Daniel Alegre, Chief Executive Officer, Yuga Labs
In conversation with: Jeff John Roberts, FORTUNE 

Brainstorm Tech 2023: NFT's to the Next Level

Conferences

All right. So let's now dive into the world of N FTS and hear from a company that has been at the forefront of the development of Blockchain based virtual worlds and digital assets. Yoga Labs has emerged as the go to hub for some of the most remarkable and influential N FT projects out there. We're talking about iconic collections like the board, a yacht club, crypto Puk and Mebit. Those legendary products opened up projects, opened up incredible options for creatives all around the globe. So please join me in giving a warm welcome to the CEO of Yugo Labs. Daniel Daniel Alegre Dell's got quite an impressive background, having previously served as president and Coo of Activision Blizzard and president of global Partnerships at Google. His role at Yugo Labs is all about pushing the boundaries of NST innovation and creating an ecosystem where art tech creativity collide in the most exciting ways. And he'll be interviewed by the editor of Fortune Crypto, Jeff John Roberts. Good morning, everyone. Thanks for joining. Um Just to kick this off, let's do something kind of different. I want to do a poll. Please put up your hand. If you know what a board of Ape is. Sounds about right. And let's see, we're going to get a picture one momentarily. Can we see the picture yet? There it is. Ok. That's the board eight. Now, my second question is who would pay a million dollars for this? There we go. Yeah, I mean, I think this last year people like Justin Bieber, Madonna Steph Curry paid north of a million dollars to own one of these 10,000 distinct board Apes. Since then. The price is, oh, down, I'm afraid like 90% or something, but they're still a thing. And so Daniel, the CEO of UGA lab, the company that created Board Apes tell us why people pay so much money for these. Well, first, I'll start by introducing Poncho. This is a, this is a board ape that I bought when I became CEO. And you know, I went through the different options of board Apes that were out there. And this is the one that I identified with the most. You know, I like the captain's hat. I like sailing. It's obviously part of the board, a yacht club has glasses. And you know what's interesting about this when one thinks about N FTS, you can look at it as just very simplistically, it's digital art. But the reality is that with the board Ape or crypto Pus and me bits, what we've been able to do is we've been able to create and also connect communities to art and that level of identity and, and connection with a board ape in this example goes way beyond the art. It goes into becoming part of a very vibrant community. I've been just astounded to see how connected and passionate the communities are. They love their board apes, but it even goes further than that they meet in person, you know, in whatever city they may be, whether they're in Tokyo, Austin or Paris. Um We have annual events where we get the whole community together. But when you own a board, a it gives you something really unique, which means that you also have the opportunity to use that brand that's been created by the community amplified by the community and do with it what you want. So for instance, you know, I got this jacket, I got the Poncho board ape on my jacket. But you have a number of community members who've done some incredible things where they've launched ape water, they've launched a brand of coffee or a coffee. So Daniel, I'm going to jump in for a sec just to summarize this. It sounds like there's 10,000 of these things and you can buy one, they're up for sale, there's an auction, you know, it's always some for sale and what you get from buying it. My take is status, you know, rich people like, you know, fancy, you know, Chanel bags or, you know, whatever they do and this is sort of a, you know, a high status thing to own, but also it's a community, you can go interact with these other board ape owners if you want, but also you control most of the IP for it. So there's a guy who like, started a restaurant in Long Beach based around his board. A, is that right? That's correct. You know, this is what this does by being an owner in NF. And by the way, there are different NF there's a mutant ape, there's a board ape. So there are different communities that have surrounded around it and these communities kind of connect by similar points of views. And you know, I have had circumstances where a board a from Germany is connected with a board ape in Tokyo and they meet in Austin and they say, yeah, you know, I love what you're doing with your board. A or, you know, you've been tweeting a lot about what you, what, what board eight means to you. That means a lot to me as well. But what, what this is unique and you know, for someone who's been in the media space almost 30 years, the idea of creating a brand, putting it into the community and have the community build the brand from that original thought and amplify it and then personalize it and take it in so many different directions is something that honestly in my career, I've never, I never experienced OK, I've got to push you a bit because there's a lot of skepticism towards crypto right now. Understandably a lot of scams, you know, prices are down, the price of board apes are down 90%. And some people here I know are thinking of it. What do you tell the skeptics who say that's just a JPEG of a monkey who would be stupid enough to buy that? Yeah. Look, I came from the, from the gaming space. I ran Activision Blizzard and one of the things that I noticed, you know, the reason why I went from 20 years at Google to Activision was that gaming was becoming the next social frontier. But something else is happening just as gaming is turning into a social platform. Individuals are now wanting to identify, you know, what, what is my persona, what's my persona in one game? And how can I port that persona to another game? And that's happening more and more as you start thinking about what ownership means to one social persona and what N FT does. And this is the reason why I join you guys. I'm so excited about it is that the utility of being an owner of not only your identity, but also part owner of a global brand goes beyond what people say is, oh, this is just, this is just a digital image it goes into, this is your persona, this is your business if you want to create your business, but also once you experience it and you experience what web three can do in gaming, for instance, you're not going to go back. And it reminds me of the internet of 1993 where there were skeptics and say, well, what's the internet? Internet was for gambling and for porn? But those who actually experienced what internet could really do, you say there's no turning back? Web Three is going to do that to many, many different sectors and the sector that I am most