ROHAM GHAREGOZLOU: Dapper Labs
is the world's first blockchain
entertainment company.
We're the creators
of CryptoKitties.
This is the world's
largest blockchain game.
And of Cheese Wizards and
other applications like Dapper,
which make the blockchain
easier to use for everybody.
We created Dapper Labs at
the end of February 2018
and raised our seed round
of financing immediately
afterwards from Andreessen
Horowitz and Union Square
Ventures.
A few months later,
given the progress
we were seeing
under the hood, we
raised a follow-on
round of financing
from Venrock and Google Ventures
to accelerate our progress.
We also have a number of
smaller investors on board
that are absolutely fantastic.
We have two of the world's
largest talent agencies,
CAA and Endeavor, as well
as Digital Currency Group,
one of the leading investors
in the crypto space.
The best way to think about
the potential of blockchain,
is to compare it to the impact
that the internet has had.
The internet democratized
the ability for people
to create, distribute
and consume information.
Blockchain's going to do
the same thing for value.
If you think about it
at its most basic level,
in the early days
of the internet,
anybody was able to go create
a website, send an email,
reach millions or
billions of people.
Blockchain will create
that same ability for folks
to go create a
token, whether that's
a cryptocurrency or
a non-fungible token
like CryptoKitties, and have
communities, corporations
or even groups of people around
the world that have never
met each other, be
able to exchange value
without an intermediary,
without any middleman.
The benefits of
blockchain for gaming
are really absolutely
fascinating.
Already, people are
spending billions
of dollars on digital
assets without actually
having any ownership of them.
In 2017, it was over
$78 billion dollars
that was spent on digital
items or downloadable content.
Now blockchain adds
three key benefits
to games that really
change the game in terms
of how people will interact
with future experiences.
First, it lets players be able
to own the assets that they
pay for and take them into
third party experiences.
So for the first
time, folks that
are buying, whether they're
buying Fortnight's skins,
whether they're buying in-game
achievements or assets that
actually advance their
progress in the game,
they can choose to sell them
on third party marketplaces
if they're no longer
interested in that experience,
they can choose to buy and
trade them with other players
in order to reach new
parts of the game.
And really, they're back
in the driver's seat,
rather than being
kind of a vassal
to the gaming
companies' choices.
Second, and partially because
of this true ownership,
games that rely on
blockchain technology
are able to create this
sort of joint venture
between themselves and
their players in a way
that was never possible before.
If you think about it, games
are all social networks.
They're just a way for us to
come together and interact
with each other in
a different medium.
And the ability
to tokenize parts
of the value in that
new medium and share it
among different parties, has
unlocked a crazy possibility
for the future.
Which means that
that possibility
is a possibility where gamers
that are part of the game
experience can financially
benefit from the work
that they do in the economy.
They can financially benefit
from making the game better,
whether that's through
bringing new players in.
Whether that's through adding
user-generated content.
Whether that's through
providing services to others
that are playing in the game.
And third, maybe again,
kind of most important,
this possibility of games to
be kind of moddable by default.
If you think about some of
the most successful games,
they started as mods.
As in third parties that
took original engines
or original games and spun
them around a different way.
Now what if we plan
for that for default?
And what if the
tokenization could
be an economy for all of
these third party developers
that are contributing
back to the game
and financially
benefiting from it?
And folks are going
to be able to interact
with different paradigms
without being as held down
by their expectations of
things in the real world.
For example, if
you're going to apply
for a mortgage on
the blockchain,
you're going to
question yourself a lot.
You're going to talk to
your financial advisor.
You're going to really
think about that decision.
And the government's sort
of, and the regulatory side
of things will have to
change a lot before it even
allows that as a possibility.
But within games,
people are already
locking up their crypto
keys and taking out
loans with cats as collateral.
People are already using their
achievements in a virtual world
to be able to take, to be
able to get real benefits
in the physical world.
And we think that's
absolutely magical.
So CryptoKitties is the most
successful blockchain game
really because of
the community that
has been created around it.
In a sense, we could
never create the game
as it currently exists,
without blockchain.
Without blockchain, nobody
would believe the commitment
that we've made, that
hey, we will not make more
than 50,000 Generation 0 cats.
That is a, because
of the blockchain,
that is a commitment
even we cannot change.
And so that gives
these assets value
in a way that it really was
impossible for a small company
like ours to do previously.
Similarly, this concept of
sort of a peer-to-peer economy,
if you think about
a Fortnite, if you
think about any modern game
day you download on your phone,
you can buy things.
You can never really sell them.
You can go online and try to
sort of through third party
marketplaces, hock your
account and things like that.
But the possibilities
for fraud are high.
The possibilities
for actually getting
banned by the game
maker are high,
because you're contravening
their terms of service.
Because of blockchain,
when you buy a CryptoKitty,
it's 100% yours, and
we couldn't stop you
from taking it into a
third party experience,
even if we wanted to.
And that final
concept is the reason
that the KittyVerse even exists.
Before CryptoKitties
was even a platform
that people knew that
they could trust,
they started building
on top of it.
And the reason is, they
knew we couldn't stop them.
The folks that made
Kitty Hats, one of which
actually works here
right now, knew
that we couldn't stop him
from creating this concept
and giving it to our customers.
And in a way, as a developer
sitting by himself,
this was the best
way for him to be
able to reach a new community
and be part of something
bigger without actually having
to reinvent the wheel himself.
So we created CryptoKitties
to make it simple
and let people understand
blockchain in a different way.
