Mike Demarais on Design in Crypto and What Web 3.0 Will Look Like

of stuff we have yet to cover. Yeah, I mean there's new stuff happening every day, but certainly one of the big things that has been going on recently is this whole idea of web three Web three point though n f T s, the idea of actually building new worlds, new spaces, new identities on blockchain technology. Yeah, exactly right. So we've done a lot about defy in the past ust and maybe maybe not crypto will have some disruptive

effect unclear. But then there's this whole other aspect and as you mentioned, like n f T S and taws and identity and de facto social networking, and I think a lot of people are excited about some alternative to I guess what I would say is the web two point oh tech giants, Like there's this anxiety about the power of a centralized company like Facebook or Twitter, and maybe some hope, even if it's still perfectly articulated, of how something that's decentralized and based on crypto or ethereum

specifically could create new spaces, new forms, new ways for us to interact in a social manner that aren't tightly controlled by one one uh one entity. Yeah, I think that's right, although I think there's still attention there which

we can discuss. But the idea of being able to have your identity on the web somewhere, or have your assets in a wallet somewhere, and then be an absolute control of them in the sense that you know, you can move them, they're portable from one wallet to the other without actually having to necessarily like interact too much with the platform that you're using. Like, there is something

that is very attractive in that proposition. No, it's super cool and like you know, the idea of say, being able to log into an app or website without saying a password or user name, just connect your wallet, it's

pretty cool. It feels like really powerful. On the other hand, like I guess I have to say, I have a hard time getting to okay yeah, but when does this become a sort of genuine social interaction, Like, you know, I can't I can't tweet and web three point o yet as far as I know, no one else is there, Like there's a bunch of social things that I do. That's when everything becomes real for you, right when you

can tweet it. Yeah, that's basically the question. No, but literally, like all my friends are in web two point oh, and I get in theory that there's some web three point of stuff that would allow us to interact, but like I don't know what it played, Uh what it what it looks like? What what social relations look like in a web three point oh based uh world or whatever? Yeah, fair enough, anyway we have. I'm very excited about our guest today because I think he is someone who talks

a lot about crypto. He's in crypto and explores crypto from this angle of like these tacit or de facto social networks, and he's thought a lot about this is a company that is building in this direction. I'm very excited. We're gonna be speaking with Mike de m Ray, the co founder of Rainbow dot Me. It's a crypto wallet and built around all this stuff built for this stuff up. Mike, thank you so much for joining us. What's up, Joe? What's up? Tracy? Big fan of the show, excited to

be here? Except how many? How many duncans have you had today so far? I'm on my second duncan right now, feeling good. I feel it's a good number. You know, this is pretty early for me. I'm normally, you know, still up at the five am what I'd missed tweet? You know what I mean? Normally I'm the first reply. Yeah, right, so, uh you know this is big, you say, GM at one in the afternoon, Yes, exactly, GM. So in all seriousness,

you know what I think. I don't know if anyone's made this analogy before, but I kind of feel like Rainbow Rainbow dot me your company. It kind of feels like the Tumbler of Web three point oh, or like because Tumbler is like all the cool Brooklyn hipsters that was like this very design oriented ease of use social networking, making blogging this thing, and it's like, rather than installing some boring WordPress template, just have this fun pool way

to interact and social media. Then you know too, pretty well, I guess it got bought up by Yahoo. What do you think about that analogy? Yeah, I definitely think so. I think other people, you know, sometimes they say, oh it feels like Snapchat or um, yeah, Tumbler as well. I think that. Yeah. I think that Rainbow stands out for being obsessively focused on on fun and delightful experiences and yeah, we're really a design first company. Um. But yeah,

I definitely see the analogy. For sure. All the hit kids are on Rainbow, that's my impression. Yeah. So when most people here, you know, it's a beautiful app, I think like they don't necessarily get the importance of that or why you're so focused on the design aspect of it. But my understanding is you're very focused on it because in a world of wallets, in a decentralized world of wallets, where people have the option to easily switch from one

wallet to another. So you know, I use Meta mask, but if I wanted to, I could easily transfer everything over to Rainbow right now, then, like the thing that you're offering is basically that design experience. Is that right? Is that like the right way to think about how you're differentiating yourself in this market? One? What's crazy is about like with Web three, there's just simply no user modes.

