Web3 represents a new and revolutionary way of looking at how assets are owned in the world. And much of it comes with authenticity, a topic that Les Borsai so eloquently unpacks in this episode. Les is a serial entrepreneur and consultant specializing in the cryptocurrency and blockchain industry. He co-founded Wave Financial, to offer early-stage VC investment, asset management, treasury management, and strategic consulting within the crypto and blockchain ecosystem. Coming from a background of managing recording artists, Les understands how authenticity is valued differently in the old-school corporate music industry compared to how it is becoming a defining aspect of the emerging Web3 environment. Tune in as he shares his thoughts on that and more in this conversation. Plus, get to hear about CoinLedger’s NFT tax-loss harvesting tool, TIMEX Bored Ape watches, and more, all in this episode of The Edge of NFT podcast.
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Les Borsai Of Wave Financial On Authenticity In Web3, Plus: CoinLedger’s NFT Tax-Loss Harvesting Tool, TIMEX Bored Ape Watches, And More…
This is Les Borsai of Wave Financial, bridging the gap between traditional asset management and cutting-edge blockchain technology. I am on Edge of NFT, the show bridging the gap between traditional artistry and non-fungible digital work.
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Stay tuned for this episode to learn why our guest believes contrary action is where growth lies, and all about vegan eating in Los Angeles, plus what an iconic brand like Timex is doing hanging out with a bunch of Apes. Don't forget that we put together a gathering called NFT LA that brought out thousands of the world's most innovative doers in the NFT space. Head on over to NFTLA.live to get tickets to our bigger, bolder and better, but also as intimate and impactful event happening in Los Angeles from March 20th through 23rd, 2023. We will see you there.
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This episode features Les Borsai. He's the Cofounder of Wave Financial, which offers early-stage VC investment, asset management, treasury management, and strategic consulting within the crypto and blockchain ecosystem. Les is a serial entrepreneur and consultant specializing in the cryptocurrency and blockchain industry. After ten years of managing recording artists, he launched and built successful startups in digital music and cryptocurrency.
In 2013, he saw the potential of blockchain technology and started working with Ripple, one of the largest cryptocurrencies as an advisor. He was an early investor in the Ethereum presale in 2014 and now provides advisory services to multiple blockchain companies, including RightMesh, YouNow, and Backstage Play. Les, welcome to the show. How are you doing?
It's funny. That bio was perfect until the last line. I'm going to have to change that because in getting into cryptocurrency early, you interact and deal with a lot of companies. I swear to God that all three of those companies are gone. I'm doing well. Thanks for having me.
We had some fun pre-show banter here. It's going to be an exciting show. We're all pretty pumped. We're jumping right in. Let's talk about this climate that we are in. What will NFT launches look like after this blow-up in liquidity? What are your thoughts there?
We're in a climate. It feels so normal to me. Having been in the space for a fair amount of time, I and the people I work with get a vantage point of a lot of fluctuations in the market and a lot of volatility. If we take a look at the early days when I got in 2013 or 2014 and you look at Mt. Gox or what happens in Asia, they're outlawing cryptocurrency and making it illegal. We have the ICO craze and then the blowout from the ICO craze. If you've been in the space, you understand there are two types of markets, bull and bear.
When we started the company in 2018, we went straight into a bear market. That sucked but it makes you stronger and more resilient. I feel the same way about the market. I have a lot of personal antidotes about that. If you're old enough to remember, which I am and you aren't, in Web1 in particular, the companies that were able to sustain all of the scammers, domain squatting, and all the nonsense that was happening ended up being the bigger companies.
Dave, my partner and CEO of the company, is conservative. Because of his financial history, he does have an appreciation of regulatory guidelines. He made the decision that we weren't going to try to be competitive at the cost of anything that crossed the line. When you look at the market keeps expanding into a place, the market is what it is because you had a lot of young guys generate a lot of wealth but do not understand the basics.
I don't know what it takes to understand the basics. If I take your money, I'm not supposed to use it for anything other than what it has been deposited for. I'm not supposed to leverage it long and take a risk with it or cover debts that have nothing to do with those customer funds. That's the simplest stuff in the world. Not understanding that is the first problem.
The other thing that's the bigger problem is when everything is so incestuous and interconnected for that extra percentage for the land grab, what do you expect? It's a house of cards because everyone wants the customer. I've seen customer acquisition costs in the market being as high as $600 a user for an account that was $500 a user. I don't understand how that math works.
We sit here wondering why the whole world has blown up around us. I'll finish this thought. It's like a poker tournament for us. I played a lot of poker tournaments in my life. You can be aggressive and try to win the damn thing but you will probably get knocked out pretty quick or you can sit back and let everyone else knock each other out. That's what we have done by playing appropriately.
That makes a lot of sense. What I became aware of to a large degree when the news hit about FTX, and the mainstream media that's covering this stuff makes everything seem like it's exploding and imploding, is I automatically thought of all of these projects and people that are deeply entrenched in the system. It had very little to do with that in particular. We talk a lot about how the creator economy is growing. We talk a lot about putting real estate on the blockchain or functional use cases, going to Switzerland for the World Economic Forum Conference, and seeing huge corporations getting deep into the blockchain. I was like, "This doesn't seem as unstable as it looks to many other people."
That's a whole other point of view that I have. I came from the entertainment business. Authenticity mattered in the way artists were broken. It did for me anyway. There are two types of artists. You could be a big pop artist where they throw everything against the wall and hopefully the song sticks, but it's not a good strong underlying base, or you can be an authentic artist that works at it.
This isn't that much different. When I hear about the big corporates coming in and everyone is so excited about it, I've been through enough cycles with apps, web, and other technologies that I'm like, "I'm not excited by that shit. I don't care." I want to take a look at what's being developed by these innovative kids and what's being monetized. That's what I'm interested in. I'm not sucked into, "Universal is going to do this." Who cares? Everything they're doing is archaic and continues to be because they're looking at the numbers and not the creativity and the innovation.
