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- [00:01]
Ryan Sean Adams
Andy 8052 welcome back to Bankless. We've had you on a bunch. It's been a while.
- [00:06]
Andy 8052
Glad to have you back a long time. It's been a long time to be back.
- [00:10]
Ryan Sean Adams
Andy. You had your maybe like rise to fame. You were in crypto before this. But like NFTs and Andy really struck a chord. Like you got, you resonate with it with the NFT market that was. Now you're doing Pokemon cards. It feels like the same thing to me. How similar is this whole energy?
- [00:32]
Andy 8052
Yeah, I mean I think, I do think there's a lot of similarities. I think at the end of the day you're talking about collectibles for the most part. Obviously with some NFT stuff it wasn't collectibles, but you're talking about collectibles and just some are physical and some are digital. You know, I was like I was super into NBA Top shot when that came out and like cryptopunks and these different things and you know, I just as easily was into basketball cards. I grew up with Pokemon cards. Like Pokemon was the first video game I ever played. And so that was a really big part of my life growing up. Like actually like I think pretty formative into what I'm interested in now as an adult. And so I think there's a lot of similarities. Probably the biggest thing that is different is just, you know, with trading cards and collectibles being physical, there's just a lot more pain points around kind of the process of owning them, buying them, trading them, all this stuff where I think NFTs actually really shined in this where once they started to take off we started to see products left and right that were really powerful and made it super easy to you know, have a full view of the market and participate and you know, make sure you're getting the best price. And that's still like very challenging with TCGs and trading cards in general. And so I think that's actually one of the things that has been pretty interesting seeing sort of the on chain rise of it all. But yeah, at the end of the day it's people buying things they like. Just with trading cards and collectibles it happens to be IP that has much larger valuations and bigger fan bases and longer histories of being around. Whereas you know, when we were like minting pudgy penguins or something, it's brand new IP and so I think it makes sense that it maybe had more intense hype cycles but in a lot of ways very similar.
- [02:30]
Ryan Sean Adams
I understand the whole buy the things that you like argument. I feel like everyone has a thing. My thing is plants. I spend too much money on plants.
- [02:39]
Andy 8052
And butterflies.
- [02:39]
Ryan Sean Adams
And butterflies. I have fantastic butterfly art. I just like those things and I'm willing to spend money on them. But like you could have bought Pokemon cards anytime in the last 30 years and right now they feel particularly hot. Like there is like a big market out there. Why are Pokemon cards hot right now?
- [03:00]
Andy 8052
Yeah, it's, I mean it's kind of a loaded question. I think there's several parts to it. One is I would just, I would say the gotcha stuff is like, it's very real. The, the demand that like all the like, like Monster and Courtyard and Collector Crypt and all of these like people call it Gotcha Repacks. There's a bunch of different words for it. But basically any platform where you can go on and basically digitally open packs to buy cards, they have exploded over the, over about the last year. And I think something that people don't really understand or haven't necessarily thought about the second order effects of is people are actually buying and redeeming cards from these platforms in very high volumes. People sell back a lot and people lose money. And there's a whole other side to it that I'm happy to get into. But people are redeeming lots of cards and then these gotcha platforms that are, they're having people buy hundreds of millions of dollars worth of of packs a month are having to buy more Pokemon cards.
- [04:06]
Ryan Sean Adams
Hundreds of millions of dollars of cards a month they are redeeming are being.
- [04:11]
Andy 8052
So this, they're having hundreds of millions of dollars worth of, of volume go through their platform.
- [04:16]
Ryan Sean Adams
Okay, okay, okay. In aggregate like the platforms themselves are seeing hundreds of millions of dollars.
- [04:21]
Sam
Okay.
- [04:22]
Andy 8052
And so then on average. And actually the biggest of these platforms are not crypto at all. The two biggest that exist are called RIPS and, and Arena Club. There no crypto at all. Then there's. And then you have Courtyard and Collector Crypt and Digitals are kind of the biggest of the crypto world. But so these platforms you have about a. It varies on platform and on user but most of the time users will sell back the cards they get. They offer you buyback rates and you can sell them back. But a non trivial like US dollar amount of the volume played through is redeemed by users. It tends to be the high end cards but in our experience with Monster it's about, about 30% of the volume played through 20%. It depends on the day and the cards and all this is redeemed by users and so you have to go back out and replenish that inventory. And so as all of these platforms have just been up and to the right in growth, the demand that they've had to buy is really high. And that's something that we've experienced as a smaller player in the space is you're competing against people who have just literally millions of dollars to spend and they kind of don't care what the price is because they just need more cards for their app to work. So that's one thing that is obviously massive.
- [05:33]
Ryan Sean Adams
When you say redeeming, I can pause
- [05:34]
Andy 8052
there if you want.