Right So in the in the past, like the recent you're you're using Facebook is because the network effects that Facebook is built up. You know, all of your friends are there, and it's really hard for a challenger to come in and compete with those network effects. But with Ethereum, you know, and and the portability of your of your of your keys, a user can eject from a wallet and start using another wallet in moments and there's nothing

locking them into a particular product. So yeah, it's it's our belief that basically the product itself, which to us means design, is really the core differentiator between these products and really the only way to actually retain users. So I don't think anyone who's interacted with crypto apps, whether they be wallets, whether they be exchanges, whatever they are, like there is not a ton of design sense in the space right now. To say the least. I think

people complain about usability a lot. It's really scary you like click one button and you're worried you're gonna lose uh, you know, expose your private key to everyone. What do you talk to us? Just like step back like what do you see as like what's your design philosophy, what do you see as the failures of the existing crypto designers? And then what do you see as like how you

think about solution. Man, it sounds so so cliche, but I think that people have been stuck in kind of an old paradigm of thinking, where like, you know, they've been used to the existing crypto products, and you know, everyone in this space is such a big nerd that it's hard for them to you know, imagine new styles, right,

new new styles of products. What I mean by that is like you know, Meta mask and other wallets kind of are all following the same like almost like utilitarian approach to the product, and no one has really tried to imagine it differently. It feels like, you know, there just hasn't been a real attempt. It's so cliche. I think that the example I always point to is you all remember like Windows mobile phones. I think like it was like with the style is with a little start menu.

It's like, you know, you can say that that's a smartphone, but really, like you know, the iPhone came around and even though on a on a a speck list, right, Oh, it's it's it looks like it hits all the same specs as a as a Window Windows mobile phone, but in reality it was like the design of the iPhone really unlocked this new type of products, right, it was like there's a fore and after moment um, And we

sort of think about Rainbow in the same way. It's like, functionally, you know, similar or nearly identical to other wallet products and its capabilities, but the way that the product is packaged, we think it's it's more you know, fun and accessible

and you know, less scary. But yeah, I mean, the way that we approach design in general is first and foremost, we are trying to make something that that my little brother would use, is always my example user Both my co founder and I have little brothers, and very much Rainbow has been designed to kind of be something that they vibe with. So that's always been our gut check.

So now that we've talked a little bit about the design, can we talk about what's actually on Rainbow, or rather what you can actually like store and buy and trade, because like, obviously you can buy cryptocurrency, but you're also offering um, you know, digital collectibles and n f t s and things like that, So what's the thinking behind that.

Rainbow is an ethereum wallet, and it supports all of the different types of assets that can exist on Ethereum, so that can be everything from e r C twenty tokens, some defy governance tokens, things like that, stable coins, things of that for I D as well as n f t s And additionally, it also surfaces defied positions that

you might have. So if you go and to deposit your money in one of these platforms, we recognize that and essentially, you know, throw a custom interface up that lets you, you know, see more information about those particular positions, because you know, it's like when you actually deposit your assets in these defied protocols, your assets are technically they leave your wallet, so it's like, you know, meta mask is unaware of your money when you going to posit

it into one of these defied protocols. So it's like, you know, it's happened to me on my first defied trade, Like it just disappeared from metal Mask, and I only you know what, I only like rediscovered it today and I'm very very happy that I managed to fire you rich? Are you rich? No? I only make it. No, I was no, I was just trying to learn a little bit about yield farming. So I think I put in like a hundred dollars and got two hundred dollars out.

So no, sadly I haven't made it yet. You're gonna make it well. So that behavior is exactly what we think more people should be doing. We think that like the best way to learn about the stuff is to honestly just play around. The product Rainbow has been designed honestly to encourage that. So I want to go back to something you said comparing the Windows phone versus the iPhone.

So the Windows phone essentially started from the premise. I think that the things that you would do on your computer you could do on your phone, just smaller, just with the smaller screen and to sort of crap your keyword, and but you still do the same thing. You send emails, maybe you try to like zoom in on a spreadsheet and serve the web or something like that. With the iPhone on paper is kind of the same thing, except the design of the iPhone opened up these new worlds.

And we obviously know that in the iPhone era, we started using phones fundamentally different new things emerged, and I thought that was interesting way you stated, what is this sort of like new forms of interaction that can emerge or that you envision or how people use it when there is a sort of design and user friendly wallet

that people that actually brings delight. We actually think about crypto today as being really like a trojan horse forgetting um public key cryptography into the hands of regular day you know, average people. So right now, it's like the things attracting people to crypto is kind of you know, speculative finance, and there's that's nothing wrong with that. That's great.

