Ep. 80: Feelings Check-in. 1) Stoner Cats SEC drama 2) Feelings Live from Permissionless - Social Fumbles, Gratitude for a Community

[00:00] I think let's do... Feelings. Let's do feelings. I don't really have any. Do you? [00:04] Oh. [00:05] What? You don't have any feelings? I'm feelingless. [00:27] Just boys club. [00:28] Hi! [00:29] Hi. How's it going? Good. At home for one day before we leave. I leave for New York, but all good. Sorry to our loyal listeners. We got off schedule this week. We got off schedule this week. We were at a conference, which you're going to hear about in this feelings check-in. And... [00:50] A conference is hard. It's hard to get anything done, like anything outside of the conference. [00:55] Yeah. And the work around that. And especially we do, you know, events, as many of you know, around these conferences, and it's just full on all the time. [01:04] And... [01:06] then you get home and you're zapped. [01:10] Totally zapped. And then even with the best intentions, it's like I could [01:14] you're meeting so many people from out of town and it's like you should probably take the opportunity to do that instead of being at your airbnb or hotel by yourself totally a newsletter or recording a podcast so anyway uh but we're here now that's what matters said we did get a podcast recorded and we did get it out so it's just get it out we did get it out this is the feelings check-in podcast we do two things on the feelings check-in podcast we unpack a happening in the web three crypto or adjacent space from the week and we talk about what happened and we talk about our

[01:44] links on it. And then we share our personal feelings in a second segment of the show on how things are going in our lives and in our work and our lives and our work are one these days. So that's where we're at. Oh man. Um, that's what we'll be doing today. We're recording this [02:03] portion of it from home. The second half of this episode, we were live from the Kraken booth at Permissionless, giving our conference feelings breakdown. So... [02:13] There's going to be a discrepancy in audio. [02:16] Because we're in the quiet of our home. And then we're in the fishbowl. [02:20] of the kraken studio at the second half so just [02:23] Keep that in mind. Don't be worried about it. [02:26] No problem. It's not a big deal. It's not that serious. It's not that serious at all. OK, let's get into it. [02:56] to full-timer, make your trades in just a few clicks. Go to kraken.com backslash boys club, sign up in just a few minutes, and you can even get started with as little as $10. We love you, Kraken. [03:07] So I'm going to break down a new story for you today. Can't wait. Are you excited? [03:10] Okay, let me just get my notes here. Something you did last week that I really liked that I think we should start to do more is what's the headline and what is the actual story?

[03:21] Cause the headline here is Mila Kunis and Ashton Kutcher's NFT project slammed by the SEC. So that's the story. And I gotta say, it's not that far off. Okay. So Instagram versus reality, we're close. We're close. We're close. There's nuance that of course is not captured, but a headline I really loved also from the verge is Mila Kunis, Ashton Kutcher's stoner cats, NFT must sober up SEC orders, which is cute. [03:49] The Verge. Someone had The Verge being cute on a Friday. Here's what happened. [03:54] September 13th, Stoner Cats, which is an NFT project, the SEC claims that the project is unregistered securities and they're fined. [04:03] So that's what happened. [04:05] Okay. That's what happened this week. That's what happened this week. For some context, Stoner Cats is very well known because there are a lot of famous people involved in it. Most prominently, Mina Kunis' [04:17] production company mila kunis has a production company called orchard farm productions and she got involved in this nft project so there's three founders of this nft project that are not [04:28] well-known A-list famous celebrities. They started this project and then Mila Kunis's [04:33] production company got involved. [04:35] and then that became a lot of the clout around the project so they launched in july of 2021 so the original project happened in july 27th 2021 they sold 10 420 unique nfts and they sold out in 37 minutes so they were like

