Date: 24th Aug 2023
Video Length: 1:15:56
David Ding: Okay. Kia ora koutou, welcome everyone. Welcome Leanne. This is this is a very cool session we've got planned up planned for you. Leanne is the founder of Tres Cool Labs, who are a frontier venture that we're working with at Callaghan Innovation, and she's got a presentation for us on how to design and mint a token. So welcome Leanne.
Leanne Bats: Thank you.
David Ding: So the format for this one is going to be slightly different to normal. We're going to have it interactive. So if you've I'm going to be asking Leanne questions as she's going through the slides. And if you've got questions, just drop them into the chat as we go, and I'll ask Leanne as she's actually as we're going along. So, when you're ready, Leanne, start with the intro and we'll kick things off.
Leanne Bats: Yeah, cool. Well great to be here. Thanks, David, for having me. It's my pleasure to be here. I guess ask, even present on this, if you had asked me two years ago, if I could sit down and do this, I would have said, there's no chance. So that gives you an idea of the, the rabbit hole that I've been down for the past two years. But as David said, my name is Leanne Bats. I wear a few hats, but one of them is heading up Web3 at New Zealand Rugby. And I'm also the founder of Tres Cool, which we'll get to discussing a bit later today.
With Tres Cool, the idea is that we're, the internet's cool, this climate action company, and we're using Web3 technology to create trustless and open source carbon removal software that's actually rewarding to use. So today, I'm going to take you through how to design a mint token and just a bit of the basics around what a token is, I've sat through a lot of talks in my life. I know I prefer it when it's quite interactive and not just a one way sort of directive. So really, really, really happy for people to jump in at any given point in time, ask any questions, that's how we'll all get a lot of value out of this. It's quite possible I won't know the answer, so don't hold me to, hold me to anything, but you know, let's open up the floor and dig through anything that we so wish to do. And of course David will do the same.
Leanne Bats: So without further ado. An introduction to tokens. So what are tokens? And assuming here that we've all got some interest you know, in what tokens are or, or a little bit of a starting point, but really tokens are digital assets that can represent anything from, you know, currency to art, to something physical, to even property rights.
They're stored and managed on the blockchain, which gives them, you know, unique characteristics like security, programmability and also obviously transferability. Okay. The importance of tokens extends beyond, you know, just the technology. They bring transparency to transactions being that they are on the blockchain. They can democratize access to various assets you know, and improve liquidity and things like that. And also foster innovation. They're sort of changing the way how we conduct business and engage with the digital world. The thing is around tokens is it's a really broad kind of topic and they do come in different types.
Most of us will know of fungible tokens, which are interchangeable, you know, things like currencies. So one token equals one token. It doesn't matter which token I have. And then we also have what they call non fungible tokens or NFTs which has been responsible for sort of the hype phase of recent years. And these represent unique or specific assets. . And whether it's sort of cryptocurrency or digital art, tokens can be tailored to suit, you know, various needs. To confuse the matter slightly, there is somewhere in between called a semi fungible token. So this is yeah, it is, as it kind of sounds, I suppose, that it's it's not quite fungible. It's not quite non fungible. It's a standard called an 1155, and we are getting a little bit into the weeds here. But essentially you could have, you know, 30, 000 of the same token. And they're semi fungible because they might have a different membership number behind them or something like that.
So a good example and a way to remember it is, you know, one Bitcoin is the same as one Bitcoin. If I've got one, you've got one, it actually doesn't matter which one we've got. We could exchange that, we'd end up with the same value. But with a specific NFT, you know, they'll come in different forms and have different values attached and that could be intrinsic to me or, you know, you know, different to you.
David Ding: Yeah, so just, just on that, you know, the whole fungible and non fungible thing. Yep. Why does that matter? Why does it matter whether how fungible it is?
Leanne Bats: Yeah, it depends on use cases, right? So for some things, the purpose of it being fungible is completely how we want it to be. You know, we don't actually want to assign different lots of value or anything like that. You know, when you're talking about, you know, a loyalty or a currency or anything like that, one, one is one. Doesn't matter what, what which one we have. We, we, we don't really care. But when it comes to things like, you know, real assets, or you know, almost anything else, there are, there are slightly different things that are important. You know, a good example I've had is, is, is a dog, you know, you could have the same breed, but they have different characteristics, you, you can't call them the same thing. And when it comes to the digital world, we need to be able to identify that, and the way to do that is with a non fungible token. And the metadata that's associated with it. So that's why it's important to have non fungible tokens as well.
David Ding: And so I think that this raises an interesting point, is that, do you believe that any form of economy needs all of these components? Or do you think there's a... So can you just talk to that?
Leanne Bats: Yeah, I mean, I think generally, yes, it does depend, like I'll go later, we'll sort of talk about the design and like what you're trying to achieve and therefore what kind of tokens you might choose but for example, this is leaping quite ahead, but for Tres Cool, we're using both so as in non fungible tokens will be used to create products and different things and ways to engage people.
We also have what we call a little interface, and I will go into this, an interface that can be plugged into any non fungible token that will remove carbon, and then to reward people and track the impact and, and give that back to a consumer, that's a fungible token. And the reason to do that is because You know, the fungible token is we're tracking carbon removed from the atmosphere. Now to measure that, you could do that by a non fungible token, but you wouldn't be able to break it down. So with a fungible token, I can get down to the gram because, you know, these things can have a number of decimal points behind it. So when you're trying to track something quite granular like that, it's a, it's a better use case. And if it was non fungible tokens that have to be kind of chunked into a, you know, a ton of carbon each time or something like that. So it's much harder to fractionalize something if you will.
David Ding: Yeah, and that that's really the thing is is fractionalizing stuff, right?
Leanne Bats: Yeah, exactly. Yeah. Yeah Yeah, and if you want to break it right down, fungible token is the way to go.
David Ding: Beautiful.
Leanne Bats: And even like we see, we see cases in sport as well. There's a thing out there called fan tokens. And you know, even if you thought about something like Fantungs aren't really supposed to be investments into sports teams necessarily, except that's how it's sort of being used, is that if you were to sell non fungible tokens as a way to kind of access your team, you'd have to put a barrier around that. You'd go, this is, this is how you access it, this is the token, and that has a minimum price point of, say, it's 500 bucks. Whereas if you have a fungible token, someone could come in and buy whatever amount they want. You know, it could be five dollars, it could be ten dollars, it could be the 500. And they'd just get, you know, the amount that they want. So again, it's this fractionalization side of things that comes.
David Ding: Yep. Love it. Thanks. Cool.
Leanne Bats: Okay. So why tokens? Well, the benefits of tokens in my mind are pretty vast and powerful. You know, they enable seamless and like rapid transactions across borders which is something that's phenomenal. Provide, you know, robust security through the blockchain and, and having that all on, you know, distributed ledger or public ledger.
You know, that can be customized for various applications as we sort of just alluded to there. And I will go into a lot more and they're decentralized in nature, right? So it means that we don't really rely on these intermediaries like we have had to up until this point for anything you know, be it physical or digital, to this point, we rely on these kind of intermediaries which remove the efficiency of it all. So by putting these tokens on blockchain, we actually get huge efficiency. And there's, there's some fantastic kind of examples around of transactions and trades that would normally take 30, 40 days to achieve, you know, international bank from bank to bank to bank can now happen in a matter of minutes. And that's the kind of world that I guess we're hoping to move towards and where tokens really become beneficial. Yeah. The current market that we're in.
David Ding: Yeah. Just wanting to probe a bit deeper there. You know, people, you know, borderless nations, people are talking about borderless nations a lot now talking about borderless transactions and they're kind of like, well, how is that possible? How can you possibly have that much trust in a system that it can be borderless? And right now you're talking about these transactions being anonymous. Can you just share with us how that's possible?
