← The Wolf Of All Streets
The Wolf Of All Streets
Bitcoin Will Skyrocket, But Crypto Casinos Are The Next Big Thing! | Nigel Eccles
00:46:56
Bitcoin Will Skyrocket, But Crypto Casinos Are The Next Big Thing! | Nigel Eccles
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- [00:00]
Nigel Echols
Online gambling, however, is not social. It's a very transactional experience. It's a very solo experience. If the streamers play in this game, why can't I be part of it? Why can't I buy into it? Why can't I play? Crypto is much better than credit card, right? Like credit card, somebody could be betting with money they don't have.
- [00:17]
Host
Polymarket absolutely exploded with its political predictive markets, but they were not the first people to do it. Today's guest, Nigel Echols founded a platform doing exactly that and then transitioned it into FanDuel, which became the largest daily fantasy sports site in the world. Well, now he's with us in crypto and is building a crypto based casino. You guys don't want to miss this conversation. All the lessons that he learned from going up against legislators and regulators in the gambling industry that he's now bringing to crypto, that's dope. I want to start the conversation with something from your history which is hubbed up because political prediction markets exploded during this last election cycle. Obviously Poly Market became a mainstream name. It's a crypto native political prediction market site. A lot of people pointed to it as having either influence or being more accurate for the election results. And of course their CEO's house was raided by the FBI immediately after the election. You had this idea 20 years ago.
- [01:34]
Nigel Echols
That's right, yeah. Yeah. We launched Hub Dub, which is a prediction market we created in 2008, started 2008, had an incredible year. 2008, just, you know, because of the election market. Obviously that was the year in which Obama sort of swept it. And it was great and it was loads of engagement. The media loved it then, as they did today. The challenge we find kind of the reason FanDuel exists today is because prediction markets are, I always, I kind of joke. It's a bit like, it's a bit like the Christmas tree market. It's amazing in December, not so good in January. And that's a problem with prediction markets is that people love them for elections. But the next, you know, there's just not as it's not there, you know, the next news story is not nearly as important. And so off years are really bad. And so what we find is as soon as election happened, interest really dropped off. And so in early 2009, we pivoted to become Fando.
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Host
It's incredible that a political prediction market site became effectively the world leading fantasy site for fantasy football. Right. And so, I mean, talk about the early days of fanduel. I Guess a bit.
- [02:44]
Nigel Echols
Yeah, they're both, you know, they're both games of prediction. And so they have that sort of common road to it. You know, the early days of Manduel, you know, Fabdeb was the star. Summer of 29 we or 2009, we, we launched FanDuel with. We basically sort of went back to first principle and said, okay, this team, we're really good at building these sort of prediction games, but you know, we need something where there's a real demand all year round every year. When we looked at fantasy, we said, okay, this is a really interesting market, but there's something like 20, 25 million people play it. But the games are very slow, take a long time. You know, you start in September and you play all the way through to like December. You can't start during the start of the season. You to have nine or ten friends to play with. It's kind of a, at the time you couldn't play on your phone. And so we sort of said, well, what if we could make it a lot faster and we could give real cash prizes and make it a mobile experience? And so that was the original product. And you know, we, we launched that in 2009 and then every year we really kind of scaled that business there like 5x3 to 5x year on year growth. And so we went from standing start to by about 2015, we were doing 100 something, 150 million in revenue.
- [04:00]
Host
And so you had some unique challenges at FanDuel that my crypto listeners, which is all my listeners, may find sort of, you know, in line with things that we've seen in this industry. Obviously you guys had the very largely publicized attempted murder merger with DraftKings. It was blocked by the FTC crypto people. And anyone trying to be in tech in the last four years in this country knows how difficult it's been to do any sort of merger and acquisition position. You went through that entire pro process, you were steering the ship as the CEO. I mean, interesting experience.
- [04:38]
Nigel Echols
So the sort of the precursor to that were the issues that we had in 2015, 2016, when we had something that's very, very similar to what's happening in crypto. So number one, we had a fairly concerted media attack on the industry. So New York Times in particular, but a bunch of other publications suddenly decided, this is terrible, this should not be allowed, and this is clearly illegal gambling, which it wasn't. And clearly we were defrauding users and just generally bad people. And so that was a fairly concerted Attack. We then had a lot of attorney generals pick up on that thread, mostly on the Democrat side. So again, very like crypto. And they try to kick us out of a bunch of states like Illinois, Texas, New York. And in those states, we end up suing the attorney general, say, look, this is not. We want to go to court. And we also got investigated by litany of the ABCs of federal agencies, again under this idea that this was illegal gambling. And the objective really, I guess was to try and, you know, kill the industry. And we responded like twofold. One was we fought back. We said, no, if you want to go to court, we'll go to court. We feel good. This is a game of skill, like the crypto industry has been doing. But the second thing that we did that the crypto industry hasn't been as successful as doing is we got in front of legislators and said, look, you know, this is. People love playing fantasy sports and they want, the attorney general in your state wants to shut it down. Is New York, you know, Texas and stuff. And we should, you know, we should write law. And we as companies want, you know, we want to be, we're happy to be regulated. We want consumers to be protected. So let's write laws that protect consumers, but also clarify that this is legal. And we did that and we actually changed the law. We passed laws in 22 states in two years. So it was really incredible. And I'm actually very positive in crypto that we're doing good on the first one, fighting back. But the second one, which is getting bills through Congress that give the crypto industry a chance to grow and evolve while protecting consumers. We've been through that process and it worked well.