[04:55] Super fast sellout. One of those crazy NFT projects in 2021 that was... [05:01] just... [05:02] stupid in terms of the like hype around it and the mint moment and stuff like that. My understanding of sooner cats was that it was, [05:09] Peak bull market. Peak. NFT bull market vibes. 1000%. They made 8 million dollars in 35 minutes. And the [05:18] minting of it had all of this drama around it a ton of eth burned and gas unsuccessful mints that sort of thing like that type of project and your classic generative pfp project with rarity and their little cats exactly classic pfp project with cats that are [05:36] stoned in some way. There's, [05:39] little objects that they're holding. It's very classic situation. Okay. The story is kind of wholesome. And I actually think the concept behind this NFT project is actually very cool. And they did deliver on the utility of it. So the concept was a token gated, [05:55] television series. [05:56] of six animated episodes that were token gated by owning the nft the storyline around it is that there's these cats and one of the cat's moms has alzheimer's and they get her stoned to treat her symptoms basically and then it's all about these cats and it's six episodes and they delivered on it and one of the things that they did is or mila kunis's production company did was bring in a ton of a-list like very well-known [06:22] celebrities to be voice actors. So Ashton Kutcher, Chris Rock, Jack Shepard, Gary Vee, Jane Fonda, Michael Bublé, Mila Kunis, Seth McFarlane, which is a big deal because he's the family guy creator.

[06:35] Vitalik Buterin was a voice actor. Oh wow. Yeah. So they got all these people to do voice acting for this six part series. They made the episodes, they delivered on the episodes. In all fairness, it's like they did the thing they set out to do and their whole concept was NFT gated IP and content creation and that you own the IP of this famous. [06:57] or soon to be, or working towards being famous cartoon or television series. So you purchase the NFT, get access to gated content. And the hope is that this content, the IP is shared amongst the token holders and [07:13] And that once this IP becomes famous, then there'll be some benefit to the token holders. How is the IP going to become famous if it's gated? Great question. Great question. So I didn't dig into this too much around the roadmap about like how they're actually going. No worries. Going to fulfill. No, totally. Like... [07:32] distribution seems impossible to add a widespread mass adoption if only the 10,000 holders are able to watch the content. [07:40] Totally. It's a weird upside down like [07:43] utility and promise. It's a weird upside down utility. Totally. I think one of the things that you could argue is that this is sort of an MVP and you're using your initial community to get feedback and to learn what people like, what worked about the show. And then you're using that feedback and you're using the royalties, which is a big part of the story to build a lot of people. [08:01] a production that has, that is open to the public and that you are utilizing the fame of the initial cast and the fame of the holders and the community to then do something more largely distributed. That isn't just like a six part, small series. So you could make that argument. I haven't dug enough into their roadmap if that was the thinking, but I could see that being a thing that worked. It's like your pilot episode is those first six episodes. Okay. That's interesting.

[08:31] that have a similar roadmap where it's like, we're going to monetize the IP and these things are going to become so popular. Not even thinking about how the experience of this IP is gated. I think that that's a huge handicap. But even beyond that, it's lightning in a bottle for a character to be created that is so deeply beloved that it's meaningful and profitable IP. And like, what are those little minions? The minions, whatever. They were, I think is one of the [08:58] I mean, I think that's a good thing. I mean, I think that's a good thing. I mean, I think [09:08] it needs to be seeded with so many people who, I don't know, there's just something about the scale of these projects and [09:17] what they expect this IP to do and then [09:20] how hard it is to create meaningful creative IP, especially in a cartoon scenario. Just, I don't know. I just never... [09:28] I can never like make it square the math work. [09:31] Yeah, I think that that is a real fair assessment. And I think it's a learning that a lot of these projects have had in a harsh way with the state of the NFT market. So basically the company settled with the SEC and they paid a million dollar fine and agreed to destroy all the NFTs in their possession, but they did not admit guilt. [09:52] so that was sort of the settlement they burned all of the nfts that the llc stoner cat 2 that owns this ip and owns the project

[10:01] they burned all those NFTs. One interesting aspect of the story is there's a lot of conversation about what precedent it sets for NFT projects across the board. If the SEC is saying that this project, which is, [10:13] did say to investors, buyers of these NFTs, that the more successful the show would be, the more successful your NFT will be, those sorts of loose promises. But claiming that this is a security. [10:27] that would mean basically any NFT is a security because all of these projects are claiming that you're purchasing this with the promise of upside, that this thing is going to become more valuable and that the company is working and doing things and providing, quote unquote, some sort of utility in order to make these projects more valuable and make these assets, these digital assets more valuable. So that's a precedent that can be set by this. The SEC has only taken action against an NFT project in one other moment. That was called impact theory. [10:56] Do you know about this project? Okay. I was not familiar with that either, but essentially impact theory was a project that you could buy in at different tiers. It was an NFT project and they were pooling capital in order to, as they said, trying to build the next Disney. So it was a media and entertainment company. And the idea was that you were becoming an investor, an early investor in this project. And then they were going to. [11:22] create tremendous value for their holders, the SEC order, [11:27] found that the NFTs offered and sold to investors were investment contracts and therefore securities. So that was one other time. That was much clearer of a case, I think, for the SEC, because they legitimately saying, like, basically become an investor in our media company. Less like, have this digital cute asset of a cat and you are part of this community and participating in this thing.

