatever protocol it might be. So we're seeing things like grantees come up with ideas of, you know, tooling or, um, protocol improvements just because they've now bought in and feel they are a part of the community as well, even though maybe their full-time job is, you know, using their real name and, you know, maybe in web two, I wanna
Joe:
Talk more about censorship and this and the dangers of centralization. And of course, one of the most obvious cases is Twitter and people find themselves their accounts are banned suddenly. But people love Twitter, you're on Twitter. The fellow eGirls are on Twitter, but you know, one day Twitter could just take your account account away. And it's sort of this poster child for the sort of like the double edge sword of web two.
Yes, there's all these like cool platforms. We can share stuff, we can talk, but we really don't own own anything. you foresee Web3 rebuilding that in a decentralized way? Like, will there be a decentralized Twitter? Do you envision that, like at some point in the next five years, you only have to use Twitter. You won't have to use discord or you don't have to use telegram because there are new decentralized versions where you can share and communicate without the need for a middleman company.
Eva:
I really do. And I think it's gonna make building applications way more competitive because the switching costs are much lower. So, you know, often the way banks and credit cards keep customers in is the costs are high. You can't reach the bank, whatever it might be. Um, here it's as easy as just sending wallet or sending funds to another wallet, um, or, you know, switching, um, your, your name or your NFTs, you know, by just selling it in a marketplace. So it'll, it'll be a lot easier to build those apps and we're already starting to see it with an app called Orbis recently came out. I know AAP called send has been out for a while. Um, but we'll probably see more iteration. What I'm personally excited for is to see the coupling of the actual actions on chain with our social platforms.
So, you know, right now most DAOs, they typically have a forum or some kind of social platform where they discuss the Dow proposals before it's actually put to, to a vote. And why is it that the voting and the, the forum discussion is disconnected? You know, one of the things I love about Bloomberg is that the reason it, you know, it, it kind of kicked off was because the messenger or the chat became so useful for traders, um, to make settlements or OTC trades, whatever it might have been.
And so I think we're gonna see that same kind of thing happen where our applications are gonna start coinciding with maybe actual transactions, you know, maybe, um, submitting trades and, you know, across the board, we could see even the way we behave with each other, starting to change, um, you know, people already start to stock each other's ENS names to see what they're doing. Um, so what else could there be?
Tracy:
I'm gonna ask another boomer feasibility question, I, I guess, but, um, I mean, a lot of the, a lot of the services online that people use now, like Twitter or Facebook they're free and the way those companies make money, um, you know, maybe with the exception of Twitter, but the way they're supposed to make money is through advertising and through gathering user data so that they can target these people with the most effective ads. And it's supposed to be the data, which is the valuable product here.
You know, you get something for free in exchange for providing these companies, reams and reams of data. When you move to decent applications, my understanding, and please correct me if I'm wrong. But my understanding is a lot of that data is supposed to be more freely available, Mo more open, more transparent, which I guess, makes it maybe less valuable to a company trying to do something with it. It's no longer proprietary. So I, I guess the quite is like, how does that wide, that wide open data, or, you know, the way that decentralization will make data more accessible, more transparent, more widely available. How does that stack up with actually making money from decentralized services and transactions? Like, how are profits supposed to be created through this process?
Eva:
Yeah, that's a really good question. And to be honest, I don't have a clear answer, um, because I would say a lot of the infrastructure to enable even the most simple, like data analysis, isn't quite there yet, you know, I can speak for The Graph and our roadmap is still quite ambitious. You know, we'd like to be able to better support analytics, um, for that use case you're talking about, but I, I foresee a lot of different kinds of monetization strategies. So kind of like I mentioned, people participating in protocols, you know, that's revenue. So, you know, whether it's a fund or an individual staking, you know, tokens and then providing services and those services could be anything from, you know, looking at images and cur which art is most interesting to actually running hardware or, you know, maybe, being a trader or a yield farmer.
Um, and that is a way to generate income. Um, I think we'll also start to see a lot more innovation in the micropayment level. So, whereas right now we're, you know, not very mature in, um, how do we enable what we call meta transactions? So kind of transaction embedded in the background, but I think what we might see in the future with Oracles, um, you know, which is retrieving off, off chain data, um, in other tooling, um, the ability to charge or, or be charged for smaller interactions, and that gets charged directly to a wallet and your wallet being, you know, something like your ENS name is now tied to your identity instead of the ad companies paying, you know, Twitter, the ad companies could in theory start paying users, and that could be micro payments or micro transactions that are sent directly to the user wallet.
Similarly, maybe instead of, um artists, you know, art being looked at and them never receiving any rewards, maybe artists start earning to their wallets based on impressions or micro impressions on Instagram.
So I think we're gonna start seeing different kinds of monetization patterns arrive as the tech also becomes more mature. Um, and that includes layer two. It includes things like the graph, um, storage, you know, things like IPFS, really seeing all those pieces come together to make that possible.
