All language subtitles for WTF.Is.Crypto.S01E03.1080p.TVNZ.WEB-DL.AAC2.0.H.264-BTN-CEsubs

You've probably heard of NFTs, but what
exactly are they? With NFTs, we found a

medium that people really connected
with. What they brought us felt alive.

A team from Non -Fungible Labs tell the
story of how they created a multi

-million dollar NFT business right here
in Aotearoa. It was a runaway hit.

Around $15 million in sales through
First Day Alone.

They're now collaborating with
international superstars. There's only

Gianni. I got to hang with the DOWG.

And bringing the metaverse to the
masses.

It's going to blow people's minds where
we're heading to now.

To find out how non -fungible labs
became such a success, we need to rewind

the 80s.

when a family got their first computer
and fell in love with technology.

I'm one of five kids.

Grew up in a rural setting.

We had a pretty basic life.

My hobby as a kid was building stuff and
solving problems, trying to figure out

how things worked.

And when we were young, we saved and
bought a computer, an Amiga 500.

I don't think other kids had computers
in the neighborhood, as long as we were

particularly fancy.

It was probably the flashiest computer
around at the time. It never felt like

that before, so it was kind of a special
thing, and maybe that helped create the

emotional connection to technology.

The sense of invention and adventure was
pretty strong in our childhood. We were

building a pig shed, and we had to haul
a lot of stuff down there. So me and

Aaron spent the entire day inventing a
very complicated pulley system.

And by the time we built the system, our
other brother had just used the

wheelbarrow and kind of shoveled it down
there.

But it worked. So that was all that me
and Aaron really cared about at the

I was 16 or 17 when I finished high
school, saved up some money and went

travelling.

I came back and started working and I
did a lot of my learning on the job.

from the ground up really literally in
some cases i started in technology

digging trenches and laying cables for a
telecommunications company and then

more technical roles and then more
business decision roles and eventually

out from there into startup land i first
heard about bitcoin in around 2015

i was interested in it from a technology
perspective, but I didn't really click

at the time to how fundamental a change
it could make in society.

The thing that really got me interested
in crypto was when I discovered

Ethereum.

Earlier in the series, we talked about
why Ethereum was such a game changer.

Its programmable blockchain means you
can do things like build decentralized

apps on its platform and create
currencies, tokens, and NFTs.

They describe Ethereum as the world
computer.

It has something called a smart contract
scripting language.

So it's a whole new language for
programming that allows for creating

contracts. Smart contracts are able to
move the currency around depending on

conditions that are set and if met, the
transaction will go through. If you buy

a piece of art off of me, I send the art
to you, then the money is immediately

transferred. Smart contracts are kind of
like the robot lawyer of the crypto

world. Through code they automatically
enforce the rules of a contract without

the need for any human involvement.

It's kind of like having your very own
RoboLawyer 3000 and they are the

blocks of Ethereum.

One of the most important things about
Ethereum is that it means applications

can be owned by a global community and
you are in control of your own data

instead of major corporations.

But why is this such a big deal?

Back in 2015 to 2020, you're seeing the
rise of these huge mega tech

corporations, social media in full
swing. There was this massive amount of

information being captured and being
concentrated into a small group of

technology companies.

There's an old adage that if you're not
paying for the product, you are the

product.

And that's very much the case with
social media platforms where people

realise that actually the sheer amount
of data that they're handing over is the

reason that they get these services for
free. There's a digital you that exists

on the internet today and that data is
being used by government agencies,

corporations.

Data is an extremely important thing and
these big companies have it all and

they're using it in ways that we
probably holistically as a society don't

with.

If we can put tools in the hands of
people that allow them to be in control

their digital self, then we can change
everything.

It's really undoing the last 20 years of
technology.

And I started thinking about how we
could change the way that we as society

interact with technology.

In mid -2016, we formed Centrality, and
the idea was to build a venture studio

which would incubate a company that
would build a collection of applications

technology together and put the customer
back in control of their data. You

couldn't do that without this underlying
blockchain and crypto infrastructure.

Social media marketing was an area that
lots of businesses didn't have

capability in, and so we could see this
need for some kind of expert to help

them on that journey.

Aaron and I really bonded about the
creator economy and understanding that

was definitely going to change the
traditional media landscape.

And so we brought Brooke's agency into
the portfolio, and Brooke and I were

having these conversations about the NFT
craze.

