The Bit Podcast Episode 8 - Sebastien Borget
26 Jan 2021, by Bittrex Global Team
This week on The Bit, we’re joined by Sebastien Borget, the co-founder and Chief Operating Officer of The Sandbox, a community-driven platform where creators can monetize their gaming assets and experiences on the blockchain with the help of NFTs, or non fungible tokens. The Sandbox native token, SAND, was recently listed on Bittrex Global.
Here are the show notes:
[01:14] Seduced by Bitcoin
[05:09] An NFT Primer
[08:23] The Shape of Gaming to Come
[13:45] Introducing the SAND
[17:29] The Future of NFTs
Tom: Hi and welcome to The Bit, the Bittrex Global podcast where we give you the inside scoop on all things crypto. I’m Tom Albright, the CEO of Bittrex Global.
Welcome to today’s episode of The Bit, where we sit with some of the hottest names in crypto to give you an insider’s perspective on the fast moving world of cryptocurrency.
I recently posted on my Twitter and LinkedIn about non fungible tokens, or NFTs for short, and asked if you were all interested in learning more about NFTs. An overwhelming number of people reached out and commented that they were interested and wanted to learn more. So we’re very excited to deliver on that today. If you’ve been following the recent growth and interest around playing cards, like Pokemon cards to video games, then this is definitely the podcast episode for you.
So with that being said, I am very excited today to be talking with Sebastien Borget, co-founder and Chief Operating Officer of Sandbox, to dive more into what NFTs are and the huge growth that is predicted for NFTs in 2021. Without much further ado, Sebastien, I’d like to welcome you to the podcast.
Sebastien: Hi, Tom. Hi, everyone. It’s a pleasure to be with you today. I’m looking forward to this conversation around NFTs and gaming and virtual world and metaverse. We’re going to say and discuss a lot of very exciting things.
[01:14] Seduced by Bitcoin
Tom: Excellent. Me too. I’m very excited for this one. I think NFTs are one of the most interesting technological developments in this space and, really, are perfectly suited for blockchain technology and really, really excited to see what you guys are working on and learn more. So I know you have a very interesting background in mobile gaming, which is obviously a little bit different than blockchain. So I always ask guests this question, but who or what got you interested in crypto and blockchain and how did you buy your first Bitcoin?
Sebastien: Well, that’s a great question to start with. And you’ll see we’ll dive in the metaverse right after. So, I essentially started…my first startup, I joined with my business partner, Arthur Madrid. And it was already into the application of decentralized technology, it was peer to peer technology. That company was helping video on demand connect to tv websites to save on their bandwidth costs through the use of that plugin. And I still have been always passionate by technology, always involved in technology.
The second startup was into online photo, video, and music streaming in the cloud. And then in 2011, we founded the mobile game studio, one of the very first involved in free to play. And that game studio was developing a game our own IP franchise called The Sandbox, which originally started as a simple project where producers could drop pixels on the screen just by the touch of their finger, share their creation with their friends in an online gallery. And it turned out into a massive success. We had over 40 million installs, 70 million peers’ creations.
Tom: Very impressive.
Sebastien: That’s been an eight years long success story. Thank you. Then we saw also one thing, that as the success of the game was growing, as we had so many players, so many creations being shared, we had no way to reward our community, to reward all those creators who contributed to make so much great content and, in a way, to the success of the game, bringing more players to the game, etc.
So towards the end of 2017, as I was already looking into Bitcoin technology from, again, the technological aspects. So I was looking…I got interested into Bitcoin at the beginning of 2017 around, “Hey, how does it work? What’s the protocol standard for the handshake, etc?” And I bought, I think I bought my first Bitcoin by then or and I bought also not just the first Bitcoin I bought my first miner by then. So I think I really got into Bitcoin by learning how to mine myself, how to configure a pool, etc. And through the year, I got more and more interested, diving into all the different aspects.
And at the end of 2017, I saw CryptoKitties, that game, appear, offering a brand new idea that instead of having just a cryptocurrency, or smart contract using that technology, there could be game items tokenized as NFTs and that players could own. Imagine immediately from my background into user generated content. And this issue we had connecting with creators and rewarding creators to the use of NFT. It clicked, you know, like, it was like that boom moment in my mind. And I say, we need to apply that technology to the user generated content. And that’s essentially how then the new version of Sandbox was born, with this idea of using NFTs, using also our own cryptocurrency SAND to empower the creators and the players.
[05:09] An NFT Primer
Tom: Got it. Well, that’s certainly an interesting journey. And there’s a lot there that I really want to get into. But before we do that, maybe let’s start in really simple terms for the listeners.
So we have a lot of people that are very interested in NFTs. I’m certainly one of them. We’ve been told, and I agree with this, that the market is going to absolutely explode in 2021. And that there’s, essentially, a $4 trillion market for collectibles and digital assets and things like that that are perfect for NFTs.
But before we really dig into all that, can you explain in just very simple terms, an overview of what NFTs are actually so that people can understand as we really deep dive?