[11:53] upside as the community grows and as the IP grows. This stoner cat case is a much more clear cut [12:00] precedent for NFT projects moving forward, or some could make that argument. Two of the commissioners, Hester Pierce, [12:07] And Mark Yudia... [12:09] came out with a dissent around this ruling on the SEC. [12:13] and this is what they said i think okay so they said they they're against it dissent they're against it yes okay they said we respectfully dissent from the commissioner's second non-fungible token settlement as we did from the first the application of the howey investment contract analysis in this matter lacks any meaningful limiting principle it carries implications for creators of all kind were we to apply the securities laws to physical collectibles in the [12:43] in the shadow of legal ambiguity. Rather than arbitrarily bringing enforcement actions against NFT projects, we ought to lay out some clear guidelines for artists and other creators who want to experiment with NFTs as a way to support their creative efforts and build their fan communities. [12:58] Love. [12:59] Love that. That's super measured. They go on to talk about Star Wars figurines and how people will create their own Star Wars figurines and sell them and resell them. And there's a whole world around that that happened, I think, in like the 1970s. That was like a really big deal. And so they're basically making the argument like if you applied this to physical objects, that would be crazy. So applying it to digital objects is a stretch and sets like a very scary precedent for creatives who want to explore with digital collectibles.

[13:27] Hmm. [13:28] That's interesting. I hadn't heard that argument before, but that checks out. I think that [13:33] It sounds like more than anything else, it was a comms issue for them. [13:36] in how they positioned the sale and the language they use around the sale, which was totally [13:42] standard language for the time yeah but [13:45] Now, reading it back, you're like, well... [13:48] Not good. Not good. You're looking for a case to make it. [13:53] security argument. [13:55] Here's one super high profile founder. [13:58] To make an example of. Yeah, I think so. I think it's a really high profile community around it. Not even community. Like Mina Kunish. [14:06] is having a real bad week. Really bad week. Mila Kunis is... [14:09] Having a really bad week. So I think that that is definitely an easy target to, if you're looking for a high profile. [14:18] splashy settlement. Two other interesting things that happened. One other aspect of the story that's interesting is the SEC order really zeros in on the royalties. So they had 2.5% royalties. [14:31] And... [14:32] that was a part of their settlement is that they were getting ongoing royalties from the resale which there was a ton of resale at the beginning like hide of the bowl nft bowl market so that was another thing and then [14:45] What's frustrating is the SEC didn't issue guidelines about what royalties might count as violations for security laws. Like there was no... [14:53] laying down of a rule book or guidelines around how future projects should or could have royalties as a part of the project. And because of that, there's an assumption that all royalties could be a violation. So that was one aspect that they talked about. They made a shit ton from royalties. I saw something like $20 million in royalties. So there was a ton of activity on these NFTs right after they sold. So it makes sense that they would zero in on that because that was such a key revenue

[15:23] funny is okay, the SEC says these are securities, they have to settle, this all happens and basically trading volume spikes. [15:33] stoner cats are worth 250% more than they were... [15:37] two days ago that's hilarious contraband they're contraband contraband but i was like why would this happen so volume spikes over 7 000 on these which these nfts had been trading at nothing back and forth they were one of the classic projects that were like basically worthless at this point [15:56] The reason why there's been some activity and trading volume has spiked is because what happens in some of these cases is that they're fined a million dollars. And then that million dollars can be set up as a reimbursement fund to pay back, quote unquote, injured investors. So it's called a fair fund. [16:15] It's a type of account that's established and basically technically operated by the SEC. And so there's this speculation that they will get paid back [16:25] That's a wild, that is insane. And it's crazy. So it's like peak DGN, peak behavior, peak DGN behavior. There's some question mark, like if you actually made a profit selling your token on the secondary market, then what will happen? Like, are you an actual injured stoner cat, an injured investor, if you like actually made money? So anyway, peak, [16:52] D-Gen is like following this case closely and trying to figure out if they can like squeeze out 800 bucks from the SEC.

