Worldwide Asset eXchange™: Project Update 2
For the Worldwide Asset eXchange Project Update 2, CEO William Quigley interviews with Alison Haislip about all things WAX including the future he envisions for the project, WAX ExpressTrade, and the ecosystem that WAX will create.
Watch the interview or read the full transcript below.
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Alison Haislip: Hi everyone I’m Alison Haislip, I am here with William Quigley, the CEO of WAX and OPSkins. William you’re going to tell us all a little bit about what’s going on here these days. I just got a chance to check out your office space here, it’s really wonderful.
William Quigley: Glad you like it, yeah we like being in downtown Santa Monica.
AH: Yeah, that’s not bad, that’s a nice life. So just for everyone at home, what is WAX?
WQ: So WAX is the Worldwide Asset Exchange and for those of you who are listening, I’m sure many of you know that WAX is also a token. Today it’s an ERC20 token, soon to be its own token based on the EOS platform. WAX does a whole bunch of cool stuff if you’re interested in virtual item creation, or virtual item trading, or blockchain based games — we provide a suite of services for that industry.
AH: Right. Now clearly cryptocurrency is a very big buzzword these days. I feel like everyone and their mother learned about what it was over the holidays when the price of Bitcoin was jumping all over the place.
WQ: $20,000 yeah.
AH: I know everyone was like, we’re going to be rich, but you guys have obviously taken it and you have a very practical application as opposed to people just like throwing some money online and being like, oh I’ve made money somehow. So can you talk specifically about what you guys are doing?
WQ: Sure. So, a lot of what I’ll say will be really germane to people who are virtual item traders, virtual items, objects within a video game that people use in the game or they trade with others. There’s virtual item collectors. That’s a giant industry, probably $50 billion or so just in the secondary market of trading and close to $100 billion every year of people buying those items from the video game publishers.
So OPSkins — the company that the founders of WAX created — OPSkins is a virtual item marketplace but over time we realized that there were benefits of using the Blockchain in what we do and those benefits are really packaged in [something] called WAX.
AH: Nice and where do you envision WAX going?
WQ: Yeah so ultimately WAX has, I’d say the grand vision, the grand vision of WAX is that it is a global platform that is virtual-item-centric. Think of it like the Apple App store, or the Google Play store, but in those stores the center of the activity is based on the app, the app publisher.
What’s different about WAX is for us the virtual item is at the center and then from that everything else happens. Where again, if you’re in Google Play, you download an app and then people who want to do something with that app do it.
With WAX, we think virtual items are so important they deserve their own platform where anyone who wants to do anything with the items can do them.
“[The video game industry] is always on a constant incline in terms of how many people are getting involved, what kind of money that’s getting thrown into it.”
AH: Right. Clearly anyone who plays video games is very specific about how they play, what they want to do within the game, and I feel like a lot of people don’t realize that the video game industry itself is the only industry that never drops. It’s always on a constant incline in terms of how many people are getting involved, what kind of money that’s getting thrown into it.
WQ: Yeah it shifts. The thing that’s interesting about the video game industry, on the one hand you could say it’s hits driven, which is true, right? But yes overall it’s been growing and continuing to grow.
It’s actually incredibly stable. You never see it plummet 50% but people change out the games and the items that they use.
AH: Right. Exactly. Okay, so let’s talk a little bit about WAX ExpressTrade because this is a newer project you’re taking on right?
WQ: Yeah. So at the core of virtual items, when you’re in a video game, most people what they want to do is they want to trade them. Now as it turns out, the majority of video games today, the publishers restrict your ability to trade them. You can buy them, you can collect them, but they don’t like the trading. We can get into a whole topic about why some video game creators and some don’t, but to the extent that items are tradable, then that’s where groups like WAX come along.
We make it easy for people to trade them because these game items are very easily stolen, right? They’re also, many of them you need to have one central place you can access all of yours, one center of all of your inventory and then you need to be able to figure out what you want to trade with what.