- [07:07]
Host
Well, the crypto industry has been in the Spotlight, even on 60 Minutes this last week, for their manipulating of the political process, which I find obviously laughable. Apparently donating to candidates that you like now is manipulating election results, which is ex. Exactly how Wall street and the pharmaceutical industry and everybody has ever influenced.
- [07:30]
Nigel Echols
Yeah, like it's when, when it's an in. When it's a candidate you do like, it's a, it's contribution. When it's a candidate you don't like, it's manipulation. Yeah, it's like that's kind of to be expected. You know, crypto is also new. It's also a, you know, a sort of a younger emergent technology. And so you're going to have pushback from the status quo. It's also very disruptive to banking. So, you know, banking is highly hostile to Crypto, because yeah, it's, it's disruptive to them. So I think we expect that. But it's also to me, in a way, I actually think crypto should start to become bipartisan because on the right, it's about freedom, right? Like, you know, like if you're a Republican, you would be like, look, this is about freedom. Like people should be able to do whatever they want with their money. Why would the government, the government should not be involved in this. But also it's kind of, you know, on the left, which is like, you know, you believe that people should have freedom to choose, you know, their, what happens to their body or things like that. Like surely you also believe they should be able to do with their money. And you also, you should be wary of big banks. You should. People give people a financial freedom. So I think it, in effect, in the longer term it will appeal to both sides. But right now it's obviously getting a lot more embrace on the Republican side.
- [08:47]
Host
I think at the core it originally did embrace, was embraced by both sides, and then it liked everything else when it became large enough, became a political issue. And you have very loud voices on the left that were very anti, I mean, the irony of like an Elizabeth Warren being the most anti big bank person when, you know, she's in bed with J.P. j.P. Morgan and Jamie, but the anti big bank, but then also being anti crypto, which is supposed to be the answer to somebody to opt out of that system. I mean, the irony is the hope.
- [09:16]
Nigel Echols
I have on the left is that their anti crypto coalition didn't make any sense. And I don't, I didn't think it, you know, it was a, it was a very small army and it just didn't, you know, and the smarter people on the left, like Mark Cuban, like, are being vociferous and kind of like this doesn't make any sense. Like, why would you go to war with, you know, a technology and something that's so popular with a, you know, a sizable segment of the community that's actually not really didn't at the time, didn't swing, you know, left or right or actually had both sides. It seems so stupid. And you know, hopefully this election they take that opportunity to go back and say, is this, you know, is this really, do we want this to be our position? And you know, in 2028, I just don't think so. I can't imagine 2020 yet. One of their big positions is, and we're going to, we're going to, I don't think so.
- [10:09]
Host
So it's the anti crypto army of one, which is Elizabeth Warren because Sherrod Brown's gone and Gensler is getting out. And you know, and that was just the natural order of things. I think it became politically unpalatable to be anti crypto. You don't gain any voters by being anti.
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Nigel Echols
Don't get any. Right.
- [10:24]
Host
Nothing.
- [10:25]
Nigel Echols
And that's, you know, and that's, you know, it's funny like, and then we find this in fantasy sports is politicians are very sensitive to two things. One is money. Right. Like they do like, you know, if an industry say, well, we would obviously like to help you campaign, but the other's votes. Right. And that's a good thing. Right. We want them to be sensitive, say, well, you know, even if somebody is willing to pay them a lot of money, they're like, well, this could cost me a lot of votes. And votes are more, is more important than money. And so fantasy sports was incredibly popular. That's why we managed to get all those bills through. But so is crypto. And so I just think on both sides we're going to see, you know, not Warren, because I don't. She's in such a cfc, it doesn't matter. But we see so many Democrats embracing it and saying, look, it's popular, why the hell would I oppose it?
- [11:15]
Host
Yeah, I think that the winds have shifted permanently in crypto's favor. There'll be holdouts. But I agree with you. You're obviously a gambler at heart, right. I mean you started political predictions, then moved on to daily fantasy sports. You're a self proclaimed meme trader, you've got an NFT as your identity and avatar on Twitter and you're now launching a betting platform or have launched Bethogen, which obviously accepts cryptocurrency, which is where we wanted to eventually arrive here in this conversation. So talk about what you're building and then I guess we'll get more deeply into why crypto is integrated into that.