Leanne Bats: Yeah. And this is again, a little bit skipping ahead. We'll go into details, but really this comes from what's behind the token. So a token is driven by a smart contract. And it's possible with blockchain technology now that takes, again, you know, we've got a consensus mechanism that's you know, we get trust from a number of computers around the world rather than just any one centralised entity that once you write into code what you want to happen and what, what you you know, the rules of the game or the parameters, that, that, that's how we can make it happen.
So we say that when X equals Y, you know Z happens. And once you put that onto blockchain, that will happen. We don't need to ask anyone, we don't need to you know, check on that we, we know that that will happen and that's really how we can get to the place where, so, tokens are kind of the, the, the surface thing, the sexy part, if you will, is the kind of smart contract that's written behind it. And the code that tells you know, what to happen every time that, that, you know, the triggers or parameters are met that are written into that contract. And the, the, kind of the way I try and sort of describe it is that we used to have phones, now we have smartphones. We've always had contracts, now we have smart contracts. And it really is a little bit like that, that all of a sudden we, we, we can write anything into the blockchain kind of automate it and then fully trust it, or we don't even need trust, trust is not part of the equation anymore which I think is kind of the, the really exciting part, if you will.
David Ding: Yep. And that there's a, there's someone on this call called Arjan, who's another founder I'm working with. So for Arjan, that's, this is trusted interactions, a stack of trusted interactions in an NFT. He's a, he's an event based architecture expert. So I think he's quite curious about this. Yeah. So, so just on the intermediaries that renders any human intermediary obsolete. So it could be just a human to make a decision in the chain, or it could be a bank. As an intermediary. So the more, the more trusted the system is, the less we have to depend on human beings, right?
Leanne Bats: Yeah. Yeah. The more, more direct and more peer to peer we can become with. Most, most things, right? Yeah, we just don't need that middleman anymore. Awesome. You know, last night I was having a conversation with someone working in this, in, in commerce, so decentralized commerce and, and another good example is to kind of, well, the way to make it real, because, you know, it does feel very abstract when you're talking about these and kind of big 10, 000 foot views of what this could play out like, but so you take TradeMe, you know, us Kiwis, we, we use TradeMe a lot to buy and sell goods secondhand and no one knew. Whereas they're working on a protocol or essentially have solved it with a protocol that could act as trade me. So we could go, you could go and you could list anything. It will have the ability to kind of bake in verification. So that the knows that I've got that product and it is what I'm saying it is, and then what would happen is that it would be automatically listed. Someone could come along and buy it. What will happen with the smart contract, it will actually escrow the funds, so, as the purchase is made, it will hold it in this smart contract, until the parameters are met on the other side, i. e. the delivery has put it into the right GPS location the consumer at the other end has gone, yep, ticked the box, it is what it is.
And then, you know, if there is a, a dispute, they can actually chat between the smart contract itself. They can chat wallet to wallet. Oh, that's so good. They can make offers to one another where they go well, it isn't quite what I wanted, but, you know, give me 10 bucks back and, you know, we'll do the deal anyway. And if they can't solve it, that's when, that's when a third party would come in and kind of then solve it for them. But you can see how one piece of technology actually solves what a whole company does right now and arguably better. So, you know, there's some really interesting use cases that are not what we've seen from the NFT world and the speculation and the hype that you can actually just start to see come out.
And when you think of commerce or e commerce as a an industry. The problem is middlemen, you know, most small retailers, particularly spending about 30% on, you know, margin gets cut because, you know, XYZ all takes it, you know, Stripe payments you got Shopify fee platforms, all this stuff, and if we can take a lot of that out, what we end up is a far more efficient market so those are just some really interesting cases.
David Ding: What, what's the name? Is there a venture in particular that's doing that? The trademe , it's protocol
Leanne Bats: it's called Boson Protocol. And do have a look. They're sort of just that they've raised recently. They're just starting to make some noise, but they've been building in the background for many years now. But it's, it's a pretty exciting yeah, venture I would say and really taking on commerce. Very cool. So it's gonna be very interesting to see where they land, and I'm sure they're not the only one, but this is just one that I had a good conversation with last night.
David Ding: Nice one. Well, there's another founder on this call called Mohamed and he's got a, it's basically smart contract a third party smart contracting service providing escrow as a service as well.
Leanne Bats: Ah, yeah, it was familiar.
Arjan: is actually more on the performance side of things. So I don't know if you'll address that later on, but I love what's possible, but I'm really skeptical about how it will impact on the user experience because the latency in getting responses are not acceptable. Yeah.
Leanne Bats: Yeah. No, totally agree. Right. And what we're saying is not working at scale yet. You know, when you look at Ethereum, you know, it's a huge bottleneck and then there's gas and all the rest of it. And then even the layer 2 scaling's above that are, you know, not there yet. So I think you're right. There's going to be a cadence to this. And we can dream of all these things and, you know, all this traffic working across this, but that really isn't quite solved yet. But there are a number of players working on it. I know like the Sui Network, which is. I think some founders from, you know, Facebook, Google, all the kind of classic places claim to have an extremely fast network albeit extremely new and no one's using it. So it's always faster when no one's using it. So yeah, so we, you know, we are yet to see, and I, I totally get you. And yeah, skepticism is wise in this point of view, but yeah. But I think, you know, we have, we have the hallmarks and like Utopia is not., exactly a given. But you know, you have the hallmarks there to go, this could be a really good way to do things.
And so yeah, there's some really interesting cases coming out of it. But going back to the sort of, you know, tokens and this, this, this sort of growing need, I think you know, if nothing else that, that commerce example is, is a good one. There's so many middleman that actually the market itself becomes so inefficient that., you know, it's actually hard to make a dollar. So, you know, if we can use tokens to kind of bring the sufficiency reduce that need for trust, you know, we're working in better markets here. And, you know, what we are seeing is even in this, you know, phases of and... I've not been through other, you know, dips and, and rises in the crypto market, like, I know it kind of does, and trends three. So what we are seeing is like a vibrant ecosystem. We're witnessing kind of growth into the space and token usage and creation kind of globally. And there are some really interesting use cases coming out, like the ones I've sort of just shared.
Leanne Bats: And as I sort of alluded to before, the cool thing about tokens is obviously what's actually the technology going on behind them. And you've asked me, this is kind of like once you lift, lift up the And this is why. It starts to get interesting and pretty unlimited with what you can do. You know what we've seen so far, especially in the non fungible token space is very basic use of these smart contracts. You know, all, all the smart contracts were really designed to do was buy and sell year to year.
Not a whole heap more than that, but what we're now starting to say is this, you know, these tokens that can become really smart and really clever. Dynamically update, according to real world data and things like that that's all possible because smart contracts. And what these are is essentially what was learning to before is self executing agreements, and so terms that are embedded within the code and once deployed to blockchain, that's when they become immutable. So you, you write these rules, you put them on onto blockchain and then they will execute as you've written. So you can imagine a traditional contract, but all the actions are automated. It's carried out by, you know, a network of computers, a decentralized network of computers. And in the context of tokens, they enable creation, transfer and various functionalities. You can almost, if you can dream it, you can put it into a smart contract and get it to happen. So I think, yeah, we're sort of just scratching the surface with what's coming out now.
In terms of standards, there's a number for non fungible tokens, which I've said are very basic, but we are starting to even see some newer standards that are coming out that allow things like account abstractions. So you know, you alluded to before about skepticism about usability and there's no way in hell that anyone could be expected to, you know, remember a 24 phrase, you know, seed phrase 24 word seed phrase in order to get back into their wallet.
You know, how many times have I had to go, I can't remember my password, I've got to ask for my password to be sent back to me. You know, that doesn't exist in this world. But now people are coming up with smart contracts that enable that, that kind of functionality to actually happen. Still really clunky at the moment, but when we move into a world where it's actually just feels like what we have today, but powered by this blockchain technology, I think we're, you know, we're starting to move to a world where to be more skeptical.