I suppose a lot of my feeling comes from the Napster days and watching Shawn Fanning and Sean Parker get thrown out of a building, and then IP being used as leverage. IP isn't leverage. IP is something that people create with their soul and blood in that whole process. To use it as something that becomes some barometer for profit is gross to me. I got my idealism back. Somewhere in the middle, I was probably just as gross but that's how I feel about where we're at in the corporates coming in.
In parallel to the music industry, you've got the gaming industry. There has been a tremendous amount of disruption over time in gaming with these different business models. You're in a pretty unique position to be able to see some of these paradigm shifts as they occur. I'm curious if we could expect to see another iteration here sometime soon around gaming monetization, how it works, how you disincentivize scam-like behaviors and all these different factors.
I'm doing it in a whole bunch of different ways. Wave Financial is an RIA. We're adhering to the SEC and its finance, but I was never going to do anything in entertainment or the re-imagination of what a Web3 studio could look like because once I got done working with artists, I didn't want to talk to them anymore. I still don't. It was a lot of decades talking to artists. It was hard.
I re-imagined through this mechanism called SeaWorld what I could do within the Cardano ecosystem. We're pretty close to Cardano. They're one of the ones that are surviving now in a nice way because they didn't tie their wagon to anything except their own abilities to create. When I think about this Web3 studio model, I think of it as an antique mall. If you have ever been to an antique mall, it's a building that has a whole bunch of shops inside it. Every single shop is different.
I compare that to what RTFKT did with Nike, Larva Labs, and all these different things that are happening that happened together without communication to happen together. When it came to gaming, I hired some game guys and started to build a game studio. When it came to the rights because rights are different, I hired a rights guy and an agency person doing a deal with streaming across the board for TV, film, music, and merchandising. All of these things are going to function together based on IP.
The thing that people don't realize is IP and ownership are different. We're talking about owners of NFTs being able to exploit those rights. That's very different from a publishing company and a record company owning two sides of a master with six writers that you need to get phone call approval from. That is the ethos of Web3 and the metaverse. On the other side of that, there are projects like the Gremplin project. Anyone can use it because of creative commons.
I don't think the bigger companies that you talk about that are coming into the space have the first understanding that this is a generational shift of how collaboration is going to happen. That's bad for business if you don't know where it's going. When I started to put all of that together, I started to quietly collect rights. To your point, everything is different. You look at Gala and what they did with Townstar the Death Row catalog. When Eric first did that, I was like, "You don't even have the rights to a Tupac song." He nailed it by being able to put it into a different environment.
I look at things like YGG and what they did in the Philippines with some of the early play-to-earn stuff. They were giving back to the community. You can see what's possible. That's always the thing that's so frustrating about people saying, "An NFT is just a JPEG. It's not worth anything." Who cares? It's not a JPEG. It's something that's meant to be connected to other mechanisms to create a bigger ecosystem. I went on a tangent. You got me on a rant.
It's all good. That's why we're here. It's to have this convo. There are so many different elements about what's happening that elevate it. It's universal themes that we're talking about and how that influences where things go. Do you see something specific within the gaming business model that's shifting? Where do you see this next iteration going? What are some of those attributes that we should expect to see from some of these games as they evolve, and new games as they come to bear?
It's deeper integration. The thing that struck me the most is I did a deal with this artist named Lil Pump. I stuck him in a game called Aavegotchi. Aavegotchi was one of the first gamified NFT-driven banking. They had all these innovations in Aavegotchi.
Jesse is great. He came on our show a little while back.
Jesse and Dan are incredible. They're probably too smart for the market in some ways because they can surpass it. When I did that deal with Lil Pump, I didn't want to do anything the way we did it. It was a different economic deal. I'm not going to do what they did with apps, and throw stupid money at artists. If you want to be part of something innovative, then you should be a part of it. If you don't, there's someone else. I don't want to set a ceiling of what people are paying to have artists participate because this isn't influencer culture in the same way.
If you're not connected and you don't understand what this is, then you're probably not the best spokesperson. Kim Kardashian, you should be fined because you probably didn't know shit about what you were promoting. When I think about how this is going to change, it's deeper integration through immersion. That's some of the stuff I'm working on. It’s understanding what global streaming looks like. I don't know if you saw Lensa that came out. It's this popular app.
It's going viral. All my friends are posting these crazy pictures of themselves on Facebook. Some of them look cool.
The ones I did look cool. A lot of them look cool, but when we start to think about AI and how it integrates into Web3 and how that works with immersive technologies in the metaverse, then we start to put that together, whereas going with the Aavegotchi point was, "Banking is not meant to be something fun." You can argue that the GameStop moment made banking fun because people were fucking with hedge fund guys, but when you look at Aavegotchi, it was the gamification of banking or Coinbase producing a movie.
There's more imagination. There's the ability to be different types of companies and do different things. We never saw that. If you were a telecommunications company, you were doing that. There wasn't a business model that you could color outside of the lines with. That's cool we're seeing that. What I want to embrace are all those opportunities.
Let's talk a little bit more about the market dynamics. In times like this where there's a little bit more of a bear position, there's consolidation and M&A. I heard a lot at Art Basel of companies buying out smaller projects for their audience. Meanwhile, there's a lot of building going on with DAOs and DeFi coming up with version 2.0. There was even a DAO hackathon at Art Basel, which was interesting. I'm curious about what perspective you have on that from an M&A perspective and retail. Looking at companies like YouTube, Reddit, Starbucks, and these types of players, are we going to see some interesting consolidation between Web3 and traditional brands?
Before we talk about Web3 and traditional brands, let's talk about the M&A conversation. We were pretty actively involved in buying an asset and bidding on an asset. It didn't go our way. We know as a company where the market is and what the market is. We're not going to be able to generate the same returns that we were able to generate in 2021. We have to do things that are a bit different. We are looking at assets and companies that are distressed, and the value to build.