- [11:52]
Nigel Echols
Yeah. So we're building like a crypto casino platform and we're very focused on creating original content, original games. One of our big, one of our big things that we've looked, that I've looked at in the last year or so was just kind of, I thought it was very interesting that I think it was two things. One was that offline and I've thought this for a long time. Offline gaming is a naturally social experience, right? It's, you know, you go to Vegas with friends, right. The idea of going Certainly for me, going to Vegas on my own is like a horrific experience. I've done it because I work in the industry and it's no fun. Like, it's like, you know, you go there, it's the loneliest place in the world. It's a very social experience. That's when gambling is the most fun. Online gambling, however, is not social. It's a very transactional experience. It's a very solo experience. And one of the interesting phenomena we've seen is that streaming has actually interjected a layer into gambling. So that's people on Twitch, on Kik, streaming, hanging out with people that watch them, and it's very social. But the interesting thing is that the games themselves haven't changed. So the games that people are playing on Twitch on Kick are the typical 5 real slot game. So that doesn't really make any sense to me. It's like, why aren't the games built for this format? And one way in which we would want to build it is actually make it much more interactive. Like, if the streamer is playing this game, why can't I be part of it? Why can't I buy into it? Why can't I play? And so none of the games at the moment allowed us to do that. And that's what we are doing is we're investing in building titles that are more social and actually, and work much better for streamers, which is one of the biggest channels for crypto casinos right now.
- [13:40]
Host
And so is it only going to be crypto deposits?
- [13:43]
Nigel Echols
So it'll be only crypto deposits. So we take deposits in Bitcoin, Ethereum, USDT and Solana. You deposit and you hold it in those currencies because obviously people want that exposure. We will add to that as we get more demand from other tokens. I think in time we're going to allow people to buy crypto and then deposit in the platform. But as an operator, operating in crypto is an amazing experience. So even like today, I was looking at it, DraftKings, which I think will do about 4 billion in revenue this year, will spend 500 million on payments. Right. Earlier this year, FanDuel said that they were spending 12 and a half percent of revenue on payments. It's a nightmare as an operator because, you know, you've got the credit card companies taking at least 3%. Sometimes, you know, sometimes the taking more. You also are totally beholden to them. Also things like chargebacks, you know, somebody comes in, loses a lot of money, next day says, you know what? I don't Want to pay for that, they go to their credit card and next thing you're actually having to challenge that. Even though that clearly was that user, the credit card wasn't stolen. That's kind of the life of the operator and it's really, really challenging. So crypto absolutely takes out all of those middlemen and allows the user to directly interact with the operator and takes out all of those costs.
- [15:14]
Host
Yeah, that makes a ton of sense and I think can be applied to a lot of industries. Anywhere where there's payments, anywhere there's a third party in between.
- [15:23]
Nigel Echols
Yeah.
- [15:24]
Host
This isn't just for gambling in that case.
- [15:26]
Nigel Echols
Yeah, exactly. And it's actually, it's one. I would argue it's probably one of the biggest areas of success for crypto. But the least talked about, it's kind of, it's sort of not as sexy and interesting like, it's not like this kind of really interesting defi protocol. It's literally, you know, the ability for someone to have money and to send that money to a provider. It doesn't. Everyone talks about buying coffee or crypto, which is a pretty bad use case. But being able to send $10,000 to somewhere instantly at almost no cost, that's actually where it's really interesting.
- [16:03]
Host
Being able to send $10 to somebody at double snow cost is also where it's interesting. You try wiring somebody 10 bucks in Nigeria.
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Nigel Echols
Yeah, yeah, yeah. Internationally, you know. Yeah. Without all of the headache. It is. Yeah. It's from an operator perspective. You know, I give the example to fandom. Draftkings, they are regulated onshore operators. You know, Bedhog is regulated, but offshore. And we're operating in like 100 different countries, every one of which has different payment infrastructure. And so instead of us having to integrate a hundred different payment stacks, we actually just have one, which is crypto.
- [16:42]
Host
Makes so much sense. So crypto casinos have existed for quite a while. Right. And most of them have been offshore. Who will this be available to? Who will be blocked from using it, at least for now? And what's going to be like, wildly different about this from the ones that exist?
- [16:56]
Nigel Echols
Yeah, so we Geo block the U.S. most of Western Europe. And so the areas we're focused on is Asia, Latin America. We also operate in Canada. The differences here is if you look at a lot of those casinos, the games look all the same. And the reason they look the same is because they are the same. Basically, most casinos, or nearly all casinos use aggregators. They work with aggregators that bring in games from like 100 different providers. And then, you know, so you'll have Pragmatic Evolution. These are all these third party providers and so the games actually aren't that different. The games, I mean the casinos themselves are exactly the same. They basically buy their products from a third party. The same ones. With us we're much more focused on building original games and content so that the user can just basically, you know, can will play the games with us because we're the only ones that carry it. And so we have some titles like Hogger, which is a unique game that can only be played on, on our site. You can't play it anywhere else. So that's. We're going to see a lot of investment in original titles.