David Ding: I think just to go a bit deeper on that, I think, you know, to Arjan's point about latency, I think really that's the major constraint, right? Because in theory, inside a smart contract, you could, you could execute every interaction in an entire digital twin of a whole company, you know, and, but it's the latency that's the problem. And I think, you know, one thing we just had a session with our head of science for quantum physics at Callaghan Innovation, and he's talking about the quantum web. And I think basically the upshot of that is, is that with the nano transactions on chain currently. You know, how, how fine you can get a verified interaction on the chain, that's, that's going to open up with the quantum web. Cause you know, if you think about how many, how many zeros are after tolerance with quantum, those zeros go, you know, infinitely so I think, I think that could be when everything becomes possible, you know.
Leanne Bats: I totally agree. And, and I guess that is the game, right? That's what everyone, all the Layer 1s and then the Layer 2 scaling solutions are working towards because none of this worked if we had bottlenecks. You know, even back when, you know, this wasn't super popular. We were sort of just experimenting with NFTs. The gas cost alone was just astronomical, you know, more expensive than what you're buying. And again, this just doesn't work. You know, no one's, no one's up for that. Only a, a few strange people are up for that myself being one of them at the time, of course. But you know, that's just not possible to go mainstream. So, yeah, you're absolutely right. That is the big key kind of elephant in the room that if that can be solved, and I mean, I believe, I firmly believe it will be solved. It's a matter of time. And I guess the only thing I can go on that is like, look at where the internet began and where we are now. You know, and you sort of have to, I guess, cross that bridge and go, you know, they'll get there. They're aiming to get there. Nothing works if they don't get there. But you're absolutely right.
So yeah, anyway, back to smart contracts, how they work really as, as I mentioned, you, you code the agreement, then you deploy them to the blockchain. Once there, it, it executes automatically and when, when those predetermined conditions are met. And because it's all on blockchain, all these actions are very viable by anyone. You can see them, you can read them, you can understand them, there are interfaces to make it far more easier for those of us that are non technical to actually understand what's going on but essentially that's the, the kind of behind the curtains secret sauce. So, where they live, where they, actually happen. So smart contracts are supported by various platforms, this is sort of what we were talking to before Ethereum sort of being the most prominent where these things exist. There's now the ability to do so in Bitcoin as well, called Ordinals. However, that is an extremely, very slow blockchain. So, you know, things. They're kind of hyped up around prospecting, but you know, functionally, that's not really designed to do this and have that kind of speed of network going on. But there are other chains of course, like Binance Cardano, you know, there's a number of them there. Solana is one that is an alternative layer one that claims to have extremely fast throughput. Sui is another one that's again coming at it. And then then you get into obviously there's layer twos of scaling Ethereum, and that's things like Polygon and you know, Optimism, Arbitrum, there's a few, there's a number.
And there's so many here, right? So choosing a platform really comes down to This is really what comes back to what you're trying to do. What you're trying to achieve with your tokens and what you need is the benefit. So what you'll see is that ecosystems attract, you know people, and this is why Ethereum has been quite popular so far is because there's community support.
In other words, if you went to a brand new blockchain and started something there, it's really hard to get people involved because there's just no one there. You're kind of in an empty mall with, you know, you got a nice shop, but in an empty mall that no one's walking through. So using a platform is a very big call. You know, when I put my hat on New Zealand rugby, that was, that's one of the hardest things I had to overcome in the early days. Not that we've actually done anything, but like, you know, if we were getting a sponsorship from a certain blockchain, How could we choose to build there knowing that, you know, we could be really disconnected from the rest of this world and with no crystal ball of understanding what the interoperability between these kind of blockchains or platforms would be like you know, it's a really big call, but what you can see now is people are navigating mostly to Ethereum and the layer twos and then there's sort of some hotspots around that with alternative layer ones. Like, as I mentioned, you know, Binance, Cardano, Nair Celo, there's a raft of them, right?
Moe: Sorry, I was just going to mention the roll ups, which is also a very good solution for scaling as well. ZK roll ups.
Leanne Bats: And essentially, if I'm not wrong, really what they do is they, they, They're very fitting to their name. And I'm not, again, I'm not technical, so I'm probably not best placed to answer. You might actually add a whole lot more than I can
Moe: You verify everything and you send it as one transaction . So you get 4, 000 transaction per second, even to 10, 000.
Leanne Bats: Bulk it in, package it up, and then submit to, or, you know, put it onto the blockchain like that. So instead of going one by one by one by one, you sort of, yeah, you bulk them up, and it's sort of like a vertical, if you will, and then, yeah, and, and then they can go. So yeah, you can, that's how you can kind of get the scale. And that is something that's even just being rolled out on, say, Layer two of polygon recently. And you know, we again, start to see these things scale kind of infinitely after that.
David Ding: Interesting. And so what, what, what did you choose for your native, for your layer one, for your token?
Leanne Bats: So we are working in the Ethereum ecosystem, so e VM compatible So what we do is for, for Tres Cool, our token, our fungible token will actually be, it's not completely solved yet, but it will most likely be minted on Polygon. And that's due to one that kind of aligned with our values and ethos, but obviously in that EVM ecosystem where it's really easy to kind of be interoperable, see how it will be interoperable in the future.
The software, however, that we're doing and this is where the solution will get quite technical is that we're even building the software or the plugin or interface into other smart contracts on Solana. So what will be happening is that, you know, we can be tracking something on the Solana ecosystem and then recognizing it on the Polygon ecosystem. Yeah. We're not there yet, right? But that's the, that's the idea is that we can actually be tracking it here and actually making it happen. We're recording it and tracking it over here. So yeah, it's yeah, she's, she's a windy world that's sort of unfolding.
Leanne Bats: Okay. So use cases. We've gone through tokens. We sort of get what they are. We are, we know that it's smart contracts behind them. This is nothing new probably to this crowd, but like, why bother? What, what, you know, why do them? And really if nothing else, the slides it's busy, right? But it shows you that they can be anything they really can, you know, from digital art, collectibles, loyalty programs you know, a new way to buy and sell real estate. Supply chain management is another really interesting use case that we see this come in. You know, so you can get provenance on where your say foods come from, where your clothing's been made from, and, you know, is there any harm or, you know, anything wrong socially within those supply chains. We're seeing things like digital fashion unfold and how to even own these things. And then David, as you've spoken to like digital twins. And these can be digital twins of anything, you know, the whole entire cities that we actually then play out and do things with, or, you know, digital twins from a commercial perspective where I might buy the physical t shirt, but I also get the digital one that I can wear in the Metaverse.
So really this is kind of. What is emerging here is a theory of really the tokenization of everything, right? So if we can overcome that latency and you know, for the purposes of today and Dreaming Big, let's just say we will. You know, you can see how we will tokenize everything. It's, it's, it's, it's a very common thing that, that, that will probably just play out. Really suggests a future where nearly every asset, or process could be tokenized. You know, we'd unlock the value behind that. We'd unlock efficiencies behind that and it would be a whole new way of interacting. You know, online. And there's a sort of saying where we sort of talk about online today will actually just become on chain.
And you can kind of see that how that will play out. Well, you can start to see how that could play out. And then, when you look at say a digital wallet, which is where we house these tokens. Where it becomes how we interact with the Internet. That's what we will connect every single time. And it's sort of like another level up from how we use our emails to sign into certain things. We, we will just connect our Digital Wallet, that will understand who we are, It knows the tokens that we're holding in order to kind of personalize the Internet for us in a lot of ways. So, you know, I think what the world we're kind of stepping into could be. We're all kind of dreaming crystal ball gazing at this point in time but, it's, it's really interesting that there's multiple use cases and applications of tokens.
It's certainly not what we've seen today, which is where you know, in my web 2 world, a lot of people get caught up with going, yeah, but isn't this sort of just these sort of membership clubs and prospecting or trading monkey pictures is kind of the, you know, the comeback to. And so it's about going, there's a lot more here, and if we kind of understand that we sort of start to say like, this is sort of, yeah, this is the third wave or the third iteration of the internet that we're starting to see unfold.