But in the future, what you can do once you have keys in your pocket, ok, like a wallet in your pocket, is do more things like use it as your identity to various degree is UM. So some of the more exciting things happening with that right now is is, yeah, like using your Ethereum wallet as a log in. You know, if you've ever logged, you know, if you've ever used unit swap, you'll notice that there's no log and experience,

you're simply connecting your wallet. That's been taking off, that user flow has been taking off a lot lately via this concept of token gated communities, which is something popping on Discord these days. So you know, on Discord you can have a channel where you know, people can join your channel only if they hold a token of a certain type. So whether that's an n f T, whether that's uh uni socks, whatever. Basically you can have communities online now that you have to the contents of your

wallet or your ticket to enter the community. So the I'd say the best answer to your question is, yet, while it's kind of being used more and more for closer to the concept of keys, are we going to see in your view things that resemble what we think of as social networking in this model of my only

login is my wallet? So maybe something that represents a photo sharing app or something that represents chat like what does because I think people intuitively, like I said in the beginning, they like this idea of social interaction that's not on some centralized company of servers. But can you talk a little bit more about what you envision that looking like, Yeah, I definitely think that it's gonna be iterative, right, I don't think that cryptocentric social networking is ready to

go right now. Where we're at is basically people are really loving this idea of portable social profiles, which I guess is really a subset of social networking. Right, so, you don't have your entire social graph today on ethereum. You don't have all of it, you know, friends and followers, etcetera. But what you do have is essentially a user profile

that you can share across applications. Right, so you can have your avatar, your user, your user bio, you know relevant links that you have, your Twitter, your get hub, etcetera. You could fill that all in once on your E N S name, and any application that would like to is able to then respect that data, right and essentially use that as the pre filled data in your profile on all of those various sites. Social networking will begin

begin to get eaten away by crypto. But I do think that there's fundamental things that need to happen before that's like really viable. So I have two questions on this. But you know, if if I if I have Tracy Alloway dot eath, and I have this identity that's tied to ethereum, how portable is that if say, you know, suddenly Salona or I don't know, doge coin or something like that become is like the de facto blockchain that the entire Internet is using, Like is my eth identity,

my ether identity suddenly useless? And then secondly, I get that decentralization and portability is like one of the big offerings of this technology, but on the other hand, a lot of it is still going through a platform of one sort or another. And I just saw right before we started this podcast that um open Sea, which sells n f T s, it just took down like some sort of all right n f T that someone had

put up there. So there's still some sort of censorship and control because these things are still going through a platform of some sorts. So I guess my question is how decentralized is this? Really great question, So to the first part of your question, what happens if ah, you know a contender blockchain you know on ceas ethereum, and how what happens then? So that's a good question. UM E n S, which is really what I guess the community is rallying around and has seen the most adoption

so far. It's actually designed and implemented in a way that is an agnostic to ethereum. So yeah, so basically Salana could read that data off the Ethereum blockchain, and even today with with e n S, you are able to configure essentially any blockchain's address and have it attached to your e n S name. So e n S is actually less hyper Ethereum centric as it might seem. But in the end, it's our belief that Ethereum is here to stay, whether or not other platforms continue to

see growth. That's that secondary that we think that Ethereum is here to stay, and therefore, you know, building a profile on Ethereum is you know, the most like conservative, long term centric place to do it. The second question is as far as like, you know, how decentralized is this what's nice about e n S and this whole concept of Ethereum as a log in is again it

puts the control in your hands. And whether or not a third party application is actually decentralized or neutral, etcetera, that's up to them, and you as a user can choose to use that platform or not. Right so open ce definitely has taken a strong approach with you know, d m c A takedowns and I guess you know, moderating the content on open c But in that in no way does that actually take away from the power you have as as a as an e n S user. Yeah. So, so the data on your e n S name is

actually decentralized and immutable. So what you can do is even um, you can configure your e n S name and actually destroy the ability for that data to ever be updated into the future if you'd like. Right, So, what that actually means is that you can confu can kind of like set it in stone and truly make it,

you know, unalterable if you if you so like. There's a number of these platforms and they're you know, you know, open ce also has their own profile system, right, they have their own user name system in their own biosystem. So I don't know if they're the best example of a compatible platform with this portable profile concept. I'd say like Mirror and unite swap are better examples of applications that you know, are more tightly integrated with this idea

of a portable profile. Can you actually explain Mirror a little bit? And so, I mean, you know, we're I get we're not even talking about Rainbow right now, but I feel like, because the idea is that you want to be someone's entry way into this sort of decentralized Do you like the term web three? I forget, you know, I think the web the term web three was a brilliant idea. UM. I don't have any issues with it. Um.