- [18:07]
Host
That's really, really interesting. What I find more interesting though is who you've had to geo block and why. So for those who don't know why would you have to block the United States and Western Europe for now and then I want to get into whether you think that could change with administrative change in the United States.
- [18:24]
Nigel Echols
Yeah, well, so it's not for the normal reasons in crypto. For normal reasons in crypto. In crypto normally you block the OFAC countries that's like, you know, North Korea, Iran, Russia and you ban the US because it's got a highly litigious and the current administration overreaching that I think changes for broadly for crypto for gaming. The reason you block the US is the US has got a regulated market and laws that means that offshore providers cannot provide games to people in the US that won't change with the administration. The only way for us or any offshore operator to come onshore would become and get regulated in New Jersey, Pennsylvania, Illinois. That is something that we definitely would love to do at some point, but it's at least probably three to five years out.
- [19:19]
Host
We're about to get though arguably more sensible regulation. Things should free up for innovators. But is it just that it's gambling and it's crypto together? And so how much can you really hope for in the next year or two?
- [19:33]
Nigel Echols
So we're not. Well, it's different from the normal regulation that you see in crypto, which is the issue and crypto does need that. But you know, so for example, for us to come on shore, let's just say New Jersey, which is probably one of the easiest states to come into in that there's available licenses, there's clear rules and it's not artificially restrictive like some other states say, well, you can only operate if you have a casino in this state, obviously that's very restrictive. New Jersey is more open. But we would need them to accept that we could take crypto instead of just taking fiat. At the moment, no regulator in the US allows existing operators to take deposits in crypto, which is obviously crazy. There's $4 trillion in this asset. That huge adoption of this and they're like, no, you have to use credit card, you have to use bank transfer. And actually it's interesting, crypto is much better than credit card, right? Like credit card, somebody could be betting on money they don't have. In crypto, no one's sending you money that they don't have. By definition, they have it. Our view is this technology was better. The regulators should be more open to this, but it's just going to take some time.
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Host
Will you eventually have crypto trading, do you think, as part of the platform?
- [20:57]
Nigel Echols
Definitely would be interested. I think, you know, there's obviously a very high overlap between, you know, people who like casinos products and people like to speculate. So yeah, we've, in fact I've been chatting to a couple of providers that potentially could sort of help us put it on. But yeah, I think that'd be a cool thing to have on the platform.
- [21:17]
Host
So how'd you fall down this rabbit hole and discover crypto as sort of the solution to these problems?
- [21:23]
Nigel Echols
Yeah, I originally got into crypto in 2017. Like my background is I've been a consumer product. Like I've been a consumer entrepreneur for, since about 2000 where I started, joined my first startup in 2000, started my first company in 2007. In 2017, sort of learned about particularly Ethereum. Like I knew about Bitcoin before, but to me, and even to this day, I find Bitcoin a little boring. I'm like, oh, great. I buy it and it goes up great. Like that's good, you know. But I, I didn't find it into. I find the white paper really interesting. I thought it was a really fascinating technical solution to, you know, the double spend problem. But I didn't, you know, I couldn't build on it. You know, I didn't see there was obvious products that you could extend from it. I still think it's brilliant, but I just intellectually I was like, okay, great. But you know, Ethereum I felt was fascinating though, because it clearly, you know, it was a world computer as a platform you could build products on. But in 2017, when I first got into it, I just realized it was not ready. It wasn't ready for us to build Consumer applications. You know, arguably the first consumer application would have been something like cryptokitties, which I thought was really cool, but just almost impossible to buy. Like, very, very difficult to buy, very difficult to sell. So after the first sort of playing around with it, I didn't really spend much time on it until 2020. And then actually it was NFTs that got me back into it. And I'm like, okay, you know, these are. This is much better. You can actually buy them on a credit card. That's what got me back into the space. And since then, I've been a hundred percent focused on crypto.
- [23:01]
Host
Yeah, I mean, you've obviously fallen down the rabbit hole if you're describing yourself, as I said, as a meme coin trader and you have an NFT avatar. So, yeah, let's talk about Meme Coins. What do you make of this more recent meme coin trend? We obviously had the first iteration with Doge and then the Dog coins going crazy in the last cycle at the same time as NFTs. Now we have, let's call it an explosion. Millions of coins being launched on a daily basis. Pump fun. How do you approach that market and how do you view it?