passionate about, let's others side Forex, because if you have one of these apes, you can sort of, you know, meet the other ape owners, but you're also building kind of a virtual world. That's the other side, right? Where you can kind of take your ape and hang out in this place. Is that right? That's, that's correct. So our, our community members, as I said, are incredibly passionate, they connect through Twitch, through Twitter, through Discord. They connect in person also in the various cities where they are. But the one thing that they've asked us for is how can we connect virtually and bring our communities together virtually. And that was the genesis of the other sides. So as an N FT holder, you will be able to participate and join what we're building, which is this other side metaverse where we're going to bring communities together where they can interact with themselves, but also bring new and innovative web three based experiences starting with gaming. We have a number of games that we've already launched and we're building out this other side platform, it leverages what web three is all about, which is interoperability. So we're going to work with third party developers to be able to build upon it. So we can actually harness the true power of what web three can do in the other side platform. I mean, it strikes me, I mean, I've covered crypto for 10 years and the highs are never as high as you think. The lows are never as low as you think. But right now, we are confronting broad based skepticism, but I think it might have been a special challenge because with the metaverse, this digital world, I wonder in hindsight, could that think kind of a pandemic thing like today? You know, the people here, they can go and go for a lovely walk in the mouth and they can go for a drink, their friend at a bar, they can go bobsledding, you know, is there sort of a challenge of like how many people kind of go on to go into a digital world and hang out with other monkeys? So what we've done, we've now had building a Metaverse platform as audacious as what other site is obviously will take time. But we've shown the community in certain in two circumstances already, what the evolution could be and every time the attendance of people who come and actually explore and connect and the feedback we get from a community is tremendous. So for me, I'm actually very excited about what, what this this platform can do to bring the community even closer together than they already are. If anyone has a question, please put your hand up. We have a couple minutes left. I've got some, I have some more questions for myself. Gentleman over here, please. Hi, my name is Christopher. I'm with the by students. Um You mentioned the um similarity to the internet and, and what it was used for at the beginning, but there was also the bubble and then the burst of the internet. What are you doing to ensure that NFTS don't end up on the wrong side of that burst? Yeah. So um one you, the labs obviously was, was at the forefront of, of the NF space and, and we're look, we're looked up to, you know, we got a lot of industry, industry questions. Obviously, we have a lot of copycats as well who try to emulate what we do at the core we care about community building and we're absolutely passionate about our community. So what that means is, you know, Bitcoin prices can go up and down. But what we know is that the utility that the reason why people connect and are so passionate about building these brands and staying connected is because we have an ongoing way to provide value for our community members to experience new experiences, like some of the games that we're currently launching. And for us, it's about building a long and established connection with the community and making sure the community is happy about what we do and stay, stays connected with each other. You know, if they're successful in their endeavors, they love being, being together as a community that actually benefits us because we can actually keep, keep the community much, much closer and continue to build unique experiences. Yeah. And I thought I've been a little hard on Daniel to say there's a lot of skepticism but you know, N FTS, you know, you might not know this. But you know, Nike and Starbucks and Reddit are all using them for their reward programs behind the scenes. They have a distinct property too, including like trench revenue authentication. There's no doubt if you own an NFC, you own it, but also for a business model. So you might ask, you know, Daniel, how the heck do you make money for this? So why don't you just tell us about the business model of yoga labs? Where's your revenue come from? Sure. So first there's, there's one thing I just, I want to add and that is there are a lot of companies who are kind of testing with NTS but you know, a mistake that some of the gaming companies have done is they say, oh, that's, that's a way to make, make money. And that just does not fly with gamers. They see through that if you bring the functionality of ownership, which means influencers can actually now be part owners of the economy and community members can also be part owners of building this brand. That's what creates value. So to answer your question, Jeff, in terms of how, how we drive revenue, whenever we issue a new mint, obviously, that's, that's revenue that we generate. And then when there's a secondary trade of any of our N FTS, there's a secondary royalty. But what we're doing is we have this community that we've built, we're partnering with some of the world's best brands. Gucci Puma are very passionate about connecting with, with our, our brands as well. So we've had certain partnership drops that we do, which are both digital and physical and are part of the storytelling that we do and then we're also creating experiences. So gaming, I want to slip in one last question because one minute here, namely Board Apes is a preeminent, you know, kind of collector nt out there, but there's a risk to issue more. I mean, easy money. Huh? Publish 10,000 things. Sell them for 100 grand each easy money. Let's do it again. But there's a real risk you dilute it and undermine the trust and confidence and other big collections have done that frankly. It seems to get greedy because it's so easy. So how can you assure us Board Apes? Will be around in 10 years and how can you resist the temptation not to do more and more mints. We're in this for the long haul. You know, we, we, we are a well funded company and we fundamentally care about our community and building for our community. There have been examples of others who have said went, went for the, for the easy money. That's not us. I'm here to build a media experience that is built off on our communities for the long haul. And you know, you will be here for a very long time. There's her answer. Ok. Thank you very much, Daniel. Thanks to everyone and uh thank you. Thank you.