So, WAX ExpressTrade is on one level it’s an inventory system, think of it from the crypto world we would call it a wallet. So it’s a place where all your virtual items get stored but it’s also a place where you can see what other people have and make trade offers to them.
Then ultimately, if you would like to sell your item, sell it for other cryptocurrency or sell it for some form of Fiat, US dollars, Euros, RMB, then you would send that to a market place like OPSkins and you can do that today.
You can take your WAX item, send it to OPSkins and immediately sell it. OPSkins is like the, it’s like an ebay for virtual goods.
“ It feels like Blockchain and cryptocurrency and all this kind of in-game trading is really something that’s going to be massive.”
AH: Well it must be exciting to be at the forefront of such a, you know it feels like Blockchain and cryptocurrency and all this kind of in game trading is really something that’s going to be massive. I mean it’s already massive now but it’s something that’s going to change the way we do any sort of business.
WQ: Yeah it is and again in these settings, there’s not time to discuss all of what I see happening but video gaming and trading of virtual items, that is an ideal application for Blockchain. We’ve proven it. Right now, we’ve created the WAX ExpressTrade specifically to enable virtual items to be traded easily, at very low cost, conveniently.
Today the state of Blockchain based gaming — it’s got a great future, but as it stands today, it’s awful. It’s just awful and the reason it’s awful is, because the primary way people are creating items and they’re trading them is with this standard I referred to before called the ERC721.
It is a, it was a great attempt. The Ethereum developers get a lot of credit for creating a token that will allow you to have a unique item, right, each ERC721 is unique. The problem is, trying to trade that on the Ethereum mainnet doesn’t work. It gets too crowded, everything grinds to a halt.
You might remember when CryptoKitties came out, it was a disaster for anybody trying to get anything done on the Ethereum chain. Now imagine thousands of CryptoKitty type things, and then of course I also mentioned what happened to us a couple weeks ago with one random company doing a promotion on Ethereum.
You went from $0.50 to $50 dollars to create a smart contract. So at this point the Ethereum Blockchain is not suited for trading massive quantities of items. The way you interface with the Ethereum chain, if you want to play these Blockchain based video games is with something called MetaMask.
Now again, it was a nice attempt but it’s, from the vantage point of billions of items traded, hundreds of millions of consumers using it, MetaMask is a non-starter. It is a terribly difficult way to interface with the Blockchain. It’s also slow, it’s insecure, it’s built as a Google Chrome extension. One of the scariest things to a, to say if you’re talking about cryptocurrencies, because it’s inherently unsafe.
So if someone watching this were to try to download MetaMask, buy an ERC721 with Ethereum, actually acquire that item and then trade it, I would be shocked if they could do that in less than 30 minutes, and if they were doing it in 30 minutes I think that’s because they were pretty darn smart about Ethereum and about virtual item trading.
With WAX ExpressTrade, it’s really as easy as using any app on an app store, to buy a virtual item and send it as a gift or a trade which many, many people do.
AH: You’ve made it accessible?
WQ: Yeah. It’s a, and we talked about this when we were on our, when we were on the WAX road show last year, we said, we believe that virtual item trading is the on ramp to mass adoption of Blockchain based things and mass consumer adoption of crypto currencies, of crypto based items and Blockchain. I think we’re seeing that.
The number of transactions that are taking place with VGO for instance, make it the top DApp, distributed application, on Ethereum. So and this is a virtual item that was created a few weeks ago. So very, very quickly it’s happened.
It’s happened because it’s an item people want, it’s priced at the right price points, but the other reason is because it’s so easy to use. I’ve been doing consumer product investing and company building for 25 years and I always say, I pray to the God of convenience. Everything with consumer has to be about convenience and blockchain and cryptos today are not very convenient.
Give us a little bit more time but I would say in the next year or so you will see many, many ways for consumers to use Blockchain that’s of substantial improvement to where we are today, with WAX ExpressTrade really leading that.
AH: Right. It seems like you, your company is specifically trying to bypass the growing pains of cryptocurrency and blockchains becoming an everyday process for people.