- [23:29]
Nigel Echols
Yeah, I think it's really fascinating as somebody who, and I follow meme coins quite closely and try to stay close to it. The thing that is often a mistake is when you see a new innovation, you go, oh, it's just a toy. It's trivial. It's not serious use of this technology. That's nearly always a mistake because new innovations often look like toys and they become huge success stories. The second thing is in consumer, the hardest thing to get is attention. And you can have. There's so many products that are built every year that have get no attention and then fail and die. Meme coins have got ridiculous attention. And I've never seen consumer product as quickly just like generate such attention. You know, someone can launch a meme coin within 24 hours. It has tens of thousands of owners and, you know, just tons of attention on it. There's a number of ways I look at meme coins. I look at it as thinking, well, maybe this is the first version of an even more interesting technology. You know, maybe, you know, we're seeing the first, you know, you know, the first instance of it as it gets more interesting and more complex. And then the other way I look at it, it's kind of the opposite. I think of it is, this is probably one of the best gambling products I've ever seen invented. You know, Looking at it purely as, you know, somebody who's been in the gaming industry for 20 years. Here we have a betting product. We compare it with sports betting or casino or you know, lottery. Here's a product where someone could have a 10,000x return, right? Number one, that, that's good. Number two, ev respected value. So if I go into the casino, my expected value of most games is about minus 3%. Sports betting it's about minus 7%. If I'm playing parlays, it's minus 20%. For meme coins, I have no idea what it is. It might be positive, right? You know, and it all depends when the market is. So that's another one. It's like, okay, potentially positive. Which means that it also. And some of the things I thirdly I think is potentially a game of skill, right? Or it almost certainly is a game of skill.
- [25:42]
Host
There's definitely edge. I mean the on chain guys who understand when things are launching and are on top of that market certainly are going to destroy retail for better or for worse.
- [25:51]
Nigel Echols
And that becomes really interesting. And we see if some of the biggest booms in betting products, they're typically games of skill like poker boom from 2003 till, I don't know, like 2015, like that sort of era. 2014, like just incredible boom. Daily fantasy sports, game of skill, incredible boom. Meme coins I think similar you're seeing. It's, you know, it's a game of skill, it's potentially EV positive which is even more crazy when giving these sort of life changing types returns. So that is like betting product. I think it's perfect in itself. Oh. And then the last thing I'd mention on it is I've never seen a product create so much content around itself, right? So it creates community and content which no betting product in history really has ever done it in the same way that just like somebody launches a coin and then suddenly people are jumping on it and suddenly all of this content is getting created and it's creating its own marketing and everyone who buys into it has an incentive for everyone else to buy into it so they're promoting it. Again, that doesn't really happen in any other betting product. So that's the thing. Sometimes I look at it and think this maybe is the most perfect betting product I've ever seen. And then sometimes I look at it and go, maybe there's just an early iteration of something bigger and I don't know which one it is.
- [27:09]
Host
I'm curious what that something bigger could be. A lot of the Things you just described actually are reminiscent of how a lot of people would have described the NFT cycle before.
- [27:17]
Nigel Echols
Right?
- [27:17]
Host
Yeah, A different version, but same concept. You built this quick community, there was something for them to rally around. There was a hugely speculative aspect about it. They could also do 10,000 X's and before, but for some reason they didn't stick in the same way.
- [27:34]
Nigel Echols
I think meme coins are a better version of NFT projects, of community based NFT projects. The ones we were trading in 21, I think they're pure and they're more honest. Like in 21 we have just gonna.
- [27:47]
Host
Say they're more honest. You don't pretend it's some membership to the most hoity toity club on the planet. You know exactly what you're getting.
- [27:54]
Nigel Echols
Also. They're also in their best form are more decentralized in that, you know, NFT projects, they had this like, we just saw artifacts shutting down, like after, you know, generating 300 million in revenue, did nothing for two years and then they just shut it down. And you're like, okay, that's, we don't want to go back to that. You know, with meme coins, for all their feelings, that's not happening. Like the money is not all accruing to some central entity who's going to like, you know, do nothing for two years and then just say actually we're all good, we're, we're retiring to our second homes in the Mediterranean. So I just think they're pure and more honest. Lots of issues with them, but I think they're a better form of nft.
- [28:42]
Host
It's interesting, you have this sort of barbell you got like you're creating a company with crypto because it's a superior payment rail, it's more efficient, it's a better way to do things. And then the other side is like, we're not going to pretend we do anything. These are purely speculative gambling poker chips that if you play them right you can make a ton of money on. Where's the in between right now for crypto?
- [29:08]
Nigel Echols
I don't know if there is an in between. It's a really good question. And I've was like every time I've seen the problem. One of the problems of meme coins is meme coins becoming anything else is so much of their value is memetic value. It's not utility, it's just this kind of like belief and it's anytime anyone tries to like sort of go, yeah, and we're going to like deliver value, suddenly you introduce reality to its valuation and suddenly you're like, you know, it's, it's kind of like, you know, the NFT days where, you know, you paid like 50,000 for this NFT and then they're like, hey, now you're going to get your utility. Here's a crappy hoodie. And then you're like, huh, you know, the, the utility is this crappy hoodie. Maybe this NFT is not worth 50,000. Whereas, like, that, that to me is like. And I've seen, when I've looked at, you know, projects, like, there's projects I know in crypto that are valued, like almost like a value stock, just like incredibly undervalued and they have no memetic value. Right? And then you're like, well, could they, like, would memetic value have helped them? And I am not sure if they will. I just, I don't know if it's, you know, we've either go to like Edge utility. It's just purely based on, you know, like, the financial analyst could look at their cash flows and stuff. And then there's the ones in the other end, which are these memetic value. There's no way to value them. And there doesn't seem to be. The middle ground is a bit of a wasteland.