Arjan: For me, I do need a little bit further clarification again about what tokens really represent, because Is a token a reference to something, or is a token containing a specific state of something, or is it both?
Leanne Bats: Yeah, it's both, I would say. And again, anyone feel free to jump in.
Moe: So if you don't mind, like, I have, I have some explanation about it. That's how I like technically, because it is how you can name it, whatever you want. And each, like the, the NFT, which is the ERC721, has a characteristic, and the ERC20, which is the fungible token, has a different characteristic. And based on the characteristic, you can give it a utility or an equity representation as you like. Some of the NFTs they represent supply chain in a factory, for example, for unique, like, watches. For the ERC 20, they represent tokens. So it's easier, they represent a currency, sorry, so they can put it in liquidity easily and people can trade it as fungible token easily.
So you, you give it the, you give it the the assets behind it, you name it. Is it a utility or equity based on your use case? Like people now using it for their art as NFT. We see a lot of use cases using it for art. So it can be whatever you want to call it and then It's gonna work like that depends on which which characteristic if it's for voting then it's going to represent voting.
David Ding: Yeah, beautifully said and I think just to my perspective on it is is that the token is an immutable container And then the protocol determines its nature. So the fundamental part, aspect of the token is that it's an immutable container.
Arjan: Okay, that makes sense. Then it does represent what 20 years ago, we actually had workflows through which tokens went and you could predict if the workflow was going to work because with a mathematical formula, because of the use of the token and going through it, they were called Petri nets. And so this actually reminds me of that same principle where we say, okay, we have a token that actually can represent, from my perspective, state of something. It subscribes a value at a certain moment in time, and it goes through the flow. And then by having smart contracts, the token gets trans. Is it the same token that goes through it, or do we create a new token that represents the outcome of the negotiation in the smart contract?
Leanne Bats: Let's put it into a use case if we can. So say you've tokenized your house. for example, Yep and has created a non fungible token, Cause my house is different to everyone else and it also has slightly different nuances. so in today's world we don't need, we don't have a token to do that, right? But what that ends up with, I guess, is that we have to, you know, use lawyers, use, use, trust each other, use agents, use a whole bunch of intermediaries that make our house sale possible.
Just say we moved to a world where we are tokenising our houses and actually now, I want to list my house for sale do you want to purchase our house. Within that smart contract would be the terms and conditions of the sale, any negotiating that we do, probably escrow it while we escrow those funds while we, you know, negotiate or figure out, you know, you have your building report or whatever conditions you need to meet on your end to kind of actually go through with the sale.
So there would be no new token. What you'd actually take is, you'd be purchasing that, that ERC721 from me. There'd be a transfer of that token. So in that case, we wouldn't create a new token, but there definitely are cases where you can create new tokens. You can actually merge them and create entirely new ones burn and merge.
So you'd actually, you know, put two together and create a whole new one or actually merge one into the other. So you lose one and the other one kind of grows with its data and all the big ones. So it's not simple to answer, sorry, because they're, you know, all of these things are possible. But what's fascinating is that 20 years ago, it seems like there was a really similar kind of principles behind what you were working on then, even.
And it doesn't really surprise me. You know, I think that's sort of like what we've possibly been, you know, stepwising towards for a long, long time and we're, we're not there yet.
Moe: If you don't mind, I just want to mention some interesting use case where the smart contracts at some scenarios generate tokens, which is the stable token smart contract. So when there are more, more demand on the state, that's why they make stable by giving an order to the smart contracts. When there is more more people buying, you're going to supply more. If more people selling, you're going to burn more and then automatically it's going to stable the price. That's one of the use cases where you need another token to, to manage the stability of the price. As, as 11 55, you can create as many for as a collection. For example, if you need more collection, you have a new art, you add new tokens.
Leanne Bats: Okay. Any other questions on this? I mean, I feel like we could, we could go quite deep here. And it's not super helpful, helpful, Arjan, I hope I'm saying your name correctly, but It isn't so helpful for painting the picture because it is so vast, right? These things could literally become anything.
Leanne Bats: But when it comes to designing a token which I'll take you through for the next few slides really this comes down to understanding the goal. So my way of thinking of it is that, you know, the token itself is not the goal. The tech itself is not the goal. You should always start with what you're trying to achieve. So for my mind, the goal is definitely not this tech, but what the tech enables. And if the tech enables your goal use token for it. So identifying your core need is paramount, you know, if you can't, if you can't do that and it doesn't fit a token, don't bother with the token at this point in time.
So, you know, these, these are very normal questions. What problem are you trying to solve? Who will benefit from this token? What unique value will the token kind of bring to this? And these are, you know, questions that are really foundation to deciding what you're going to do and if you need a token to start with. So, you know, especially in this case when there's, there's, there's opportunity cost of coming here because this isn't actually, you know, particularly user friendly in terms of a user journey and depends who you're actually trying to attract and what you're trying to do with it. So always start with identifying your needs, you know, identify that problem, identify your target audience. Come up with your, your, your value proposition of why you need a token, be it fungible or non fungible or both to, to solve this.
Brendan: You say about you know, understanding that, that business problem, not necessarily just gravitating towards the token, first of all which is true. Then once you actually go, yes, there's a there's a token that fits into this this business model, then the whole legal side then kicks in and that's what we're finding is, is that, that is a real can of worms. So, you know, we can understand the business problem. We can understand the technology to be able to achieve that, but the maturity on the legal side just hasn't popped yet.
Leanne Bats: Yeah, there's massive limitations here. So yeah, exactly right. So the regulatory compliance is something I mentioned. But you're absolutely bang on, right? So you can go, yep, cool. It still stacks up. And then, oh, there's a whole bunch of gray hair and risk. It might not be worth it. Right. And then there's plenty of people that have gone all the way to their ninth degree and spent a bit on legal costs and the rest of them going, you know what, this isn't worth it.
I can just do this off chain for now. And then you know, prime and prep myself to come on. Do this, bring this on chain when the time comes, when the regulation finally comes. And there are certainly the opposite people that are like... You know what? I can handle this risk. I'm quite comfortable with it and off I go. You know, we see lots of examples of that too. So, absolutely, that's something you've got to consider. So yeah, choosing, obviously choosing these right things are critical. You know, you need to think think about the actual token itself. You know, if you are, if you have decided you're going to do a token, then which token?
And this comes down to the non fungible, Fungible .You need to decide whether, you know, this needs to be interchangeable or unique. And what fits your use case. You need to then choose the right platform. There's a lot of, a lot of decisions to be made here, which can hold people up for, you know, for a very long time. You know, is this Ethereum? Which blockchain? You know, what sort of scaling needs do I need? Is gas something that can be, you know something that's going to be a hindrance? So, again, for... you know, New Zealand rugby if we would ever sell this to the consumer. Having a day where there's 50 worth of gas, just, it's not possible, it's not something we can even risk.
So we would never build on Ethereum at this point in time. And then yeah, as you mentioned regulatory compliance right? Understanding the legal considerations and you know, the jurisdictions that you're operating in. The biggest one being that, you know and again, I'm not a legal expert. This is not legal advice, but here it's, it's great at best, you know, and they've basically come out and said, we haven't decided yet. We're not going to. So you guys do it. And, and, you know, what we've seen in the States is really around security laws which are really, outdated laws there's been the ripple case which kind of sets a precedence that goes, you know, these tokens can actually be seen as bond which is, you know, again not hugely surprising but you know it all depends on how you're using them how you're selling them and what you're doing.