I think it's fine. Honestly, it's pragmatic. You I think that perhaps to a certain demographic, certain you know, nomenclature maybe has been tainted right by bad preconceptions about you know, use cases, etcetera, right like as crypto just for drugs and terrorists or whatever. And and that's you know, obviously a poor framing because it's that's just not the reality. So Web three is nice in that regard. So what

are we gonna do with Web three? Because like, okay, I'm aware of like mirror and it kind of seems like a little bit like medium or substat but with crypto. But you know, medium and substat seem to work well. And they people are making money and finding ways to get paid and not have to be on you know, work for some major news operation. What is the what are we going to get out of Web three? So, I mean it's a couple of things right now. Web

three is about having fun. It's about having fun. The same way that playing around on the early Internet was very fun. It really sparks your curiosity and it and it kind of yeah, it's right now Web three is about like remixing and having fun. Now broadly, I would say the big difference, uh is the ability for content creators to to monetize directly with their audience in a super streamlined and undisturbed way as far as like there's no middlemen. What is mirror? Mirror is a like a

content platform. It's similar to Medium. In the beginning, it was essentially kind of gated where it wasn't open to everybody and it was instead something that you had to use tokens to vote on which writers. You know, we're able to actually write on the platform. So I think that I don't know Web three. I'd say it's one. It's kind of this like fun living kind of like democratic experiment in a lot of ways. So it's it's as a user you're able to kind of it feels

like you're participating in every step of the way. Can I ask another late technical question, just going back to the notion of identity and you know digital assets which are yours and tied to your wallet. My understanding is that you own the token, right, so you own basically a database entry that is somehow connected to a jpeg

or somehow connected to your identity. How do you link, like, how do you actually link those two such that they're immutable and incontrovertible without having a third party have to do it? So you know, if I buy I don't know one of those like APE n f T S, I know it's an APE n f T because it was listed on open c or whatever. But once I own the data entry, what actually proves that it goes to that particular jpeg. Let me think there's there's two approaches to n f T s and the way that

the data is actually stored. So there's one path in which the content itself, right that whatever the graphic or media is, so that that can actually be stored directly on chain using s v g S. So you know SPG as like an image format. You know, it's similar to pn g S, except it's uh like lossless. So examples of n f t s that are completely on chain with s v g S are things like loop or blit maps, you know, Ava stars, And that's ideal because those are the most immutable and the most permanent.

The other path of for storing n f T data is essentially keeping a record on ethereum that points to the the third party location of where that n f T data is stored. Right, So, you know, for example, Crypto Kiddies, one of the original n f T the data for the Crypto Kitties images are actually being stored on something similar to Amazon Web Services. Right now, that might seem problematic, but in fact there's actually a number

of ways that that's really not that problematic. So say the crypto Kitties community, you know, so they all love the kiddies. Everyone is obsessed with the kiddies. If Dapper Labs, the creator of Crypto Kitties, went out of business tomorrow and stopped paying their AWS bills, the community itself could

easily recreate the entire thing. Meaning as long as one person, where a couple of people have essentially like you know, mirrored or you know, archived all of the images and the associated token ideas that they're matched with, it would be pretty trivial for the community to reboots the storage of that of that media type. Right, So, yeah, I think that as far as like the permanence of that data.

That's something that people are very, very interested in, and there's a number of you know, novel improvements that people are working on right now, you know. So it's like it's an ongoing kind of like R and D effort.

So you just mentioned crypto kitties, which reminded me of gas fees on ethereum, because I remember back in the olden days, crypto kitties used to like clog up the entire chain, and this is still an ongoing issue for anyone who's actually doing stuff on defy or trading, and you know, you might put in a trade or you might say that you want to buy something and then suddenly your gas fee goes up, and that's not much

fun for everyone. So I'm wondering, given that your goal is basically to create an enjoyable wallet and to make the Internet fun once again, how much of an impediment is the gas fee issue. Yeah, it definitely sucks how expensive gases these days, So it is an impediment. It's like meaning, you know, not everybody. If everyone in the world used Ethereum today, it'd be bad, right, So it's

almost like it is inherently not ready for everybody. There are a number of solutions, um that are very exciting that we think, you know, we'll largely solve that problem, you know, And and the timelines on those things are anything from six months to a year and a half, right um. In the meantime, though, we really think that it's okay that you know, gas is expensive, and we largely view this as perhaps a little bit of like a luxury experiment, right that this is really like, this

is experimental stuff. Maybe it's a little a little bit of a luxury good as far as like the affordability of playing around with these things, it's our strategy to really focus on creating the most unbounded feature full product kind of at the expense of the affordability um. And the reason why is because once these technologies come along that allow Ethereum to scale more affordably, our product will

be able to easily adopt those things, right um. Whereas if we focused exclusively on making gas fees cheaper in Rainbow, it would actually mean that Rainbow would have an extremely you know, small subset of its current features because only so many things actually work on those uh you know,