- [30:45]
Host
Do you have a concept for which crypto people are most likely to use on your platform? I would imagine that even though you're going to accept, I think, Bitcoin, Ethereum, Solana stable coins I saw, I would venture that people are less likely to part with their Bitcoin for gambling than they would with perhaps Solana, because maybe people who are in Solana are used to trading meme coins.
- [31:07]
Nigel Echols
Yeah, it's good, Good question. It's still very early for us to, like, draw conclusions and we're. I'm quite aligned with Solana and so I think that's driven most of our deposits and some of our games only work in Solana. And so the biggest one we're getting at the moment is Solana. Historically with crypto casinos, actually bitcoin has been one of the biggest. So if you look@stake.com or some of the big operators, yes, Stake would be like. Or Bitcoin would be one of their biggest ones just because it's the most valuable one. But I think Solana is one of the fastest growing as people adopt it. The other thing I'd say is that there surprisingly isn't much overlap between, say, crypto, the crypto community, like crypto, Twitter and The casino vertical. It's almost seemed like they're just who, they use the same technology, but they never, like they don't really look at each other. Like, I would argue that Stake.com is probably the most successful crypto consumer app today. Like they will do. Or they've already done over 12 billion in deposits and probably like 4, you know, 3 or 4 billion in revenue. And how often do you see that on crypto Twitter? Like never.
- [32:24]
Host
You never, you never see them mentioned unless it's like one of their rare kind of sponsorship deals. But you see them on F1 cars.
- [32:30]
Nigel Echols
Yeah. If they're sponsored or they get hacked, like that will get mentioned. But it's, it's a totally different like demo.
- [32:37]
Host
Why do you think that is? Because you would think that crypto Twitter is largely, you know, a self proclaimed DJing crowd that's flipping meme coins around. I'm not talking. I think there's bifurcations. There's guys who have millions of followers with memes I've never seen. I have millions of followers for a podcast. They've never seen me. There's NFT influencers I've never heard of. I think we do. It's not just one thing anymore.
- [33:00]
Nigel Echols
Yeah.
- [33:00]
Host
Still, you would think that if they're doing, you know, tens of billions in deposits, that would be a pretty frequent.
- [33:06]
Nigel Echols
I think one of the reasons is that most people in crypto or crypto Twitter view their crypto activity as ev positive activity. They don't view it as entertainment, bizarrely. Even though they would probably lose money on. Some of them are. But like they view it as, you know, so they think of themselves more like a poker player then they think of themselves as like a slots player. And so stake is just not interesting because, you know, nearly all of the games or all of the games on stake are ev negative. Right. They're, you know, if you go and play it, you expect to have less money than when you started. And I think that certainly in crypto Twitter, it's full of people who all think they're smarter than the next person and so they have no interest in that product.
- [33:52]
Host
So that player versus player, not player versus casino.
- [33:55]
Nigel Echols
Correct. That's, that's right. If they're like, oh, it's, you know, it's a, It's a standard 1% take. Then they're like, well, I can't make money on that, so why is that interesting?
- [34:05]
Host
That makes a lot of sense. But I'm still surprised that there's that much money out there being deposited in crypto. And it's that quiet.
- [34:12]
Nigel Echols
That's right.
- [34:13]
Host
It just shows you how many absolute monster whales there are out there in the world that are not part of the public community. Which shouldn't surprise you, I guess, but.
- [34:21]
Nigel Echols
Well, yeah, it is. Even within the way I think about it, it is still really surprising. This should be absolutely a poster child of this is what crypto can do in that it solves a massive problem, which is payments. And here's a really good example of one that it's very successful.
- [34:41]
Host
I mean, polymarket got all of the attention and that was Polymarket only because you could just do it in crypto and became this killer crypto app. And that's not coming. Not even a drop in the bucket versus what Stake's doing.
- [34:51]
Nigel Echols
The thing about. And polymarket did a great job and that team is really executing, but in a lot of ways they didn't really do anything new. Like prediction markets have been around for about 20 years. What they did is said, we're going to take crypto. And suddenly it became really easy to fund it. And that's when it, you know, that's when it just kind of like turned into a rocket ship.
- [35:11]
Host
I mean, I listen, you had Hub dub, you were probably just too early. I mean, that's the answer. It's like, I mean, you know, Uber type apps existed before iPhones didn't work very well until people got iPhones.
- [35:23]
Nigel Echols
We, we launched before even bitcoin launched. So like we had no way of, you know, we just couldn't have taken money. Yeah, that's a really big issue that, you know, you see with polymarket. But we've seen mistake. Is that because they can take money, you can build really big businesses.