For example, to illustrate this
concept of digital scarcity,
this concept of limited
edition digital objects,
we created 50,000
Generation 0 cats.
And everybody could tell
from the day one of the game,
that there can never be
any more than 50,000,
because the rules of the
software won't allow it.
And so these Generation 0 cats
throughout the bear market
of 2018, actually kept
their value better
than Bitcoin did
for this reason.
Another example of
how CryptoKitties
helps people understand
blockchain better,
is if 85% of transactions
within the CryptoKitties network
are between players, rather
than between players and us.
And this is much more
of a Napster-like game
than a Spotify-like game.
And it lets people
understand the concept
of a peer-to-peer
economy, rather
than a centralized economy.
The third, and I think
my favorite way, where
CryptoKitties starting to show
the potential of blockchain
in a way that can be
easily understood,
is this idea of extensibility.
So because the blockchain
software programs run out there
in the open, anybody can
you build on top of them
without taking this thing
that we call platform risk.
Without taking the risk that
the creators of the software
can cut them off.
For example, within weeks
of launching CryptoKitties,
we had folks building
third party applications
like KittyCalc.
Now we have things
like KittyRaces.
We have KittyHats.
We have Kota Wars, which is the
ability for people to actually
fight their cats together.
And all of these
developers are actually
creating an ecosystem, an
economy on top of CryptoKitties
in a way that shows the owners
of CryptoKitties, these users,
the power of blockchain.
The power of open
source services
that can live out there,
be accessible by anybody,
and eventually be recombined
by developers in new ways,
creating more choice
for the consumer.
Yeah, the KittyVerse
is essentially
this global community of
developers that are building
applications for CryptoKitties.
Most of them are
hobbyists, they're hackers,
they're independent
Ethereum developers.
But we also have the
academic institutions.
We also have people
who are trying
to use CryptoKitties to teach
the value of blockchain.
But also the path to building
on top of the blockchain.
And recently, we've also had
professional gaming companies
that are reaching out,
wanting to both license
the CryptoKitties IP, as well as
develop on top of the platform.
And the reason
people are doing this
is that the community is a
cohesive community of folks
that are willing
to spend in order
to invest in their
experiences in their cats.
And in a sense,
because blockchain
is a fabric of value,
because these cats as tokens
already hold value,
it's relatively
straightforward for
third party developers
to be able to have their own
business models on top of ours.
For example, KittyRaces
charge per race.
KiittyHats allowed artists
to design clothing,
whether they're hats or glasses
or a variety of accessories
for cats, and sell
them to kitty owners
and make a piece of the profit.
So in this sense, you kind of,
because blockchain is such a
by nature, a
token-driven economy,
it makes it a lot easier
for folks who are already
part of the network to spend
on complimentary experiences,
without affecting, I should
mention, our experience.
Nobody can corrupt
your CryptoKitty.
No third party developer
can build something that
takes something away from you.
They can only add to the
experience that we created.
The folks that are
playing CryptoKitties
are really the
early adopters that
were willing to go
through all the steps
and look past all of
the under construction
signs on the Ethereum
blockchain to actually get
to the core experience and
be a part of the community.
Most of our players
actually don't identify
as cryptocurrency fans.
They identify as
gamers or folks that
are interested in the
collectibility aspect
of things.
And this is across the board.
Whether it's parents that
are playing CryptoKitties
with their kids to teach them
the value of true ownership
and the different,
the possibilities
for a different kind
of digital future.
And these are mostly Silicon
Valley parents, who themselves
work in large tech companies.
Or it's just hobbyists who
really enjoy the puzzle
aspect of finding these cats.
And they enjoy the fact
that they can actually
monetize and sell the
collectible pieces
that they don't want.
Unlike every other
game, where you sort of
have to take the things
you don't want, as well as
the things that
you're working for.
It's a very interesting
concept to them,
because they're playing the
game and they're enjoying,
but they can also get
the financial return
or recoup part of their costs
by interacting with this larger
economy.
As a company, we're
really focused
on two categories of things.
I mean, first is
obviously creating
experiences that teach people
the benefits of blockchain.
And CryptoKitties,
we've got a lot
of big plans for
CryptoKitties ahead.
You might have also seen
Cheese Wizards, which
is our next game experience.
Now Cheese Wizards is
essentially everything
that people thought
CryptoKitties was, in the sense
that it's a
speculative experience,
it's a high risk
experience really designed
for the current
crypto community.
And it lets people
interact socially in a way
that really wasn't
possible before blockchain.
And in a different way, I
should add, than CryptoKitties.
So CryptoKitties
and Cheese Wizards
are two of the experiences that
we're working on currently.
But the rest of
our team is really
trying to solve some of
the fundamental blockers
to adoption of
blockchain as a whole.
And we're trying to do that
in a way that's as open source
and serving the
community as possible.
One of the products that
we released in this vein
recently is called Dapper.
And Dapper is sort of the first
step towards making blockchain
safe and usable for everybody.
Because today, most
blockchains' applications really
expect the user to take
charge of everything
related to their own security.
They give the private
keys away to the user
and they say, well
hey, if you lose this,
you're completely out of luck.
We honestly got a lot of
flack from some of our players
for not guiding them better
throughout that process.
And that's why we
created Dapper.
Dapper as a smart contract
wallet, which means instead
of us giving your
private key to you
and putting it on your device
or a place that it can get
lost, we put it in
a smart contract.
And there's a
variety of rules that
determine how you can interact
with your assets, And in a way,
that keeps you safe,
but doesn't give us
any control over the things that
you've bought and or paid for.