layer two's, et cetera. So where of the belief that it's okay that you know, gas is a little expensive and that we would rather have, yeah, like as many cool things to do in Rainbow as possible, you know, and if if that potentially limits it's it's immediate user base, we think that's okay. We've been here for years. Honestly, it's blown my mind the you know, the interest that Rainbow has gotten over the last year. Um, and we we wouldn't have expected this, this you know, level of

adoption to have happened so soon. So honestly, if anything, yeah, like we're excited and this is going, you know, way better than we thought. So the gas fees, you know, they'll go down for sure. So I have a question about n F two. Is so like, I'm a boomer

obviously and buy and large. When I look at, uh, when I look at like various n f T projects, I guess, in some sense, the idea of like buying into, like I don't know, some collection of art and then having like a gateway to a discord where maybe I

could talk to people or do stuff with them. Like I guess maybe it kind of seems cool in theory, but in practice I have to say, none of it appeals to me, And I'm not a n f TY either, And I'm not like, oh, I'm just gonna like right click and say that, like I get, okay, you own this, but like I don't care about the apes. I don't care about the kiddies. I don't care about It's not

my thing. What is going to be like a type of n f T thing that, Well, what am I gonna like, like, when's the thing gonna When is there going to be something that sort of appeals to normally is like myself. So I think that, Yeah, n f T s, it's either you kind of get them or you don't. I think that, Well, Joe, are you a collector of anything? I guess or identify as a click? Yeah, no, I guess that's the thing. Yeah, so it's an n f T I think that. But I like the idea.

But but I but I like the like when when people talk about like a community or it's like, oh, you buy this and you're part of some scene, like I guess, like you know, like oh, the apes like they hang out with each other ira all. Like I guess I kind of get that theory. I don't like, you know, it's not they're not my scene. That's fine, it's a different scene. But like you know, I don't hate the idea of like a scene per se or like buying into some community. I just haven't seen anything

that like. It looks very fun to me. Yeah, I think that n f t s are just like crypto in general, which I find to be an asset that almost comes with that scene built in, right, Like from the beginning, crypto assets tend to kind of evoke almost a religious zeal from people right where it's like you are, now you've bought into this thing, and you have this vision for the future of that thing, and you know it comes with it, you know, ideology, it comes with it,

whatever belief system. And I think the n f t s are largely similar to that. N f t s will be a part of people's lives, whether they realize it or not, in the sense that you know, the e n S names that we were talking about before, Um, you know those are actually n f t s. That's that's how they're That's how they functionally work, is that they that they are n f t s. You know, whether or not, Joe, you'll be collect doing cartoons, you know,

who cares? Right, Like I think that other. So there's other things you can do with n f t S

as well, purely from a functional perspective. For example, there's like Rainbows interested in UM potentially doing you know a k y C n f T right UM where essentially, once you've been ky ced, you know, to access our fiad on ramp, we we could issue an n f T that says, hey, this is a real human who has gone through the k y C process UM, and third parties could use that token UM or the existence of it, for example, you know, to unlock further functionality

in their app. Right. So you might have some feature in your app and you really don't want it to be bodied, right, you don't want it to be like, you know, someone in an automated way to take advantage of it UM, and you could use the k y C n f T to to only let you know humans through right. That whole concept was really you know, pioneered by this company Wire a few years ago, but no one ran with it. N f T S. Yeah, you really have to be a collector of something to

really get them. I think UM or at least in the current trends. So what's the deal are people really paying a hundred and five thousand dollars for a pair of Yeah, I mean people are paying a lot of money these days for the uniss You can you explain that. Why is the price of unisocks? What is it and why is it a hundred and five thousand dollars for

a pair of socks? If I'm reading this right. Yeah, So unisos are somewhat similar to n f T s and really they're collectibles, right, Really, that's what an n f T is, and that's what unisos are. Unisos are instead what's called an e RC twenty token, so they're more of like, you know, a currency than uh an n f T is um. But yeah, what unisox are was this really silly experiment done by the unie Swap team back in um as a demonstration of the unit

swap protocol. Uh So, what unisox are is basically like merch for unit swap. The company it's it's branded socks. And what they did was they created five pairs of socks and then five hundred socks tokens um and put them on unit swap, which is a decentralized exchange. Then anyone in the world can buy and trade the socks token, and at any time you can take one full socks token and redeem it, meaning it gets burned, and then the unit swap team will mail you a pair of

the socks. So that whole system ends up with something looking like kind of the way that you know, it essentially creates something close to Yeasies, right, or kind of like Supreme, where you have this limited edition run product that you know, it's like, yeah, it's it's like, you know, memorabilia.