But what you do not want to do is get yourself in hot water, and, you know, if you're a venture that's starting out, the last thing you can afford is to be either held up in this process or having, you know, legal bills or, you know, get yourself in hot water. So, it is nearly impossible to overcome. You have to have some element of risk, I think, that you want to take on here. But yeah, it definitely pays to really fully understand what what's going on. And given, again, these tokens are, don't really have a jurisdiction. They're everywhere. You'll see people kind of try and exclude direct sales to U. S. because of those, those reasons, right? So you can see what others are doing to kind of get around it. But it's certainly a big kind of, elephant in the room. There's a few elephants in this room actually
David Ding: so actually just on that Leanne, I think that this point is, you know, kind of topical at the moment because there's a lot of talk in New Zealand about regulatory sandboxes and and a lot of, a lot of people are writing and speaking about it. But I think what I'm seeing in terms of innovation is technology emerging that's producing a risk profile. on a transaction rather than trying to make it totally trustless. It's saying this, this is a nine out of a 10, this an eight out of a 10. And so your risk profile becomes your own. Like you can decide whether you want to take the risk. Do you think there's an argument for the individual this choosing, whether to take that risk or not, if they're prepared to, you know, lose what they're putting into the transaction rather than you having to comply with the standard.
Leanne Bats: So yeah, so if I'm understanding correctly, you're saying the buyer beware, you know, like you're actually the one.
Yeah. Yeah. Yeah. I mean, I think again sort of the point of this internet is like well as long as you know What's up, you know what the rules are what the parameters are what you're getting yourself into you should you should be entering that contract No, as long as you as long as you're made aware So yeah, I do think there's a case for that Like, but you could say that across everything, you know, and we know that there's kind of untoward ways of not making people quite aware of what's going on.
We see it today and, you know, in the world that we live in. And that's why we have issues and problems. So I don't think that's actually a solve, you know, in utopia, could that be a way that, I mean, it should be that we all are responsible for our own decisions and we actually, you know, get to make our choices, but we have to live by the bad ones as well. But we know that in reality, that's probably not going to actually solve the problems we need. We do need standardization here. We do need regulation here. We do need to understand the parameters that we all need to play within. Instead of just getting given this, well, we're really not sure yet. You can do it, but we might chase you later.
And I guess... you know, even being a founder in this space to come down to it, like, well, you know, we're not selling our token to the market either. So there's a big difference there, right? We're using the token to kind of track and reward and kind of incentivize and, you know, grow a community more so than, than anything to do with prospecting. It is an open token, so it can get sold in trade, but that would be a community. based thing. You know, that's anyone owning this thing. I can, you know, like I can sell my Nike sneakers and Nike can't stop me. The same would happen for this token. It's not a directive that we've taken. So I feel comfortable in that personally, but that's a personal decision. And that's what it comes down to at the end of the day at the moment, because there is no clear guidelines on how to. Tackle this.
Arjan: Yeah, you have to be very careful. I've worked a lot in the ski resorts business, and quite interesting how the T's and C's vary depending on the country, and it will stifle down the whole user experience. If you go in the direction, David, that you mentioned, it's a mindfield. So, I, I think that's where we really should embrace the community side of, of the whole blockchain approach where you say, okay, it, it's based on zero trust because you can trust us. And contracts will be needed to use, be used to to conform to rules. That, that, that's what. Smart contracts are for to see. So if I think if we go in a direction, then my idea would be that there are regulating smart contracts that you have to go through or could choose to go through to give your product more credit.
Leanne Bats: Yeah, because at the moment is the standards, right, but they are created by the community. But if there was regulation of those standards and what they were you know, there were always basic, whatever they were rules written into these, does that help? Essentially, which is yet an interesting point.
David Ding: Community regulated regulations.
Leanne Bats: So coming back to, you know, designing a token again you know, this, the strategy development is really about putting the, the two pieces together. So you've identified needs, you've chosen the token type. Now you need to make a coherent plan of of, of what to do from here.
And really this kind of, these are, these are basic things. You know, if you are building any product, the same rules apply. You need to make sure that, you know, the token aligns with. the business and the overall goals and the overall needs and requirements. There's technical considerations, obviously that you're assessing the needs and the limitations of what's technical, i. e. you know, there's latency, gas costs, you know, if anything goes wrong or, you know, you've got things, components that are off chain or anything like that. Marketing and adoption, again, just because you build something does not mean people will come. When we went through the big bull run at the beginning, that was a, you know, that's something that people get caught up with. Like, I've just got to build this and get it out there, and, and it will take off. And, and it's very, it's hardly ever the case, right? It does, you do hear stories, and I think that's what people latch themselves onto. But you know, marketing, adoption, plan for promoting and distributing is, is key. And then the long term sustainability of this, you know this might be cool for, you know, 30 days, but how do you make this cool in 30 years? And really kind of having that, that long term view on, on what you're building here and making sure that it's still valuable in time.
Leanne Bats: Okay, so now you've gone through all that, just say that we do actually want to go forward with a token the next part really comes to actually developing the smart contract itself. And it is a process, right? So, there's sort of two major ways that you can go about doing this here. One is the kind of DIY route, and the other is kind of buy it off the shelf. Now when I say buy it off the shelf, I mean like really going to a launch pad, you'll actually deploy what is their built smart contract. You can still own it, just be careful sometimes that you won't own it, but often, now, most of the time you will and it'll be your smart contract, but you can actually go and do this, and there's platforms like Zora or Magic Eden Manifold is another one, and there's a handful of places that you could actually go, say, if you wanted to create it.
But your use case will be fairly limited. This is Zora I know does an ERC20, so they do do a fungible token. Most of the others will be a non fungible token. Of course, what we see these used as mostly is like the same things we already have. You know, it's, it's my 10, 000 apes or my 10, 000 ducks or my 10, 000 other, insert an animal here, create a community do that kind of thing. Or what we are seeing is a lot of digital art too. But what you're not seeing really is those platforms being used for any of these other kind of use cases. Most of those people will actually build themselves. So if you're going to do it yourself, you can start with a standard smart contract.
It's usually a good place to start. So like we just talked about before, you know, the communities come up with these standards. For a non fungible token, it's the ERC721. It's kind of the base smart contract that you can then layer on or add bespoke components to. 1155 is good for, it's like a semi fungible. So so you're making a membership card and they want different numbers, but they all look the same and they're all in the same collection. And that, that would be an 1155 and then you're going fully, you know, fractionalized. You want to create something that can, you know, go right down to, I think it's 18 decimal points.
Then you go on ERC20 and you go a fungible token. So they can all be picked up off, you know get hard repos. God, the name escapes me right now, but there's a place you can go. I'm going to have to put this in the comments later because there's no way it's coming to me. Open Zeppelin, Linton, thank you. So that's where you mostly go to pick these up. But the, obviously the testing is paramount, right? So what you can do with this is actually once you've built your smart contract again, you obviously need to choose the platform that you're going to do it on. You obviously then write the code, then you deploy it.
And, obviously, testing is paramount, right? We want to make sure that these things aren't broken in any way, they're going to work as we function. You know, we can put these through and test them like we would any other product with a closed beta group. So what you can do is obviously put this onto testnet first. And there are a number of these. What you do need to go through the process of getting is there's faucets, which will give you the test net currencies. And then there's a, there's usually a number of test nets depending on which one you're on or which sort of platform you're building on. So there's a test net for testnet, for Ethereum, testnet, polygon and so on and so forth. So that's the playground to go and play first. That's you know, not in the real world, if you will. So always recommend deploying to Testnet first, giving it a good, rigorous run through. Once you're happy with that, then the next step is deploy to main net.
And the other thing to consider is that when you deploy there is a cost it depends on the blockchain and is quite obviously related to gas and like the computational power that you're actually asking it to do so I think on Ethereum at the moment, it might cost you 100, 120 bucks to deploy a smart contract, depending on how what's in that smart contract and how like, you know, Smart it is or what, you know, what depth it has, whether it's just a kind of standard. Anything else on that?
David Ding: Is purely gas, is that purely on gas fees,
Leanne Bats: Purely gas, or is it, yeah. Yeah, I think so. Moe you might know better than me, but I believe the costs are really associated with the gas, like the computational power that you're asking it to achieve. Is that right?
Moe: So depending on which network you choose to deploy, you pay gas on the same network you want to deploy your smart contract on.