He said, you need to learn about these
things now. I hadn't ever heard the word

fungible. It was a deep dive.

You can think of an NFT or non -fungible
token as a digital version of a one -of

-a -kind collectible. But instead of,
say, an autographed basketball card,

a digital image, video or even tweet.

And just like those rare cards, NFTs can
be incredibly valuable.

because they can't be replicated.

It's essentially a method of verifying
ownership of a unique digital asset, and

that could be a piece of art, it could
be a weapon in a video game, it could

even be an event ticket.

If you've got children or you yourself
play games, you're already buying a lot

of digital items, skins, characters,
cool outfits.

But they're not really yours. You're
just renting them in the game. And if

game disappears, all of your investment
is gone.

Now, with NFTs, you can truly own that
skin because that has become a part of

the blockchain.

And you can on -sell it. It puts the
power in your pocket.

One of the cool things about...

The NFT world is that smart contracts
enable us to automate the process of

royalties. The artists not only earn up
front, but whenever that piece of art is

sold down the line, they still take a
small cut of that profit.

With NFTs, they're not just about the
content itself.

It's about ownership of your identity
inside a community.

We found a medium that people really
connected with.

We both realised that NFTs were clearly
connected to communities, content, the

creator economy, and so we built non
-fungible labs to explore them.

We brought on Alex Smaler, who's a
really brilliant young guy. We had a

of great, interesting experiments, but
it did not make us a lot of money.

Enter Jesse Metcalf.

Jesse Metcalf and I met late high
school.

I had a lot of appreciation for his...

artistic talent.

Jesse and I started exploring half a
dozen different project ideas.

Jesse actually had a pet rabbit called
Fu, a Flemish giant, and we decided to

take inspiration from Jesse's rabbit, an
avatar that people can embody.

Everything that was being produced at
the time was largely this two

cartoonish art, and what they brought us
was this.

vibrant 3D animated bunny that felt more
alive.

Every great world starts with a great
story.

Alex had really thought about the story
behind these characters.

These creatures, they've seen the
horrors of mankind. They have decided

they're just going to basically be new
age hippies.

They'd had a cataclysmic event that had
started to awaken the community.

We were like, whoa, this is...

bigger than anything that we've been
thinking of.

We didn't realise how big at the time.

One of the great watershed moments is
when you realise that you're not the

smartest person in the room.

It was clear that they were geniuses.
And Aaron pulled me aside and said,

guys are the real deal.

We gave 60 % of the company to Alex and
Jesse and got behind them to help build

the Fluff World vision out.

Everything they did was five, six steps
ahead of anything that anyone in the

industry was doing. We already saw that
this was all heading towards the

metaverse. So why would we ever make
something 2D? If this is all going to

in immersive environments, then they
should be 3D.

Then they should also be animated so
they feel alive.

Well, if they're going to be animated,
then let's make them dance to original

music. Over time, they started to come
more and more to life.

It was important for the collection to
represent society at large.

And we wanted to create a space that
felt welcoming to different genders,

different races, and to try and embody
the kind of society that we want to live

in through these characters.

We definitely had an ambitious roadmap
from the characters themselves into

building out the rest of the world.

It was incredibly risky to build this
production, this pipeline that was so

complex. As we got close to the launch,
it all felt a bit surreal.

I could see it all coming together, but
that still didn't remove the nerves as

we got close to launch date and just
knowing that there's always a myriad of

factors that can go wrong that could
jeopardise all the hard work that we had

done.

We launched on the 8th of August 2021
and we had the full collection of 10

plus and within 40 minutes we sold out
the entire collection.

Aaron called me to say that it's sold
out and also that probably our lives

changed.

Seeing how stoked everyone was in the
community with what we'd built was

actually such an incredible feeling.

It's kind of like seeing your baby walk
for the first time. It's that moment of

joy and elation and pride and euphoria
all mixed together.

When someone bought a fluff, they paid
$300 US for it. We sold 10 ,000 digital

bunnies. People paid us $5 million -odd
for those.

Then people started to trade them. Those
people have sold them twice or three

times. So there was around $15 million
in sales the very first day alone.

It was a runaway hit. It came down to
Jesse and Alex's brilliance.

It was just an incredible moment.

but also I was under no illusion as to
the amount of work that was coming down

the pipeline.

Let's get to work in delivering
everything that we said we're going to

community.

The first thing you could customise was
the name and the backstory.

Then we released the ability to change
the music and the background scenes so

people were able to be a participant in
creating the content they wanted to

represent themselves in the metaverse.

OK, hang on. I've heard this word a lot.
But what actually is the metaverse?

The first thing is the metaverse is
already here. The metaverse exists. It's

just the internet going through its next
evolution.

It's taking what have often been quite
separate web -based experiences, social

media, gaming, shopping.

and breaking those walls down so that
you can shop while you're in a game and

communicating with your friends.

It's about user -owned content and
applications and data being able to be

portable between different applications.

Each of us will have an avatar that
starts to extend further and further

these metaverse activities.

People are already creating their own
digital avatars of how they represent

themselves online, but they don't truly
own that identity.

Whereas now with... nfts you have all of
that ability we were constantly looking

at how we could introduce new characters
with unique stories and one of the

first things we did was release thingies
3d animated game ready spiders

very cute ones we trained an ai to paint
10 000 pictures for us

and then we used those pictures as a
base for the patterns on the spiders

They are themselves AI artists. They
have their own little brain. It's

incredible. But who would have made
spiders? Only Jesse Metcalf.

He crazy.

We had lots of people approach us at the
time wanting to collaborate with us,

and one of those stood out from the
pack, and that was the party beers.

We wanted to bring a character in that
was kind of just the lovable life of a

party. And for us...

Music being a massive part of our
community and to make them the DJs of

metaverse.

And it fitted into the world of fluffy.

9 ,669 unique beers.

The entire NFT community giggles when
they say 69.

None of them have ever done 69.

69 is the apex of ambitions.

They only knew how.

It's not that great, guys.

As we continued to introduce different
characters, we also needed to start

building up the world itself.

The bunnies had been hibernating
underground, so the first space that we

to create for these characters to exist
in was the burrows, the underground

world that the lore was originated from.

I'd known Jessica from beyond for a
while, and I knew she was kind of a

specialist in the VR domain.

There was obviously a high demand for
their community to have something to do

with these characters.

We started off with the idea of having
three different burrows of different

sizes and different looks.

It's highly complicated to design
something like this and to make this

platform that people could then
integrate their characters in and they

actually play and explore the space.

Some of them are a little bit grungier.
They have a graffiti wall.

The high roller has a party space with a
big disco ball.

One of the features we did was have art
that came from your wallet. So if you

had other NFTs, you could customize your
burrow by having your art gallery

showing off. off your NFTs. They turned
it into these incredible spaces.

When everyone else was creating these
quite stark square boxes in the

to come back with this rich and textured
organic world was pretty incredible.

Community is such an important part of
this NFT digital character space.

What NFTs do is they allow a community
to exist that is passionate about an

or an experience.

And ownership changes the way people
interact. People take on a different

connectivity and then they get that
sense, that real, it's mine now, I'm

this.

One of the really early community
members was a guy called Nick Adler. And

has been working with Snoop for a long
time.

We started discussing the Burrows and we
came up with the idea that we could

theme one with Snoop.

Snoop is right into the space. He is
everywhere.

He's got a bunch of his own NFT
projects, so he's big on this.

The opportunity to collaborate with
Snoop Dogg definitely was a bit of a

yourself moment.

He helped provide some design cues,
which we took back to the Beyond team.

It's pretty cool being...

A relatively small studio here in
Wellington, working with such a big

I'm an old -time Snoop fan. That was
exciting.

I think you'll see some leaves down
there that you might recognise.

It has an incredible Snoop sculpture in
there, and then a full music studio.

It's pretty dope. And we built a Snoop
dog party there.

It's got his vibe as if he was a bear.

For me, it's like a Kiwi kid grew up on
a farm meeting someone who you'd listen

to their music and was the Hollywood
celebrity.

It was a pretty surreal experience. And
I got to hang with the D .O .W .G. a

couple of times, and he's actually just
an awesome person.

One of the biggest paradigm shifts is
that we've built the exoskeleton of

World, but then it's up to those...

own it to really flesh out their
character once you have that avatar it's

you can monetize it if you want to
because all of that infrastructure

and contracts is now handled by smart
contracts one of the

icons in our wider fluff world ecosystem
would be angel baby

The team behind Angel Baby, they're a
songwriter and music producer that works

with some of the biggest artists in the
world.

They took a fluff and they named it
Angel Baby and started to build the

around this character and have grown
that up into a $100 million business in

own right.

But the idea didn't stop there.

I really wanted to see what would happen
when we...

created a space where our community
could actually meet in real life.

We thought it was really important, even
though we're in this virtual space, not

to forget that we live in the physical
world. So Fluff House is the brand

the physical experiences that we
interact with our community through.

And so at Basel 2021, we built our first
party and it was like off the chain.

We had artists perform alongside Angel
Baby doing Angel Baby's first live

performance as a metastar.

And then it culminated with the biggest
clubhouse so far, which was at South by

Southwest. Two days, 18 ,000 people.
That really has defined the next phase

entertainment, which is far more
experiential and immersive, community

-oriented, token -gated experiences.

Fluff wall that is expanding now, it's
just completely and utterly going to

people's mind where we're heading to
now.

Non -fungible labs is now part of a
collective of companies working within

McDonald's Futureverse.

These innovators are working towards a
user -controlled metaverse.

We bring the full force of that last
six.

of work and the vision that we have for
creating a better internet to life.

The future -verse is at the very heart
of it, people that believe in an open

metaverse, an open, inclusive, fair and
even free metaverse.

The type of environment that we think
can be transformative and bring positive

change to people all over the world.

To understand where the future -verse is
heading, it's important to understand

the concept of Web3.

So what is it?

Web3 is really the collection of
technologies that enable a world where

internet is owned by society.

When we talk about Web3, we can take a
step back and look at the journey of the

internet to date.

If you remember websites you went to,
you could just read the website. That's

Web1. Then came the ability to leave
comments and then write blogs, and

it was read and write. That's Web2.

When we look at Web3, we've moved from
just read and write to read, write and

own. In Web3, you'll be able to see
content from your favourite creators and

them directly.

And that direct payment is via smart
contracts.

It's putting content in the hands of the
people.

It's completely transformative.

As tanga te whenua, it's been a really
important part of our journey to try and

connect. What we're doing in the
metaverse through outcomes that we can

change in the real world. There's no
point building this awesome metaverse if

the real physical world we exist in is
going to hell.

The things that we're focused on are
both climate impact as well as impact

indigenous communities.

The Futureverse Foundation came together
through making some connections to

Keanu Reeves and his partner Alexandra
Grant.

There's only one Keanu and it turns out
there's only one Alexandra Grant who is

in her own right an amazing artist.

She has this real vision for providing
the opportunity for indigenous artists

be in mainstream galleries and having
their art become part of the economy

there. So now Alexandra and Keanu are
the patrons of the foundation and also

part of the Futureverse itself.

We're already working now with young
women in Afghanistan that are learning

code and do digital art.

We're looking at some amazing projects
with First Nation cultures here and in

the Pacific.

This next internet, Web3, needs
contributions from the thousands of

beautiful cultures that exist out there
right now. They have incredible stories

that have been missing.

And so the next internet, we hope, is
going to be rich.

People don't realize the difference in
the world that we'll live in if it is

controlled by a few tech billionaires
and we are just effectively products or

an open and inclusive metathesis where
cultures from around the world are

contributing and there's a distribution
of wealth that's a lot more fair.

That's what we're battling for and so
I'm so proud that we sit in that camp.

I'm extremely excited for the future. I
think the technology has come a long way

since those early days of Bitcoin.

And when you're trying to change as much
as the Web3 community is trying to

change about society, no doubt there'll
be ups and downs. But I think we've

reached a precipice now where the future
is definitely in sight. And that makes

me excited that it is possible that we
can change the future.

We're actually building something that
even transcends the existing Fluffworld

collection. The Third Kingdom is the
world beyond the Burrows where all of

characters plus lots of characters
across the metaverse can come and enjoy

social experience and explore other
parts of that Third Kingdom environment.

We always had great ambitions of how far
we could take this but never in my

wildest dreams did I think it would be
anywhere near where it's gotten to now.

For me this is a dream come true.

Next time, we meet the innovators
bringing Te Ao Māori into the metaverse.

NFT is such a radical idea.

I was very hesitant first.

These tiki are on a mission to go and
navigate the new waters of the

And the disruptive, smashing crypto
stereotype.

We really believe in what we're doing
and how we can be a part of the change

this industry.

maybe from the inside we can start to
turn it into something more accessible.