We have lots of things we're looking at. We have lots of partners we're looking at those opportunities with. It's a good way to hedge again and do something productive and good for the economy and the consumer. It's the reason we're doing the media stuff as well. In terms of retail, NFTs, and what that looks like, I had to hold back on buying one of those Tiffany necklaces because I would have never done anything with it, but they blew those out in a second. Interesting retail that is specialized is going to work.
I went to Universal Studios for the Halloween thing. In every line, they had a QR code saying, "Get your collectible NFT." The thing about that as I looked at it wasn't like, "It's expanding. Universal is doing this shit." It was like, "That's a pretty boring use. I wish they were more innovative." That's how I feel about everything. We're going to see it.
Here's the other part of that. I bought my first NFT in 2017 that I lost. When the NFT thing started going, you saw two paths. You saw the NBA Top Shot path. You then saw authentic projects like Art Blocks. Everyone who had a Fidenza or a Ringer all of a sudden was balling hard. You saw this real division of where the world is going. You're going to see Starbucks and the other retailers doing their thing.
The thing that was the most cringe out of everything I've ever seen was Taco Bell talking to Kentucky Fried Chicken talking to Pepsi Cola. It was on Twitter. They were doing the whole GM thing as a brand. It was all those buzzwords. These brands were doing it. For me, that was gross. I don't care about those brands. I don't think that's interesting.
Do you know what I think is interesting? I did some work with FIFA. They're smart and credible. I don't even know if it's public or if I can even talk about it, but they looked towards the metaverse as an organization. I thought that was smart because whatever is being built now is what's coming next. You're going to have to pick and choose who those guys are that built an amazing next opportunity.
You mentioned Pepsi. I don't know if you saw that quasi-documentary on Netflix about Pepsi and the rewards program they did.
It's for the Harrier jet.
One thing that sticks out in my mind is that for them, that was a major shift in their branding in terms of rewarding consumers beyond buying the product itself. I do feel like rewards in gamification and rewards, in general, are great use cases for using Web3 technology that we're just scratching the surface of so far.
It is. I'm not saying that corporates and retailers are not going to use all of this in the way that they use it for the masses. I'm scarred. I saw Nirvana at the Roxy when they were coming off of Bleach on Sub Pop. That whole thing about being early with music stuck with me. I'm always interested in how I get there early. By the time it gets to the big retailers, it's late. I watched that Von Dutch documentary. I'm like, "Gross." By the time it got to the big stores, even though they were making all that money, it wasn't something cool.
I'm always the guy that wants the underdog creator to win. I even want some of the guys that aren't underdogs. I'm very curious to see what Stani does with the Lens Protocol. It's going to be interesting because it's going to be a shift. Even further to that point, when we talk about our data and privacy and who is monetizing it, it's unfortunate if it's not you and you don't have a say in it.
Information is too readily available for any of us. Anyone can find out anything about anyone. We need to be a little more precious with our privacy and our data. For me, because I'm older, it goes back to the guys that started this thinking. It’s all those early cyberpunks that started this thinking with cryptography, where they came from, and what they believed in.
It comes down to the details of what co-creation means. There are opportunities for co-publishing, co-data ownership, and things that haven't been done yet that are starting to be done. That's one thing that we're looking at as one of our projects from a media technology perspective.
Anything is promising and available if it's my choice. If I want to be a guy that partners with a big retailer, it's my choice. I want to do that. What I'm against is someone taking my data and then monetizing it, and I don't have a choice. I'm all about choices. Who knows? Maybe I'll want to do something with Facebook if I'm paid appropriately. The problem with companies as they get bigger is they look at the bottom line. This happened in the music business. The minute the accountants came in, it ceased being a creative place. Everything became about the bottom line. When someone takes your data and monetizes it, there are security issues with that. Not participating in it or not having a choice sucks.
I appreciate that. I feel that almost on a daily basis. Sometimes I feel worn out by this whole system. It’s just remembering and looking at trying to do like, “Yeah, a DNA test, that's cool. I could do that. I could learn about my health. I could check out my ancestry and all this stuff in it." I then have to go, "23andMe, that's the lady that was married to Sergey Brin of Google. They're all about my owning my data. She's going to know my DNA. She will know how to probably kill me with a pill or something." It's scary stuff. It's something that has worn on us as a culture. That's part of what is underlying this decentralized movement, owning your data, and having more of a say in what's going on for sure.
All of it started with trust. When 23andMe came around, for about half a second, I was like, "I don't want to give them that information." Worse than that, I was in the music business for three decades. I don't want to know if I have a kid somewhere. That would be terrible, "You're 54. You've got a kid. He's twenty." That would be terrible. 23andMe doesn't work on any level.
A good friend of mine found out she has 45 siblings.
My time with my family is this. I have one sibling.
Let's surprise Les. She's your kid. We're kidding.
Can you imagine me as a father? It's terrible.
Let's conveniently shift the topic to stablecoin regulation. What do you think about what's going on here? What's next? Do you think there's a way for regulations to spur innovation? Is that an oxymoron? What's going on here?
I can only speak to personal experience. I watched the hearings for FTX. I can't remember what the guy's name is with CFTC. This guy is brilliant. I feel comfortable with the way he was talking about Ledger X and the regulatory process they took. They're the one thing that's solvent out of the FTX nightmare. We need regulatory guidelines. They always say that a form of regulation is not regulating at all. That's what I feel has happened. Once we put the guidelines in place, it's better for innovation because you know when you're stepping outside of them. Not knowing is a lot harder.
Those hearings were interesting. When you listen to the politicians though, that was scary as shit because there is a handful of them that understood and knew about the space. Regulating the space is complex. I listened to a senator say, "How do you know that it's security?" I listened to another senator that day say, "How are you going to handle all this cryptocurrency as a small organization like the CFTC?"