David Ding: All gas fees, it's not an admin cost, it's just pure gas.
Moe: It's pure gas.
Leanne Bats: If there's a lot more in your smart contract, you're asking the network to do a lot more to deploy that, and I think then the gas costs will go up. Your average, you know, this not, you know, not, not bespoke, just pretty standard smart contract will cost about 100, 120 to deploy to Ethereum. The other thing to mention, sorry, this is really important, is that security cannot be an afterthought, right? So what can happen in the code is obviously there's exploits, you know, there's ways to kind of siphon the funds out, and we see this, you know, often happening in the space.
So it's a really important that you get an audit of your code. Less important, I guess, if you are just taking the standard smart contract, right? That is usually pretty sound. It changes when you start to add your bespoke or little, you know, kind of personalities to it, what you can do. There's another platform called Third Web. Now they have a bunch of pre audited smart contracts. So again, if you'd kind of wanting to DIY this. It's not full DIY, because it won't actually mint it for you, you've still got to build the, the minting application, or, or DAP, they call it to do so, but you can actually take pre audited contracts, because an audit, again, is not cheap.
It depends on what you're building, but even the most basic audits can cost around five grand. You know, so you do need to really factor that in once you're, when, when you're building. But there are quotes for, you know, audits on smart contracts that really are kind of more in the defi space that are really handling like lots of transaction stuff, you know, can be 120 grand to get just the audit done.
Because what you basically need to pay someone to do is try and break it. But find a way, find a loophole, find a problem. So yeah, you can be really up for it then, depending on what you're developing, what you're developing for. My advice is to, think of the security, think of how you're factoring that in. You know, if this is just a small thing and just a bit of a play, then you can go to these platforms which have pre audited contracts available to you. And that's part of the service and benefit that they provide.
So, that's really on how you design and create a token. It's not... super technical, not super hard. There are now tools out there for everyday people, like even like myself to go and create one you know go spin one up now, if I wanted to, but it comes back to, why what you know what am I doing it for? Why would I even bother? So really, that's obviously where we must start. And we can come up with that first, and then if a token works into that, then I'd say you're on the right track, off you go.
Leanne Bats: But what lies ahead, you know, we talked about a little bit about this before but what we're really seeing is you know, there are trends of adoption and tokenization across a number of sectors spurred by this sort of, you know, this emergency technology of Web3 and Spatial Web and where we're sort of headed.
There's definitely a push towards... This cross chain interoperability You know, as I mentioned right early in my days with New Zealand Rugby, it was, it was sort of really hard to see that if we built on this island, how would we ever connect to this one? We're starting to see how now bridges happen and we could actually connect all this all these kind of different ecosystems can actually now start connecting together. Maybe not quite yet, but you know, you can start to see how it could happen. But looking ahead, I think we can anticipate further regulatory clarity. We definitely don't have it at this point. And, you know, New Zealand has kind of come out and said, we're not sure yet. So, you know, you can sort of see that they're sort of watching, waiting, trying to understand, wanting to see what the rest of the world will do.
But then up in Europe, they're quite progressive. You know, they're saying, come here, build here. And in a similar case in, say, I think Singapore, Middle East, same sort of thing. However, there's still, it is still really unclear. But I think we'll start to see that kind of play out. We should see. An explosion of like innovative use cases. So you know, the common example I was speaking about last night, I've no doubt there's a thousand and one more that I've no clue about. A lot of people are building at the moment, but because there's not the hype there, it's really quite low key. There's a lot of building behind the scenes going on.
And so what we, what we should start to see is these things start to be actually coming to life, you know, instead of coming out of kind of stealth mode and into, into reality. And we're, we're definitely starting to see a continuation of mainstream brands and, and, you know, big kind of entities using it. You know, the FIFA World Cup was just on, that they had this as a part of the fan engagement with mint tokens. Man United's just come out. You can actually mint a token for every home match to kind of commemorate it. Excuse me. So what we're going to see is, you know, a lot more of these really kind of simple use cases.
start to become a bit more like dripped into mainstream and kind of acceptable with, you know, really good user experience. And then behind the scenes, I think we're going to start to see these kind of programs come in and, and really kind of actually drive the efficiency in markets and really kind of game change. And that would be the actual true innovation because some of this stuff is just kind of the fluff and the use on top. As we all mentioned, road head isn't without obstacles. We've got big latency issues. You know, there's a, there's a, a, a cadence to this that has to happen. We have to go through security remains paramount.
There's still scams breaches and problems that happen every single day. You know, really well known art project called Visualize Value put out a kind of a new concept and got breached for, I think, 48 the other day before they could stop it. So, you know, there's still. You know, unless the code's absolutely perfect and robust, there's, someone will find the, the exploit and, and exploit it, you know, so there's still big challenges around this and around scaling this.
And then more of, obviously there's the shaping of public perception, most of which is, is probably predominantly negative or has been negative for a while. Education is vital, you know, if people don't really understand this, I mean, I was the classic case and I think it was 2015, someone was trying to tell me about Bitcoin and how I should buy a couple. And I was like, I have no idea what you're talking about. I couldn't even get my brain around it. And it wasn't really until non fungible tokens and then sort of the real tie in to like culture and community and coordinating internet strangers, if you will, I was like, oh, I can see how this is really interesting technology, which made me, piqued my interest and made me dig in further.
So and still we sort of start to actually see education, but it might not even be education. Like, I don't care how my emails run. I do not care on the operating system that they work. So, you know, education on, either, from a covert point of view that hey I'm using this technology, I didn't even know I was using it, but I just get the benefits from it, and that's cool you know or it could be getting the right people that, you know, to turn on the light switch and go, okay I can see why this stuff's actually really useful. As these things happen, I expect that we'll see, you know, continued growth. And I know that for sure that we're still really only seeing the very earliest use cases of what this will actually turn into, and we'll probably look back and laugh one day that, you know, this was all kind of Kicked off. I mean, I think Bitcoin is obviously the, you know, the main use case, but like, we'll probably laugh about Bored Ape, Yacht Club, you know, and what it managed to achieve in this space that we'll probably go, really like this thing that kind of like, you know, push this out there. But you know, the, there are often cases like that in innovation and tech and when it goes forward.
Leanne Bats: Okay. So to give you a practical example, I wanted to share how we're using tokens. And what, what would a presentation be without a little plug at the end, right? So no, I, I mean, this is, this is what we're doing. It's, again, it's one way of using tokens. To try and do something interesting, I think. But yeah, the practical example I wanted to share was with Tres Cool. So that's my company. And we're, how we're using really tokens as both a new form of carbon removal software but also to reward and track climate impact.
So what we've done is actually developed an ERC call. And what this is, is really what they call an interface that sits on top or can be plugged into, or you know, woven into a smart contract standard of any type. So you could have a 721, a 1155 and they could be used for any of those use cases you see. Where this sort of fits is really anything that's direct to consumer, where people, consumers care about sustainability. So what you can actually do is, with the smart contract, weave in carbon removal into either, you know, digital or physical goods that are backed by a digital, digital token, and tell that thing to remove carbon.
Why this is sort of an improved version on, hey, the sustainability claims we have today is because it removes the trust. So, in today's world of commerce and all the rest of it, you'd go online, you'd shop, it would have a little tag saying this is sustainable, or this is, this will be offset, me as the consumer, I have one, no idea if that actually ever happens, two, I have to trust the company and three, I've no idea like, you know, of the quality of what actually happened or anything like that. So there's a whole heap of trust that goes on here and if there's one thing that's really, really paramount in the, you know, climate space or sustainability space is that there's very little trust. You know, we know that people kind of exploit these things all the time. So this is the reason to put it into a smart contract in my mind.