Joe:
So, Eva, one of the reasons that I'm excited about having this conversation is you're really on both sides of the market, as part of the eGirl collective, you're an investor in various, uh, web three infrastructure and the director at the graph you're building stuff and raising money. So I wanna start like, okay, obviously we've seen this pretty big volatility and by volatility, I mean, selling Ethereum has basically been cut in half since the middle of November, a lot of coins have done worse. So I wanna just start with like a simple question, which is have you seen when you're going out to market as an investor, looking to buy into projects, has the selling, um, had any effect on sort of like private market evaluations or deal pace or anything like that?
Eva:
I haven't seen it affect it, and I would be surprised if it does because the thesis with, you know, girl and others is much more long term, um, typically at least two years, often decades. And so we're really focused on what is the next thing we're building and how do we invest in, in, in that team, that's building it.
Tracy:
I mean, when you see people talk about crypto, winter on Twitter, and, you know, there have been people who maybe panic, is it the right word, but certainly there's a sort of sense of unease amongst crypto investors at the moment, I think. Does, does it affect your investing behavior at all? Or does it affect the way you think about things? Does it length the timeline to make things, um, come together or be viable or affect it in any way? Yeah,
Eva:
I'd say it probably affects us in how we think about our community. So anyone who was around during the last bear market remembers how brutal it was. You know, there were a, a lot of really challenging experiences, whether it was layoffs or, or, or lack of capital. Um, and so that is the, the, the first thing I thought about was, you know, are we going to make it as a collective? You know, is everyone going to be okay? But the more controversial perspective I have is that, you know, bear markets are great as a builder, you know, The Graph was built in a bear market and most of the best projects and infrastructure today, whether it's layer twos or NFTs, you, you know, arrive during the bear market.
And it gives us time to actually make mistakes and iterate. And even as an investor, you know, you need that time for a project team to iterate, to actually come up with something innovative. So I'm also excited, you know, if that is what's, what's happening, if we're having a little bit of a slowdown maybe take that time to reassess, whatever the roadmap and keep shipping.
Joe:
So the other part of this, and this was, you know, this may be true now in January. Maybe it's probably true in November is there's just an insane amount of like institutional money coming into this space. And last week there was a report that, and there Horowitz, which raised has a huge crypto fund has been into the space for a long time.
There's a report that they're rate looking to raise like another four and a half billion for another crypto fund. We'll see if that comes together, but is there really, like, I mean, I guess there there's questions like is capacity, like right now can money at that scale be put to use, is there enough need for that much capital, or if you have a good project as a builder, like, is it really like all the options are on your side? Like, who has the power right now? And is there really, is there really a use for that much cash coming into this space?
Eva:
I would say there is, you know, there's a lot of projects that continue to raise whether it's, you know, their seed or pre-seed, because they're just starting to out maybe a series B because we're a few years into their cycle. You know, there's a lot of opportunity to get involved depending on what the flavor is, you know?
Some institutions are more interested in DeFi given it's more consistent with their, you know, typical finance exposure and some are more interested in protocols. And I would say protocols are probably where there's more opportunity because they take longer to build. And so when, when an investor might be thinking about, you know, the, the roadmap of that team, you know, Ethereum took, what, what is it now 2022?
So about six years, almost six years, just to really ship east two, you know, and, you know, maybe there were some inefficiencies, but really it's just hard problems. It's hard cryptographic problems that requires coordination between many different teams, often global. And so I think that's the best place that, um, we could see more investment, you know, given that the roadmap is, is likely, you know, the next decade,
Tracy:
I have a really tough question. You know, we talked about in the intro, how there always seems to be a new use case for crypto. So, you know, we had method of payment and then we kind of moved into DeFi and then web 3.0, what do you think is the next big crypto use case, or, or perhaps what do you think is an under appreciated use case at the moment that people are going to be talking more about in the
Eva:
Coming years? Yeah. I have two favorites here. So ENS, like I mentioned, Ethereum Name Services, um, as the universal login, I think has been untapped and, you know, watching them grow over the past year, grow into a DAO, you know, is really allowing them to flourish. And so sort of surprised the web through a community. Everyone in Web3 has known about them. Um, but the goal is really that that could be the killer app that gets web two people in because a universal login is something we can all relate to.
You know, we all log into many apps and we all forget our passwords. The second is this cross chain universe. So something we've seen at the graph is a lot more queries and usage of sub graphs that are more focused maybe on wrapped Bitcoin. So, you know, creating some kind of wrapped Bitcoin or a solution that enables access to Bitcoin on Ethereum or other chains. And to me, that signifies a lot more interest from the Bitcoin community to actually get involved in DeFi some of these new activities or markets. So whether that's investing in NFTs or maybe actually just doing some investing in utility tokens, um, seeing that growth in wrapped Bitcoin and wrapped tokens, um, signifies a much more mature, um, smart contract ecosystem. Um, so folks not only interested in the typical Bitcoin use case of, um, you know, hard money, um, but also seeing that there's a bigger world here and a lot more opportunity to get involved.
Joe:
Well, Eva, that was great. I've always wanted to learn more about the work that you but I gotta get back. I really miss saying GM in the eGirl Discord. So I don't know what happened, but if it still exists, I really wanna come back.