[16:59] So that's the story. That's what happened. Oh my gosh. That is a hilarious detail. That's crazy. I just want to say, Gary Gensler, if you're listening, the Boys Club NFT drop, we did not [17:12] Promise any utility or any upside. Literally none. Literally zero. So don't come looking this way. I don't think he will. Okay. [17:21] Thanks. [17:22] Thanks. Thank you. Thank you for listening. Thank you. [17:52] I've actually hit them up a few times with very dumb questions about our account, and they were so nice and so patient. It just takes a few minutes to get started today at kraken.com backslash boys club. [18:02] Okay, podcasters in the house. We're here at Permissionless in the Kraken... Den? Den? [18:10] Lounge? Arena? We're in the arena. We're in the Kraken arena. [18:15] For real. It's amazing. It's amazing. And they have a podcast studio that we are live recording from, and it is... [18:23] The lights are on. You're in like a greenhouse, not a greenhouse. We're in a greenhouse. We're plants that are thriving. We're thriving. And people are watching. Like a fishbowl. Yeah, we're in a fishbowl. We're in a fishbowl. And we were going to talk about our feelings, which I think we still will. But I feel exposed. Feelings on display. My feeling is I feel exposed.

[18:44] In my life, I feel like a [18:46] professional podcaster. Me too. I feel like I am showing up [18:51] I feel like talent. [18:53] I was like in a little green room prior to this. Yeah. Crazy feeling. So shout out to the Kraken team for just really... [18:59] believing in us. Yes, giving us this platform and enabling this moment for us. [19:05] I would say a few thoughts on how Permissionless is going so far and the feelings around it. [19:12] I've yet to cry at this conference. Have you cried? I did cry. [19:17] But not about work. That's not exactly true. Not to... Oh, man, blow up my spot. Yes, I did cry. You did cry. But it wasn't about work. It wasn't about work. So that feels like growth. I guess. Just my personal life. But I have been feeling a lot of support from our partners and from our team and from our community members. And that's honestly the main feeling. We had a brunch this morning. Yeah. [19:45] It was so much fun. We were poolside, micheladas and tacos, breakfast tacos, and... [19:51] I was just... [19:52] awash with gratitude for [19:54] the... [19:55] people and amazing, thoughtful people in our community. Me too. Shout out to everyone who came to our brunch. [20:02] at permissionless. [20:04] I don't know. It's just really nice to hang out with your internet friends in real life. [20:08] Big time. And everyone is so generous and [20:13] giving and warm and funny and fun. And it's just really fun.

[20:18] to be around everyone IRL. [20:22] Yeah, just huge thanks to everyone who came out. [20:25] One guy, shout out to tokengay.es. [20:29] from Australia. [20:30] Wow. And he is incredible. Such a funny dude. And he listens to this podcast while he's driving around in Northern Australia. Cool. I know. That's amazing. And he came and I mean, he's been on a whole US tour, so he's been having a great time. But, um, [20:46] folks coming in to [20:47] Austin to hang out and it's just so fun. [20:50] That's the overwhelming feeling is my real feeling is [20:54] We're in a bear market. [20:56] We're in a bear market. [20:57] We're in a bear market. [20:59] I feel the bear. I feel it. The bear is amongst us. [21:02] I feel it. And, and that's, [21:04] mostly a reflection of [21:06] Everyone is [21:07] a little bit worn down. [21:09] I'd say. Yeah, there's a feeling of being really excited to be with each other. Yes. [21:14] and almost like you would in war. [21:18] In combat. Yeah. [21:23] We're in the trenches. We're in the trenches of it, yes. So I feel that... [21:28] presently [21:29] And I feel a responsibility to... [21:32] people we invited here. [21:34] just want people to have a good time and want people to have some learnings and some good networking. [21:39] I am present to [21:41] a feeling of being responsible to people. [21:44] And so... [21:45] That's one thing. Another thing that I'm thinking a lot about is like