But what's cool about unisox is like, instead of you know, buying you know, Yeasies and then sitting on them and hoping that the price appreciates and then like having to mail the physical box, what's nice with unis oxes you can just trade the token back and forth, you know, if you're there to purely speculate on the price of that thing. Instead of having a custody the box, you can just trade the token back and forth and the

box sits you know where it is, right. So it's it's a really interesting experiment in kind of like bringing markets or making markets more efficient, uh, in you know, non traditional markets, right. I think the closest analogy to unisox is like high end steakers in that whole culture. You know, it's it's something that crypto o g is, like, you know, us as a status symbol. I guess. Yeah.

So just on this note, I saw a really great description of n f t S today and I wish I could remember where it was from, but I've forgotten. But the basic argument was that like forever or like throughout all of history, there have been rich people who have a lot of money that they can spend on whatever they want, and traditionally those things that they've been buying happens status symbols like I don't know, watches or

sneakers or fancy clothes or bags or whatever. And now there's a whole different class of people who have a lot of money, who've made a lot of money out of the crypto space, and for them, the status symbol is now n f t S, Like that's the thing that shows that you know who you are and how much money you've made, and it's basically sort of like digital bragging rights for nerds. Does that make sense, Yeah,

very much. Yeah. I mean it's similar to I don't know, it's like you meet a hipster and they're like, yeah, I like that band five years ago, right. And it's like if you own some of these n f T s and you've had them for years, I mean you could have bought Crypto Punks a few years ago for like a hundred dollars, right, and they're now I don't

even know, like sixty or something. You know, like Joe, I'm sitting you know, my day is mostly sitting on Twitter, right, And you know, how do you express yourself on Twitter or in these digital places? And U n f T s are a really great way to do that. I don't exclusively tie them to like wealth or status. I think of it more as self expression to a degree. But yeah, I mean I think I think honestly that

they're just like fun collectibles. Um, you know, some people collect anime dolls or you know, baseball cards like whatever, and uh yeah, n f T is just like are a new thing. So speaking of n f T s, and this actually relates to Tracy's question about you know, will ethereum be the chain that wins out? Literally, while we were recording this episode, I see that, uh, former First Lady Milana Trump is launching an n f T project and it's on the but it's on the Salanta

block chain. And also I saw last night Michael Jordan and his son they're also launching some sort of like fan experience n f T thing and on the Salanta blockchain. And I guess the current temporarily at least, you know, you mentioned like gas fees on Ethereum, like you think it will be solved, but temporarily, other chains like Salana are much cheaper. And furthermore, I think like if you're like just like a Jordans fan or on your Trump fan,

you probably don't care too. You might not be that much interested in, like you know, various aspects of decentralization and other pluses and minuses. You just want to like have a cheap way to buy something from a celebrity that you like. How much of a threat it is, like you know, all these people are just like, yeah, let's just put it on the cheap chain. How do you think about like that competition and the sort of like threat that poses to Ethereum as the scaling and

as the layer two uh solutions. Uh, you know, there's still not really still not really built or widely available. Yet There's has been some interesting traction happening over in the world of Salana. One of the things to consider when assessing one of these chains is simply the ecosystem itself. One of the biggest values about you know, Web three, and so it's like I have an ethereum wallet. The nice thing about an ethereum wallet is that it's compatible

with so many different things. It's like all of the assets within it are interoperable with each other, and all of the applications um, you know, targeting ethereum can interact with those assets. And you know, if most of your assets are over here in ethereum, but then you wanted to go by that Michael Jordan's n FT over on Salana, that actually creates this like weird fragmentation where now it's like you have assets over their assets over here that

are incompatible with each other. I think that there's there's an appeal right now for these systems that have cheaper gas fees. But you know, it's not truly just about decentralization. That's not the like, you know, the only trade off. There's like the reliability aspect as well, and you have to think, like, you know, which one of these systems will will definitely exist in five or ten years from now.

I guess as you sort of applied also the interoperability, so that in theory you want different n f tw s on the same chain to create the possibility that somehow they could interact with each other or work, and so there's sort of like a correct network effects. Yeah, exactly, there's a network effect there. And um, I'm not a crazy maximalist or anything. If anything, I honestly kind of consider myself, like you know, approach this stuff pretty conservatively.

When we started Rainbow, people were trying to pay us to integrate various chains, right like why don't you support e O S, why don't you support tsos, etcetera. And it would have been a bad idea to have supported those things out of the gate, because you know, it comes to the detriment of the product, right, it's just like additional scope that you have to have to add.

