Ep.39 [EN]: Zedd: Unpacking the long march of Magic Eden towards the market winner
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You are now listening to Hotlong. I'm the host, Mabel Zhang. This show attempts to shed light on the broader Web3 community. The guests will include Web3 operators, investors, or ecosystem participants of other forms. The show will also have a special focus on the Asia-based Web3 world. Connect East and West. Enjoy the warmest Web3 conversation. I have a recording in here. It's kind of crazy. I don't know. What is it? It says Sansom Street, which is for SF.

Oh, that's a long time ago then. 2022. We can listen to it after. I'm kind of curious what it is. All right, then. All right. Welcome to the latest episode of Hot Long. This is Mabel. Today, I'm super excited to welcome back an old friend who I think you were also on the other episode of Hot Long before as well, but that was like a while ago. Zhaoxun or Zed, whichever you go. Go with both now. He's the co-founder of Magic Eden. Yeah.

I would say since the last chat, a lot of things has happened. You guys, if you're interested, feel free to check out the previous episode. I forgot which one it was. I'll put it in the show notes as well. So maybe you might share with our listeners Magic Eden's journey since you started back in 2021. Yeah, thanks for having me back. It's good to be back. I think it was 2022. I actually, I remember...

taking it from, I think I was working from home in San Francisco. So good to be back. Okay, so I can give a little bit of background then. So before the Magic Eden journey, which is where I guess Mabel and I met, I was working at DYDX. So that was the beginning of my crypto journey. 2018, late 2017, early 2018 was when I first kind of came into crypto. Very different time because the ecosystem was a lot smaller. And

it was, yeah, very different time. People were just building kind of DeFi protocols and things. So very, I feel very fortunate to have been part of that journey. And then,

Fast forward a few years, spent some time at Coinbase on the institutional trading team. I forgot you joined Coinbase. Yeah, I was at Coinbase for a hot minute, about a year and a half. And then, yeah, then we started Magic Eden in September of 2021. So been a crazy two and a half years. Yeah, yeah. I was actually trying to get you get a download for Magic Eden's Journey. Oh, all right. Well, okay. Well, we can do that too. Magic Eden's Journey. Right. So...

How do I sum up the last two and a half years? So we started in 2021 building on Solana. Yeah. And it was a crazy time because NFTs were popping off on Solana back then. We were very lucky to kind of capture that run. We were purely a Solana marketplace for about...

A year or so. And a few months into the company, we always felt like we wanted to be and we needed to be a multi-chain marketplace. Not many, and I would still say that's true today, not many dApps are actually multi-chain. I think there's dApps that do within EVM and do that pretty well, like expanding across the L2s.

But, you know, our whole thing is that we want to be able to facilitate, you know, trading exchange of anything, any kind of value that's on chain. So to do that, you have to be on every single chain or at least a lot of the ones that matter. So we ended up expanding into EVM through Polygon first and then eventually Ethereum. And then a year ago, also the Bitcoin ecosystem, which I think we can spend some time talking about. Yeah, that's it's been pretty, pretty insane.

When you decide to march into Polygon, were there any other options? So let me think back. That was 2022, I think. Yeah, there were a few options, much fewer options than there are today. Yeah, now I feel like there's hundreds of options. Back then, I think, let me think back. We were probably considering, I think we were considering Immutable.

at that time yeah because they had been seeing some level of traction at least in gaming we're considering polygon obviously and i think that might have been it maybe avax i think i want to say we're evaluating that too but none of them really had um significant traction so i think we kind of felt for all of them and this is nothing against any of them it's more that

we fell for all of them, we would have to take a little bit of a leap of faith. It wasn't as clear a signal as, say, going to Solana in 2021 when there was clearly a lot of activity and traction. Yeah, we ended up deciding Polygon because a lot of teams that we spoke with

at least were trying something out there. And we felt like, yeah, there would at least be some activity that would be experimental and they were doing a lot of aggressive BD with a lot of games and we ended up trying that out and we felt like it was at least a good entry point into the EVM ecosystem.

So how was the experience building in Polygon and Ethereum? Because you guys are quite native in Solana, you know everyone. And then basically it's like the community knows about, I guess, TIFF or whoever was speaking on the Twitter space. But then Ethereum and Polygon was a completely brand new for you guys. How did you initially try to break into the ecosystem? I'd say it was hard for a couple of reasons. One, because...

The timing of when we decided to do that was really like... Bare. It was really bad. I'll just say it. It was really bad. Was it when FTX? It was... I think we launched on Polygon maybe two months after the FTX stuff happened. Oh, okay. I see. Which, by the way, was completely coincidental, like timing-wise. Because we started working on the integration...

I don't know, like before FTX. Yeah. So it just so happened that all these bad things kind of coincided. And then the Solana ecosystem had obviously bad knock-on effects from the FTX stuff. And it kind of looked like we were abandoning Solana. At least that's a lot of the FUD that we received at the time. And it was challenging for us because, yeah, we didn't really communicate that story or the intention very well.

But from the outside, it looked like from the Solana ecosystem that we were just like abandoning ship, which was definitely not true. Because if anything, you know, back then, even today, we're still heavily resourced from a team perspective to keep building on the Solana ecosystem.

So that was one problem, one challenge, I'd say, not a problem, but a challenge that we had to face. And then the other challenge was definitely just understanding the community more deeply. Number one, that was ourselves. Like as a company, we needed to have more people who were deep in EVM and deep in Ethereum. And number two, the ability for us to penetrate and get mindshare in the community, which was

It's harder than you think, you know. I know it. Yeah, it's harder than you think. And we did a really good job on Solana. So we felt confident for sure. But it takes some extra like superhuman effort to be able to do it. I'd say I would give us like a B, you know, at the time. We didn't really do that good of a job. We weren't able to really cut through a lot of the...

Yeah, a lot of the ecosystem, you know, beyond sort of the existing NFT marketplaces that were already on Ethereum. So...

That was pretty challenging. But I think it's something that you can chip away at, you know. And over the next couple of years, as we did more and more on EVM, we sort of found a wedge by working with creators. And we ended up partnering with like Yugo Labs and Pudgy and Azuki and all these sort of OG Ethereum creators to help them around like royalties and things like that. So since then, I think we've done a lot better job sort of penetrating and becoming creators

more known as like this multi-chain marketplace, but it was definitely very hard at the beginning. Yeah, when I try to work in Polygon space, I definitely felt like at that time, like when we started Gas Hero, you guys are very well respected already by then. But I think for Ethereum, it's much harder to break. A few follow-up question on this one, actually.

How did the partnership with Yuga Labs go? Well, if I recall correctly, it was something around building a NFT marketplace practically for them. But then you guys white label kind of. Yeah, so I'll share a bit about how it came about and then what we did together. So how it came about was we had been talking to them for years.

I don't know, back and forth, casually back and forth for maybe, I don't know, six months. Just finding ways to work together because I think we just liked each other as teams. And we also had a connection through our chief gaming officer had worked with Yuga's, I guess his now former chief gaming officer, Spencer. He's now far away. Through that connection, we kind of just got to know each other. Over the subsequent six months...

We basically went through this journey on Solana where we had to resolve the royalties issue. The CNFT. Not CNFTs, it's PNFTs. Sorry. There's so many different NFT standards now. But we had to go through this journey of like, yeah, there was no royalties for a while. Then it came back and we were a big part of that full circle.

And I think Yugo had seen that and they reached out when the existing marketplaces on Ethereum decided to not support royalties anymore. So that was the genesis. And then we kind of got talking and thought,

if we could build something that would not only benefit Yuga, but benefit the rest of the creator ecosystem, there might be something interesting that we could build together. So that was the genesis of like building this marketplace that respected royalties, but was not just for Yuga. It was for everyone and anyone. And we launched that, um,

four or five months ago now so that was basically i think that gave us more of an entry point and a and a wedge within the ethereum ecosystem that i didn't think we we really really had before uh that was pretty cool it was pretty cool to do that with them is it more for pfp trading or is it for also their games and it is both it's for both yeah it's for both so i think um

The gaming stuff now, they've spun it out. Uh-huh. Right? So Spencer and that team and like all the Legends and the Mara, like all of that stuff is now with Faraway, which was one of the teams that was basically building a lot of that. I know Faraway. Yeah, so... I think UltiCoin invested in them as well. I think so too. Yeah. So it's for both. Yeah.

I see. How did you guys feel when Blur was doing quite a good job? I guess you probably also studied how they did all the things. How did you view that competition? Yeah, in the very beginning, I would say because we weren't in Ethereum back then, we were following it, but we didn't have that many feelings around it. My one observation, I think that's been consistent all throughout is that

We have been focused more on like just where are the users, where are the users spending time versus necessarily volume, I think can be a little bit of a dangerous metric sometimes in crypto because volume is so heavily incentivized. It could be, yeah. Can be very easily incentivized. So we actually look at users and then we also look at revenue because I think that like, it's like, what are you paying? What are the paying users? Sure. Yeah.

So with Blur, I think definitely they nailed a lot of the liquidity incentivization, which I thought was really clever. But we always felt like that was not the kind of product or platform we wanted to be. Because obviously a marketplace should have liquidity, but the marketplace should be a place where a lot of people want to come and trade, not just a few traders, right? So...

And if you look at like even in the last six months when Blur was completely dominating OpenSea volume, OpenSea had way more users still than Blur.

Even now? I think that's true even today. Yeah, I think that's still true today, actually. Interesting. Yeah, it's like an order of magnitude difference. Wow. Yeah, even though the volume is order of magnitude difference the other way. Yeah. So I think, yeah, so I guess short answer to all of that is that volume is a potentially dangerous metric. And we were looking at this also from a user perspective. But I think the way they did a lot of the incentives for liquidity was very clever.

But I guess like if you have volumes, you can always make money, no? Yeah, potentially. Potentially. They're 0.5 right now. Their trading fee. Oh, is it? I'm asking. Oh, no, I think it's still free. Oh, is it still free? I think it's still free. Yeah, they pay 0.5 in royalties. Oh, that's minimum. To creators. I see. Yeah, but I think it's still no fees on the trading side as a user. And then it's also, I think, I can't remember the numbers. It's somewhere in the thousands of users on Blur. Like...

And I think if you combine total NFT users, it's in the hundreds of thousands, right? I'm not sure if this is something that you can share, but are there professional market makers on Magic Eden these days? I believe so. Yeah, I believe so. Yeah, there are definitely professional market makers just in general in NFTs. But I think it's quite different to market making fungibles. Yeah, for sure.

It's like a... You have to take some... It's very hard not to take directional risk. Very hard. Even when you choose the collection, right? You'll have to think about that. The reason I asked about your view on blur was that...

I think a lot of people will want to build the scale first and then later on they can make money from the scale. But I guess you are still... But I think user scale is actually... You think it's more important. I think user scale is actually more important. And even if they don't trade that often...

Correct. Yeah. I mean, both are important. I think like you've got to do both. You can't have zero volume and like, yeah. Yeah. But I do think like over the long run, it's more durable to have a lot of users.

But then later on you guys did some gamification with trading rewards. We did, yeah. We've been experimenting with that. How did those go? Good. So we launched basically, yeah, we call it diamonds on Magic Eden. It's like, you know, kind of like earning diamonds. And it's been really good. We wanted to basically experiment with like, yeah, different ways to incentivize and reward users.

But we didn't want to do it in a fully zero-sum kind of way. We didn't want it to be like a PvP game. That was not the goal for us. I'll give you an example. We actually just launched rewards on our Bitcoin marketplace. We just did it two weeks ago, I think. And actually, the majority of the rewards and the incentives are actually directed towards Taker. The Taker site, right? Which incentivizes people to buy rewards

And that's very intentional because if all of the incentives are on the maker side to like provide listings, it creates like a, yeah, it creates this mechanic where people then want to continuously list as close to the bids as possible, which I think then has a negative spiral on floor prices. We wanted to create a more healthy market, which is why we've, we have some of the, um,

Yeah, the way we do it is that we then incentivize more on the taker side, which I think is generally better for the ecosystem. Funny enough, you said this. Yeah. When we design, so like we have a FSL point. For a different product, we have different rules for FSL points. One point is one GMT basically. But then you cannot buy points. You can only turn the points into GMT. For Stepin, we only give points to the taker.

Oh nice. That's the, I think it's the same idea as well. Yeah, same idea. So it's quite interesting that you also, I didn't go into like the mechanism of how you guys designed the diamonds, but it makes a lot of sense. And then I want to pivot a little bit discussing gaming. I know you guys did a lot of efforts in gaming, particularly not last year, right? I chatted with some of the team.

How do you view the effort on that front? Like how do you rate it? Any learning, inspiration come from that? Yeah. So we've had a gaming team since 2022. End of 2022, I think. Yeah.

Not a big team. The team has always been around four people-ish, which is true today as well. And it's mostly been on two fronts. The first front is like, it's mostly a BD led team to the degree that it's like we want to partner with games that are launching a lot of NFTs as part of the game. And then the second thing is like we typically partner with them on Launchpad and we help them launch. And then obviously we help them when they want to use the marketplace.

So it's been, yeah, it's been pretty interesting journey, I would say, over the last like 18 months. One that, yeah, there was a lot of hype, I would say, in like 21 and early 22. And...

I think a lot of games were pretty heads down in the last 18 months. So there wasn't actually that much activity. There were definitely some games launching things, but it was not by and large widespread. I would say the other challenge has been from a product and engineering perspective,

a lot of the infrastructure that games need is fairly custom as well. So we have not gone to the level of depth, I think, that each individual game needs.

It's hard to build something like that. Right. So that's probably the area where I think we, yeah, candidly underestimated that level of complexity back in the day. And today we have not made that product investment, but we definitely still have like a strong BD effort to partner with games at sort of that early launch stage.

I think that quote-unquote product investment, it's primarily more on the number of staff on it because it's more like a time-consuming thing when you're customizing things. It's not very tough. But then if you're only building a...

Like a marketplace that's good for PFP, it's not going to use by the games. I think that's basically the trade-offs. And then you'll also have to take directional risk, which is like betting on who is going to be there. Exactly. Yeah. And I think, yeah, basically if you look at then the decisions we've been making over the last year or so,

Yeah, I think we kind of supported PFPs more, right, in some ways, because we did ordinals and things like that, which is kind of like an extension of the PFP category. Yeah, like a lot of people thought that would die and then get replaced by games or something, but it sort of hasn't really played out like that either. So it's been pretty interesting. My biggest take on games is that

The games that actually would have volumes, they might have like 80, 90 percent of the market share. And then they would tend to want to build their own thing because they know their product the best. So it's always harder. I think people like people from last cycle, you know, like Fractal and all of those people were talking about how they would like the gaming marketplace to be a...

like, you know, somewhere that, you know, a lot of the actual volume and because like, it's also a high frequency exchanging, right? We just talked about gas here as well. The reality is that like that the effort of like building that it's way underestimated. And then like, if you build something, but that doesn't take off, then how do you justify? So,

Yeah, you're kind of at the whims of like, it's still hits based at the end of the day. Correct. So you've got to place bets. It's like gaming investment. Yeah, it is. It is. Yeah, exactly. Yeah. Now I want to talk about your winning horse, Bitcoin. How did you guys start building things around the Bitcoin ecosystem?

Man, winning horse. Yeah, we had some hard non-winning horses. Yeah, for sure. Back in the day. Well, I mean, that was like everyone these days when they talk about match eat and they're like, oh, they're winning and Bitcoin makes everything for them. So when you told me just now earlier, Bitcoin is only half of your market share, I was actually shocked. Yeah, yeah. We actually have a...

We talk about being multi-chain a lot, like publicly and all this kind of stuff, but it's actually very true. It's a reflection of the business actually, because Bitcoin is roughly, roughly, I mean, this changes on a daily basis, but roughly it's like 50% of our business. And Solana is still a significant part of our business. EVM is still the smallest part of our business. So it's kind of funny that we are almost like,

It's like a barbell strategy. Like we have like Bitcoin on one side, Solana on the other side, a bunch of EVM stuff in the middle. But I think it's a good place to be because a lot of the really interesting development experimentation is happening on both ends of that barbell, like on Bitcoin and Solana. So I think we're actually quite well positioned. But how do we start building on Bitcoin? It was pretty crazy, to be honest, because...

If you asked us in 2022 at any point if that was on our horizon, absolutely not. Yeah, it probably was not on anyone's horizon, right? And then in early 23, one of our team members is actually our general counsel, funnily enough, like someone you would not expect. Yeah, you would not expect it to be him.

And him and a couple of other guys told us about Ordinor's Protocol. But it was quite theoretical. You know, we didn't think it was actually on the horizon. But...

But very quickly it became clear that this thing was real and people really wanted it because I remember being in the Ordinals Discord in the very early days. There was sub, I don't know, there was like less than 100 people in that Discord. Wow, you're early. Yeah, and not because I had the alpha, it was more just like the magic. Studying. People in the Magic Eden team were already in there because they're just like, they love, you know. That's why it's the importance of like make sure the people in your company also love

Playing things around. Exactly. Indeed. That's like super important, I think. We would not be here doing this stuff if, yeah, if we did not sort of build the culture and the team that way. But anyway, because the team was in there and we started getting in there, we started seeing people like trading on Discord. And it was crazy because we had never seen inscriptions before. Like that as a concept mechanic was not a thing. And we just thought it was really interesting because...

it is truly what people thought NFTs would be. It's like actually the thing is on the chain. Data container. Yeah, exactly. Maybe it's like you can't do that much stuff with Bitcoin because it's not that efficient, but at least that was happening. And then we started to see more people trading on Discord, more people talking about like, hey, here's an OTC market using spreadsheets. Like,

And when we saw that, we thought, okay, people definitely want to trade this stuff. So we started working on a version of a marketplace because back then we didn't know if it was possible to build a trustless, non-custodial marketplace. We actually did not know. It was unclear. So Rex, my co-founder, Rex, who's just a gigabrain, spent a weekend building

He's very good. Yeah, just building stuff, like writing an architectural design. And then he basically came back and said, like, yo, guys, it's possible. It's possible. And then we were faced with this choice of should we move a bunch of engineering resource to do this thing? Which was actually kind of a hard question to answer.

You know what? That actually makes me realize or confirm my thought on you have very advanced engineering resources because not everyone would be able to just like move from one, well, I guess not stack, but like you get what I'm saying. Like one stack to the other. I'll tell you actually what the trade-off was. We actually, there were people working on our Polygon marketplace at the time and we actually decided to move some of them to work on Bitcoin.

after Rex had figured out that this thing was possible. Did it have to study new things? Definitely, they had to ramp, for sure. They definitely had to ramp. It's really different, right? It's completely different. And we did not have Bitcoin developers just in the company, right? It's kind of like, in my opinion, and I felt this was true at DYDX and I think it's still true today,

It's very hard to find even today like amazing smart contract developers. You just got to find amazing engineers and then they learn, right? I think that's what happened with Bitcoin for us. We had good engineers, they were passionate and they were excited about Bitcoin and then they learnt it. But they... Yeah, so at that point we made that trade-off. It was kind of a very difficult decision to make because...

it's very hard to reason about what's the ROI of this thing, right? It's like, will this thing take off or not? It's like, I don't know. It's hard to say, very hard to say. But we ultimately decided to do it because we just felt like if people were willing to trade NFTs on Ethereum and Solana,

And Bitcoin is the most well-known chain. And people have always wanted an ecosystem on Bitcoin. Things to do with Bitcoin, like ways to earn more Bitcoin. People would want that. So then we decided to go for it. And we hosted a hackathon in the company, internal hackathon.

Wow. Yeah, with like 10 engineers in California. And then they hacked on the marketplace for a week and then we launched it like soon after. That was within the span, like all of that, what I just said just happened in about three weeks. That was basically the span of time. And then we went live with it, I think in like February or March of 2023, 23. And then since then you've,

been quite deep in that space. Anything that comes out new, you'll be able to be the first one. Just about. Yeah, since then, yeah, to give everyone a sense, so we did the Ordinals marketplace first. Then we supported this thing called Rare Stats, which is kind of like

Very simplified version is like, it's like coin collecting on Bitcoin. It's like rare coins, right? And then we did dabble in BRC20s a little bit too. We ended up removing support of that. Oh, why is that? Yeah. Mainly because I think we tried to extend into BRC20s when we weren't really ready. Yeah.

And we didn't have enough resources to basically work on both Ordinals and BRC20. And we felt like Ordinals was more of our core. Yeah, because someone else has been doing BRC20 quite well. Exactly. And we just felt like it's better for us to just double down on Ordinals, make sure we're the best, very, very best at that.

And then most recently, we did Runes as well. Well, I guess since now that you talked about the timeline, I know this is quite basic, but I think for people who don't know on the show, who don't know about Bitcoin ecosystem for NFT, you can probably give us a quick download for all of them. Like what those are, what's the difference? Yeah, difference between like Ordinals and all of that. Correct. Yeah, Ordinals is basically thinking about, it's like NFTs, thinking about it as NFTs. The difference is that

Instead of like NFTs on ETH and SOL, you are actually inscribing the media or the data directly on the chain. So that's ordinals. BRC20s and runes are basically different fungible token standards. There's actually more. There's like BRC420 and like a bunch of other things. But the main ones are BRC20 and runes.

Runes is very, very recent. It is about three weeks, four weeks old. And then BRC20 has been around for almost a year now. And Runes is almost like a, it's like a slightly more user-friendly version of BRC20 in that it doesn't require like some of the inscribing activities to be able to like move them around.

And Runes is also developed by the same guys that did the Ordinals protocol. There's a small team that works on the core development of Ordinals and it's the same team that did Runes, which is what gave it a lot of the traction and hype. Do you guys talk to them at all? Yeah, yeah, yeah. Very often. Who are the people who are trading these different assets?

It's a good question. So one interesting thing that we've noticed is that we have a lot more users in Asia on our Bitcoin products than we do like Solana. That's the first thing that's really interesting. The other interesting thing we've noticed though, which is maybe a counterpoint to this, is that we have a lot of users we know for sure that have been doing a bunch of stuff on Solana, on Magic Eden, and are also using our Bitcoin stuff. So there is more cross-pollination than people think.

It's not as siloed as I think people think. I think people who would be interested in playing around on Solana are not the quote-unquote OG. They have the growing mindset, and then they're willing to learn. They're like the people that want to use the new stuff.

So this actually makes me realize a very interesting point, which is for marketplace, you could actually have your own native community. Like I don't think of, I think Blur has, I think OpenSea doesn't because I think they are too neutral. But I think for Magic Eden, there definitely are native communities who just want to use your product regardless what you build. Yeah, I think that's true. It's also been reinforced recently because we launched a cross-chain wallet

like three months ago and the reason I know that people have like cross-chain wallet not multi-chain oh I guess maybe terminology is wallet that supports multiple chains and then you can also like swap assets across multiple chains oh so it is a cross-chain so you can basically say you have bitcoin yeah you can get sold in like immediately who built the VEX? we actually partnered with Exodus

Yeah. So if users want to go between Sol, ETH, Bitcoin, etc., USDC, you can just do that through the Magic Eaton wallet. So for the...

The Solana crowd, when they move to Bitcoin, they probably would have to figure out a new wallet extension or whatever they would use. Or they choose prioritizing your wallet first? Yeah, yeah. A lot of our users are, yes, they download the Magic Eden wallet and then they just convert some SOL to Bitcoin and then they start using Ordinals. That's an interesting learning. I didn't realize. But then how about like the Bitcoin native traders?

Yeah, then they are basically, there's a few other Bitcoin wallets as well. They are mostly, I think... OKEx? OKEx basically is like,

Yeah, so it's most of the Chinese users. Then there's like Unisap, which I also think is mostly Chinese. And then Xverse, which I think is partly, it's like both Western and Chinese. Those are like the main Bitcoin wallets outside of Magic Eden. Where do you see all these Bitcoin NFTs going though? I think in our industry, let's put it this way.

the demand for speculation and trading is always there, even if there's no meaning whatsoever. I think Memecoin already proved that, which I also agree. But I guess because you just mentioned there are actually quite a few people who are building stuff on Bitcoin. Where do you see all these going? So I think there will be more. I definitely think there will be a lot more, let's call it NFT originals creation to come. The projects, though, are like... They are not...

with utility. You know what I mean? Like, it's not like what people were promising on for like ETH NFTs as an example, which I actually think is good. You know, it's like... It's a collectible marketplace. Yeah, let's just call it what it is. It's fine. You know, you don't need to like attach some utility with it. That I think is the main difference between NFTs on Bitcoin and what we've seen on Solana and Ethereum. And then a lot of what's being built right now is...

is basically lots of tooling around how to mint and etch ordinals and runes a lot of tooling about that there's a and then a lot of uh people trying to figure out like how other other ways to make trading uh this stuff easier because obviously trading on bitcoin l1 is like yeah yeah i joke that it's kind of like um

when you trade Solana meme coins and then you come and trade ordinals, it's like going to the spa. It's like getting a massage because it's like you're like in this chaotic environment on Solana where like, you know, market cap can go to 100 million in 30 minutes.

It takes 30 minutes to just have one transaction on Bitcoin. So it's almost like if you're used to meme coin trading, you get to Bitcoin, it's like relaxing. It's like chill. So that's like the style. But anyway, like a lot of, I think what people are trying to work on, including us, is like how do you make that experience better? So you have many, many L2s that people are trying to create that purportedly can make it better. We'll see. But I do think that

There's something to be said about there's a reason that this stuff took off on Bitcoin L1. It's because it's different. You know, it has different properties. You guys are building marketplace, so you probably know it very well. Have you thought about building L2 yourself then? Never say never. Yeah, never say never. We don't really have the bandwidth to take it on at the moment. Yeah. I also think that, especially if we're talking like Bitcoin, I think we would only want to do it if it's a native platform.

Bitcoin L2 versus like say, you know, like, yeah, a lot of the L2s I think this first generation are not, they're definitely not native Bitcoin L2s.

They would just call themselves Bitcoin L2s. It's more like a Bitcoin sidechain. Which is nothing against that. I think it's good that people are working on it and trying to experiment with it. And we'll probably end up maybe working with some of them to some degree. But it's not quite like what optimism is to ETH. It's not like that. Well, I mean, I guess it's like history always repeating.

Because fraud proof and all of those are quite hard to build. So before roll-ups happen, all of these sidechains are calling themselves L2 as well. That's right. That happened on ETH as well. Exactly. That's right. So I think we're going to see the history repeats again. It's a natural evolution. For you guys right now, Bitcoin obviously it's kind of like a kingmaker for you. Like I said, people now when they refer to you, they're like, oh, they're the absolute number one. That actually did not happen before.

Two months ago, a lot of people were still thinking OKEx did very well. I mean, they are still doing quite well. I think that they are very respectable competitors to you in a sense, because like as an exchange, you technically don't have that genes to build that. That's true, actually. Yeah. So I think so far what they've done is quite interesting. But now I think people kind of treat refer you as the number one of and then when people are saying number one, I think they mean all chain, not just like on Bitcoin and whatnot.

What have you done company level to lean in that, I guess, success? Good question. No one's really asked me that before, actually. Really? Yeah. But actually, yeah, it's a really good question because we have spent a lot of time thinking about this. Yeah, because it is very hard to build on all these different things, not just from a technical perspective, but also from like a...

Number one, how can you still maintain focus in the company? And then number two, how can you create a culture that incentivizes the team to get close to the ground, close to the community? Because that's the only way you can be successful. You have to be fast and lead the trend. Yeah, and you cannot be fast if you don't know what's going on. So you have to set teams up to have good intuition.

So that would be close to the ground. And then you have to set teams up for fast execution because when you go to a new chain, it is like another zero to one bet in the company. And then you have to then operate that way. So, for example, the way we would operate our Solana marketplace where it's a little more mature as a business, the market is a little bit more mature as well. It's no longer like a zero to one effort.

But when we went to Ordinals, it was very much a zero to one effort. When we did Runes just three weeks ago, that was a zero to one effort. The way we actually organize in the company is that we basically, it's almost like a business unit model. So each of these marketplaces on each of these chains, it's like a separate business unit in the company. It's not like a fully separate in the sense of no one talks to each other, but it's a business unit in the sense of for each of them, say like Bitcoin, there is a dedicated product manager

There is a full engineering team. There is a full business team. And that whole team, all they think about is Bitcoin. And they will not work on the Solana stuff. But they will definitely communicate with each other as and when it's needed. Because we also don't want the Magic Eden product to suddenly be bifurcated into five different versions of how do you...

make a bid or like, how do you sweep? None of that stuff should be like different. That should be the same, but each team should have enough flexibility to be able to say, oh, I want to go and do like runes, which is a purely Bitcoin thing and not a Solana thing. Right. So we definitely, we have these business unit setups. And then the reason we want to do that is because we also want the engineering team to be very close to the business team.

So if the business team is like in the weeds in the community talking to users, talking to creators, we want the engine team to also feel that, right? And we want them to be a part of that. And we previously had felt that we couldn't get the whole company really close to the ecosystem. It was really hard to do that. So that's something we've spent a lot of time thinking about. And then

The other thing I'll say is that even if you have this setup, it's really important to think about how to then set the right expectations for the team on what does it mean to do something zero to one, right? And I'll give you an example, which is like when we did Runes a few weeks ago, it is really different to how we would normally run like a product cycle. Because usually when you build product, it's like, yo, we, you know,

build it for a while, it's in design for a while, then you maybe roll it out to some set of users in a beta, and then you test it, get feedback, and then maybe roll it out to more users. So it's like a more prolonged iteration cycle.

But for a zero to one, my philosophy is that like, it just, you just have to be fast. You have to get to market, right? It matters a lot. And then you can iterate quickly once you're in the market. End to end, it probably, we probably spent three weeks building runes and we could have definitely spent like eight weeks because we could have polished it way more, right? Could have worked on more things, but we sort of talked about it internally and said, nah, the most, most, most important thing we should optimize for is

is just let's just get this thing to market as quickly as possible, see if users actually like it, and if they like it, we can just do more. And I think that's like a very conscious decision and conscious thing you have to continuously fight the urge on. 'Cause as you get bigger as a company and we're like over a hundred people now, which I would say is like, we're not like huge, huge, but we're definitely not like tiny anymore.

there is definitely a natural gravitation as you get bigger to slow down. So you have to fight that urge. And in moments like this where it's like a zero to one, you have to really fight it and make sure the team also realizes that and that everyone is aligned to just get this thing going, get it out as quickly as possible. I think with Bitcoin and NFTs, one of the interesting things, though, is also it just started this cycle. So you're almost growing from

from the beginning with it. So a lot of the things itself, like runes as a standard, it's also developing as well. Exactly. So...

It's quite important. I mean, regardless, if you ship three weeks versus eight weeks, I think a lot of things would have changed in that five weeks. Right, yeah, exactly. The ground will move under you kind of thing, right? Yes. So I think getting the real user feedback, it's the easiest way. A lot of the users from Asia, they were joking about how they felt like this team is...

Oh, wow.

Wow. I guess it's a compliment though. Because you have a lot of respect on that. And I think like having, like being able to foster the curiosity, it's very hard, especially when you grow, right? Like people tend to not want to learn, like keep learning and then try new things and always like, you know, on a very fast pace. It's very tiring. Mm-hmm.

But I think if people who you hire are all like that, then you actually grow a very, very valuable ecosystem. No, it takes work. Yeah, it definitely takes work because it's very hard to always hire like people who have amazing skills and they are, you know, into all the crypto stuff. Yeah, they just gotta be willing to learn and like,

jive with the culture and then yeah that's really important it's really really important we spend a lot of time thinking about how to do that and making sure that it's known in the company how large is the team right now? we're about just over 100 oh that's not too big yeah because you run so many different chains anyway yeah

Outside of Bitcoin, do you see any demand supporting other chains like other EVMs or roll-offs right now? Yeah, keeping an eye on it. There's the parallel EVMs. But those are not shipping yet. Yeah, Say is about to become EVM compatible. I think that's happening in like a couple of months. Yeah. Something like that. Yeah, Monad obviously later. Yeah, I was thinking Monad. Yeah, later this year.

Yeah, the L2s are interesting. L2s on Ethereum are interesting, but there's not that much activity on them right now. And then the other thing we're keeping an eye on as well is that people are starting to build their own chains, like kind of the fully verticalized model. So keeping an eye on that. Yeah, but nothing that we're actually building at the moment.

But I think for app chains though, especially app roll up or whatever, if they are starting with a lot of users, they will probably build their own marketplace. Right. They just go full stack. Because they already have their users. Like they already done the hardest part. In that sense, yeah, I think the focus for us will probably just be on the wallet side.

I see. So yeah, no, I was thinking like Ronin, for example. Like they would require whoever working with them to use their marketplace. Or Azuki, maybe. Oh, have they built their... They're going to. But I think PFP is a bit different. Because like you the labs work with you guys online.

So not everyone would want to build their own thing because building marketplace and trading experience is always the toughest. You just don't have the know-how. If you don't have the know-how to build the optimal experience, I think it's going to be hard. So we'll see. And then I think we'll want to touch upon a bit more on the community side. Yeah. Well, I just mentioned that you guys did very well in terms of building the native community, especially in Solana and also Bitcoin. What do you think you have done right?

So growing your native user community. Yeah, I think basically it's a few things. One, it's that we had to make sure we had DNA in the company that represented the community. So for example, when we went to Polygon, we hired this guy, Johnny. Yeah, who...

was just... He knows everyone. Yeah, knows everyone in Polygon, like loves Polygon and is kind of the guy that's willing to, you know, he'll just go on spaces all the time for fun, right? Just because he loves it. And so one is like having the right DNA in the company to reflect what you're trying to do in the community. And then two is making sure that we have like very active comms, socials, like all of that stuff.

And then number three, I think, is like fostering like the in real life events. So we're always throwing events every conference we go to. I think NFT NYC, we did seven events across the week. That's for Mindshare? Yeah, exactly. It's more just like, yeah, people see that you're a part of it. So I guess it is like a brand exercise in some ways. And then I think the last thing is, yeah, learning from...

your like mistakes and, and issues. We have messed up on a lot of things that two and a half years. Right. And now I think we have a, I would say a much better relationship with our community than previously because the community has kind of seen the ups and downs along the way, but they know, well, I hope they know, like, I hope they know that we are number one, like here for the long haul. And number two, that we,

In our hearts, what we really care about is we just like to build a lot of things and we do it fast. We're a very execution-driven team.

that's what I think what hopefully we want to be known for, you know, and I think people do recognize that now. I think for Bitcoin, right, you ship fast and then you grow with the like all the new things, then you're always already in the weeds because otherwise you won't know what's happening, like where the I guess where people's minds are. So I think for Bitcoin, it's definitely that. I think for Solana was

It's just like, I think you guys understand the meme culture there very well. And then it was fun. I don't know how to describe, but it's very chill. And I think that whole company, like innovation, exploring, that kind of... It was also a very good fit. Just my impression. Going to Ethereum for you guys was definitely much harder. Yeah, I would agree with that. And then there's obviously a lot more competitors. And then there's already strong power factions existing. Yes. I would also say on Ethereum, it's like...

It's also technically different, you know? Like, I think you have to kind of be doing a lot, not a lot, but more like protocol level development, open source stuff. We do a little bit of that, but we are not as active on the Ethereum ecosystem in that regard. So that's something I think that we should and need to step up over time. But we haven't been that active. You mean like if you open source, you'll get better mindshare in the dev space?

Yeah, I think it's more like just contributing more, right, to some of the development. Sometimes I would actually counter-argue that you're user-facing. Like, you're not trying to please Ethereum Foundation. So...

For sure, if you get some retweet or really good mindshare in the devs, it's probably good if you're building a ZK rollup, ZK-EBM. I'm not sure about marketplace. That was my general take. I don't know. Probably now as well, there's less low-hanging fruit to do as well on Ethereum. That's for sure. Whereas Bitcoin, I think when we built the marketplace, we open sourced that immediately, which I think was really helpful for a lot of people.

Everything we do now on Bitcoin is like ruins if we also just put that out. So it's kind of like a, I think, a good thing. And that goes very well with the Bitcoin ethos anyway. Yeah. Yeah, exactly. And how did the demographic of users of Magic Eden change over the years? It honestly hasn't changed that much apart from the geographic thing that I mentioned about Bitcoin. Right. It's like more Chinese users now than two years ago.

Yeah, I felt like you guys never thought that you'll have a lot of Asian users. We never actively tried to do it. Actually, even for Bitcoin, we didn't actively try to do it. But it's very cool to see that. So we definitely want to invest more into that. Last question. None of you guys are Chinese or I guess East Asian team members. Without someone who knows the language, I think building a community is quite hard. How do you guys find it now?

No, I would agree. It's pretty hard. So I think, yeah, I mean, you're not... We're not truly really building the community in Asia at the moment, I would say. I think we are maybe... Do you want to? Yeah, we want to figure out what is the right way to do it, right, for us. And then we can invest in that resource to make it happen. I think it's the person. Yeah, yeah. So we haven't...

Yeah, we don't have the right person at this point. Do you want to hire? Yeah. This podcast is actually very good for hiring. Oh, is it? A lot of people found their job here. Oh, really? Somehow, yeah. Wow, okay. Didn't realize this was a job network as well. Well, I mean, people, they were trying to hire someone in Asia or if someone in Asia wants to find a job for a... Anyway, we're always looking for good people in the community. So if there's someone out there that is passionate about growing...

Yeah, NFTs, our wallet, all this kind of stuff. But in Asia, like we'd love to talk. There's, I think, like so much greenfield that I feel like we have not touched. But in many ways, I also feel that even if without geographic expansion, we already have a lot of surface that we have to work on. We also want to be mindful of like doing it in the right way. So it's not like just extending Magic Eden,

into stuff that we just cannot you know cannot handle that's true but i think um having regional support definitely can serve the users better yeah um because a lot of the user behaviors habits are quite different yeah um it's funny i have a funny story actually uh just just reminds me of the early in the early days of magic eden the super early days like this is like week three of magic eden okay

we decided because you know we were so early back then we were just trying to find any ways to grow that's basically what you told me in the first call is that you're like we're just gonna out ship i was like okay we we started yeah we added like turkish and a bunch of languages onto the magic eden website okay i think we did korean turkish chinese okay maybe a few others and um

just as a way to grow users. We were like, any way that can get us more users, we'll just do it. Did you have native mods? No, right? No, no, we just put it on the website and then we, like, in Discord, we just said, now we have these languages. And I think we might have found, like, one or two influencers, like, distributed. Obviously, it did not work. Because we took it off the website fairly quickly. But it goes to show, like, we're, yeah.

Yeah, no, I think you need someone. If you want to grow the local community, I think you need someone who's native there. It's almost like you expand into Polygon. You need someone who knows Polygon. Cool. It was a fun conversation. Thanks for being here. Thanks for having me.