Social Money is How We Take a Piece of the Trillions in Value Captured by Social Media: Roll Co-Founders

Hello Defiers! This week’s interview is with Bradley Miles and Sid Kalla, the co-founders of Roll, a platform that enables the issuance and distribution of so-called ‘social money.’ Roll is one of those projects building something that just couldn’t be possible without a decentralized network; personal tokens, which can be issued by anyone and used as money-less incentives for others to do what the issuer deems valuable or accepted as payment by the issuer, too. These currencies are portable and can be used to strengthen bonds among communities on different platforms.

Some of the key things we talked about:

  • Personal tokens can take some of the value being captured by social media platforms

  • Some of the most futuristic use-cases, like staking social tokens to access content

  • Their big-name investors, BitMEX CEO Arthur Hayes and Brooklyn Nets player Spencer Dinwiddie

  • Their plan to monetize by becoming social money whales

  • Some of their activity stats so far; number of wallets and “activations” or times users spend and earn tokens

  • The long-term vision of a “social money stack” and personal tokens becoming ubiquitous and composable

This interview has been edited for brevity and I’ve bolded my favorite quotes. 

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Bradley Miles: I started out as the founding researcher at CoinDesk. A lot of my job was basically broad market research coming out at the end of every quarter in a product that was known as the State of Blockchain report. I met Sid there and we became very interested in the idea of using Ethereum uniquely to have digital communities completely own their value systems, independent of platforms.

Camila Russo: Sid, were you also a researcher at CoinDesk?

Sid Kalla: Yeah, I was a researcher for several years as well. I'd written for CoinDesk and some other publications. My focus was on diving into the specific crypto economic protocols that were coming up before the ICO world and during that whole boom that happened. A lot of my job was digging into the economics of the token and what makes sense, what doesn't.

I have some technical background as well. I used to be the CTO of a financial company based in New York and London, leading a team of developers. We built out platforms for tracking traditional financial assets and their the ownership across countries. I actually started out my career way back as a programmer at Bloomberg.

CR: Bloomberg connection here! So when did you make the jump from CoinDesk into building Roll full time and what was your very early vision for it?

BM: We launched on main net in August. We see Roll as an Ethereum protocol and web app that allows communities to create, use and distribute social money. We really kept at it and tried to make it as simple as possible and now it's become so easy and so accessible. The communities are now using social money every day on the platforms that they already know and love.

Sid Kall (second left) and Bradley Miles (right), with Roll team members. Image source: CoinDesk.

Ceci N’Est Pas an ICO

CR: This concept of issuing your own token, how much of an influence did ICOs have? Sid, you mentioned you spent some time analyzing that space. What are some of the similarities and differences with what you’re trying to do with Roll?

SK: Yeah, so we both looked pretty deeply into ICOs and we really think that some of the economics and the value systems were inverted. In a traditional ICO the team gets the value first because they're pre-selling most of the tokens. Then it kind of becomes up to the team whether they want to build a product or not. And unfortunately we have seen many teams raise money and then not fulfill their promises. So there are some fundamental differences with social money. One of the things we do is we always vest tokens over time. What we absolutely want to ensure is that the majority of the value is captured by the community in the future as that evens out some of the speculative aspects of things.

The other thing is that Roll doesn't raise money from the presale of tokens. There's no underlying Roll token in this. We want to make sure that the economics are aligned so that the users of Roll and Roll itself as a company succeed and fail together.

CR: So the way I understand what you do is, creating an ERC20 token and turning it into social money is difficult to do. I tried to do a Cami Coin before and it was just difficult and I didn’t know how to distribute it and create uses for it and a market. So is it right to think of Roll as an interface that makes this easier for anyone to do?

BM: Exactly. Roll basically becomes a platform layer that sits on top of folks' existing social web and pretty seamlessly does the things your community already wants on the places your community already exists. So we're starting to really see social money as the unbundling of social capital across those platforms.

Social tokens on Roll. There are 60 in total. Image source: Roll

How Social Media Can Become Social Capital

We really see it as this enormous market. We want to bring decentralized finance to social capital to really unlock that value for the first time. So you can do things like trade some of the social money on a Uniswap front end, and we have imagined things down the line like taking out a loan and using social money as collateral. So we can potentially plug into a protocol to do that. We seen social money as a payment method for tasks or digital cash for communities, as a loyalty reward system or even as a store of value for these digital communities that sit on top of all these platforms.