It takes away from your focus. There's other chains that are cheaper that are more compatible with the theory, um, right that actually that that like you know, respect the interoperability, so things like polygon, things like arbitrum, etcetera, and that we think that that's where a lot of this like more like, you know, low value type of activity is

going to happen. When I say low value, all I mean is like you know, low dollar amount right where you know all of you know, if you're paying half a milli million dollars for a crypto punk, the transaction fee is really not something you're you're thinking about. Whereas if you're talking about you know, and f t s from a major brand that you are a fan of, um, you know that activity, we see that more likely happening

on Yeah, one of these chains with cheaper fees. But yeah, I mean we're just really big believers in the network effects of Ethereum, which is something that I feel like is under discussed. Yeah, I mean, all these other chains like Salana are really starting their network effects from from zero,

which is you know, totally fine. It's just that it's going to take a lot for these other competing platforms to really build up the eCos the same like you know level of ecosystem that Ethereum has, right, Like how

many Salana wallets are there? Right? Well, in the world of Ethereum, it's like, as a user, you can choose from ten wallets, right you know, obviously Rainbows number one, but you actually have a number of pretty solid alternatives, whereas some of these other chains, you really don't have anything to choose from. Right, there might be only be one platform for you know, buying and selling n f T s, right, whereas an etherorium there's like already a

competitive you know, ecosystem. So yeah, I don't know. I think that like big brands are attracted to some of these other chains as well because of like their ability

to handhold them through the experience. So you mentioned before the amount of interest that Rainbow has gotten, and I'm curious how much interest you've gotten from venture capital and potential funders, because like it just feels as if there's so much money pouring into the space right now, and it almost feels like people are keen to buy anything related to the crypto market, um, you know, regardless of

how well it's designed or how usable it is. So has that been your experience, Yeah, they are very thirsty right now. There's been a lot of attend and I think that all of a sudden this year, people who hadn't been paying attention realized that the stuff is real and not going away. You know, people are you know I got vcs in my d MS, you know, pretending like they're willing to quit their job to come join

the Rainbow team. But then you know, halfway through the conversation they switched it up and they're like, hey, actually, nah, can we invest? And I'm like, what are you talking about? So yeah, I mean there's a lot of VC attention. What's crazy though, is that Rainbow in particular, we had very little interest from kind of the crypto o g money right, Like the big crypto funds really didn't understand Rainbow and broadly have like misunderstood the wallet product and

the wallet opportunity. So Rainbows raised money mostly from consumers social investors. But yeah, I mean the space is definitely heating up. I think that, like, you know, people are trying to get us to raise more money right now. Um, we're not interested. People that you know are trying to acquire us right now, We're not interested. But yeah, I mean it's definitely a good time to raise money, I'd say,

so can we just go on this further? I think it's really interesting what you said about vcs who want to invest pretend that they want to be employees of Rainbow and then then they changed the conversation. Is this like a sort of broader phenomenon where startups or projects in the crypto space find themselves more starved for labor than they are capital ergo the way to get your

foot in the doors to pretend to be a worker. Honestly, I think that this experience is pretty unique to me because I've kind of, uh, you know, part of my recruiting tactics has been to you know, to really turn it into a meme. I think that that's kind of what's happening here is you know, I do think that labor is the bottleneck and not capital. Honestly, there is an abundance of capital, most of it is undifferentiated capital. Yeah, from you know, the labor side of things, there is

a huge talent drought UM. But more and more people are jumping ship from fang and you know, joining the space um, which is really exciting. But yeah, I think that I kind of asked for this whole, like you know, VC trickster games. I kind of brought that upon myself with my recruiting memes. I was going to ask when you tweeted that you were looking for like CIA agents UM with psychological warfare experience because you want them to be able to create high potency memes. How serious is that?

I mean, you know, I don't know. I heard Reality Winner is out of jail or whatever, so you know she's looking for a job. She can hit me up. No, I mean, listen, I think that memes are fundamental to crypto. I think that it's honestly what keeps people involved is just like it's crypto. Twitter is one of the funniest places. And yeah, I mean we have somebody on the team today who's title. You know, it's like our official job

offered them. Their title is memes et cetera. Right, So it's like memes are a super vital part of building in crypto. Um, it's essentially our flavor of marketing. Whether you know any CIA agent is, you know, looking to leave the agency for a career change, I mean, we're more than happy to talk. It's like, memes are a skill you have to be good. And uh, some people out there playing some real good four D chess and with the memes, and you know we respect that. Yes,

so if you've got the skills. So I have two questions. One is very short and one is a little more substitutive, The very short one is are you sitting still on the stalwart dot Ethan Tracy Halloway dot you do? You? Do? You? I have both of those. Oh yeah, you said you would send it to me, you know, Tracy, I gotta get my assistant to get that over to you. I'm so sorry, but yes, I have been keeping those safe for you guys for a long time. I knew that some day you would want them. Thank you. I do

want one, and I do too. The other more substantive question is, you know, there's this other question about Web three, and I've seen people debate it, which is like, whether all of the services that we sort of think about with respect to Web two will eventually be like on a blockchain like Uber on a blockchain where it's a dow and there's a token and no company or Airbnb you live a token, etcetera. Is that something that you envision? I think in the far off future that it's definitely,

you know, an inevitability. I think that the biggest obstacle there is actually regulation. Personally, I think that that stuff is is a little bit of a pipe dream today for two reasons. One is technical and the second is regulatory.