Let's answer those two questions for a minute. The Howey Test has been around forever. The difference between security and commodity and who regulates has been established in traditional finance markets. You take a look at how big traditional finance markets are. For a senator to say, "How are you going to handle this with your smaller organization?" How big is a commodities business comparatively speaking to this? That's my fear.
They don't go deep enough to understand the difference between a stablecoin and something else. When we go even deeper, we start to see decentralization, DeFi, RealFi, CeFi, and regulated finance. The whole thing is layers of complexity that most people don't spend enough time understanding. You throw in NFTs, the metaverse, the marketplace, gaming tokens, treasury, Layer 2s, and everything else that's coming. What will you regulate first? They're still stuck on Bitcoin.
It's good to see people who have experience in these domains getting into regulatory positions. It shouldn't be adversarial. It's a cooperative one. I haven't done a full-on survey of it, but other domains that are regulated are complex as well. Look at pharmaceuticals, food, drugs, and things like this. It's a matter of getting in there, taking it on, and doing a good job.
When you started to talk about it, I was reminded of this quote that I often enjoy. It's a Stravinsky quote. He says, "The more constraints one imposes, the more one frees oneself. The arbitrariness of constraints serves only to obtain precision of execution." I always take from that. Stravinsky was a groundbreaking composer, but he enjoyed having some rules around what he created. He wrote music that drove people crazy with its novelty. It's interesting. It's somebody obsessed with rules and constraints in such a way that it helps to provide inspiration and guidelines, and make something creative happen.
I've listened to it for some strange reason. It's one of those things. If you connect to it, it's disturbing. It makes you feel uneasy by design. That probably plays into constraints. I have no idea if this is true or not. The way you compose was down the middle in terms of not coloring outside of the lines in a different way when you talk about the constraints of it. It's disturbing to listen to in a lot of ways. It always makes me feel uneasy. I don't know why.
Speaking of uneasiness, everybody in the marketplace is trying to understand what the next inflection point is going forward here. Is it a further dive into the abyss? Is it a trigger that's going to drive the next bull market? At some point, there will be a bull market. You talked about it right out of the gate. These are normal cycles. They ebb and flow, but predicting exactly when something will happen or why is always very difficult.
You're in a distinctive position where you can see some of these signals that come up, and may be able to point to potential things that are going to be part of the trigger that launches us into the next bull run. I'm curious about your perspective. What do you think that might be? Is it that last cycle thing happening in the DeFi space that triggers this? Is it some other corner of the industry that's going to be the launchpad for this next bull cycle? Where do you see things launching next?
I'm going to give you an answer that's true to my heart on this one. It will be the opposite answer of what my partner Dave Seymour would say. In my lifetime, I have clenched with both fists everything I've ever done and planned. I tried to see all the angles. What I've tried to do since I've been in this business is not do any of that, not predict, and not care. If I could figure out a way to run my own business, that was down my lane. I'm doing it for all the right reasons. I wasn't looking for those inflection points.
Dave does that because we're good at risk mitigation. Dave knows when to pull, where to invest, and where to hold back. That's why it's a good partnership. I'll give you an example. We did an NFT fund. It's performing above market, but it's way down as it should be comparatively speaking when we bought it and what we bought. To everyone who asked me about it, my answer is the same. I don't give a shit what the market says. I bought these because they are collectibles. I invested in these companies because I believe in the companies. I don't dictate the timeline of when the value comes back, but I believe in the blue chips I've purchased and I believe that it does come back.
If I need to cite it to a parable, let's look at art markets. After Andy Warhol died, he had so much shit out there that you could buy for nothing. That turned to a corner. Everything does turn corners if the selection process is based on valid information or even if it's not. If I'm buying something that I believe in and that I like, then there's a good chance that it will work but maybe not. I don't get caught up in what's next. It happens when it happens. If I like gaming, which I do, and the metaverse, then I'm building into the things that I see improving the economy. I'm not having to wait for it. Maybe something I do will help it.
We don't know what that catalyst is. We're usually wrong about it. If we take a look at when China made that big decision, that could have killed crypto. It didn't. Any one of those single things, including FTX, could have killed the whole thing, and it didn't. If it didn't kill it, how the hell do I know what's going to make it? It's going to happen. Playing that game where you're like, "The institutions are coming," and when they put their money in because it's big, that's going to turn everything.
We have been saying that for a long time now, and that hasn't happened.
That's exactly my point. Saying it and watching it not happen, why do I care? Let me do what I'm doing. There's less competition now because so much of it blew up. Maybe the company is not making what it could have made a year and a half ago, but that's okay. We're still here without problems. That's the way I look at it.
There are a lot of people that feel that way. We met a lot of them in Miami. These are dedicated folks that are building. It's one reason why we're going to have a hackathon at NFT LA. There are a lot of buildings still to be done here, and a lot of innovation. We're just scratching the surface of the potential here. One of those areas of innovation that has been talked about for a long time with a greater amount of attention is AI. We talked about Lensa. There's the AI art component.
I saw someone that created the ability to create derivatives of your NFT in five seconds. That was interesting. We showed it to a couple of founders of these big major projects there. They were processing, "How do I feel about this?" A lot of us are processing that. I would love to understand how you feel about AI, and the potential scale and impact it could have in the metaverse and beyond.
There are a lot of interesting projects using AI. One of the ones I love is Aaron McDonald from Centrality. He has the ASM Genesis Brains. They're connected to a game or sports. Those players learn how to play. The Lensa thing is cool. I want to go home and do it again. I did 200 avatars. I always go back to that story you hear about Meta having to turn it off. I don't know if you ever heard that story. There was a story about Meta ransom AI. It started to get too smart, so they turned it off. Here's to the destruction of the world through AI. Who cares? It would be funny.
I love anything innovative. We have seen all of this before in science fiction movies and television for the last 100 years. A lot of what people had imagined, we now have the ability to build a lot of that stuff. I walk down the street and I don't even flinch. You see those little robots driving around with food in them. What the hell? We don't even flinch. The world is connected in a different way. These big companies have always driven that. We're going to see another version of that start to happen. AI is a trip because you know the big companies are doing things with prompts. It's going to change everything. It's going to be strange.
Here's one interesting use case I learned about. I moderated a panel with some of the Sandbox accelerator projects. There's a company that is using AI to design three-dimensional assets that would normally take tremendous amounts of manpower to create these assets that could be used in the metaverse. I think about the conversations we're having with projects like SuperWorld, where we were, and the ability to create assets in these worlds. It felt like that was a big hurdle. That's no longer a hurdle. Fast forward to now with companies like this, you can create three-dimensional objects, not just 2D art. It's interesting to think about the impact on architecture both in the physical world and in the metaverse.
Gathering information and spitting it out in different applications is interesting. The other thing that's interesting is not just AI but physical versus digital. We're seeing these combinations. A company bought one of the sweatshirts. You're going to end up wearing it in the metaverse. That physical-digital is the tip of the iceberg on that stuff too. We have a theme. It's a collaboration of chocolate and peanut butter or things that aren't meant to go together that do. A lot of it may happen on purpose, but some of it will happen by accident. That's when we will see these interesting things emerge. Maybe it won't all be good, but it will sure be interesting.
We have seen a lot of things already. Ten or fifteen years ago, AI was still something that people were like, "I don't know if that's going to be anything of significance. People have been working on that but we will see.” We would love to get to this next segment, which is our Quick Hitters where we get to know you a little bit more personally, your story, and what drives you. First, before we roll out, tell us what projects you've been following in the Web3 space that you get excited about. Our audience is always interested to know what other stuff you're paying attention to.
It's interesting. With the way Wave is, we have the M&A stuff we're doing. This is going to sound terrible. I was going through a divorce. I had a lot of time to spend in the metaverse with games and everything else. I've been more focused on what I'm building and what we're doing with the company. Between those two activities, I haven't had a lot of time for discoveries. It's amazing that I was able to play with the Lensa thing, to be honest with you. I will get up to speed. We will come around. I'll spend fourteen hours a day looking at shit and be like, "That's interesting."
Tell me this. If you could buy one NFT for that NFT fund here in the down market for a deal, what would you pick?
Let me answer that other question all the way first. What I'm interested in is some of the bigger platforms that are emerging that do multiple things on a foundational level. I'm taking a look at the relationship between NFTs and things like streaming. How is that going to work? What is that going to look like? Companies are looking at that.
The other thing I'm fascinated with and I've been digging in deeply is influencer culture on Web2 and connecting it to Web3 because Web2 is still foundationally faster than anything else, and how that's going to open up other monetization. I won't say that I'm interested in Web3 projects as much as I am in disruptive business models. That's what I'm into. How do we do something that's completely disruptive where we can make money that people haven't thought about making money in those ways?
The other question I interjected was if you could buy an NFT in the down market here, what would you pick?
I'm a sucker for the old-school stuff. I would probably buy another Punk or another Ape. The thing I love about the Apes in particular is if I own them, I can exploit them. I bought a big three basketball team with the fund. It was Ice Cube's basketball team. I bought an Ape. We put the Ape on the jersey and did that in a day. It wasn't because I wanted the Ape or even because I wanted the basketball team. I was more curious about the jersey. I'm taking that and seeing if I could sell it digitally and physically.
That's the stuff that's interesting. I like that blue-chip stuff. In a down market, it's obvious. You look at the Art Blocks stuff, Azuki, and all of the stuff that they're going to build and what that is going to be. I didn't look at Loot (for Adventurers). I'm curious to see what those are trading in. Do you remember all the rage about those Loot cards? I never bought a Doodle.
I was going to ask you what your thoughts were there. They had a great activation, the DoodlePutt. One of the more interesting aspects of their activation was the word NFT wasn't anywhere part of it. They're building a brand. While not Doodle holders, we were invited as media. From the drinks to the ambiance to the decor, there was a vibe of a real brand that already exists in the world. Kudos to them on that.
I'm going to buy some more CrypToadz. I like CrypToadz because of what they represent. I like Gremplin as an artist. My guys are looking at all the new stuff like Gabe's thing and DigiDaigaku. I get that but I like what I like. I would probably buy another Ape or two. It would be the classic stuff. The thing I'm mourning the most though and I'm still pissed about is the premium I paid for my Tom Sachs Virgin Rocket when I bought it.
It ends up in a museum. This is my point though. These things end up in museums. They end up with Budweiser putting it on an ad, yet they're trading for nothing. Maybe I'll buy a bunch of Tom Sachs Rockets because I liked the project and everything he did with it. He launched these little model Rockets all over the world. It was such a cool art thing, yet it didn't pick up momentum.
He's one of the coolest ones among everything that came out.
There was a couple that was cool. The Ferrari Rocket and the Hermès rocket were pretty cool.
The next segment is called Edge Quick Hitters. It's a fun and quick way to get to know you a little bit better. There are ten quick questions. We're looking for a short, single-word, or few-word response but you can feel free to expand if you get the urge. Are you ready?
I'm ready.
What is the first thing you remember ever purchasing in your life?
The first thing I ever purchased in my life had to be something related to BMX or skateboarding. I bought it myself. That's my guess or fireworks. I grew up in Anaheim. It might have been fireworks. You have to be a certain age with fireworks, so maybe not.
That was the appeal. I remember there was a corner store that would sell us eleven-year-olds fireworks. It was not supposed to.
What am I talking about? It was candy. Going into the corner liquor store and buying candy would have been the first thing I purchased.
What's the first thing you ever remember settling in your life?
My dad was a guy that took us to the swap meet. He loved to barter. He was Eastern European. The first thing that I sold was at a machine shop. I used to drive a Vespa if you remember those things. Vespa had this thing called a flywheel. It was a pain in the ass to get this thing off if you needed to work on the Vespa. My dad helped me make these things called flywheel pullers. We made a bunch of them. I sold them. It was a way to get this thing off. Everyone who had a scooter bought these things because no one ever made them. That's the first business thing I probably sold.