[21:50] in a conference setting [21:52] I [21:54] have 1 million opportunities a day [21:57] to socially fumble. And I do it [22:01] pretty consistently. [22:03] Hmph! [22:03] And [22:05] Foot in mouth moment. Foot in mouth syndrome. [22:08] LAUGHTER [22:10] Like a few, a few. [22:14] times already today. Yeah, it's early too. It's 2 p.m. Central time. We already had a few social fumbles. Yeah, I have too. [22:23] Where I'm just like, I... [22:25] I am missing... [22:27] this moment and interaction, I'm not delivering either because [22:32] Someone will say, I love... [22:33] the podcast or I love boys club or I love you guys or whatever any of those things cool [22:41] And then... [22:42] I... [22:43] I feel as though I-- [22:45] am disappointing them in some capacity and sometimes i am disappointing them because i've said something fucking stupid yeah you know i do yeah i do do you have a social fumble you're willing to share oh i had a huge social fumble oh let's hear it i had a huge let us huge fucking go [23:02] This angel that I have been on a call with for the past six weeks. Once a week, six weeks. I know what you're talking about. Yeah. I know what you're talking about. [23:10] Once a week for the past six weeks. Probably even longer. No, three months. Yeah. Yeah. A full quarter. Yep. One queue. A full queue. Every week. [23:19] uh, [23:19] once a week.

[23:21] half an hour call with this [23:23] person [23:24] such a nice person. So nice. And we've had many conversations. I know he I know they went on vacation. Yeah, you said he and the quickly the day so that you didn't. I don't want to reveal who they are. I say don't listen to this podcast. But [23:37] Fine, he... I know where he went on vacation this summer. I know he just moved in with his girlfriend. Like, I know so many details about this guy's life. Because we've been talking every week. Totally, yeah. And... [23:48] and just on Zoom. [23:50] And then last night at the party... [23:53] I'm walking... [23:54] through a crowd of people and he stops and he says, [23:57] Dina, hi. - Uh-oh. [23:59] And [24:01] It wasn't there. I was like, [24:02] I'm so sorry. It's missing. Have we met... [24:04] what remind me and he's like [24:06] Coming up zero. So and so. Yeah. And even after saying the name. Oh my God. Dina, even after he said his name. Even after he said his name. Not good. I was like. [24:15] I'm [24:17] And then it just got to a certain point where I had to say, oh, of course I know who you are. And then like give him a hug. And then it was midway through the conversation. I was like, OK, now I know who this person is. [24:27] But it was really, and I just want to say, if in the... [24:32] 0.01% chance he listens to this. [24:34] He's so nice and was so warm and it's no fault of his own. It's 100% a fault of my inability to translate words [24:41] a Zoom face to an IRL face. You have a what's that disease Brad Pitt claims to have? [24:46] where he can't see faces? Yeah. That's me. With the zoomed IRL bridge. I can't make it. So,

[24:53] That was my big social fun ball. Okay. [24:55] Nice. [24:55] Love to hear it. Any that you want to share? Yes, I have one. Oh, my God. Okay. [25:00] So we are recording to online. [25:05] today as well. [25:06] And our other podcast show, our other podcast show. And I had two stories that I wanted to share. [25:14] But I was really nervous. I feel like you're doing a social fumble and sharing about this. I'm doubling down, tripling down. [25:21] But I was like, I don't know if I want to share them because I have really strong feelings about one of the people in this story, this online story. [25:29] And [25:31] I proceed to talk about how much I disdain this person. [25:34] and find them to be grotesque. [25:37] And then in the moment, it clicks... [25:40] who I'm talking to is friends with that person. [25:43] And I was like, [25:44] You're friends with them, aren't you? And he was like, I am. [25:47] And I was like... [25:48] "Well, the worst has already happened, so I guess I should tell the story on the pod." And he was like, "You should. You definitely should." He was incredibly gracious. And he was like, "You know what? It's a fair take." [25:58] and gave me a lot of space to just like [26:01] This person, bad, bad. That's bad. So I'm moving past that as quickly as possible. Does it feel cathartic to share it here? It almost now I'm like, wow, that was really bad. [26:13] Anyway, that's life from Permissionless. Those are some feelings and thoughts. I think being in a community, being in a lot of social settings, I just have to get comfortable with the fact that I am going to fumble the bag. Yeah.

[26:25] and try to enjoy my moments that feel [26:28] fun and easy and relaxed as much as possible. [26:32] Totally. Okay. [26:34] All right. [26:34] Bye. Bye.