- [05:35]
Ryan Sean Adams
So like, yeah, this is like redeeming feels like if we were talking like commodity markets, you're talking like oil, we were like take physical delivery of. Yeah, but you don't have to. So like these platforms, you can open them up on the platform virtually. Kind of in the same way you were saying like, well, there's some merit to the NFT world because it was all digital and seamless and things just work better as software. And so there's this been this rise of like non crypto virtual based card opening platforms, pack opening platforms where you open up a virtual card and then like you get to keep one if you like it and then you give the rest back. They buy it back from you at like 70% of the face value. They get some margins that way and then if you want it, you can get it shipped to you. And this market has exploded. I still don't get why. Well, why has it exploded?
- [06:26]
Andy 8052
So I think there's a few things there. And this kind of gets into some of my larger thoughts on why I think the Pokemon market has gotten so big. Or not just Pokemon, one piece has exploded. Collectibles in general, it's not even just
- [06:39]
Ryan Sean Adams
Pokemon, it's just collectibles.
- [06:40]
Andy 8052
Yeah, if you go and look at the auctions for sports cards too, like, oh my God, it's not, that's not as talked about. I feel like in kind of our circles, the sports card market, it's a little bit quieter, but it is like the volume is baseball cards, basketball cards, baseball cards. So like if I go and pull up fanatics right now, who's one of the big auction houses and I go to their current auctions, they have like multiple cards in their current auctions that are already sitting at like million dollar bids and they don't close for are
- [07:16]
Ryan Sean Adams
these historic baseball cards? Are we talking like Babe Ruth's or
- [07:20]
Andy 8052
I don't know, Like, I mean, like Derek JR Ohtani is. Is huge.
- [07:26]
Ryan Sean Adams
I lost track.
- [07:27]
Andy 8052
Yeah, he's a current baseball player.
- [07:29]
Ryan Sean Adams
Okay, so current. I don't know baseball.
- [07:31]
Andy 8052
Baseball, but he might be the best baseball player ever. That's kind of like a whole other thing. People are gonna get mad at me for that probably, but he might be.
- [07:38]
Ryan Sean Adams
Okay. So his whole thing is these aren't just historical cards. These are current players. Current cards.
- [07:43]
Andy 8052
Yeah. So there's like a Victor Wembanyama card right now that's, you know, that sold for like a little over $5 million about a week ago. It's like a one of one rookie card of him.
- [07:56]
Ryan Sean Adams
This would make sense. During COVID when there was helicopter funny money and money itself was distorted, but like, we've had high interest rates. We've had sustained like 4 or 5% or whatever for like three years now. And so this seems to be like. This is breaking my brain.
- [08:14]
Andy 8052
Yeah. And I think so. I think part of it is as you get to, especially with trading cards, if you kind of leave the sports side out of it. I believe the current target demographic of who are the real power spenders in trading cards are people who are around our age, you know, mid-30s, early-40s, who grew up with these things, and now they have real disposable income. And I think you kind of see this thing where it slowly gets more and more normalized to where it feels like you're not insane to spend five grand on a charizard because you love charizard.
- [08:50]
Ryan Sean Adams
And you have five grand.
- [08:52]
Andy 8052
And you have five grand now that you didn't have even maybe during COVID you were in your mid-20s and you're trying to figure it out.
- [08:58]
Ryan Sean Adams
You got laid off.
- [08:59]
Andy 8052
Now six years later. Yeah. And you have, you have money and you're like, yeah, you know what? Yeah, I'll take some of my, like my. The s and P500 at an all time high. Like, I'll roll some of that into a charizard. Why not? And so I do believe that that is part of it too, where we're seeing more and more of kind of this transition from collectibles as a whole to being like this niche alternative asset to a bit more of an asset class that people are interested in as far as alternative assets go. But I will agree with you, as someone who spent a long period of my professional career in the NFT space, like, all of these phrases and things like, really terrify me. I get a lot of PTSD from big cryptopunks, auctions, and things like that. And what helps me feel better about it is I think that we very well could be at a local top for the demand for Pokemon one piece, these things. But we're talking about the most valuable IPs in the world. We're talking about brands that have been around for 30 plus years. Pokemon celebrating its 30 year anniversary this year. And so there's a lot of hype around all of that and they're not going away. And these brands have shown that they understand how to manage and nurture the collectibles markets and they, they clearly recognize the value in them. There's other brands that have not done that well. For example Yu Gi oh, who was nearly as big as Pokemon for a long time growing up. Like growing up, I would play both. They have not done a very good job of managing the like collectibility and all that. And they're trying to rectify that now actually.
- [10:29]
Ryan Sean Adams
What did they do? They just like minted too many or like.
- [10:32]
Andy 8052
Yeah, they would just like reprint the same cards over and over again. Just kind of like hurt the, the value of the original stuff and just not necessarily kind of like pay it the respect that you need from the original brand.
- [10:43]
Ryan Sean Adams
And so part of the reason why Pokemon cards and maybe baseball cards as well are, are doing well is like the, the OG Rare Charizards are still the same card that they were a decade ago. And so there's some like property rights, property rights social contract that have been, has been retained by the people who have the power to print more cards.
- [11:06]
Andy 8052
And so it's like, you know, we see that same Charizard reprinted but it's always done with a twist where it's very obviously not the same card. And you know, little things like that where it's more like it's paying homage to this like OG where I think it actually increases the value. And so for example this is a bit different. But so they like I said the 30th anniversary for Pokemon is this year. And so they just rolled out, they're starting to release the new cards that are going to be in this pack and a non trivial amount of them are going to be reprints from previous years paying homage to popular cards over the last 30 years. And like all of the cards that have been announced in this, you would think that their value would go down because they're being reprinted. But actually their value has gone up because people are excited about these cards. Kind of like pumping their bags a little bit. Yeah. And so yeah, it's very interesting and so I believe that those are kind of the two major forces at play here where you have this like asset class that is really coming into its own. And you know, as much as I may not like it, influencers like Logan Paul and people like that who really
- [12:13]
Ryan Sean Adams
say there has to be a huge influencer social media layer around this whole thing as well.
- [12:19]
Andy 8052
Yeah. And we watched this happen with NFTs too. This is just, you know, again, I'm going to keep saying this, it's like imagine if the same people who were pumping bored apes were instead talking about Pokemon then like, it's just a different brand. It's no discredit to these NFT companies. It's just different. And like Pokemon just this past year came out with a new game, Pocopia, and it was like considered the best Pokemon game ever and massive success, sold out everywhere. And so it's like they, they have this staying power that I think people are just kind of recognizing and getting excited about. Um, and so all that to say, like, I, I do think there's a chance we're in a bit of a local top with kind of mania around these different gotcha and rep packing platforms. And like I, I go and vend at shows a good amount too. And like it's crazy. It's so competitive. Like the tables sell out within 30. It's like a secret drop.
- [13:12]
Ryan Sean Adams
It's frothy.
- [13:12]
Andy 8052
Oh my God. Yeah. Like it's hard to get a table to vend at these shows because everyone wants to be doing it. And so there's a lot of things like that that give me pause. But my feeling is still that long term that doesn't change the fundamental value of why people like Pokemon cards. And so maybe there could be periods of, of decreased demand. Like maybe after Pokemon 30 comes out and that whole, whole bit comes to a close, there could be a lull in demand. But there's always more catalysts with these things. It's like One Piece is kind of the second largest trading cards brand which has gone just absolutely parabolic over the last like two years. But people think Pokemon has gone crazy. One Piece is another level.
- [13:54]
Ryan Sean Adams
Like there are One Piece is like the altcoin that has performed outperformed everything Pokemon genuinely.
- [14:00]
Andy 8052
It's like Pokemon's bitcoin.
- [14:01]
Ryan Sean Adams
One Piece is ethereum and it's 2020. 2021.
- [14:06]
Andy 8052
Yeah. And so One Piece is for those who are not really familiar. It's an anime that has been around for forever. Uh, it's like I, I don't watch anime personally. I don't know that much about it. I basically have only learned about it from the cards. Um, it's. The anime's been running for like over 20 years, I want to say 25 years. And like is still beloved. Netflix is currently making a live action series of it. And so there's all these other continued kind of hype potential things that are coming.
- [14:33]
Ryan Sean Adams
The brand is growing.
- [14:34]
Andy 8052
Yeah. And, and their trade. But so their trading cards actually only really started coming out in like 2021, 2022. There's people who are could definitely come and give you significantly more history on, on their cards than I can. But so they're not nearly as old. You know, Pokemon cards started in 1996 with like the original Japanese collection that came out and. But like some of their most valuable cards over the last year have pulled like genuine 100x's going from selling for like $1,000 to $100,000 type of things. And it's insane.
- [15:07]
Ryan Sean Adams
Are there price charts for these or how do you. You just look at the prices on the secondary market. There's no charts for this kind of.
- [15:16]
Andy 8052
And so that's an example where I think, you know, saying NFTS actually did this really well very quickly into the life cycle of NFTs, there was all this data because it's all on chain too. There's all this information. There are charts. There's a website called PriceCharting.com that you can go to which gives you decently good information, but not everything. And everything is very segmented. And so you have, you know, you have.
- [15:41]
Michael Naito
Right.
- [15:41]
Andy 8052
There's no single source auction houses. So there's, there's the big auction houses are fanatics. Golden and alt are like kind of. And then there's ebay. And so like if you go and search like Charizard. Yeah, there you go. And so click on like that first one. And so this is the original base set Charizard. And so you can look and see this is the ungraded value. So if you click on PSA10 on the top right there of the chart, top right, PSA 10. Yeah. So that, that, that shows you like the graded, like basically the pristine graded Charizard.
- [16:15]
Ryan Sean Adams
And the value is just like the actual physical quality of the card. Like has it been bent or, or something.
- [16:22]
Andy 8052
Yeah. And so that's another really important part of the entire kind of Pokemon or just collectibles kind of market in general is these grading companies have quite the stranglehold on the industry.
- [16:34]
Ryan Sean Adams
Oh, interesting.
- [16:35]
Andy 8052
So there are basically three major grading Companies which are psa, Beckett and cgc, PSA owns Beckett, so, you know, whatever. But PSA is kind of. They're the king of the castle. And so they. When you have an ungraded card and you want to get it graded, you submit it to one of these companies and they will. They charge you for it. And it's kind of a racket. And they make. They make so much money.
- [17:05]
Ryan Sean Adams
Do they charge you a flat fee or do they charge you a percentage?
- [17:08]
Andy 8052
So what they do is they charge you a flat fee and then if it gets graded high enough where the value is higher, they say if you want your card back, you have to pay more if you want it back as the graded amount, otherwise we'll send it back to you ungraded and you could try again.
- [17:22]
Ryan Sean Adams
That is a racket. Yeah, that's an absolute racket. You get penalized for having a pristine card.
- [17:29]
Andy 8052
Yeah. And so there's people who, like, genuinely couldn't afford, like, if you have, like, an insane card that's worth, like a hundred grand, you. There's a lot of people who, like, could genuinely not afford to get a graded, which is nuts.
- [17:40]
Ryan Sean Adams
That is nuts.
- [17:41]
Andy 8052
But so these places are all massively bottlenecked with grading. They're. They're seeing, like, hundreds of thousands of submissions a day. And so PSA and another one, I can't remember who, they just basically PSA just announced, like, we're not really taking new submissions anymore. They've basically said all of their, like, value. All of their value levels. You have to start paying, like, a hundred dollars per card just to get it graded, just to get in the door. Because they were just. Their inventory was just getting way too high. It was taking six plus months to get a card graded. And so they have a real stranglehold kind of on the industry. And I think that's another kind of aspect of this that's interesting is there's a bit of like a. At this exact moment in time, there's a bit of, like, a liquidity crunch where you, like, can't really get new graded inventory into the market. And so I think that's something where it's been interesting where kind of naively you would think the cards that are going to perform the best when there's these, like, big gold rushes are going to be, like, super vintage cards that are from, you know, 1998. And those cards have done quite well, but they've been equally, if not outperformed by a lot of more modern cards that maybe look cooler, are more Interesting. And I think a lot of it is these modern cards, they've gone up in value a ton, but people can't go and get them graded and say, oh, wow, this card that I had, that I got for 100 bucks is now worth five grand. Let me get it graded real quick and then I'll sell it. Like, you just can't really do that currently. And so the like, liquidity on these cards as far as inventory goes, while Pokemon is still printing new cards all the time is not growing as much on the like, supply side as you would kind of expect. And so I think that that is playing a decent part in this as well, where there's just never been demand for graded cards like this before as that's what all of these gotcha and repacking platforms offer. Or, or generally it's what they offer that's the most popular offering because it's more standardized then. And you can say this is a PSA 8 card, which is generally worth this much. This is what you have. And you don't have to worry about it getting damaged or something because they all sit in like plastic. Like this, right?
- [19:49]
Ryan Sean Adams
Like hard, hard plastic.
- [19:51]
Andy 8052
Yeah.
- [19:52]
Ryan Sean Adams
It's a hard plastic case. Okay.
- [19:54]
Andy 8052
Yeah.
- [19:54]
Ryan Sean Adams
And it's sealed. I'm sure it's a pain in the ass to open it up.
- [19:58]
Andy 8052
Yeah, I've never done it personally. You gotta. I think you have to like take pliers and wait.
- [20:01]
Ryan Sean Adams
That was a charizard, right?
- [20:03]
Andy 8052
It is, yeah.
- [20:04]
Ryan Sean Adams
Okay, so what is.
- [20:05]
Andy 8052
This is actually the exact chart that you have open. This is a charizard, right. Graded number eight.
- [20:09]
Ryan Sean Adams
That's the Charizard that I remember from my childhood. And that is.
- [20:12]
Andy 8052
Yeah, I need to ship this out to somebody.
- [20:14]
Ryan Sean Adams
What's the grading on that?
- [20:15]
Andy 8052
So this is an eight.
- [20:16]
Ryan Sean Adams
That's an eight. Okay, so we can go look at this. Let me, let me share screen again. We can go look at this. Share screen. Back to this. I'm still right here. And so is. Am I looking at the right thing? So that's about $1,300.
- [20:29]
Andy 8052
Yeah, yeah. And so let me see. So the.
- [20:32]
Michael Naito
We.
- [20:33]
Andy 8052
I use an app personally called Card Ladder. Card Ladder, which does. Yeah. And they do a lot of that tracking as well. They. They grab from a few more sources than, than price charting does, but there's
- [20:50]
Ryan Sean Adams
no unified buyer here. So these are all. How, how do they get the data? Because when you're selling that to an individual that was a peer to peer, you know, direct transaction, you're not going through the party. Right. So they don't even know how. So how, how do they know?
- [21:03]
Andy 8052
So they're. So this card, we have it valued currently at $1,276.
- [21:08]
Ryan Sean Adams
Okay.
- [21:10]
Andy 8052
So they, so price charting uses ebay public data. I see alt and fanatics, the auction houses and golden card ladder will track those as well and keep in, keep track of the auction house sales. But most of the market does move offline still. There is a really large volume of trades that happen at shows, people paying cash, a lot of stuff like this that is just not tracked. And so it's still very much a black box. You know, there's people who will go to a bunch of shows and buy 50 copies of the same card and then go to the auction houses and bid up that card 2 or 3x. And now all of a sudden you've, you've, you've 3 extra inventory.
- [21:56]
Ryan Sean Adams
You've made some paper games.
- [21:58]
Andy 8052
Yeah. And then you got to go find people to dump them on in person again. But, but people will try to do that. Um, but yeah. And so it's, it's still a very opaque market. We're kind of, right now it's a seller's market. You can kind of say this is what my price is and people don't really have an option but to, but to pay it.
- [22:17]
Ryan Sean Adams
This kind of makes me sad about NFTs because everything you're saying to me is like there's just broken market structure left and right. We have these rating agencies which have this like random monopoly on things. It's like a very illiquid because there's so many different platforms. Like NFTS fixed all of these problems and yet the market is elsewhere. Like these should have been tokens on Ethereum and they're not. And we had, we had the NFT mania run in 2021 and it's 2026 and this market is not being hosted on blockchains. WTF?
- [23:00]
Andy 8052
Well, so what I would basically say to that is I think there's a lot of people who will discredit the gotcha and like repack platforms. They are really a Trojan horse to bringing all this inventory on chain. And I don't think people realize it, but they are buying millions and millions of dollars of cards a week and they are tokenizing all of them and putting them in these packs and then users are holding them and now who are so like collector, Crypt, Courtyard, Phygitals, bz.
- [23:30]
Ryan Sean Adams
Okay. Not the actual issuers, not the first party issuers.
- [23:34]
Andy 8052
No. So it's all second party. You still have to have custody. So there's, there's still some custodial risk where you're, you know, you're accepting that
- [23:42]
Ryan Sean Adams
you could be insolvent.
- [23:44]
Andy 8052
Yeah. But all these platforms are tokenizing millions of dollars worth of cards and I don't think people realize that. But there's a longer like vision and larger, larger play here where a lot, a large part of this market is slowly but surely coming on chain because of this. And I think it's going to take time and there'll be definitely pain points along the way. But now they're starting to offer like lending against them and stuff which I'm not totally convinced on personally but like it's starting to happen. And so these marketplaces are growing currently. The, the like pack opening stuff is really the main draw and does like 99% of the volume. But these marketplaces have volume.
- [24:29]
Ryan Sean Adams
Right. That's the like opening them packs is kind of the point. That's actually like the foundation of everything is like that's the retail activity is like retail is opening packs and then that has such a large amount of demand that there's this entire secondary market around that behavior.
- [24:45]
Andy 8052
Yeah. And so now they're all building their own marketplaces that kind of look a lot like opensea did back in the day where you're trading them as NFTs. Like there's several really good apps out there. There's one called like only Slabs. There's another called Traded GG that they will aggregate all these markets and you can like set alerts when people list cards below fair market value and things like that. It's like I have friends who don't play the gachas. They just monitor the crypto marketplaces for cards that are listed below fair market value and then buy them and redeem them. And so there is, we're like starting to see more and more kind of come on chain through this which I actually think is really cool and makes me optimistic about what the future of this could look like. But you're fighting against some absolute behemoths in.
- [25:34]
Ryan Sean Adams
Yeah, behemoth incumbents.
- [25:35]
Andy 8052
Ebay is doing and what even what like I was saying, the, the non crypto platforms like RIPs are doing like I think they're running circles around everyone else. But there's still, there's still a lot of time and there's still a lot of value that is coming on chain which I think is pretty cool.
- [25:53]
Ryan Sean Adams
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Michael Naito
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- [28:49]
Ryan Sean Adams
Okay, so you're not totally bearish. You're actually like, okay, we got some of the things right with NFTs. Unfortunately, people, fortunately, unfortunately people really want to trade real world collectibles, not cryptopunks as much. But nonetheless, the value of settling tokens on chain is still there. And because people prefer trading Pokemon cards more than, you know, NFTs, there is the whole encumbered process of getting them on chain. But nonetheless we can still manifest the on chain vision that we had in 2021.
- [29:23]
Andy 8052
Yeah, and I mean, I still believe that there will be some NFTs that make it through whatever this is and become desirable collectibles that look like Pokemon cards in 10 years or something. I just, you know, that takes time, it takes a long time to really build that because it's just so easy, you know, when the NFT market goes down 20% for any given collection, it's easy to be like, oh well, that's it, that was over. That was fun. When the Pokemon market goes down 20%, people aren't gonna be like, well, that's the end of Pokemon, so see you later.
- [29:51]
Sam
Right.
- [29:51]
Andy 8052
Like that's just, that's not what's going to happen. And so I think that there's just such a big difference there. That just takes time and it just takes building that brand and building the brand equity and awareness that these platforms have currently that NFTs don't really tell
- [30:07]
Ryan Sean Adams
me about monster strategy.
- [30:10]
Andy 8052
Yeah, and so we, we started kind of like late summer of last year and so we are one of these gotcha repack platforms. We have a bunch of cards that you can come and try to try to win from us. One thing that I think is really interesting in general from a lot of the crypto based platforms and we do this as well, is we actually offer on average the card that you pull, let's say you buy a $50 pack is actually going to be worth $55 for us. And so I think that's something that's like kind of fun for users. And it's something that we see a lot where we, we have a lot of people who come just to build out a collection and they say, we like the, I like the cards that you guys have. I'm going to come and I'm going to play. And so each pack has a price, an expected value, which is the average. You know, if you pulled a thousand cards, this would be the average of what you got. And then every time you open, there's also an immediate buyback offer. And so for us, this buyback offer lasts for forever because like I was saying to you, getting inventory is really hard. And, and so it's like we will always buy back the cards that we've previously had. And so as you go up in price point, we offer higher and higher buybacks. So for our $50 packs, it's 87% fair market value and we track that. So like if you buy the car, if you open a pack and get a $100 card, you know, we offer you 87 bucks. If you hold it for six months and it goes up to $200, we'll offer you, you know, $174 to sell it back. And then like for our really high end cards, we offer 95% buyback. And so because the liquidity is good, right? Yeah, we might have actually upped it to 96 now that I say that. 96, 95%.
- [32:06]
Ryan Sean Adams
Okay.
- [32:06]
Andy 8052
And, and so, so for those, it's like, for the really high end stuff, the liquidity is there and it's harder to get inventory. And so it's like, hey, listen, if you don't want this card, we'll basically buy it back from you at nearly fair market.
- [32:17]
Michael Naito
Right.
- [32:17]
Ryan Sean Adams
Because you as a platform are pocketing about 5%.
- [32:20]
Andy 8052
Yeah, but so we, but we also offer, you know, the average value on that pack when you open it is about 102, 103 cents on the dollar. And so the actual pocketing is less than 5% because we're on average, you're pulling more than you put in.
- [32:37]
Michael Naito
Right.
- [32:38]
Andy 8052
And so if people came to our platform and only ever pulled and never, never sold anything back, we would, you would lose.
- [32:44]
Ryan Sean Adams
But the reason, but you're, you're trying to grow, you're trying to scale. And so you are trying to incent buying by literally paying people to buy because you make it back on people selling back some of the cards.
- [32:55]
Andy 8052
And I also think that, you know, long term, as we build out this product and this is how a lot of these platforms operate and think, you know, the real users in the demographic that we want are people who love trading cards and who love collecting. And so we want to attract that type of user who is going to keep coming back because we restocked the platform and we added new cards. And maybe there's, you know, people message me all the time be like, oh, I really wanted this card, but someone else got it. Like if you add another one, I'm going to try to get it. And so I do think that that is like a real part of, of the users who we want to attract and who we want to be offering a service to. And you know, as we expand over time, you know, the gotcha stuff is kind of just a way to get a foot in the door and it's a revenue leader. But we plan to really try to expand the entire offering of like, how do you just offer a great platform for people who love to collect things, whether that's packs that you can open that are like real packs of cards, not kind of these repackaged cards. Different ways to build like wish lists and portfolio trackers and all these different things. I think there's just like a ton of space here. The, we haven't seen that much growth in a lot of the kind of tertiary stuff around trading cards and collectibles. It's been marketplaces and gotcha platforms and everything else. As you build out tech in this space, you realize like, it's really hard to find what the fair value market of a card is. It's really hard to find all the sales history. It's really hard to like even build out your own portfolio tracker or like, you know, there's, there's stuff that exists, but none of it's amazing. And so I think there's just like a ton of space to really service people who love trading cards and love collectibles and build out a platform for them.
- [34:41]
Ryan Sean Adams
There needs to be some consolidation in this market. Right. It feels like, you know, the growth stage of crypto where there were like 17 B and C tier exchanges, Bittrex and you know, the other weird ones that no one remembers anymore and they, we just need some consolidation down to some fewer platforms. Is that, does that sound right?
- [35:01]
Andy 8052
Yeah, I think we will definitely see that. I think to a certain extent, you know, different platforms have different offerings that are interesting. You know, some platforms target Eastern audience, some, some target U.S. audience. You know, some only have PSA cards, some only have vintage cards. And so you kind of have these like different people doing different things, trying to find what, what makes them unique. But yeah, I think long term, if you don't have some sort of unique distribution angle or way to some, some unique user base, there will definitely be consolidation among the, the top players.
- [35:44]
Ryan Sean Adams
How do you manage all of the physical cards? Like where somebody buys a pack and they say, I want this one, please send it to me. What happens in the background? Where is the card? How do you send it to them?
- [35:53]
Andy 8052
That's a great question. So the, a lot of the auction houses that exist also offer vaulting surfaces. And so this is a really interesting thing that exists. All the auction houses offer vaults that exist in no sales tax states. And with the way that online purchase sales tax work, when you buy something, they have to charge sales tax based on where you ship it to. And so if you basically like buy and ship to their vaults, you don't have to pay sales tax on the purchase.
- [36:27]
Ryan Sean Adams
Nice.
- [36:27]
Andy 8052
And so they basically offer this as a way to keep people in their ecosystems long term. And so the way that we manage our inventory is we vault through these third parties and then when people redeem, we send it directly to them from our vaults. There's times where we can't do that. And so I have cards in front of me because they're going internationally and this vault doesn't ship internationally and so I have to redeem.
- [36:50]
Ryan Sean Adams
So they ship to you and then you do it for them.
- [36:53]
Andy 8052
Yeah, and so that's something that we're actually very actively working to improve. It is candidly a ton of work.
- [36:58]
Ryan Sean Adams
How many times have you gone to the post office in the last month?
- [37:01]
Andy 8052
I was there this morning, so many times. So we have a lot of international users. Actually, I send out like seven packages today. So if anyone's watching this, you probably have some Pokemon cards on the way. But yeah, and so it, it's a pretty big pain point. And we're actually pretty far along in talking to a team about consolidating everything. The other challenge is, you know, there's times where I'll, like I said, I go to card shows as a way to get inventory. Just that's where there's a lot of cards at these shows. And you can stop, it depends. But you can generally get them below market value at the shows, especially if like an average person just kind of comes to you, comes to a show and they have maybe they Brought a thousand dollars worth of cards, but they have other new cards they want to get. And so you can buy them for maybe 850 or $900 cash. And then they'll go out and go try to find whatever they're hunting for. And so when I get those, then I have to package all those and mail them to the vaults. And it's, it's a whole thing. So I'm really actually looking forward to consolidating to one vault. It should be happening pretty soon. I think we're getting like the legal docs today to, to sign up and do all of that.
- [38:14]
Ryan Sean Adams
What are the kids. Are, are kids doing this? Like, I remember when I was 5, 10 years old, you know, we all, in first grade, we all had show and tell and everyone just showed off their Pokemon collection because that was the thing we were doing. What are the kids doing who are in first grade? Are they in this market? Do they care about Pokemon? Like, are they collecting packs in the same way you and I were when we were children?
- [38:37]
Andy 8052
I can't say I'm talking to a ton of first graders these days, but what I will say is every time I am vending, there are many parents with their kids who come by and it's a very different experience. They're not coming to buy graded cards, right? But it'll be, you know, a dad and his son and his like, I very distinctly remember, like this is nerdy little like 8 year old, and he was looking for this one Pokemon that looked like a bug that he liked. And so I had to Google what the bug was so that I could see what Pokemon it could be. So. And I actually ended up having the car that he wanted. And so I was able. I just gave it to him for free because it was like a dollar nice. But there are a ton of kids who are coming, but it's just different, right? And it as, as would make sense. Like when I was a kid and I was buying Pokemon cards, I was playing the, the card game with my cousins and with my friends, right? I wasn't. I didn't care at all about what the value of the cards were. I wish I had, but I didn't. But so that's still seemingly is very real. And like I said, I think that the games and stuff really help with this. Like I said, this new Pokemon game that came out, Popopia was like absolutely massive. My wife put in like tons of hours into it. I know a lot of people did and I think a lot of kids really enjoyed it. Too. And so yeah, it's a different world for them, but there definitely are kids who collect. I think that would probably be, you know, as you think about what are the risks to Pokemon as a brand 30 years, it would be that, that next generation falls off that, you know, currently 30 to 40 year olds love Pokemon art. Doesn't people who are 20 right now, when they're 35 and they have disposable income, are they going to love it? Are they going to want to be buying it?
- [40:24]
Ryan Sean Adams
Yeah, yeah, I suppose a small fraction of the market is thinking I am buying this Charizard as a 30 year investment plan. And I'm not, I'm not saying many people are doing this, but like some are. And the fact that, the fact that some are kind of incent, Incents the rest of the market to just play the game.
- [40:46]
Andy 8052
Yeah, definitely. And I, and I think that, you know, there's just, there's something really powerful about the emotional nostalgia side of it. Like, like I was saying earlier, like for me, Pokemon is just a big part of my life. Like I have an extremely distinct memory. My, my first memory of Christmas, like as a child was like, I was 4 years old and red version came out and I didn't know how to read yet and my dad had to sit next to me on the couch and tell me what to do in the game because I couldn't read. But I was playing Pokemon red version. And like that was just like how I grew up was playing the Pokemon games. I would, there was a comic book store around the street and from the time I was like 8 years old to like 14, anytime I would make any money mowing lawns, shoveling driveways, I would go to that comic book store and I would buy Pokemon and Yu Gi oh cards. And I think that it's, it's really hard to like quantify what that is worth and what that nostalgia means to people. But it does mean a lot. And I think that that's something that can be easily discredited by someone who doesn't have that same nostalgia. But like I was, I got together with one of my, my older cousin who kind of, he was really, who got me into Pokemon. He's about five years older than I am. And I was talking with him and he's married with kids and you know, I, he had, I remember like an insane Pokemon collection. And I was talking to him about it and I was like, yeah, if, you know, if you, you were talking about wanting to retire early and I was like, you probably have, like, genuinely hundreds of thousands of dollars of Pokemon cards sitting, like, in your basement right now. Like, if you want me to help you look through myself, I'm happy to do. And he was like, I just don't want to sell them. Like, I. I know, but, like, I really don't want to. Like, I. I don't even want you to go through and. And price it out for me, because I don't want to know.
- [42:29]
Ryan Sean Adams
He doesn't want to know.
- [42:29]
Andy 8052
I just. Yeah. And so that. That's the kind of stuff that I think makes it really hard to say, like, what's. What's the value of fandom? Or what's the value of one person saying, I want to buy and keep this thing? Because there's probably a lot of people who have that same sentimental feeling.
- [42:43]
Ryan Sean Adams
That's. That's amazing. Yeah, I. I think the tweet that burned this idea into my brain was some, like, seemingly, like, pretty legit research study about millennials. People our age have a center in their brain because so much of their childhood time and attention was spent on Pokemon. Like, thinking about Pokemon, collecting Pokemon cards, watching the TV show, playing the video games. That there's, like, a center of. Cluster of neurons grew to be our Pokemon center of the brain. And, like, enough millennials in the United States or just abroad have the Pokemon center in the brain that's, like, has, like, a rich identification and nostalgia and feeling that, like, this Pokemon center fires because so much of our childhood time was spent thinking about Pokemon cards. And, like, it's literally in our brains, dude. Like, the bulk is in the brain.
- [43:38]
Andy 8052
I haven't seen that.
- [43:39]
Ryan Sean Adams
I'll try and find that tweet and dig it up.
- [43:41]
Andy 8052
I mean, I believe it. I definitely have the Pokemon center brain. I believe that for sure.
- [43:46]
Ryan Sean Adams
Andy, this is great if people just want to, like, I don't know, learn more, Tinker with Pokemon cards. Where can we send them?
- [43:55]
Andy 8052
Yeah, our Twitter handle is mnstr. It's just monster without the vowels. And our website is mnstr.xyz. my Twitter handle is andy8052, and I tweet about Pokemon cards and all this stuff all the time. Actually, I think based on some conversations earlier today and recently, I'm going to maybe go into a bit of a deep dive on Twitter of everything I've learned running one of these gacha platforms and doing all of that, because I think there's a lot of one misconceptions. But also, people are just really curious of, like, hey, what is this? Like, what Is what does it kind of look like when you say, I'm working full time in the trading card world, so I'm going to start kind of getting into that stuff a little bit more and trying to pull back the curtain a bit. It should be fun.
- [44:36]
Ryan Sean Adams
And to be clear, all of your cards are tokenized.
- [44:41]
Andy 8052
Not. Not currently. So they were at one point we migrated blockchains. And so basically, for the sake of speed, they are not. We will one day be airdropping people new tokenized versions of them. Just currently. There actually isn't that much value for us because we don't have a lot of the bells and whistles around it to do that.
- [45:01]
Ryan Sean Adams
Okay. But when.
- [45:02]
Andy 8052
When most of these platforms are so like Courtyard Collector, Crypt Digitals, BZ, they're all NFTs that you get on your platform.
- [45:10]
Ryan Sean Adams
Cool. All right, so if we're bullish NFTs, maybe the canary in the coal mine is how in demand the on chain version of Pokemon, of the Pokemon marketplace, how much that grows.
- [45:21]
Andy 8052
And what I will say is probably even the bigger thing is the stablecoin payment side of it is massive because there's a lot of fraud in these markets. Oh, chargebacks being able. Yeah, a lot of chargebacks and all that kind of stuff. You know, when you go to these shows in person, no one accepts cards. No one accepts it. You gotta. You basically got cash.
- [45:38]
Ryan Sean Adams
Wow. You come with cash, huh?
- [45:40]
Andy 8052
Yeah.
- [45:41]
Ryan Sean Adams
Wow.
- [45:41]
Andy 8052
And so I think that's like a big side of it as well.
- [45:45]
Ryan Sean Adams
Well, okay.
- [45:45]
Andy 8052
Yeah.
- [45:46]
Ryan Sean Adams
There's one half of me is like, damn it, crypto. What are we doing here? And then the other half of me is like, oh, we've got this. We have the solutions here. So it takes people like you and the other tokenized platforms to build it out. So, Andy, thank you.
- [46:00]
Andy 8052
Thanks for having me. This was fun.
- [46:01]
Ryan Sean Adams
Cheers. Bankless Asia, you guys know the deal. Crypto is risky. So are Pokemon cards. As Andy said, there might be a local top, but who knows? Maybe the tops keep on topping. This is the frontier stuff for everyone. But we are glad you're with us on the bankless journey. Thanks a lot,
- [46:16]
Sam
Sam.