It's a great business. You are your customer. You know people need it. Flipping into more recent times, what's the most recent thing you purchased?
The most recent thing is probably some clothing.
Is it fast fashion or something more expensive? What are we looking at here, pants, a tie or a suit?
It was probably more expensive. The most recent thing I purchased is iPhone 14 because I got tired of Apple's conspiracy destroying my 13. I got sick of it finally. I went to buy one. I bought the Apple 14 Pro.
When is it coming? There were some supply chain issues there.
I found one. I had to grab it because I couldn't take it anymore.
What's the most recent thing that you've sold?
The only thing I've ever sold is some cryptocurrency. Honestly, it's the only thing I ever sell. I don't sell NFTs. I've held on to all of those. I'm going to ride those into the dirt all the way to zero. I'm in, but I have sold some cryptocurrency. I haven't sold anything else.
What's the motivation? Is it tax-loss harvesting? Are you done with whatever chain?
I sold it because I wanted to buy some other things. I don't do that enough. I usually hold on to everything, I was like, "I've got a fair amount of this. Let me get rid of it so I can buy something else that I want."
Flipping the topic, what is your most prized possession?
It's weird because I don't think it's the possession that matters to me. It's the thought process of the purchase. I'm thinking about it, researching it, and figuring out what I want to get. That whole process is candid or something. It's the journey. That's what I like. My most recent prized possession purchase was a Murakami painting from the Gagosian gallery of an NFT.
That sounds great.
It connected to everything else, RTFKT and Murakami. I love that but I won't say it's my most prized possession.
I enjoy the process of looking for things, and then I notice I don't want to buy them. I'm sure I would look for a while.
I'm trying to think of what I'm coveting. Sadly, there's nothing.
I always term those things that I have as artifacts of adventure. I can look at those things. It's the story behind it that brings value to me. I do relate to that.
Next question, if you could buy anything in the world, digital, physical, service or experience that is currently for sale, what would it be?
We're here for such a limited amount of time on this Earth. For physical possessions, you could say an airplane, but an airplane gets old. That's not something you love. It makes the experience easier, but what you're working towards is the experience. I had one where I took this remarkable vacation. It was all about the experience. I want experiences now. I don't want possessions in the same way. They don't matter.
Possessions don't matter as much as experiences. Click To Tweet
Having said that, I did this race car thing in Las Vegas and drove the Ferrari 488 GT. I'm an electric car guy but that was fun. It was the experience, which leads me back to the old question. There's a country club in Palm Springs that has a racetrack connected to it. That seems fun. That would be a good experience and a purchase. You would need the car and the country club membership with the racetrack.
It sounds like it would be nice to have a pass to drive any car you want whenever you want. That would be fun. It's the whole comedians in cars getting coffee thing with Jerry Seinfeld. He's like, "You seem to like this car. Let's get this car. Let's drive it around. Let's have some fun." If you could pass on one of your personality traits to the next generation, what would you choose?
Am I trying to be kind? Am I trying to be mean?
You get to do whoever Les Borsai is. You're passing on a trait to the next generation.
Honestly, I don't think I would ever want to pass on ADD to the next generation. As I've gotten older, I have a pretty good moral compass. I inherently know what's good and bad. Kindness brings kindness. If you can do that and pass that attitude on to the next generation, that works. I'm not down with shortcuts and succeeding for the money. It's not cool. It brings too much crap into your life. When I was younger, I would have done that every which way I could. I didn't know any better. I just wanted the money. Whatever it takes, I want the money. As you get a little bit older, taking that approach isn't the right one.
Kindness brings kindness. Click To Tweet
That sounds like authenticity.
Authenticity is the thing across the board. If it's authentic, it's usually pretty cool.
Here's the next question, which you may have already answered. If you could eliminate one of your personality traits from the next generation, what would it be?
For me, there are all sorts of origin traits that create anxiety. Anxiety is a completely pointless feeling. It would be nice to get rid of the underlying causes of that. If I could relax a little more. I have the need to constantly work. I can't tell if it's because I like to work or I'm substituting other feelings I have by bearing myself in work. That's a terrible trait and a great trait at the same time because if you keep working, you can do okay, but that's not what life is about. You don't get the experience if you're working all the time.
A common issue nowadays is the general anxiety that people have. My theory is it's a symptom of our sedentariness. We're designed to run around outside and do things.
It's funny you should say that because I started martial arts classes again. Seriously, this is no bullshit. I'm going to take a salsa class. I don't know why. I don't have rhythm. I can't dance for shit. I thought, "Maybe moving my body a little bit is going to be a good thing. I'm going to do this and not think about it." That's something I couldn't do when I was a little bit younger or even ten years younger. The idea of someone looking at me and not being able to do something was terrifying. There's this stuff called contrary action where we have to do the things that we're uncomfortable with because that's where growth lies. I'm big on that. It's like, "This doesn't feel good. It feels terrible." Go do it.
I love it. This is question number nine. What did you do before joining us on the show?
I was downstairs answering emails. It was nothing riveting.
You have to do it. Our final question is the flip side. What are you going to do next after the show?
Funny enough, it's a bookend. I'm going to answer emails. I have a dinner tonight that I have to also deal with because I like to isolate. My secret is out. I have to deal with dinner.
Les, I've got a bonus question for you selfishly because you've been in LA a long time. What is your favorite restaurant in LA to go to when you want a good meal and nothing else matters?
I've been vegan now for a while. There's a great vegan restaurant. Crossroads is always fun, but there's this place called Mr. Charlie's on La Brea. As a kid when I was in elementary school, for whatever reason, they gave us McDonald's hamburgers on Tuesdays. My parents wouldn't let me participate in that program. It always pissed me off. No one was trading food with me. When I got them, it was this magical moment. It tells you, "McDonald's got you." Mr. Charlie's has these cheeseburgers. It's the same thing I had when I was a kid. They taste the same and they're vegan. That's a guilty pleasure.