Some of the most amazing things we've seen with sort of a specific Web3 use cases is things like Paul [Berg] and what he's doing with Sablier and social money streaming. That was an awesome article on The Defiant. And more recently folks at Kickback integrated social money for social staking. So staking social money to gain access to events.

CR: Oh, interesting. But those are pretty advanced use cases. Can we take a step back and if you could just explain to me the very basic, general concept?

SK: The way you can think of social money is it lets you make your social capital real. In a practical sense, you can incentivize your community towards things that you deem valuable.

CR: Right. And can you explain what you mean by social capital?

SK: So if I have people who really like my writing, who follow me on Twitter or Instagram or any of the traditional social media platforms, the value is real and we know the value is real because cumulatively these platforms are literally worth trillions of dollars right now. But a lot of that value gets captured at the platform layer and not at the individual there. You have tens of thousands of Twitter followers, which says that people find value in what your tweet. But guess who's mostly capturing the value --it's going to be the underlying platform. Communities generally understand that there is value in what they're doing, but it's also a very hard problem to capture that value.

CR: And your goal is for social money to help individuals capture the value that they’re leaving on these platforms?

Portable Communities

SK: Yeah. Something like that. Individuals, and also communities in general. The other advantage of tying this to Ethereum and tying it to your personal brand is that the platform then becomes less important. You can take your community from Twitter to Discord to TicToc tomorrow. Your community becomes portable and you can pour it over across the platforms.

CR: So it’s the token issuer and token holders what makes a community and not the website itself, not Twitter or Instagram.

BM: Right. We generally see communities as having a network value. Similar to a lot of the protocols that we follow, except in this instance, the value flows directly through the people responsible for generating that value in the first place. So it's not only the creator of the social money, it's also the community as well.

Better Than the Greenback

CR: So how is this better than just using dollars?

SK: Actually in several ways. One is you can bootstrap value. There are several tasks that are socially much easier to facilitate from a community based money. Let's say someone provided a nice review for your art. Would it make more sense to send that person a hundred Hue or say, ‘Hey, give me your PayPal address and I'll send you 2 cents.’ It's just not behavior that we see anywhere and it's not native to people.

CR: Right, and I think it’s really interesting that it can really facilitate the interaction in global communities.

SK: That’s very exciting. Some of our artists are in the U S but a lot of their fans are abroad and social money is just such a seamless way for them to interact with the people they follow. It completely dissolves any geographical boundaries for them.

Social Streaming to Social Staking

CR: Can you dive deeper into the different ways that you're seeing people already using social money?

BM: The thing that received the most attention was when we forked the Uniswap protocol. That allowed the trading of social money. It was the very first time that people could literally see the value of social money on an exchange. A few marketplaces have actually reached out and we've started to list some of the social money that folks are trading. From there a lot of attention started to come from different parties, but when we made contact with Paul, this idea of literally exchanging services based on your social money through Sablier became a natural fit, and was super exciting for us. Kickback was exciting for us as well.

I think the concept of social staking is going to be very big in the next five years. You could imagine this idea that staking a social token may get you access to various forms of social content. You can imagine plugging into various protocols, whether it's Unlock or anything else that may come out, literally redefining what a subscription could be in the future. That's really part of the vision of what, what role is.

Building a Social Money Stack

CR: And with this as a starting point, what’s your bigger vision for the future?

BM: Because of how fast things are moving and what we're seeing, we do think it's inevitable that a social money stack for the web will start to emerge. This will open up an entirely new feature set for millions of digital communities. And the goal of Roll is really to introduce this stack. Today, right now we're building for communities. Tomorrow we're building for developers to really continue opening up this stack and have social money live on all these platforms. So right now, every day we're seeing communities become digital assets through social money. The next step for Roll is really building out the stack to take that to the next level.

CR: What do you mean exactly by social money stack? Like different platforms and tools for social money?

SK: Yeah. So the way we see this is at the very base layer is the idea of communities as digital assets. And we are seeing that value become real in many different ways. The next layer is actually seeing the value tangibly in an exchange. Once you have established that value, what are the things you can do on top of that? The Roll app is just one example. We make it very easy for you to distribute social money on the platforms you already use.