One, because it's, can be open source so that the actual interface itself is completely open source so anyone could go pick it up off the shelf, plug it into their smart contract that they're building. And tell it to remove carbon to a percentage, they just set that. Every time there's flow of funds through this contract, so that'd be on the initial sale or secondary sale, carbon will be removed. And what we actually do here is, that part is off chain, right, so I was talking to you, this is early, and what we're dealing with is a kind of a hybrid model where the carbon we're purchasing is really high quality carbon removals. And that does not exist on chain yet. No one's actually bridging that carbon on chain or tokenizing that carbon.
They will do in time, but that doesn't happen yet. So we actually then have an API that will go off chain to purchase carbon. And then what we do to kind of seamlessly wrap this up or close the circle is actually tokenize that impact. And that is the fungible token that I was talking about. And what we've called that is cool factor. The idea of cool factor is to kind of meme internet status based on positive impact. So one cool factor equals one kg of carbon removed. So as you're buying, say that this say I'm buying a digital t shirt to keep things really easy. You might go wild after you're buying a digital t shirt, but ask the kids, they do it already.
This, this t shirt could remove carbon. The smart contract will take care of that. So we don't have to trust the company in the first place. And then whatever is removed will actually be delivered back to me in my, my digital wallet. So I will see there, I get, you know, 1. 5 cool factor and that's 1. 5 kgs of carbon removed. So I know that what has happened there and that token can actually give provenance back to exactly what was removed once our tracking allows for it. So really what that does is kind of close the loop, but then gives you like a reward because with cool factor essentially anything can happen.
You can have fun with this token You know It could be recognized around the internet sort of becomes like a new loyalty model and our ideas to kind of put that out there is it should be internet status anytime we're doing something positive, it should be recognized. And the idea or concept is try and flip the script from climate action today being this chore, responsibility or burden, into, let's have fun, you know, let's bake it into the things we like.
This isn't perfect, you know, it's not going to silver bullet and fix everything, but you know, we can actually turn everyday things into little opportunities to actually remove carbon and have , mass impact at scale through micro sort of interactions or actions. So, yeah, you can see how we're using tokens or smart contracts, if you will, to weave into tokens as a way to kind of, one, remove trust, add transparency, but then actually add fun. Like this, this is a way to kind of change the way we look at it. It's a very, very consumer based but that is, this is where, where, where I'm using smart contracts hopefully to do something a little revolutionary for you know, the space of climate action, which is fairly dull and boring at the moment, that's what we're doing and with that, this is really the presentation over, it's a little bit early, but and we've had questions along the way, but honestly, we'd love to open up the floor and dig into anything, it doesn't even have to necessarily be related to this, because I know that we're all in the same nerdy kind of mindset that I'd love to, you know, dig into anything.
Moe: I have a question, if you don't mind. I was thinking about what you explained about the F K T R. So each time people use the technology that I, they are saving carbon by not using a paper. And then, is that what you mean? No, so, sorry, I haven't explained it very well then.
Leanne Bats: So, just, let's put it into a real life case. So, say Nike is selling a digital t shirt online. Just, we'll keep it digital just to make life a bit simpler. So Nike would be the one that picks up the contract and plugs that interface in. So, their digital t shirt's going to be an ERC721. What they do is they pick up our ERC core and plug that on top.
As they do that, they'll decide... 1% of the purchase price is going to go to carbon removal. So as me, the consumer, then comes to buy the t shirt, that will happen. Like, as soon as I pay for it, that, that's the flow of funds, it's all happening on chain, so that will happen. But what I get back as the consumer is those factor tokens. So say this t shirt, like I said, is 1%, it's going to remove 1. 5 kilos of carbon, depending on the price and all the rest of it. What I'll get back in my wallet is 1. 5 factor tokens. And then Nike could choose to recognize those Factor Tokens and give people special access to something. You know, you could get percentage off. It could be Adidas that go, actually, we love people that hold Factor Tokens. We want them to shop with us. Come shop with us. Here's a special activation for you. Is that making a bit more sense?
Moe: Yeah, so the carbon is to have less carbon used by going through the, this platform, right?
Leanne Bats: No, not this carbon use.
Moe: It's all the funds to support the carbon.
Leanne Bats: Yeah, correct. Yeah, the funds will go off to purchase. So it's like a 1% for the planet kind of model, but the difference is, is this is baked in up front and immutable. So it's not a promise. It's not something that someone will do later. So it's, it's not quite like a donation because again, it's in the smart contract. So it's a committed. You know, a mutable transaction that will happen every single time without fail and perpetually. So on secondary sales too.
Arjan: Is there any effort, I assume there is, around ownership of identity that NFTs are being used as a profile of yourself? And you use smart contracts, how to expose information about yourself, but in a zero trust way.
Moe: Actually there are different platforms doing that in different ways like one of them is pink sale, for example, as a launchpad, doing KYC and for you as a profile owner I'm doing this in my platform as well by having on chain KYC tag on the ERC20 to represent X people So when they trade with other people, we know these are like who they are, not using other names.
Some of the data can be linked. So of the ERC20 is the token, and then you can have database on chain related to that token using IPFS. If you heard us enter file system storage. Yeah. Yeah. So even the data, like the picture or the PDF file or whatever data there, not just the token can be linked to an immutable, like unchangeable data.
So whether it's a text or image, it can be on chain as well, and no one can change it. You can have an improved version of it. Where you can see the old version, but there are different use cases where people use like, it's, it's, it's a big you can build an entire system and you can put the architects anyhow you like and when you make it in a, like a good way, like you can use ARC20 as an identity profile.
Arjan: Okay. Cause a lot of things in, in, in blocks chain and that's crypto are really aligned to the principles that I'm working with. So one of the key principles in event driven architecture, or at least in event sourcing is that everything is immutable. So you never work, you never change something. You always create something new. And you always keep history. You never throw away data, yeah. So I'm really interested in that cross section between using event sourcing with blockchain Perhaps in a way to see how it speeds up because if you add another element of event sourcing is that it's a write only database. You only store information in there. So again, the immutable aspect which means that it applies the same principles of trust as with blockchain, but blockchain principles could ensure that, you know, that it hasn't been changed and that's not available yet in event sourcing.
Moe: Yeah, at some places you can have control, sorry, interacting, like you have private blockchain as well and public blockchain. So in a private blockchain like Stellar, XLM, or many different like Hyperledger as well, you can have more control. As well as on public blockchains, you can have upgradable smart contracts and smart contracts with proxy. So, you can still have some sort of control, but with a trust in it. For example, you want to update something there, there is a bug on that smart contract. If you have proxy, you can sync all the users from that contract to the new contract, and then announce there is an issue there, we will move to here, and all the data will be moved straight away. If you build it with a proxy, for example.
Arjan: Yeah. As, as, as David as you know. So my, my methodology, the stuff that I'm working right on right now is, is based on event driven architecture in combination with system thinking. Where I use the principle of a system is not the sum of its parts, but the system is the product of the interactions between the parts. Yeah, so the only thing that you actually need to model to make a working smart contract, for instance, are the interactions that take place and under which rules those interactions take place. So if you apply this, my ideal would be that blockchain and smart contracts form the interaction layer between systems. And then you have something that you can design without knowing with what you interact, but you still have always the right outcomes because that's being caught in the interaction itself, which the end result of the interaction is the token that's why I asked that question.
David Ding: Wow, that's brilliant. So just to give some clarity on that. So the reason I'm working with Arjan is because his, he's built something that could potentially convert like a monolithic software platform like Facebook or anything really into event based architecture, which could then be put on chain. And there'd be no alteration in the user experience. So quite profound if he can get this to work. Hey Moe, would you mind sharing with us how you're using tokens for your venture?
Moe: So yeah I'm, I'm making a smart contract as a service solution. For users to build their own use cases using those smart contracts. And I built around four smart contracts to be like a foundation for a platform one is user authentication, which is using ERC 721 with on chain tag, and I'm using chain link to link the tag on chain and have the KYC process off chain.