- [35:38]
Host
Are you having been here since about 2017? I think I started in crypto in 2016. I'm far from an OG. Are you surprised at how far it's come in this amount of time? It seems we've seen it just on a rocket ship of late, obviously fueled by the election and regime change and ETFs and all of these things. But sometimes I do pinch myself and say, like, why am I seeing a Bitcoin Ethereum and Solana ticker on cnbc?
- [36:03]
Nigel Echols
Right? Yeah, I'm. I guess I'm a little surprised how far it's come, but I'm also surprised how far it hasn't come. Right. Like, it just, it feels to me that crypto has continued to fail major narratives. Right. Like, you know, even go back to the start. Like bitcoin was supposed to be cash, like we were supposed to be paying people in Bitcoin and we just don't. It's. It was supposed to be used for remittances. It really isn't like USDT is being used for remittances. Tron is being used for remittances. It was supposed to be, you know, you know, companies were supposed to put in their treasuries and outside of, you know, microstrategy, like almost none are doing it. And it's. I think it's ended as final narrative which is it's digital gold. And I think that one it will pass on. It is in effect. But to me digital gold is kind of like when you feel everything else and you still have lots of value. You're digital gold, right? You just sort of like we. Yeah, well it doesn't really do anything, but it stores value.
- [37:05]
Host
Great.
- [37:05]
Nigel Echols
That's digital gold. When I look at beyond Bitcoin and I look at the 2021 narratives like you know, they think about them. NFTs. We were going to revolutionize online clubs. We were going to have, you know, web three games. We were going to have, you know, it was metaverse.
- [37:22]
Host
Nothing none bigger than the metaverse. Come on. We were running around with no legs buying $2 million mansions next to Snoop Dogg in the, in the sandbox or whatever and yeah, yeah, and we failed.
- [37:33]
Nigel Echols
All of those like Web3 games today. Virtually non existent. Like the, you know, one of the crazy stat that I saw recently is the biggest, you know, one of the biggest games today in web 3 gaming by MAU is Axie Infinity. Still. Right. And so it's, that's kind of stunning to me. We don't, you know, wallets are still incredibly hard to use. Like I, I was helping somebody, a friend of mine is an airline pilot and I was helping him stake some solana and he has crypto, he's bought it, you know, no problem. He's even put it in a wallet. And I'm like look. And I end up saying to him look, it's easy. And he said that's like me saying it's easy to fly a Boeing. And I'm like okay, yeah, that's, that's fair. And I had to walk him through it and I'm like why is this stuff so hard in 2024 still? Yeah, still. Right. Like why like even a simple one, wallets that I find insane is that we expect a user to be able to set up a self custody wallet that distinguishes between a wallet like having like 20 bucks, 50 bucks, a hundred bucks in your wallet and your entire life savings.
- [38:51]
Host
Bank account.
- [38:51]
Nigel Echols
Yeah, and bank accounts. Right. And things that are really protected and the wallet treats them exactly the same. And like. Yes. Oh, you go get a ledger and then you have to go figure all that out. I just don't understand why wallets are not like, more siloed. So, like, there's one wallet which is. This is a wallet. You know, if you lose your money, then it's like, it's not a big deal. Here's another thing which is we don't call a wallet.
- [39:14]
Host
It's a safety deposit box, man. You know, like, yeah, yeah, it's a vault.
- [39:18]
Nigel Echols
And we don't let the vault interact with the wider world. We only let it maybe interact with, you know, the vault. Interact with your wallet, not with the wider world, because it has to be kept totally safe. And we don't let you as a user go and do stupid things with the vault of the vault. So that, to me, I just don't understand. We haven't designed those in the last three, four years because it all seems possible to me. But, you know, that's so. And then just lots of other infrastructure stuff that particularly in the theory ecosystem, I just see more infra. On infra. On infra. And I just, I'm like, who's going to use all of this stuff? Like, I just am like, what about having better wallets, having, you know, easier, like money transfer? Like, these are things that, you know, users are going to care about. The infra. On infra. Infra just kills me that I just.
- [40:04]
Host
So you're not a big fan of layer, ones, twos, threes, sevens, twelves, 47s. I guess that's probably why you like Solana.
- [40:11]
Nigel Echols
Yeah, so I like Solana for like, in 2021, there was no alternative, right? Like, there was like, if you wanted to build consumer applications, you built it on Solana. I'd say today you can now build on L2s. And I do think it's weird. And the best L2 is basis one. That's the most consumer adoption. I do think it's absolutely bizarre that if you're building on Ethereum, the best option is to build on a completely centralized option, which is base or not completely centralized, but as centralized as you can get. I think that's weird. I think it's still too early to say Whether whether the L2 approach is a mistake or not. I don't. What. I don't think with L2s is we're not going to have thousands of L2s. I think we're going to have two or three and I think they're, you know, they're going to be fairly dominant and I think each one of those is going to act in their own economic interest and they're not going to interoperate with the other L2s. I think that's the fantasy, that we're going to have a thousand L2s and they're all going to play nice with each other. That's not going to happen just on basic. Like, you know, if I build an L2 and I'm dominant, I don't want to want to play with those other guys and then if I'm the small guy, I want to play with the big guys. But, you know, that's.