So if you're a Discord user and someone let's say, makes fan art for you, you can say, ‘Hey, this is amazing. Here's 100 CAMI for you.’ And that's like a super easy thing to do. They don't need MetaMask or Ethereum, the connection is with you and the community. That's just one application. Distribution of social money is a solution to one problem that our app is doing. We will never say ours is the only way to do this. Ultimately you want to give that power to the communities.

The other thing is also because communities are so different in their needs, us as a centralized company can never do everything that every community needs and what we really want to do is give the tools to those developers so they can build the tools on social money that are useful to them, whether that's distribution, whether that's staking or whether that's even something that we have never even thought about.

[ … ]

Paid subscribers have access to the full interview, including sections on:

  • Roll’s big-name seed round

  • Roll metrics so far and their monetization plan

  • Where does social money stand in terms of regulation

  • Berg’s view for an “hourglass on steroids

Subscribe now so you don’t miss any of The Defiant content. Subscribers reading this post: Head to posts marked with the little lock to see the full content.


The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

Recap: DeFi Week of Feb. 17 🦄

Hello Defiers, hope you’re enjoying your weekend!

Summing last week up: It was a shorter week for The Defiant because of the U.S. holiday, but an incredibly intense one. Two exploits leveraged flash loans and five different DeFi platforms, including bZX and dYdX, to manipulate the market and make a profit. The schemes, which yielded about $900,000 (depending on the ETH price), had the whole ecosystem scrambling to find which other protocols were vulnerable. It turned out there was a potential exploit on MakerDAO, which triggered an emergency governance vote yesterday. The silver lining is that we got to see decentralized insurance in action as Nexus Mutual paid out bZx lenders’ claims. On less stressful news, Decentraland launched, causing digital land sales to spike, and Synthetix is adding ether as collateral.


Friday

Dives

  • $180K of Digital Land Sold as Virtual City Gates Open: Decentraland, the virtual world built on the Ethereum blockchain, launched yesterday after three years of private development.

Sums

  • Synthetix Adds Ether as Collateral: Synthetix, a platform to mint and trade synthetic digital tokens, is adding ether as collateral in its Achernar release.

  • Nexus Mutual Paid Out bZx Insurance Claims: One silver lining from the bZx exploits was proof that Nexus Mutual’s decentralized insurance system works.

    Bytes

Thursday

First

  • Exclusive: Cristiano Ronaldo is Getting Tokenized: Sorare, a fantasy football game, entered a licensing agreement with Italian giant Juventus to issue scarce digital tokens representing the team’s players. Cristiano Ronaldo’s card is getting issued today.

Dives

  • So This is What a Bank Run on DeFi Looks Like: Three days after bZx’s second attack, the protocol is still paused and users are waiting to close out trades and take out their money.

  • MakerDAO Scrambles to Fix Potential Flash Loan Exploit: All of DeFi is in high alert after the bZx exploits made it clear that hackers can use flash loans to manipulate the system. With MakerDAO holding more than half of all the ETH in decentralized finance, it’s a big target, and token movements spurred speculation hackers are preparing an exploit. 

Tuesday

  • Exploits Yield $900k and Raise Questions of “De” in DeFi: In the last four days, the bZx DeFi trading protocol was exploited twice; the first attack was executed over Valentine’s Day and yielded ~1,271 ETH, while the second one was just last night and made ~2,378 ETH. That’s about $320,000 and $600,000, respectively, with ETH at $250. Questions on whether DeFi is sufficiently decentralized, and on the potential points of failure posed by price oracles, were raised as a result.


💜Community Love💜

Thanking all the amazing Defiers for the support and love this week (and always)!


The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

Almost $200,000 in Digital Land Sold This Week as VR City Opens Gates

Also, Synthetix adds ETH as collateral, decentralized insurance protects bZx users, Ripple creates bridge to Ethereum.

Hello Defiers and happy Friday! Here’s what’s going on in decentralized finance:

  • Land sales on Decentraland spike as virtual city launches

  • Synthetix adds ether as collateral

  • Nexus Mutual pays out bZx claims

and more :)


$180K of Digital Land Sold as Virtual City Gates Open

Decentraland, the virtual world built on the Ethereum blockchain, launched yesterday after three years of private development.

The first plots of land were sold after the project’s initial coin offering, which raised $26 million in 30 seconds in 2017. For the past three years, users have been trading their digital land and building out this city, making everything from art galleries where they can display actual copies of digital art, to castles and casinos.

Now the world they’ve created is open for anyone to see. You can go to this link right now, create an avatar, and start exploring. I did it myself (my avatar is pretty cute!)