So the client's data is protected. Another contract is called a tender, which includes RFPs, request for proposal, and you have a bidder, and then they can agree on something. And third one is an escrow, which can be created independently or by awarding an RFP. You can create the escrow automatically. And the escrow happens, you have issuer, receiver. duration, time, and amount. If the time finishes, the issuer can refund. During the duration, the issuer can only release and the receiver can only cancel. Otherwise, the money will be on hold on the smart contract. For all that duration. And the fourth one is the 1155 for users to be able to create like equity utility use cases for different use cases or have a profile.
I have a use case called my IP space dot com. And it's where people can have their own articles, podcasts any personal IP for them or business IP listed on their profile using 1155, for example. So I'm planning to provide the use case and hopefully we can have a number of front ends people can just plug in and use as well and integrate with that smart contract.
David Ding: So Moe is about to purchase a piece of land and fractionalize it.
Moe: So it can be used for construction, like real estate development as well.
David Ding: Leanne, can you just share with us before we wind up what you're doing with your campaign and the artwork?
Leanne Bats: Yes. So, for Tres Cool's launch, we're working closely with Polygon Labs and the reason for this is essentially really values aligned, right? Polygon trying to came in as the sustainable option to Ethereum you know, even if you go to their sustainability page, it talks of them having, you know, a smart contract with planet Earth. Now, They currently don't, but we've kind of created that, right, so they're really keen to work with us and kind of push this forward. So, what they'll be doing is launching next month, they're going to launch an art project, so it's, it's, it's just digital art, but it's a bit more fun than that. So, it's based on a derivative that you may or may not know in this group, but a guy called Jack Jack Butcher created a checks VV, what it was called.
And this was a play that came out when Elon Musk took over Twitter and he put the blue check and he, and he basically made it possible for anyone for eight bucks a month, you could buy this check, which basically made you notable if you will. And kind of, so Jack Butcher's an artist and he jumped on this going, well, you know, if anyone can be notable for eight bucks a week. No one's notable because then, you know, what, what difference does it make? And then he kind of pulled on the threads that, well, actually blockchain is the thing that can verify, you know, who you are and what you do. And actually you know, it's, it's not too different from, you know, that event space architecture of like, these, these are the things that make us who we are, not what we say or pay for.
So he released this art project that just went ballistic and it was, actually 80 Twitter checks. That was just an open edition. So what they do is they put this out there for a period of time. It's completely open end in terms of, there's no set scarcity on it. So there's no limit to how many can be minted, but there is a time. So he said, you know, for, I think it was like 48 hours, these things are eight bucks, and I think something like 70, 000 of these things got minted. It just went crazy, you know, just went all over the internet. And then he took it from there. He's quite a, quite a clever guy with his architecture and structure and how he uses smart contracts. So what he did was then that was all off chain. It was using IPFS as your storage for the art. But then he actually then said, those people that minted that can now come and actually put that on, on chain, which is, you know, then verified and notable. And that artwork then, you could actually buy and collect these things and merge them together.
And so the 80, if you merge two 80s together, became 40. So it got rid of some of the checks. And the way it gamifies out with the, I think it is 70, 000 when I bought it originally, we'd end up, there's only three possible endpoints. Single checks. So by the time you merge and burn everything down, there's only three possible ways to get to one. And what spun up out of this is like, essentially das have formed to try and buy the artworks in order to try and get to this, this, you know, coveted one check. So it's a really fascinating use of art and technology and kind of, you know you know, a lot of sarcasm and, you know, that kind of thing and, you know, pulling on threads, you know, lots of cultural threads here.
So what Polygon and, and I've decided to create a derivative of that. So obviously after, you know, this is the internet, so lots of memes and derivatives spin out of this and, you know, all sorts of people were creating their own checks versions. So essentially what we're going to do is, is the same thing. So it's, it's called carbon checks, but instead of the, if you think of the little blue Twitter Check and it has a little tick in the middle. This one will have the C that's based on the periodic table. Now what we're going to do is sell Single checks. The checks themselves will actually be designed by the community. So Polygon next month they're going to run a competition for anyone to draw this check in your style. So as long as you draw a little cloud with a C in it, you can, you know, stencil art it, you can make it abstract you can do whatever you like in a square. The top ten will get selected to be sold as open additions that are open for a certain period of time. They will be sold for $1 each. Out of that at least 1kg will be puchased and carbon removal. So as you're buying them, every time you buy one, a kg of carbon is removed from the atmosphere. Again, that's verified by our contract and our system. But what you can then do with these is actually then collate these and buy them, collect them off the secondary, collate them and make bigger artworks.
So if you buy two singles and merge them together, you'll get a double, two doubles make a quad, and then eight, and then 16, 32, and so on and so forth. When you get to phase 10, you're at 1024 checks. So you can imagine an art board with lots of these different things all designed completely differently and all by that stage, you know, it'll be completely random with how they appear. But, but what you've done is if as these are bought and sold on the secondary maybe for higher prices more and more impact has been is happening and being more carbons being removed. So these artworks get more impactful and by phase 10 what we want to do is actually auction off the most impactful Phase 10 at either Christie's or Sotheby's. So there's this, there's this kind of end game. It's like I wanna create an artwork that actually gets auctioned off at one of these, you know, massive art houses. And all the while, of course we're, you know, this is, this is really positive impact. So the overall project, we have this goal of trying to remove a thousand tons of carbon from the atmosphere, which.
was going to put us right in the top 10 of all kind of projects removing carbon except like Boeing and Microsoft and all this have poured into this market recently and they're putting like, you know, millions and millions of dollars behind this. So we probably won't make it to the top 10, but top 25 is now our aim. But yeah, the idea is that this artwork may or may not be notable in the fight against climate change. And that's the kind of plan, but really it's to showcase the fact that if we bake it into the smart contract, We can just have fun. We can have fun on the surface. The business is happening at the smart contract level.
And then yeah, we just get to have an art project that's actually, you know, climate action. So that'll be our little launch. Well, hopefully not little, hopefully big. But watch this space and I'll make sure that obviously the Web3 community are well informed and can hopefully mint some, make some art.
David Ding: Absolutely. Hey Brendan, have you, Brendan, have you got anything relevant to share with what you're working on in this context?
Brendan: Yeah. We, and, and hence the, the, the legal stuff. So and some work on DAO so, so, and that's to some of the points as well. That's a tokenization of assets with inside that. So IP and things like that governance tokens to be able to create these like kind of sub circles and DAOs and then obviously a remuneration kind of token as well. So decoupling, decoupling the 2, that's what we're trying to achieve and, on the back of that we've, we've been speaking to Brian, I'm trying to get a group together to actually establish a, a shareable kind of almost open source legal framework that can be used for DAOs in New Zealand. Really kind of things out. So we've had a first session around that and I'm trying to get a few of us who are working in the DAO space so that we've got something that's reusable and just, just make it so it's we don't have to go to Delaware. We don't have to go to Cayman Islands to do some of this. I really wanted to be here so we can have some innovation out of New Zealand and not, not go to other countries, yeah.
Leanne Bats: Awesome. Very cool work. Well, if I can be of help to that, the other part of Tres Cool is that we want it to be owned by the users, right? This is not something that I want to own and you know, be the owner of. The idea is that, you know, those that get those factor tokens will actually then get to govern the, the, the way we use the, the funds that the company makes. The profits that come back into it, so it will not happen overnight, and it will not happen quickly, but this progressive decentralization into that kind of format is something I really, really want to do and achieve, but as we all know it's all good in the brain, but then when you start to come through really, really, really hard, so love to keep them in touch with what's going on there, it'd be really interesting.
No, nothing from me other than thanks for showing up, listening to me speak. I hope I haven't bored you to death and hopefully added something new or interesting. And thanks for participating because this is what it's all about. You know we've got to learn and share together. I know every single day I'm learning something completely new in this space. So yeah, the more we share, the more we will do you know, better with this, I think. So yeah, thanks for coming along. Okay.
David Ding: Sounds good. Thanks for coming in. We appreciate your time. Thanks for the crew for attending, and we'll catch you in the next one.