There you go. My favorite vegan spot is Plant Food + Wine on Abbot Kinney.
I don't live out on the West side. I've been there. It's good. I went to this place in Hollywood which was a Japanese restaurant that served plant-based sushi. That was interesting and weird.
I know the spot.
Nicole Buffett hit me at a place called Au Lac.
It's downtown. It's good.
That's good vegan food. Next is Hot Topics, news of the day. Let's get into it. NFT loss harvesting made easy: no liquidity, no problem, "There's a silver lining to the crash in the NFT market. Millions of dollars are potential tax savings. To help NFT investors claim their tax savings before the end of the year, CoinLedger launched an NFT tax-loss harvesting tool." This is the word of the day. I mentioned it earlier. I didn't even know this was our Hot Topic. I don't fully understand tax-loss harvesting. I've talked to various people. The story that I've gotten is that you can only offset your losses for taxes on gains. You can't offset your taxes in general on tax-loss harvesting. That's something I have to contribute to the question. The conversation is a question about the strategy.
There's something interesting about this tool though, which is that they will buy your illiquid NFTs. This is not the first time I've heard of people that are snatching up these low-four NFTs. I've got to think that there's some creative upside for them if they conglomerate all these interesting NFTs that they can do fun things with. It's a creative marketing campaign. It does make sense to think about these things before the end of the year.
I'm not going to say that I've never done it but I will say this because I had a bad experience early selling things. I shouldn't have sold. I don't sell anything. To get the benefit, you have to sell it or get rid of it one way or another and burn it. I can't bring myself to do it. I would rather take the hit-and-hold because there's no way anyone on this show can tell me what's going to be big in 2023. You can't. Everything explosive might happen for a reason we didn't see coming. Why get rid of anything? I already bought them.
Consistent withholding was your mantra earlier in the episode. If you had some big gains, you made some big purchases as a follow-up to some of those gains, you took some losses, and you had some other wins, maybe it's a move that makes sense fundamentally for you. If you have a number of different assets that you could say that about, you don't necessarily have to sell your NFTs. You could sell a number of things and still be able to reap the rewards, short-term gains, and long-term gains. There are a bunch of different ways to do it. It doesn't have to be the NFT.
I'll tell you the one thing I would do with those Bamboozlers. One time, I got pegged. I lost on that thing every which way but sideways. I got in too late. I hate those things but I might do it on that. Do you remember that project? It was one of those Ponzis.
It sounds like a red flag there.
I know all the Ponzinomics. I missed that thing over and over again.
There are some spots where that makes sense. It's mostly a good time for everybody to think about taxes, and what your setup is where you have exposure and where you don't. Make those moves now. You can't make many of them after the end of the year. Some you can around retirement funds and things like that. You have to look at that stuff. Now is a good time to do it.
If you've got your eye on that Bored Ape or that CryptoPunk and you know a friend that has one, this is how you can sell them on selling it to you, "This is tax-loss harvesting." You could grab that CryptoPunk you want, Les.
I might want to buy a Noun. They were always overpriced but they were cool.
I met some Nouns in Miami. They're cool people too. They're working on an initiative called Nouns On The Ground. Look for more Nouns out having fun. They're doing something with the Rose Bowl.
I'm bullish on the Cardano ecosystem. That’s because we work closely with them. The Ape Society was interesting. These guys are more active than any community I've ever seen. It was the craziest thing. I believe in some of the communities that are coming out of that ecosystem.
Let me say one last thing on tax-loss harvesting. They don't mention it in this article. That isn't part of this service. Traditionally, when you talk about tax-loss harvesting, you're not just selling the asset but you also traditionally talk about buying it on the back end 30 days later if it's a stock, for example. That's usually part of the combo because you still believe in it, but you're trying to harvest the loss and then still make the long-term bet.
When I first saw that service, I was thinking they will buy it from you and then return it to you, and that there was some mechanism to enable that. That wasn't the case but I thought that would be pretty cool if there was a mechanism that would do that where it still made economic sense. Maybe they got a royalty related to it or something that would enable more traditional tax-loss harvesting.
Cryptocurrency and NFTs are still the Wild West, especially where taxes are concerned. As good as it sounds to do the harvesting that way and rebuy it, I don't need to do anything that's going to raise a little bit of a flag.
The smart contract aspect is very interesting here. You could make a smart contract that says, "Come back to my wallet in 30 days. It's the legally defined period."
That's a very traditional above-board approach. Rebuy in 30 days. If you go under, you don't get that benefit.
The other interesting aspect here is if you trade your NFT for another NFT in the same collection, does that count as buying a different asset?
Why not?
Thank you, regulator Joshua Kriger.
The definition of NFT is a non-fungible token. What regulators would say, that's what I don't know. That would be funky.
Regulators love to have a problem with things. Let's move on to the next Hot Topic, "Timex launches $2,500 Bored Ape watches and matching NFTs. Owners of Bored Ape Yacht Club NFTs will soon be able to show off their PFPs on their wrist, enshrined in a one-of-a-kind Timex watch." It takes a licking and keeps on ticking.
I popped by the launch party for this event on South Beach. It took about 90 minutes to get over there but there was quite good Mexican food and a bunch of fun Apes that were hanging out and celebrating this collaboration with Timex. We interviewed Timex. There will be a short segment on social media from that event. I didn't know this was going to be a Hot Topic. I don't know if you knew that I did that.
It was cool to see an iconic brand step up to the plate and try something new. It started with an RFP and then it ended up with a very different collaboration that felt a little bit more authentic to the community. They had some Bored Apes as advisors. Bored Room Ventures helped with it, and @TheMiamiApe and a bunch of different folks got involved to help them with this collaboration.