Decentraland Cami. Image source: https://play.decentraland.org/

I’ll have to spend some more time there though, because to be honest, other than walking around and looking at the very nice-looking graphics, I wasn’t sure what else to do! I wasn’t the only one.

But clearly many people do know what they’re doing. More than $180,000 of non-fungible tokens representing land on Decentraland have been sold this week, according to NonFungible. There have been 467 sales totaling over $550,000 in the past month.

Image source: nonfungible.com

The digital city has fixed dimensions, where 90,000 plots of 10 meters by 10 meters give it roughly the size of a virtual Washington DC. There are “districts,” where developments of the same category, like art or fashion, come together, and property near the main square goes for higher prices. The Decentraland marketplace is already starting to look like traditional real estate portal, with advertisements that say things like, “Top location surrounded by road >>Commercial Development *roof terrace.”

Land parcel being sold on Decentraland. Image source: market.decentraland.org

Decentraland DAO

But unlike in the real world, anyone, anywhere can access and build on this city, and no single government or corporation can suddenly change the rules. A Decentralized Autonomous Organization, or DAO, governed by users, decides on things like policy updates and land auctions. Land owners are free to build whatever they want on their land —and this got easier. Previously, coding skills were required to build these fantastical worlds, but the team recently released drag-and-drop 3D editor.

Cryptovoxels is a similar project, which has seen volume of $19,000 in the past week and almost $400,000 in the past month. Their value proposition is being a lower-fidelity version of Decentraland, that’s easier to build.

Same as with the fantasy football cards I wrote about yesterday, Decentraland and Cryptovoxels are unlike other virtual reality games in that users actually own the non-fungible tokens representing land and other items, and they’re free to trade them in secondary markets.

Virtual Mortgages for Virtual Land

As with most things on Ethereum, Decentraland is getting sucked into DeFi. One day after the launch, Rocket, which is building a platform to offer loans against NFTs, is already offering mortgages for virtual land.

Some are taking things even further, speculating whether there’s a way to use flash loans to profit from virtual real estate. —In case you haven’t been keeping track of the DeFi world this week, flash loans, which allow traders to take out loans of any size without collateral as long as they pay them back within the same Ethereum transaction, are wrecking havoc. They minimize the risk of market manipulation and people are taking advantage. [Read more here.] But I digress, back to Decentraland.

There’s a four-day treasure hunt going on in the digital city right now, with prizes totaling $100,000 in value, so go check it out.

Synthetix Adds Ether as Collateral

Synthetix, a platform to mint and trade synthetic digital tokens, is adding ether as collateral in its Achernar release.

There will be a three-month trial period, with a planned initial total cap of 5,000 ETH, collateral requirement of 150 percent, a minting fee of 50bps, and an interest rate of 5 percent APR. ETH stakers won’t receive sUSD (synthetic USD) trading fees or SNX staking rewards, as they won’t take on risk of debt pool fluctuations.

The goal of adding ether as collateral is to increase the system’s scalability, as there will now be more liquidity available upon which to issue synthetic assets. It would also make the system more stable, as ether would diversify collateral held from only SNX currently, and protect it from the token’s price volatility. It will also make it easier for a newcomer to start trading on the exchange.

Nexus Mutual Paid Out bZx Insurance Claims

One silver lining from the bZx exploits was proof that Nexus Mutual’s decentralized insurance system works.

Three of six Nexus Mutual members with bZX cover submitted claims after the exploits, and they all got repaid. The first claim was rejected, as claim assessors initially concluded the bZx contracts worked as intended, and Nexus Mutual protects only against smart contract failures. The user was able to resubmit their claim and get paid after the bZx post-mortem made it clear that there was bug in the code.

Claim assessors, which is any member of the mutual willing to stake their NXM tokens, vote on whether to pay out claims.

[Read my interview with Nexus Mutual founder: Open Finance Can Protect Those Who Legacy Insurers Can't Serve]

Ripple Plans to Build Crypto Bridge Between XRP and Ethereum (ETH): Daily Hodl

Ripple says it’s looking to build a financial bridge with Ethereum. The company launched a series of challenges at ETH Denver to pay coders who can connect the two cryptocurrencies on the Interledger Protocol (ILP).


The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

Click here to pay with DAI.There’s a limited amount of OG Memberships at 70 Dai per annual subscription ($100/yr normal price).

About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.

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