Eva:
I will make sure you're invited back in. Tracy. Do you also wanna join?
Tracy:
You know… okay, I'll come in, but this is a lot of pressure cuz now I have to think what my avatar is and what my, I'm gonna join on an anonymous basis. I gotta go choose my ape. So it's a lot of pressure.
Joe:
Alright Eva, thank you so much for coming on a lot.
Eva:
Thank you so much for having me. It was a pleasure.
Tracy:
Thank you Eva. That was great. Take care.
Joe:
Tracy. I thought that conversation was really fun. I really don't know how you could like look at like the website of eGirl capital and see this investment collective of like all these cartoon characters and part of their investments are like, like on their like portfolio page are a bunch of NFTs. And even if you think the whole thing is kind of nuts, like it seems pretty fun and cool.
Tracy:
Yeah I don't wanna get too profound about it, but maybe it's a really nice like due diligence test. Where if, if you saw a bunch of cartoon characters saying that they were investing and all this random stuff, you would be like, well, I have no idea if they're serious or not, because you know, one is a frog and the other one is a and another is an anime character or whatever. But if you actually looked at what each of them is doing and saying and understood whether or not what they were saying was making sense and whether or not they were making intelligent commentary on the space, I feel like that's actually probably a better method of due diligence than seeing like Mark Anderson is, is investing in whatever startup. And so it must be really good, which seems to be what a lot of people do nowadays.
Joe:
I totally agree. And it, it it's exactly right. Like if, you know, like I said in the beginning, a lot of the people over the last, you know, we've been following this space for years, but a lot of the people who I've been following and really like must read their stuff. I have no idea who they are. But they’ve broken through. And in crypto specifically, I would say also, you know, I think what did, what was the term that Eva used like anti suit or something like that? Like mm-hmm, we suits, but this idea, like a lot of the people who I think like, frankly, speak the most nonsense and speak in total jargon are exactly like suits and people who it's like, I don't trust you. And so I do think like, crypto, the whole world, like sort of flips on its head where credibility comes from, where credibility is earned.
Tracy:
Yeah. And actually, I mean, this has been a challenge for us on Odd Lots because there have been anonymous people that we wanna get on the show especially to talk about NFTs. And it's hard for us to get them on because, you know, even if they don't wanna dox themselves on the show, And it's a bit difficult for us to have totally anonymous people, but if they give us an audio recording, you know, unless we like try to disguise the voice, um, there's still a concern that they might docs themselves. But, um, I don't know. Maybe if anyone has any good ideas for getting around that we would be all ears.
The other thing I want to say is, you know, we were talking about the difference between people who just like sort of babble in technical jargon. Um, yeah. Try to sound like they're knowledgeable versus people who are actually able to explain this stuff in a clear way. And I thought Eva's definition of what, you know, web 3.0 is what true decentralization is as this right to exit is a really simple yeah. And intuitive way of thinking about it.
Joe:
Yeah. A hundred percent. The idea of like that you could like, okay, you have this, or you have to use a cliche term that's or some jargon that's coming back like the so called social graph and the idea that you could move it and the idea that not one company could control it and could be somewhere else is very powerful. I still feel like, you know, it's like, look, we're all like tweeting Eva tweeting. The other girls are tweeting girl discourse or sorry, discord, et cetera.
Like there's still an incredible reliance on web two tools. And I don't know, like it's still really hard for me to like envision like what the decentralized version of all this is gonna be like, I get NFTs. I get like having a wallet with like showing your NFTs, but that's different than like updating something that would be equivalent to a tweet, sending something a message. That'd be, that'd be the equivalent to an email. So I still like have some part of me that's like has a hard time wrapping around like what the decentralized internet really looks like. But you know, I don't get most of this stuff anyway. So I wouldn't necessarily hold that against them. Well,
Tracy:
To me, the, the data is the important issue here. And the thing that has to the big question mark around it, right? So if you have the right to exit, you have the right to take all this data with you. And historically web 2.0, has been run on proprietary data. That's how people make money. Yes. My question is like, how does that transform into companies that are actually making profits and okay, maybe you don't need everyone to be making a profit in the same way that Facebook and Google and whoever have traditionally been making profits, but it seems like you still have to have some sort of monetization in order to incentivize people to come in and build this stuff.
On the other hand, it does seem like there are a lot of people who are interested in building it right now. And there's certainly a lot of money pouring into the space without that monetization question, actually having been answered in detail. So maybe that's on its way who knows.
Joe:
And I certainly believe says that even with the recent selling and so many coins basically being cut in half, that the sort of like impulse to build and invest is still going strong. Still there. I don't think we're going to have like an actual like crypto winter where everyone sort of like forgets about it crypto for three years, the way we did starting in 2018.
Tracy:
It does feel like there are so many people and so much money in the space and it's almost its own building system at this point that it's really hard for it to go
Joe:
Away. Totally agree.
Tracy:
All right. Shall we leave it there?
Joe:
Let's leave it there.