I think that there's a lot of improvements needed to the tooling and infrastructure available to dows to actually enable that, um, Like using a doll today is pretty clunky, um and would not scale to the size of like you know, imagine if every Uber driver wanted to vote on some sort of company policy today, that would be really difficult to do via a DOW. But I think that there's merits to the idea of new corporate structures enabled by tokens.

That's honestly how I've thought about this from the beginning, Right It's like, there can you know, this technology can honestly enable like a new renaissance in capitalism where there's

all entirely new corporate structures available to everybody. Right So, whether you're a small business, um, whether you're trying to create some sort of like you know, large network like Uber, there's advantages to the flexibility of like you know, it's like remixing your corporate structure with a click of a button, right, Like doing that today is incredibly difficult, Like you know, changing around how you know your corporate structure works today

is like difficult. It requires lawyers, And honestly, if you're like a small business, you don't really know how to do that. So I think that that that is definitely within our future. But I think that, you know, our politicians don't really know how to use email today, so I think that in reality, their knee us to be uh, you know, it's going to take some time for regulatory clarity to happen on kind of like real world dow you know experiments. Mike, that was awesome. That was really fun.

I'm looking forward to having us getting our done you handles and h thank you for coming on out. Love. Thanks Mike, that was fun. Gang, Thank you. Have a good morning GM. GM. You know, Tracy, I really like that conversation. I was thinking about a recent episode that we did with Matt Wong of Paradigm, and I do kind of think that like the more compelling crypto visions that you hear are sort of like what I see.

The parallels that I see is like organic and unique to crypto in other words, like the models where it's like, oh, this is going to replace X or Y or you know, I don't know, like defy, like I don't know whether

that's what's going to happen there. But the idea of just like things that are like totally new to crypto, like some sort of like token gated community, even though there's not any community that I really want to be part of that I've seen, or something related to interesting art with n f t s Like I have to say, like the idea of like new stuff new is like is uh seems compelling to me, even if I don't

know what it is. Yeah, I think that's right. And also, um, Mike's idea of like just making the Internet more fun once again, I think I think that's a big part of it, because I think there are a lot of people who are maybe in their thirties or late twenties now, who can remember what it was like, you know, when they first started going online. Um, maybe they were on something like a o L or Netscape or whatever, and it was it was genuinely a fun time and you

were discovering new things, um, chatting with new people. Remember AOL? Okay, I don't know, I'm getting my timeline mixed up. I remember AOL. But anyway, I think, like, I think what's nice about Mike's approach and others like him is they're not taking it so seriously as some of the maximalists who are like, we're creating a brand new financial system with its own ideology. This is about actually creating things

that people want to use. Yeah, And you know, I loved his point in the beginning about the difference between the iPhone and the Windows phone, and it's like we didn't really know, you know, it's like the first iPhone like didn't like there wasn't even an app store at the time. But I think everybody sort of intuitively recognized that because of this new like highly usable phone, it would like open up these new possibilities, like it would

create eight new things. And so I sort of see that, Like what he's saying is like if you get designed right and if you um create this sort of like just a better experience, then maybe like these new things that people want to do that aren't the same as just like over like shrinking a spreadsheet with the Windows phone,

like that will that will open it up in some way? Yeah, Or just being able to see where you're like defy etherorium has got to that would be useful and in a decentralized identity, like the idea of like you know, we both like sort of played around with, you know, swap. The idea of being able to log into an app with a wallet as opposed to I'm gonna like set up my name and password and mother's made name and

all that stuff. The idea of just being able to do that with a name or a dott Eth handle or a wallet is like pretty interesting and potentially it seems like powerful and I could see that actually appealing to a lot of people. Yeah, I agree. All right, Um, well that was a fun conversation. So shall we leave it there? Yeah, that was good one. Let's leave it there. Okay. This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at

Tracy Alloway and I'm Joe wi Isn't though. You could follow me on Twitter at the Stalwart. Follow our guest Mike de Murray, the co founder of Rainbow dot Me. His handle is at Mike de Murray. Follow our producer Laura Carlson. She's at Laura M. Carlson. Follow the Bloomberg head of podcast Francesca Levi at Francesco Today, and check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening to