0:08

So, summer of 2021, this

0:10

was a sort of crazy time for the

0:12

Solano network. I think for the most time,

0:14

people were just starting to learn about what

0:17

Solano was, what you could do with it.

0:20

Serum was the first central minorder book built on Chain.

0:23

And then out of nowhere comes this idea

0:25

that there's going to be an NFT standard

0:27

on the Solano network. And in

0:30

the course of just a few months, this

0:32

goes from ideation to launch to the launch

0:34

of DJNA Academy and all

0:36

of these early projects that launched on

0:38

the network. This was all made possible

0:40

by a group no one

0:42

had ever heard of before called Metaplex

0:45

and this contract called the Token Metadata

0:47

contract. And now we

0:49

fast forward to 2024. There's

0:52

been incredible upgrades to that,

0:54

whether that's greater

0:56

functionality to Gumdrop, to Bubblegum for

0:58

compressed NFTs, to now this new

1:01

standard you guys have released called

1:03

Core. I think there's a

1:05

ton to get into today about protocol

1:07

standards versus application level standards versus sort

1:09

of soft network standards, how

1:12

the very different evolution of Solano came about

1:14

for both NFT specs and specs in general

1:16

than you see in other networks. And

1:18

we have Stephen Hess here to talk about

1:21

it, who was there at the

1:23

beginning, has been leading the charge at

1:25

Metaplex since 2021 and

1:28

really glad to have you in studio today. Thanks

1:31

Austin, it's great to be here. Definitely

1:33

think back to the original Solano

1:36

summer often, feels like

1:38

we're very much in the

1:41

throes of season two as well. So

1:43

it's been really exciting to see the renewed

1:46

interest in crypto but obviously

1:48

Solano as well I think as

1:50

you know and as we know well,

1:52

the teams that put their head down in the

1:54

bear market are really an incredible opportunity and so

1:57

we're excited to be part of that. of

2:00

building that's happened since summer of

2:02

2021, especially on the Metaplex side. So there's a bunch

2:04

of stuff I want to get into today. I kind

2:06

of want to start off with a

2:09

bit of an overview from you of

2:11

what is the scope of the NFT

2:13

ecosystem look like on Solana? What are

2:15

some of the tools and different parts

2:17

of the Metaplex, both foundation and

2:19

the labs organization that are working on different things

2:21

in the space and kind of what's the scope

2:23

of what you guys work on? Yeah,

2:26

absolutely. So for those that

2:28

aren't familiar, Metaplex is a community

2:30

governed digital asset protocol. We're

2:32

best known for introducing the first

2:35

Solana NFT standard, but we've had

2:37

the opportunity to continue

2:39

to innovate on the base

2:41

level technology with compressed NFTs

2:44

programmability, which is now the

2:46

default system for royalty enforcement

2:48

across chains. And then most

2:50

recently with the introduction of core, which is

2:52

this consolidation into a single

2:54

account asset. And through that

2:57

journey, we've had the opportunity to

2:59

work with just this incredible community

3:02

of artists and creators and builders.

3:05

And we see NFTs really

3:07

providing at the base level

3:09

the social fabric of the ecosystem. And

3:13

most recently, we've seen this huge explosion of meme

3:15

coins. And there's this view that NFTs are dead,

3:17

that now the Metas have moved on. But

3:23

if you look closely, it's actually these NFT

3:25

communities that are oftentimes benefiting most

3:27

from the airdrops of these new tokens,

3:29

they're helping bootstrap and launch these new

3:31

projects. And so I think

3:33

fundamentally, like that social glue has been

3:36

really critical to just the

3:39

overall excitement, energy, and

3:41

activity in the ecosystem. If

3:43

you drill down into the numbers, NFTs

3:46

are almost as far

3:48

and wide within Solana

3:50

and Solana itself, like there's over

3:52

40 million wallets now that hold

3:54

a Metaplex NFT in

3:57

last month and March. over

4:00

700,000 unique signers to the

4:02

Metaplex protocol and close

4:05

to 100 million transactions. So,

4:07

you know, like close

4:09

to 12% of all the transactions

4:11

on the network related to digital assets

4:13

and NFTs using Metaplex. So

4:15

I'm really excited because I think that we're

4:17

now we're entering the part of the stage

4:19

where we're going to see a lot of

4:21

new people come into crypto. And

4:23

I think these NFT communities are like the perfect

4:26

jumping off point. And I think we'll see a

4:28

lot, you know, sort of a resurgence of interest

4:30

as the tent widens and like our

4:32

hope is to be a supportive part of that. Yeah.

4:35

And you guys, you know, at the foundation

4:37

have built a bunch of different types of

4:39

tools over the years to sort of help

4:41

the NFT ecosystem evolve. Like walk me through,

4:43

like, what does that tool set look

4:46

like nowadays? Yeah, absolutely. So

4:48

the way I would think about Metaplex

4:50

is that it's a framework

4:52

in a platform for creating, managing

4:56

and using digital assets. And

4:59

at the base layer, we have what's called the

5:01

digital asset standard. And that's a point of view

5:03

about how the data related

5:05

to assets and the functionality of

5:09

and behavior of those assets should work. That

5:12

standard is then implemented across

5:14

several different programs. So

5:16

token metadata, bubble gum, which is

5:18

the baseline program for compressed NFTs and now core.

5:23

They're individual programs, but we've also

5:25

built technology that helps there be

5:27

a plurality of asset programs. And

5:29

so we have what's called the

5:31

digital asset standard API, the DOS

5:33

API, which is now run

5:35

by almost all of the leading RPC

5:37

providers. And it

5:39

provides a single interface for application

5:42

developers to access the data, regardless

5:44

of the program that's implementing that

5:47

standard. And so that really

5:49

opens up the creative space where now you

5:51

have, you know, new takes on how digital

5:54

assets can work and a pipeline by which

5:56

application developers can integrate those without

5:58

having to integrate a. totally new

6:00

standard ultimately in terms of how that data

6:02

is represented. Yeah, you know, I think

6:04

for frequent listeners of the

6:07

show, I've talked before about

6:09

how the launch of

6:11

Metaplex was actually like one of

6:13

those perfect encapsulations of how you can have

6:15

a theory about what people want. And you

6:17

can have a theory about a product vision.

6:20

And, you know, going back to

6:22

the launch of Metaplex, almost everything that folks

6:24

thought about the original vision of Metaplex was

6:27

wrong, right? It's this idea that

6:29

what every artist really wanted was their own store front.

6:32

What every artist really wanted was the

6:34

ability to run auctions for price discovery,

6:36

you know, that that was really important, that everything

6:38

was fully on chain from like the front end

6:40

to, you know, the media to all these sorts

6:42

of things. And almost all of

6:44

that ended up being not the direction that

6:47

the Solana community chose to take it. But

6:49

because these things were built in modules, they

6:51

were not, it was not one waterfall monolithic

6:53

project. The core

6:55

functionality of token metadata lived

6:57

on. And it was that piece that everyone

6:59

said, oh, this is actually what we really want. We

7:02

don't actually want storefronts. We don't actually want

7:04

auctions. We want, you know, a bunch of

7:06

tooling to expand that. But then,

7:08

you know, from there, it's like Metaplex picks up

7:10

where it finds product market fit and then builds

7:12

out a whole bunch of other tools to

7:15

make that even even better. Right. And that goes

7:17

into Candy Machine, right, which

7:19

was sort of like the dominant

7:22

NFT whitelist minting system for a

7:24

while into protected NFTs and programmable

7:26

NFTs with royalty enforcement. And so

7:29

talk to me a little bit about that process of like

7:32

finding where there's product market fit and

7:34

deciding what tooling and what sort of

7:36

feature set is worth building out versus

7:38

also having your own vision, the foundation

7:40

for where you'd like the space to

7:42

evolve into. It's a

7:44

great point. I do think that

7:47

that gets lost in hindsight sometimes.

7:49

Yeah. That Metaplex started out with

7:51

a creator centered vision. It was

7:54

born from conversations with NFT

7:56

artists on Ethereum that were frustrated

7:58

with the centralized. launchpad approach to

8:01

distribution. They're having to go through Nifty

8:03

Gateway, they're having to wait for weeks,

8:05

they're complaining about not getting paid on

8:07

time. We looked at the

8:09

current market and asked ourselves the question

8:11

every Solana builder should ask, which is,

8:14

what can you do that's only possible

8:16

on Solana? We identified

8:18

an opportunity to

8:20

build what's effectively a WordPress-style

8:23

product for deploying and spinning up

8:25

your own NFT marketplace, like really

8:27

living and pursuing this

8:30

idea of decentralization, which is

8:32

that you as an artist can spin up your

8:34

own marketplace and get direct distribution. It

8:36

turns out that in order to build

8:38

that, you need an NFT standard. And

8:41

so we've built an NFT standard. And

8:43

also, I think arguably

8:45

really the first pattern for

8:48

building a web application on

8:50

Solana that was fully open source. And

8:53

so what that ended up producing, which was

8:55

unexpected at the time, was that

8:57

we started building what at this

9:00

point is one of the largest web3

9:02

developer communities around this technology that was

9:04

looking at the standard. It was looking

9:06

at how the application was structured

9:08

and built, using that as a

9:10

template to then go build all sorts of different

9:13

applications on the network. And I think

9:15

as we've gone through the

9:17

project, we've realized and come to

9:19

really appreciate and focus on the

9:22

impact that we've had with developers and also the

9:24

importance of our responsibility to really

9:26

focus on the developer. And

9:29

so if anything has changed fundamentally, I would say

9:32

the vision is still the

9:34

same. It's like building a

9:37

digital asset economy, creating peer-to-peer

9:39

commerce infrastructure, decentralizing commerce broadly,

9:42

but a focus and a doubling down on

9:44

the developer platform, the on-chain

9:47

programming, the standard, the tools that

9:49

are going to enable dozens,

9:52

hundreds, thousands of different types of

9:54

applications that are interfacing with that

9:56

core technology. pieces

10:00

that is, as you're saying, is

10:02

like it's lost in hindsight, or the history

10:04

of how things evolve is like, things are

10:06

often remembered for their successes, right? But it

10:09

is usually a process of like intense iteration

10:11

to find that thing that has product

10:13

market fit, that cracks open a market a little bit. And

10:15

then you know, you just pour everything

10:17

possible through that hole. And like that becomes

10:19

the entire product category. So at the beginning,

10:22

the sort of vision for Metaplex was this

10:24

sort of, I wouldn't call it vertically integrated,

10:26

but this integrated stack where you had sort

10:28

of the creator and application level on top,

10:31

where you had, you know, minting tools, and,

10:33

you know, storefronts, and these sorts of things.

10:36

And at this point, you guys have sort

10:38

of decided to take the protocol in a

10:40

bit of a different direction, where the work

10:42

that the foundation does is very much on

10:44

that, that base layer smart contract development and

10:46

like developer tooling. How is that

10:48

process both internally of figuring out like, this is what

10:50

we want to focus on, this is what we want

10:52

to hand off to other teams. Talk

10:54

to me a little bit about that process to

10:57

say, like the stuff Metaplex should be focusing

10:59

on for the long term is more technical and

11:01

more low level. Ultimately,

11:04

it's, we view it as

11:06

a really encouraging development, which is that

11:08

in the beginning, the number of use

11:10

cases for NFTs was fairly narrow. So

11:13

it's appropriate then to build point solutions

11:15

that are more vertically integrated in that

11:17

sense, like, okay, here's here, here are

11:19

the on chain programs, here are the

11:22

SDKs, here's the front end implementation, you

11:24

can deploy it, maybe customize it. But

11:27

now we've seen just this huge

11:29

explosion of use cases, especially with

11:31

the cost reduction that's come from

11:33

compression, where we have on chain

11:35

communities, we have digital artists, we

11:37

have social applications, we have games,

11:39

we have RWAs, we have

11:42

marketplaces, we have wallets, we have borrowing

11:44

and lending protocols, we have hybrid NFTs

11:46

that are moving back between fungible and

11:48

non fungible assets. And in

11:50

that world, the highest leverage work

11:52

that we can do is building

11:55

great developer tools. So great

11:57

SDKs, like it's the small things often

11:59

that matter. with developer platforms. It's like

12:01

the documentation is good. If you have a

12:03

question, you can get an answer quickly. You

12:05

have guides that will step you through. Your

12:07

error handling is sharp. And so we really

12:10

think that the way that we

12:12

can add the most value at this part

12:14

and the technology lifecycle is really providing enablement

12:16

for developers. And frankly, it's been really exciting

12:18

for us because that brings new ideas, new

12:21

creative energy. It's changed the cadence of our

12:23

work where I think one part of it

12:25

that I really love that I do less

12:27

of is like the direct work with creators,

12:30

but more work with the builders that are

12:32

then unlocking and opening up these

12:34

brand new industries that are getting

12:37

disrupted by digital assets for the

12:39

first time. Yeah. So I think

12:41

that's a very natural progression for

12:43

any protocol that's maturing, right? You

12:45

see that Solana Foundation very much went

12:48

through this as well. We're like, the amount

12:50

of work that we do with teams building

12:52

at the application level is much lower than

12:54

it was back in 2021, right? Now it's

12:57

much more work with GDO and FireDancer

12:59

and these sort of core contributor teams

13:01

that are building very close to the

13:04

protocol level and the protocol level itself.

13:07

One of the challenges there, and you hear this from

13:09

the folks at Anza all the time, right, is that

13:12

you are now pretty far removed from

13:14

the user. So how

13:16

do you guys actually go about the

13:19

feature discovery, for lack of a better

13:21

term to say, like, we are heads

13:23

down on building new NFT standards and

13:26

tooling. There might now be

13:28

two or three application layers in between

13:30

you and the creator who's actually issuing

13:32

an NFT or the trader who's actually

13:34

buying an NFT. So talk to me

13:36

about product feedback and sort of how

13:38

you guys keep your eyes on how

13:40

the market's evolving. It's

13:43

a great question. I do think

13:45

that the common mistake for

13:47

developer platforms is to take

13:49

a very theoretical view on

13:52

the technology. It's like, this is

13:54

disrupting by providing like, you know,

13:56

whatever, whatever, where what you really

13:58

need is a very strong

14:01

point of view on the use cases for

14:03

that developer platform. And so that would be

14:05

like, I think the core

14:07

idea is that being a developer

14:09

platform doesn't excuse

14:11

you from having a strong point of view of

14:14

what the end user market looks like. You still

14:16

have to have conviction. You still

14:18

have to go through the process

14:20

of design and discovery and understanding,

14:22

empathizing, staying very close to those

14:24

users. And so I think the way that that

14:26

shows up for myself is like,

14:28

you just have to

14:31

be out there in the field. It's like

14:33

in Discord, on Telegram, responding to DMs on

14:35

Twitter. And

14:37

I've been fortunate

14:39

to develop relationships in the artist

14:42

community and in these other areas

14:44

where I've trusted relationships where they

14:46

can come to me and be like, you're missing

14:48

this whole huge part of the field and here's

14:50

how. So it's almost like maybe what I've learned

14:52

is to develop a few of these super nodes

14:55

into these different industries that are helping

14:57

me keep pace with what's the

14:59

latest meta. So I'll have

15:01

the friend that I talk to who I know is

15:03

like knee deep in MemeCoin

15:05

and he'll read me in on

15:07

what is the latest trend, what's

15:09

happening. And yeah,

15:11

I think that's important because of how fast things

15:13

move. Building a successful

15:16

crypto project is a combination of having a

15:18

10 to 100 year vision project

15:21

that's durable where you have a problem you

15:23

can sink your teeth in for a long

15:25

period of time and find creative inspiration from.

15:28

But then also riding waves and

15:30

staying very close to how

15:32

the ground is currently shifting and positioning yourself

15:34

to take advantage of that. Yeah,

15:38

it's funny you talk about that way because I think

15:40

one of the things that

15:42

sort of core to Metaplex's DNA is

15:45

controversy. I

15:47

think this is an area where you're laughing at

15:49

me. That and our official brand guide. But

15:53

like even the launch of Programmable

15:55

NFTs was something that was seen

15:57

as quite controversial where this was

15:59

a feature set that certain artists

16:01

and projects really wanted and felt

16:03

they needed. And sort of to take us back to that

16:05

time, this is when, you know, for

16:07

six weeks, there was something called YAW, which

16:10

was this marketplace that, you know, famously

16:13

decided it was going to not respect

16:15

the royalties that were written

16:17

into an NFT metadata, but were

16:19

not enforceable in any sort of

16:21

traditional sense. They were socially enforceable,

16:23

but they were not technically enforceable.

16:26

So programmability was this sort of extension on top

16:28

of that that said, hey, we're going to

16:30

actually build a bunch of programmable features

16:33

into this. And one of those programmable

16:35

features was royalty enforcement. But that was

16:37

not without controversy. So I think this

16:39

was sort of the first time that

16:41

I can think of that you guys

16:44

took an opinionated stance on what the

16:46

future of this technology should look like.

16:48

That was not necessarily a consensus opinion

16:50

at the time. How did

16:53

you guys get comfortable internally and externally saying,

16:55

you know, we're gonna become a little bit

16:57

more opinionated in how we think this stuff

16:59

should evolve and the tooling we need to

17:02

build, as opposed to just building sort of,

17:04

you know, the type of stuff you've been

17:07

doing before, which was very optional tooling. Ultimately,

17:10

I think you have to

17:12

make decisions as an organization that are

17:16

customer driven, they're user driven, and

17:19

they're focused on your vision. And

17:22

so while royalty enforcement

17:26

was a controversial topic, in

17:28

terms of our own internal decision making process,

17:30

it was actually pretty clear what we had

17:33

to do in that moment, which

17:35

is in talking to creators, the

17:37

incentive alignment between their collector

17:40

base and their projects, which

17:42

royalty enforcement provided was fundamental.

17:44

It wasn't it wasn't optional.

17:46

It was functional to what

17:48

allowed them to continue to

17:50

reinvest and work for years

17:52

and decades building the community

17:54

and the project around that

17:57

collection. And so when

17:59

you're in a Situation like that. I think you

18:01

have to be you have to be true to

18:03

yourself like that is the durable Nucleus

18:06

to any successful project is do you

18:08

have a strong conviction on the problem

18:10

that you're solving and who you exist

18:12

to serve? And if you can answer

18:14

that definitively Then I

18:16

think you can weather any storm I

18:19

do feel like we've been proven right

18:21

and I know maybe this is gonna

18:23

gonna end up in the comments with

18:25

people disagreeing But we didn't

18:27

see the full collapse of Solana NFTs like

18:29

as people were foreshadowing Yeah program ability like

18:31

no one's gonna ever touch an NFT that

18:33

has program ability who's gonna want an NFT

18:36

that does that you Are killing Solana NFTs

18:38

like this was like quite literally the other

18:40

side of of the debate at

18:42

the time and in you know

18:45

In this year like in December we flipped

18:48

all of aetherium for secondary trading volume

18:50

with royalty enforcement And

18:53

the the other argument that was made at

18:55

the time is this is gonna kill liquidity

18:57

This is gonna kill trading right because you

19:00

now have this extra friction attached to the

19:02

transaction and we've seen the opposite We've seen

19:04

that royalty enforcement creates valuable assets that are

19:06

not just beneficial for the creator They're beneficial

19:09

for the collector They're beneficial for the marketplaces

19:11

for the traders that are providing liquidity

19:13

into the ecosystem And so,

19:16

you know ultimately we view

19:18

program ability as as a key

19:21

primitive to the NFT ecosystem that's

19:23

here to stay and Not

19:25

only has it now been normalized We

19:28

now see other chains adopting similar concepts

19:30

using the same terminology and

19:32

so, you know, we think that like most

19:34

things in Solana NFTs like we were at

19:36

the the tip of the sphere and Really

19:39

could not have have pulled that off without

19:42

broad support from the creator community So I

19:44

think they also deserve a lot of credit

19:46

here Like we definitely

19:48

took our fair share of shots

19:50

and controversy over this But

19:52

I think also the creators standing up

19:55

for their conviction and being okay with

19:57

some collectors walking away from their projects

20:00

in order to double down and be

20:03

able to provide value to their

20:05

core supporters has ended up

20:07

making the ecosystem healthier. Yeah, this

20:09

is something. I remember tweeting something around

20:11

the Yaw Marketplace debate, for lack of

20:14

a better term, that was like, royalty

20:17

circumvention is immoral, and

20:19

70% of the comments were

20:21

negative from traders. And

20:24

I think what we've seen is that exactly

20:26

what you said, it allowed projects to weather

20:29

through the bear market, it

20:31

allowed them to maintain enough funds

20:33

to actually keep development going, because

20:36

otherwise, in the late stage of

20:38

many NFT projects, there are

20:40

diverse revenue streams. In the non-late stage, in

20:43

the early stage and mid stage, there's

20:45

just one, and that is largely

20:47

royalties. And so if

20:49

you remove those sorts of things, I think we probably would have

20:51

seen a lot more projects that

20:54

couldn't last out the bear market if they didn't have any

20:56

royalty stream. I want to kind of

20:58

take this to the next piece

21:00

of, let's call it, controversial metaplex history, which

21:03

was the process to actually go and

21:05

look at the future of token metadata.

21:08

Token metadata was at the time, and

21:10

still is today, but it's been diversified

21:12

through bubblegum and now core that we'll

21:14

talk about in a minute. It was

21:16

the fundamental underpinnings of all of the

21:18

NFTs on Solana, or 99.9% of the

21:21

NFTs on Solana. And

21:24

you guys made a decision that we supported from the

21:27

foundation, but you guys made a decision to say we

21:29

were going to add a whole series of protocol

21:31

fees to token metadata.

21:34

Yeah, I think in retrospect,

21:37

this is something that has allowed Metaplex to

21:39

have a sustainable revenue source for the foundation

21:42

that has actually been

21:44

able to help with additional protocol development, and I kind

21:46

of want to talk about a bunch of that. But

21:48

going back to that moment where you guys said, hey,

21:52

we are building an open

21:54

source public good, but that

21:57

doesn't necessarily mean it has to be free.

22:00

How did you guys get comfortable with that?

22:02

What were the conversations with artists and marketplaces

22:04

and collectors about, you know, that

22:07

is a decision that I'm sure was not made lightly.

22:10

That's right. And I think

22:12

in many ways it represented a key component

22:15

to what we view to

22:17

be the standard for building

22:20

digital asset protocols. We think

22:22

that digital asset protocols

22:24

are a fundamental and

22:26

important category in web three. And

22:29

that that work should be

22:31

funded, but the collection

22:34

of fees, the fee amounts, the

22:36

development of the protocol should ultimately

22:38

be community governed. So you're right.

22:41

Like there isn't this inherent

22:43

conflict between those two ideas. Protocols

22:46

can have fees and also be

22:48

public goods and community governed. And

22:51

that's our focus. Famously, every blockchain

22:53

has fees. That's right. They're

22:56

called gas fees. Exactly. That's right. Does

22:58

it create a closed loop? And like

23:01

that's ultimately our goal as well, is

23:03

that there's a closed loop between the

23:05

protocol, the users, the token holders

23:08

and the fees. And

23:10

that is the

23:12

vision of having a fully decentralized

23:14

digital asset economy, is that the

23:17

organizations like the Metaplex Foundation that

23:19

are playing key roles today

23:22

are able to decentralize and hand over more of

23:24

that authority to the Dow and to the community

23:26

progressively over time. And so that's really what I

23:28

view as my job ultimately. So

23:30

those who've been watching Metaplex for

23:33

years, there's the two components

23:35

that most people are familiar with. There's

23:37

the Metaplex Foundation where you work and

23:39

a bunch of the core protocol developers

23:41

are employed through. There is what

23:43

we might call the Labs component, which is

23:45

Metaplex Studios. And then there's also

23:48

this Metaplex Dow that exists. And you guys

23:50

made a bunch of big changes

23:52

and announcements over the last month around what

23:54

the future of that Dow is and

23:57

how Metaplex tokens are going to start playing

23:59

into the... that as well. So I want

24:01

to get into that as well. But

24:03

you know, walk me through how these

24:05

different pieces function within the Metaplex protocol

24:07

world. Yeah, so so

24:09

similar to like the structure of a

24:12

Solana Labs and a Solana Foundation or

24:14

like a consensus and Ethereum Foundation. Metaplex

24:17

was set up with a US company

24:19

called Metaplex Studios, which has

24:21

been building at the application layer. And so

24:23

best known for Creator Studio, now called

24:26

Truffle. Metaplex Foundation, where

24:28

I'm one of two directors,

24:30

we're focused primarily on the

24:33

on-chain protocol. So the standard,

24:35

the SDKs, the

24:38

DOS API, and helping

24:40

build the larger ecosystem token economy

24:43

and decentralized governance of the protocol.

24:46

And so now really, you know,

24:48

Metaplex Studios and Truffle is just

24:50

one of many applications that are

24:53

built on top of

24:55

the platform. And you'll see Metaplex

24:57

really doubling down on developers and

24:59

building out developer tools to enable,

25:02

as I said before, what we expect to be

25:04

hundreds and dozens of applications. And

25:07

so how does the DAO fit into all of this? The

25:10

DAO ultimately is the most

25:12

important organization in that ecosystem.

25:15

The goal is to transition all

25:17

meaningful decision making, including the fees

25:19

and the placement of fees and

25:21

the usage of fees to the

25:23

DAO, which is governed by token

25:25

holders. And today, the protocol

25:27

is governed by the DAO. Anyone

25:29

in the community can make a proposal to

25:32

change or modify the functionality of

25:34

the of Metaplex, including our

25:37

new program core. And you'll

25:39

continue to see the DAO becoming

25:41

that central decision making body, but

25:44

also the forum by which controversial

25:46

topics are debated, discussed and ultimately

25:48

decided upon. Yeah, so

25:50

I think there is, you know, DAOs are

25:52

interesting, right? DAOs, there is a little bit

25:54

of a tyranny of the masses that can

25:57

can take effect in a DAO. You know,

25:59

you mentioned the DAO is in part

26:01

token weighted in terms of how it

26:03

operates. But the incentives of token holders

26:06

don't necessarily line up with the incentives

26:08

of creators. Oftentimes, the people who are

26:10

holding tokens are not necessarily the same

26:12

people minting on a network. I think

26:15

one of the classic examples

26:17

of this is in the corporate

26:19

world are things like share buybacks,

26:22

which are very important to shareholders but don't

26:24

matter at all to the users

26:26

of a company. People doing

26:29

share buybacks does not make my iPhone any better. How

26:31

do you think about maintaining a diverse feedback

26:34

loop at the DAO? Ultimately,

26:36

for a DAO to be credible

26:38

as a forum and decision-making body,

26:40

it has to represent the users

26:42

that it's serving. I

26:45

do think that that's an important

26:47

step in any DAO's development is to

26:49

make sure that the people that are

26:51

impacted the most have a seat

26:53

at the table. The

26:56

DAO itself has a treasury of

26:58

MPLX that it can use for

27:00

grants to individual project teams, several

27:02

of which have been given so

27:04

far. It could implement

27:06

rewards for the usage of

27:09

certain types of programs and

27:11

protocols. I'm looking

27:13

forward to engaging with the DAO

27:16

specifically on that topic. As

27:18

you know, there's another side of that,

27:20

which is you don't want to be

27:22

rewarding people that are just farming your protocol. You

27:25

don't want to be rewarding spammers, which is an issue

27:27

we have to look out for because there's a lot

27:29

of spam usage of NFTs. You

27:32

want to give tokens to

27:34

the people that are going to provide

27:36

the most value in a constructive way

27:38

going forward. It's also a

27:40

tricky problem because it requires some discretion

27:43

and there are ways of doing that

27:45

that are ultimately counterproductive to that goal

27:47

if they're not done in a thoughtful

27:50

way. Yeah, I think that's fair.

27:53

So talk to me about some of the changes

27:55

that the DAO has sort of brought

27:58

in along with CORE. So

28:00

I think pretty famously you guys have had a

28:02

token that represents Metaplex out in the

28:04

market for a while. There

28:07

hasn't been much utility or functionality attached

28:09

to that token. The distribution

28:11

was based on NFT usage, NFT creation, and

28:13

all those sorts of things. But

28:15

token metadata fees are not paid in

28:18

Metaplex token, these

28:21

sorts of things. How has the

28:23

uses of that token evolved over the years?

28:25

And how has the DAO chosen to change

28:27

what that looks like today? Yeah,

28:30

I'd encourage anyone who's interested to

28:32

take a look at the proposals

28:34

that are being submitted to the

28:36

DAO. You can

28:38

visit dao.metaplex.com. We

28:40

also have a submission

28:42

form at mip.metaplex.com. And

28:47

most recently we've had proposals related to

28:50

additions, so making it easier for

28:52

artists to list open

28:54

editions in multiple marketplaces.

28:57

We also had a proposal recently

28:59

around spam NFTs and

29:02

restricting usage of the bubble gum program

29:04

that's common for NFT spam. And

29:09

so I think you'll continue to see the

29:12

DAO being used for those

29:14

types of improvements to the protocol,

29:16

functional changes, new additions. And

29:19

most recently the foundation has decided

29:21

to take 50% of

29:24

the fees that the protocol has generated, both

29:27

historically and going forward, to convert

29:29

to MPLX, which is then sent

29:31

to the DAO. And

29:34

that MPLX, then the DAO has the

29:36

ability and discretion to distribute through

29:39

rewards, through grants, through incentive programs. And

29:41

so we're expecting there to be

29:43

a really active conversation over

29:45

the next several months. And for anyone

29:47

listening, I would encourage you to weigh in on

29:49

the discussion. This is a really key

29:52

piece of infrastructure for the

29:54

Solana community. And we want to make sure

29:56

that the future of this protocol

29:58

is in lockstep with the community. that's using

30:00

it and benefiting from it. Yeah.

30:02

So let's talk about core. Core

30:04

is this sort of new next

30:06

generation vision for what NFTs

30:09

can look like on Solana. This

30:11

is sort of a first for you

30:13

guys. Most of the work that's been done

30:15

sort of initially since token metadata was either

30:18

expanding product category with programmable NFTs.

30:20

It was creating a new standard

30:23

with, you know, compressed NFTs.

30:25

But those were all sort of derivative

30:27

of that sort of original token metadata

30:29

program standard. So walk us through core,

30:31

what it is, how it's different, and

30:34

sort of why you guys are proposing

30:36

this as sort of a new generation

30:38

of standard. Core is

30:40

really, I would say, perhaps

30:43

the end of

30:45

the NFT standards era and

30:48

the beginning of the digital

30:50

asset protocol era for Metaplex.

30:53

And what I mean by that is

30:55

NFTs, as we've known them to date, have

30:57

largely been attaching metadata

30:59

to fungible tokens. And

31:02

so practically and with token metadata,

31:04

that means you have these five

31:06

Solana accounts and you

31:09

have complexity with managing all of the

31:11

data related to a fungible

31:13

token program. And so what core

31:15

does is it simplifies that. It stores all

31:17

of the relevant data for the asset in

31:19

a single account. And the result of that is

31:21

an 85 percent improvement

31:23

on minting costs and

31:26

on compute. And

31:28

in addition to that, it's much easier to

31:30

work as a developer because you're not sort

31:32

of flying around trying to manage data between

31:34

these different accounts. And so

31:36

we really think that core is going

31:39

to unlock this next wave

31:41

of use cases that allows for the

31:43

data to be in account space. It's

31:45

accessible, it's like in the memory, in

31:47

the RAM of the network that you

31:49

can write programs that key off of

31:51

those attributes. You can CPI with the

31:54

data easily, but it's in the most

31:56

condensed efficient form factor as

31:58

possible, which. which will then

32:01

allow for complex transactions, like

32:03

complex multi-burns, and then a

32:05

plugin system which will allow developers to hook

32:07

into any of the lifecycle events related to

32:10

the token and program custom

32:12

applications based off of that. Yeah,

32:14

talk to me a bit about the plugin module.

32:16

Is that sort of similar to like pre and

32:18

post hooks in Uniswap? I

32:21

would think of it as

32:23

more closely connected to like

32:25

managing lifecycle events with the

32:27

token. And royalty enforcement

32:29

is an application of that. There are

32:32

different flavors of royalty enforcement that could

32:34

be enabled. So if you're looking at

32:36

like only enforced royalties, if it's being

32:39

sold at a certain price level, for

32:41

instance. There's types of customization

32:43

there that are now made easier. You

32:46

can have transfer fees. You can

32:48

have the data inside of the NFT

32:50

changing when it's being transferred. And

32:53

so it's interesting, like we've been listing

32:55

out the use cases for this. It's

32:57

one of those situations where we have

32:59

like three to five ideas that we

33:02

think are reasonable, but because it's opening

33:04

up such a large creative space, I'm

33:07

expecting to be surprised here in terms of what

33:09

developers are ultimately gonna be able to do with

33:11

this. So you guys have made

33:13

a ton of architectural improvements with core and

33:15

the way it works. So token metadata, five

33:18

accounts, pretty heavy, pretty innovative

33:20

for its time. Compression, totally

33:23

different structure because it's using Merkle trees and the

33:25

data is actually stored on leafs and let's get

33:27

into how that works too in a bit. But

33:30

with core, as you're saying, one account is

33:32

sort of that core component for how that

33:34

works. When you're talking about

33:36

plugins and sort of these additional modules that

33:38

connect, how does that relate to

33:40

sort of the heaviness or the account usage of

33:43

that program? So ultimately

33:45

core does have one account. So going

33:47

from five to one, pretty

33:49

considerable in terms of the cost savings,

33:51

the compute savings, the ease of use,

33:54

and then the plugins don't introduce new

33:56

accounts. They just add data to that

33:59

core account. And part of

34:01

the reason why we called it core is

34:03

because we see that core data object being

34:06

extended by plugins, but then

34:08

also being integrated with across

34:10

a number of different applications

34:13

with some simplicity. Yeah. So

34:16

you mentioned that you don't really call

34:18

this an NFT standard anymore. Talk

34:20

to me about kind of that expanded vision for

34:22

what core could evolve into. So

34:24

we ultimately look at it as

34:26

digital assets or perhaps even on-chain

34:29

assets as a more precise term

34:31

now that real world assets are

34:33

coming online and they're being tokenized.

34:35

NFTs are, in

34:39

my view, they continue to be a really

34:41

important term because they're one of the few

34:43

crypto terms that's crossed into the mainstream. But

34:46

we think categorically that NFTs is fairly

34:48

limiting in terms of what ultimately this

34:51

technology will create. And so we do

34:53

view the broader mission and purpose

34:55

of Metaplex to be enabling

34:57

digital assets. So when

35:00

you guys were thinking about the architecture

35:02

for core, what was sort

35:04

of important to build in to expand

35:06

that vision beyond what we currently think

35:08

of as NFTs and sort of that

35:11

additional functionality you want to support a

35:13

digital asset standard? So third

35:15

party plugins because they allow

35:17

for programming actions based

35:20

on any lifecycle event of the

35:22

token, meaning transferring, update, any of

35:24

those base instructions, you're opening up

35:26

an entirely new set of use

35:28

cases around rentals and subscriptions. You

35:31

can have point systems where the

35:33

data is directly tied into the

35:35

asset itself. You can have game

35:37

assets that are destroyed or revoked

35:39

based on the behavior of the

35:41

game. You can have

35:44

custom royalty enforcement where the

35:46

royalties are only collected in very

35:48

specific situations instead

35:50

of on every sale. And

35:53

I would expect coming out of

35:55

that there will be a long tail of use

35:57

cases that we haven't forcing.

36:00

or view possible. And I think part of what's

36:02

exciting for us is really just opening up as

36:05

much of that low-level functionalities that that

36:07

innovation process can start. Yeah,

36:09

it's interesting when you talk about it that

36:11

way, you know, the idea of like an

36:14

NFT being something special. Like

36:18

you could almost think about the other way that

36:20

the special thing is actually like USTC, like

36:23

a fully fungible token, that

36:25

the individual unit truly

36:27

doesn't matter. You know,

36:30

in the future of blockchain, that may be a

36:32

more rare occurrence than what we think

36:34

of now as sort of the rare occurrence of a token

36:37

where the specifics of it matter a lot. Yeah,

36:40

almost the distinction is like, is

36:44

how it moves through time, like

36:46

something can start fungible and then

36:49

can pick up characteristics to it.

36:51

So like, there's a big difference

36:53

between USDC and like a single

36:55

dollar bill. And if I

36:57

was to like, you know, draw a

36:59

heart on my dollar bill, that now

37:01

imbues it with unique characteristics. And

37:03

so I do think we'll probably see more

37:06

fluidity between those types. I think like the

37:08

hybrid NFT ecosystem has been really excited about

37:11

this, like the idea of being able to

37:13

move from non-fungible to fungible tokens

37:15

and assets. But I

37:17

do think that's like the key

37:19

differences, like ultimately, is there individuality

37:21

to the asset? And if so,

37:24

that's in the non-fungible category. So,

37:27

you know, before joining the Fauna ecosystem, I

37:29

worked with Bison Trails. Bison Trails

37:31

got its start as a blockchain

37:33

infrastructure provider for validation nodes. So

37:35

they ran block producing nodes for

37:37

proof of stake networks. And that

37:39

was sort of the core original.

37:41

But they expanded very

37:43

quickly into what we now consider in

37:46

the Fauna ecosystem, RPC nodes, indexing

37:48

services, sidecar data files, all that kind of

37:50

stuff you need to be able to answer

37:53

questions really quickly about what the state

37:55

of a blockchain network is. You

37:58

know, it always got me thinking that, you know, we think Think of

38:00

the internet as a read

38:02

and write operation protocol, and that's

38:04

true. Famously, we add

38:06

own and we get Web3. Read, write, own

38:09

is sort of the conception here. But

38:12

the vast majority of things that happen on the

38:14

internet are still read operations. They're

38:17

not write operations. If you are watching

38:19

Netflix, that is purely a read operation,

38:23

99.99% of all data going over the internet

38:25

is not writing something. This

38:28

is where we've seen the evolution

38:30

of the CDN to

38:32

be actually the data layer, the content

38:35

delivery network on the internet that is

38:37

responsible for most of our actual interaction.

38:39

You are very rarely talking to a

38:41

server nowadays. You are that can actually

38:43

have the authority to write data into

38:46

a database. You are most often talking to

38:48

a system where all it does

38:50

is read a request and give you

38:52

something back from that. I

38:54

think we saw a little bit with compression sort of

38:56

like the version 0.5 flirting

38:58

with the idea that data accessibility can be

39:00

separated from the state of a

39:03

network itself. Very

39:10

famously compressed NFTs, while

39:12

those Merkle trees and the Merkle roots

39:15

are stored on the sauna blockchain, the

39:17

trees exist in their

39:20

uncompressed state on the

39:22

RPC layer. They're not actually uncompressed on that

39:24

core network. So when you're reading data from

39:26

a compressed NFT, you are reading data from

39:29

an RPC server. You are

39:31

not quote unquote reading data from the blockchain in

39:33

the same way. Even though that whole tree can

39:35

be rebuilt from the data that's stored on the

39:37

blockchain, that's a very different paradigm. It

39:40

seems like as we think about this

39:42

world you're articulating where the scope of

39:45

what's considered to be a digital asset

39:48

and all of the properties you

39:50

may want to index or track or examine

39:52

attached to a digital asset expands, that

39:54

we may be looking at a slightly different system

39:56

for how we're actually interacting with these digital assets

39:58

over the next few years. in the long term. I

40:01

think that's right. The Solana runtime

40:03

really is optimized for right performance.

40:06

And there are NFT collectors that want

40:08

to see the data for their asset

40:10

fully stored in Solana account space.

40:13

And so we've seen the interest

40:16

around inscriptions for really high value

40:18

NFTs and assets. But

40:20

that ends up being really expensive because

40:22

that environment is not designed to optimize

40:24

for reads. It's optimized for

40:27

right performance. And so

40:29

what compression then does is it

40:31

stores just the minimal data necessary

40:33

in order to keep that global

40:36

state maintained on Solana, while then

40:38

providing the RPC layer, which is

40:40

indexing, and then providing that performant

40:42

access for applications. And

40:45

this tension has been part of

40:47

the Metaplex story from the very

40:49

beginning. That first Metaplex storefront, if

40:51

you remember, struggled to load.

40:53

That was the meme, is you would go to

40:55

a Metaplex storefront, and you'd be

40:57

waiting for minutes, and then maybe

41:00

a half an hour. And as

41:02

the data increased, the indexing that

41:05

was happening in real time, and the

41:07

get program accounts calls that were being

41:09

made in real time, we're making

41:11

it impossible for people to get the information that

41:13

you need. So it's obviously very

41:15

valuable to get your transaction through and be

41:17

able to write and maintain the global state.

41:20

But to deliver performant end user applications, you

41:22

need to have a performant read layer. And

41:25

progressively, we think that read layer will

41:27

need to be more decentralized. And we

41:29

think what we've built with DOS

41:31

API really is the beginning of

41:33

a more decentralized way of indexing

41:36

on-chain data that application developers

41:38

can then use. Yeah,

41:41

it's funny, because for years, I've been

41:43

saying someone needs to build a decentralized

41:45

CDN layer on top of this stuff.

41:48

And there's all these things that a lot

41:51

of questions I've asked myself over the years,

41:53

why are there no video NFTs? And

41:56

not no, there are some video NFTs.

41:58

But for the most part, we. have gifts

42:00

as NFTs, if they have any motion in

42:03

them at all, we don't have the ability. It

42:06

seems like a no-brainer that I should be

42:08

able to go and buy

42:10

something from a very independent director

42:12

from a documentary that's put out

42:14

by a nonprofit potentially that's not

42:16

represented by a big studio. Why

42:19

can't I buy that as an NFT? Because

42:22

there are markets for these things in the

42:24

traditional space. For

42:26

example, I can go on any number of

42:28

different marketplaces and I can spend $40 on one

42:31

album, but I'm

42:33

going to be getting 2 megabit per second

42:35

flack files that come out of that. If

42:38

I'm that kind of nerd, that matters a lot to me.

42:41

Blockchain seems like a very natural home for this. But

42:43

for the most part, most NFT data is

42:46

still fairly constrained and fairly limited today. That's

42:49

right. And decentralized file storage is

42:51

the other piece of this. You

42:53

have permanent file storage with IPFS

42:56

and RWeave. And then

42:58

you have the L1s, which provide you

43:00

execution and managing global state. But there

43:03

really is this gap that lives in

43:05

the middle. And the RPC providers are

43:07

currently delivering that gap. But

43:10

when you have something like compression,

43:12

which is generating hundreds of millions

43:14

of NFTs per month, you start

43:16

to have a pretty significant economic

43:18

problem, which is like, who's paying for the

43:20

storage of this data? Supporting

43:22

that at scale. And

43:25

yes, you can replay the transactions to

43:27

recompile that data. But that doesn't really

43:29

help if you're trying to serve a

43:31

response time in a couple of seconds,

43:34

or hopefully faster. And

43:36

I think that middle area

43:38

will see a lot of innovation

43:40

and decentralized networks for delivering and

43:42

serving that data. And we

43:45

view the DOS API as the

43:47

first starting point to that. And

43:50

just some meta-plex history. We

43:53

know it is fundamentally possible to

43:55

do video NFTs because the first

43:57

NFT is bought and sold on

43:59

Solano. were something like 4.7 gigabyte files.

44:03

Yeah, that's true. That's very true. Shout

44:06

out to Blondish. Yeah. That, that

44:08

original drop at Bitcoin Miami, each

44:11

of those files was stored on RWeave and they

44:13

were, there were multiple gigabytes and the limiting factor

44:15

there was they were very hard to consume because

44:19

first off, you can't load that much data into a Chrome

44:21

extension. So the wallets weren't able to

44:23

necessarily play them, but you had that reference

44:25

point to say, here is my file stored

44:27

on RWeave that I own and I

44:31

can go download it if I want to. But

44:33

it wasn't, there was no CDN layer on top

44:35

of it to make it consumable and playable and

44:37

what we would all consider to be ownership,

44:39

which is like, if you buy a

44:42

movie from iTunes, first off, you're licensing and

44:44

you're not buying Apple, we'll set that aside

44:46

for a second. They will serve you vastly

44:49

different quality files depending on

44:51

your available bandwidth and your device. And

44:53

that whole layer doesn't really exist right

44:55

now in blockchain. That's right.

44:57

Yeah. And there's no concept of like being

44:59

on the edge of the network and being

45:01

able to pay for, for better performance. And

45:04

practically speaking, if the goal is

45:06

censorship resistance, uh, then you have

45:09

to have decentralized solutions for delivering that

45:11

data and basically every crypto app in

45:13

the world is now using centralized

45:16

solutions for the, the indexing

45:18

and distribution of the content in

45:20

real time. Yeah. Awesome. So

45:24

Steven, where can people follow up on

45:26

more developments of the Metaplex protocol? So

45:29

definitely follow us on X it's at

45:32

Metaplex. If you're a developer, come

45:35

jump in on the discord. A lot of

45:37

folks are building with core and we're there

45:39

24 seven around the clock, if

45:41

you need help. And in

45:44

terms of the Dow, go

45:46

to Dow.metaplex.com to, to

45:48

view the latest proposals or MIP, M

45:50

I P dot metaplex.com to submit a

45:53

proposal. And yeah, we're

45:55

really excited. You know, appreciate having the

45:57

opportunity to come here and talk

45:59

with you. today, but also looking forward to

46:01

an amazing year and like this next

46:04

leg in the journey for NFTs and

46:06

digital assets for both Metaplex and Solana

46:08

on large. Awesome. Well, Stephen

46:10

Hess, thanks for joining us today. Thanks,

46:14

Austin. Validated

46:18

is produced by Ray Beli with

46:20

help from Ross Cohen, Brandon Ector,

46:22

Amira Valiani, and Ainsley

46:24

Medford. Engineering by Tyler Morsad.