WQ: Yes particularly since there’s so many companies now, game developers who want to build blockchain-based games. Many of those come to us and say, hey we would like to trade our items on WAX ExpressTrade. That’s because it’s a far better way to do it than MetaMask, but we also know a lot about trading virtual items. We have been doing this for 20 years. So we understand what the user behaviors are, by the way, it’s probably no surprise, most people would prefer to not to have to buy Ethereum or Bitcoin in order to use something, because it’s hard.
It’s hard to buy it, it’s hard to spend it, it takes, sometimes 10 minutes, sometimes an hour for your Bitcoin confirmation to go through and if there’s a lot of transactions as there were on the Ethereum Blockchain couple weeks ago, it takes 17 hours to multiple days.
So that’s not the way we’re going to hit mass market adoption of Blockchain based businesses. It’s going to come from allowing people to use Fiat which you can do in the WAX ecosystem, and allowing people to very easily trade something without getting bogged down by a slow mainnet.
AH: Right. Okay so what kind of ecosystem are you looking to create with WAX?
WQ: I’m glad you asked that question because virtual item trading is a massive ecosystem. At its base level you have got hundreds of millions of people who own these virtual items, originally they came from video games and now they’re coming from the Blockchain. They got them, they started wanting to collect them and then they maybe coveted the other guys stuff.
AH: You always do.
WQ: Yep, hey can I trade yours for mine? Then along came companies like OPSkins that said, well maybe you would like to trade it for cash and many, many, different currencies. So lets, let me give you a highlight of the ecosystem. It is actually quite surprising to most people when they understand how vast it is.
So virtual item trading, there are tens of thousands of companies across the world that facilitate it. There’s companies like OPSkins. OPSkins is a marketplace as I mentioned, it’s like an eBay for virtual items. You can go on, you can if you’re a seller you can showcase your item, people can look at it in a three-dimensional model and they can buy it.
They can buy it with cryptocurrencies, they can buy it with Fiat currencies. What’s fascinating is they’re buying it from people all over the world. You’ve also got people who arbitrage. So these are people that don’t necessarily want to own the item, but they do want to make a profit when people want to buy it, or sell it. So they facilitate the liquidity of that market because they’re constantly looking and seeing, are their prices that they think are out of alignment and if they’re too high they’re selling if they’re too low they’re buying.
These arbitrageurs really help lubricate the liquidity in that market. You see something very similar of course in Bitcoin and cryptocurrencies general with crypto exchanges, thousands of crypto exchanges, where some people want to use the tokens but often people simply want to invest in them, right, and some of those are formally what you would call arbitrageurs.
Then there are many thousands of sites that provide what I would call information. They’re media sites, they’re fan sites, they talk about why a particular type of item is important or coveted. These range from simple blogs to full on large well produced content sites.
AH: They’re the reviews.
WQ: Yes. Reviews, they have lots of fans who share what they’ve been doing with them. So you have all of these businesses and people coming together, each trying to do what they want to do but in the end you would summarize that and you would call it an ecosystem. Where there’s a thriving economy that allows people who either want to make virtual items because they have a game, people want to acquire them because they’re fans, they want to trade them, or they would just like to run a side business.
So, we of course, my team started out as OPSkins and we were doing that for a number of different well traded virtual items and then with WAX we said, well let’s bring the blockchain and the advantages of the blockchain to this and maybe in another episode we’ll talk about where a blockchain is useful and where it is not. It’s not useful for every single thing but for certain activities you do with virtual item trading, there’s nothing better than a blockchain-based solution, which is what WAX is helping to build out.
AH: Nice. Well thank you for your time William, this has been, I feel like I have learned so much sitting on the couch from you in 20 minutes about this industry than I have just like reading anything I could ever find online. You clearly know what you’re doing here.
WQ: We’ve been doing it for a long time.
AH: Yes. Awesome.
WQ: Thank you.
AH: Well this was wonderful, thank you, and I hope that helped all you out there too.