- [41:31]
Host
I just don't see that it's still capitalism.
- [41:33]
Nigel Echols
Yeah, still capitalism. And we actually see other day it's like, oh, BS is increasing its dominance, right? Like, we're not even seeing like a clear number two in the market. And so, like, I think that's really good for Bis and I think that's really good for anybody else who becomes a dominant L2. Is that good for Ethereum? I don't know. I genuinely don't know. I'm not sure.
- [41:56]
Host
Jury's out.
- [41:57]
Nigel Echols
Yeah, I think the jury's out. I think that to me personally, I would find it very difficult to hold much eighth because the future success scenario for me with Ethereum is we have one or two L2s that do really well. What does that mean for Ethereum? I don't know.
- [42:17]
Host
Yeah, I think that that's a fair assessment and becoming more consensus that, like, that all of this can exist. We don't need this much block space and it can't all work. But I do think that we'll still have see some success stories, I think.
- [42:31]
Nigel Echols
Yeah, I definitely. I'm, you know, personally, I'm excited about Mage. I think that that's potentially interesting. I don't. The only thing is, I will say is that I think it's getting harder and harder to launch a new L2RL one. I think Solana, when it launched, you know, like when it was competing with Ethereum in 2021, 22, it had a 100x improvement. You know, like, it was like, it was really hard for Solana to compete because you're saying you have to bridge your assets over here. If you're launching noise, particularly as a new L1, like a Monad or a Barachi and I'm like, is your argument that you're 2x better than Solana? I just don't know if anyone cares at that point. It's like, well, I'm gonna need a big step up on what I have today because if I go over there, I have none of the infrastructure, you have none of the users. If I'm an application developer, like, why would I build there and not build here on Solana? And that's my biggest sort of question mark, which is, I think as we've got much later, it's going to be so much harder to compete for, particularly on the consumer side.
- [43:45]
Host
So quickly, before we finish, when are you going to be fully launched? What's that rollout going to look like and what are your expectations? I guess what are you most excited for after that happens?
- [43:57]
Nigel Echols
Yeah, so we, we launched the product, it's into beta, it's like a public beta. In last month we had a strong launch. We are really kind of rapidly, we're launching a new game about one a month or one every two months. So we've got a quite rapid development. We're doing a lot of building around the, you know, sort of the VIP scheme and just moving, improving the user experience and so that's all happening concurrently at the moment. The thing I'm most excited about is the new games that we launch, particularly ones that are social. We also have some titles that are PvP. So there are ones that if you're skillful, you know, you could win at them. So we're really interested in seeing those and we really want next year to be about just launching new titles and getting traction with them and seeing people get excited about them and, and continue to improve them.
- [44:51]
Host
So it sounds like the regulatory environment in the United States and all these changes really shouldn't affect you so dramatically. I mean, you're building a business, there's existing models for it, this is a better way to do it. So you're just going to compete by creating a better product?
- [45:05]
Nigel Echols
That's right, yeah. No, the change in the regular environment I think is sort of generally welcome, but it doesn't really affect our sort of day to day business.
- [45:15]
Host
I think that's really interesting because that's not what you generally hear from people who are building in crypto these days.
- [45:20]
Nigel Echols
Right?
- [45:21]
Host
Yeah.
- [45:21]
Nigel Echols
Like one thing it does is it and with price inflation what you do do is you get more people onto it and so it's easy for us to convert users and those users have more money, so that's good.
- [45:31]
Host
They have the wealth effect or the wealth effect of the money they've made in crypto. And what am I going to do with this stuff? The same reason that, like, you see bitcoin blow up and then when it gets boring, all of a sudden all the other coins start to explode. It's the same reason you see that same cycle. It's the same people who are going to come and say, I've got all this extra money. Let's go play some games.
- [45:48]
Nigel Echols
That's right. Yeah. So that's definitely true for us as a second order effect. But, yeah, primary, it's kind of on us as a team to get our heads down, focus on building really good titles, listen to users, continue to optimize them. That's the focus.
- [46:04]
Host
I can't wait to play some of those games, Nigel. I appreciate it. So where can everybody follow you and keep up with what you're building after this?
- [46:11]
Nigel Echols
I'm Nigel Echols on Twitter. That's N I G L E C L E S. And then the product that we're building is Bat Hog. And you'll see it on twitter and it's bathog.com awesome.
- [46:21]
Host
Thank you so much for your time. You've been through, like, so many of the horror stories that the crypto industry has seen without actually being in the crypto industry. It's pretty impressive. I hope that if the battle ever comes to you again, you know, you'll. You'll be willing to stand up and fight like you did at FanDuel.
- [46:36]
Nigel Echols
Oh, thank you. Oh, absolutely.
- [46:39]
Host
Appreciate it, Nigel. Have a good one.
- [46:42]
Nigel Echols
That's dope.