Once you mint your watch, it's there forever. There's a custom etching that you're allowed to do on the back of the watch. It is cool. It was interesting that the Bored Ape community chose to partner with Timex. There's an interesting dichotomy there with those two brands coming together. That's what makes it special. I give everyone involved the courage to launch something like this in the current market. Kudos to Timex for trying to do something authentic in this space. It's 2 ETH. It's not your average Timex, but it's a special limited edition collectible piece.
When does that drop?
December 4th, 2022. You could have also gotten one at the pre-party event. Shari Fabiani was the Vice President of Global Marketing that I spoke with. They were super excited to do something in Web3. They're super committed to doing it right. It wasn't easy for them. They had to move a lot of red tape around to do this type of project that was one-on-one for each Ape holder that participated. They did it as a proof of concept.
It must have sold out in five seconds.
We should check it out and see what happened there. They own a number of bigger brands like Guess and whatnot. For them, this was an experiment, not just for their Timex brand but for all their brands.
I'm going to have to go look at that because I was thinking about watches. That's cool that they did that. That's a brand I would want to work with even though I don't love Timex as a watch brand, but it's cool that they did that.
In general, that's what's happening with IP. You mentioned it earlier around Apes. The thing is there's so much cool shit happening there. It's being developed, refined, and iterated on lots of learning. Some stuff works. Some stuff doesn't. The Timex took a pretty cool approach here in co-creating this. It's true co-creation, not like, "Let's come up with the concept internally and then get a couple of people to help us promote it," which so many big brands do. That's cool. Josh, I didn't know those details. It is cool to hear about some of that stuff because it didn't even come through in the article. Gary Vee is talking about it a lot and the iteration he is doing with VeeFriends. It's neat to see that community do things like that.
I didn't know that. I met the whole Timex team. They came in from all over the world to launch this thing at Art Basel.
There's a lot of cool stuff going on at Art Basel. Fashion is a place where there's a lot to be explored. We saw gmoney popped-up. He was doing fashion and printing t-shirts on demand for folks who had the appropriate NFT. They had scannable codes in the shirt itself where you could say, "I've got a couple of POAPs from people's shirts.” It was fun to do more with fashion. All this stuff is happening. It's cool to see it at Art Basel.
I missed it in 2022.
What else can we do to make Les jealous, Josh?
That didn't make me jealous. I'm happy.
The Sandbox party was incredible.
That's a blessing. I don't want to go anywhere.
Les prefers NFT LA. It's closer to home.
That's even a stretch but I can make it there.
We were talking a little bit earlier about this shout-out segment where we like to give any folks within your orbit or realm of influence some love. Les, what do you have for a shout-out for our audience?
Honestly, I was stumped. This is the only question you stumped me on. I was like, "Who is in my orbit that I want to say something to?" I couldn't come up with anything. I was thinking about people that inspired me. Richard Prince is an artist that inspires me. There's Murakami. Those people inspire me for sure. Chuck Palahniuk is a great author. It's anything that has darkness attached to it, I suppose. I don't have a shout-out for someone in my universe or orbit, which is sad.
These folks are because they have moved the needle for you. That's what we're looking at there to give that love to folks that move the needle for you, whether they're in your immediate vicinity or not.
Wednesday Addams is the current one. If you're watching that show on Netflix, that show is so funny.
Part of what we find valuable about this segment is putting things on people's radars that they might not find out about. Cheers to that. I'll pick up some Chuck Palahniuk and read it now and look at Richard Prince's work.
I'm also going to see Wednesday Addams and enjoy that show with my girlfriend.
She does such a great job as an actress. You will have some fun with that. I haven't been able to watch a lot of TV lately.
Thanks for pulling those together, Les, despite your difficulties. I still think it was a fun shout-out. We're about to wrap up here with the show. Before we do, we want to make sure we found out where folks can go to learn more about you and the projects you're working on.
I'm going to have to update that bio because those were old projects from 2014. Honestly, I'm on Instagram and Twitter. I'm probably on Instagram more. I don't have a lot of followers on Instagram but I'm pretty current with it lately. I don't know why. I was a late starter with all that social media stuff.
You have to get all the right bathing suits, the right filters, and the right hotel partnerships.
I'm trying to be eye candy. It's not working. That's probably the only place. Thanks for having me. I appreciate it. This was super fun.
We have reached the outer limit at the show. Thanks for exploring with us. We've got more space for adventures on this starship, so invite your friends and recruit some cool strangers that will make this journey all so much better. How? Go to Spotify or iTunes, rate us and say something awesome. Go to EdgeOfNFT.com to dive further down the rabbit hole. Look us up on all major social platforms by typing EdgeOfNFT and start a fun conversation with us online. Lastly, be sure to tune in next time for more great NFT content. Thanks again for sharing this time with us.
Important Links
- Wave Financial
- NFTLA.live
- Cardano
- Gremplin
- Gala
- Townstar
- Death Row
- YGG
- Aavegotchi
- Jesse Johnson - Previous episode
- Lensa
- Art Basel
- NBA Top Shot
- Art Blocks
- Fidenza
- Ringers
- Lens Protocol
- Centrality
- ASM Genesis Brains
- Sandbox
- SuperWorld
- Azuki
- Loot (for Adventurers)
- Doodles
- CrypToadz
- DigiDaigaku
- Rocket
- Gagosian
- Mr. Charlie's
- Plant Food + Wine
- Au Lac
- NFT loss harvesting made easy: no liquidity, no problem
- CoinLedger
- Noun
- The Ape Society
- Timex launches $2,500 Bored Ape watches and matching NFTs
- Bored Room Ventures
- @TheMiamiApe - Twitter
- VeeFriends
- gmoney
- Richard Prince
- Chuck Palahniuk
- Instagram - Les Borsai
- Twitter - Les Borsai
- Spotify - Edge of NFT
- iTunes - Edge of NFT
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