Sebastien: Yes, NFTs are essentially any class of digital assets that’s been tokenized on the blockchain. So that’s the high level view. Now, one of the most common applications of NFTs have been art, digitalising art and turning it into crypto art that users can own and own unique pieces of it, as well as games, game items. Because in the gaming industry, there’s over $160 billion annually being spent into virtual items like characters, weapons, skins, virtual currencies, etc, that’s being spent, and that actually are not really owned by the user, they are just rented and they are lost when you leave those games or those games stop to exist.
So the idea of taking any game item and turning it into a token on the blockchain that then benefits from four main advantages from the application of that technology is very powerful.
The first benefit is around true ownership, the fact that those items are belonging to the users. The second benefit is we have the capacity, finally, to have a provable scarcity attached to them. So users, players can finally see if there’s only one in existence, or only 1,000, gold sword or golden cat, dragon, robe. That’s true. That’s right. Like you can see that on the blockchain enhance comes the new parodic value that I’m sure we’ll discuss about the fact that you can trade those. Yes, they are owned by the user. So they don’t need to ask permission to the game developer or any centralized platform for the permission to actually be able to exchange it, to send it to another user, exchange it with another user, or even sell it on the marketplace and make revenue from it.
And finally, and something really new, is being called interoperability, that capacity that because the content can live on its own on the blockchain, it could be used by more than one game, one application and in the decentralized web that leverages that token to offer experience, which was added to the token other, different experiences with the same content.
[08:23] The Shape of Gaming to Come
Tom: And that really seems to me that’s something that has the capability to fundamentally change how gaming works, and just the level of experience that people can have and the enjoyment that they can get out of games. So it seems something that could fundamentally change the industry and make it far, far better for players. Is that something that you agree with? Or am I way off base there?
Sebastien: I absolutely agree with that. I think that, overall, those four benefits are here establishing a new paradigm of values, enabled finally, to have player owned and creator owned economies in those games. And that search where players are spending time in games, their own item, the earned items and rewards, they can sell them for revenues, they can start trading them, they can build online collections that can appreciate in value. It’s already very powerful.
And going further, something that the whole industry is exploring, and I’ve seen a few use cases already, is that idea that I own an avatar, I own a game item, and I can use that game item into several virtual worlds or several games, rather than always starting from scratch. My whole experience is also something totally akin and new that I’ve never seen before except in science fiction and movies.
Tom: Absolutely. Yeah. So I’m very curious how gaming companies and gaming development studios feel about this and how they’re adopting this technology. And I know you guys have one of the highest, if not the highest, NFT trading activity in a multiplayer online role playing game. So I’d love to hear about your approach to that. Obviously, you’re very much in favor of NFTs in the space. But I’d love to hear about that, and then how other game studios are interacting with the space as well and adopting the technology.
Sebastien: One thing I didn’t mention also, by the way, when you introduced myself, is I’m also the president of the Blockchain Game Alliance. It’s an organization, a nonprofit organization, that regroups 169 members from the industry, whose goal is to promote adoption of blockchain technology like NFTs, decentralized gaming, Dao, etc, to the traditional gaming industry.
Among our members, we do have all the leading blockchain games, so Dapper Labs with CryptoKitties, Axie Infinity, Sorare, which are just a few of the examples of the games that you can see and notice in the top rankings of trading volume and user adoption those days.
What’s really exciting is how this adoption curve has been accelerating. Over the last few months, and especially in 2021 versus 2020, we are seeing now on a weekly basis trading volume largely above the million dollar, including on some games like NBA Top Shot or, I think I’ve seen in Sorare, as well, usually over 300,000, 400,000 on a weekly basis. Axie Infinity has one of the largest user bases and adoption so far with well over 20,000 unique active users on a weekly basis.
Sandbox is definitely very well positioned and is going to open to the public in beta this year. We haven’t launched yet the play part, we have only launched the creation part with the different tools on our platform, as well as the capacity for users to own a piece of land, you know, virtual world, so VCs, called like, we can compare it to virtual real estate, where the land owners are going to build experiences, build games on those lands, and we’ll be able to monetize them through the game experience, and the players that will be enjoying those experiences, or rent them to the creators, etc.
So those are some just some of the examples of the successful games right now. And just around the corner, I think we’re going to keep seeing more and more announcements of major industry actors that are already using the technology or about to use it. Typically, Ubisoft or Atari, as game companies. There has been IMVU with the VCOIN that, I think just last week they made an announcement, and we are going to announce something also today with them for the BGA. And in Sandbox, as well, we are bringing a lot of major IPs and brands within The Sandbox virtual world to adopt that NFT technology. We’ve done it already with the Smurfs, Care Bears, Shaun the Sheep, Atari, Roller Coaster Tycoon. And I’m excited to announce more soon.
You’re listening to The Bit, the podcast that gives you an inside look at the world of crypto, from Bittrex Global. Our guest today is Sebastien Borget, co founder and Chief Operating Officer of Sandbox.
[13:45] Introducing the SAND
Tom: So I do want to follow up a little bit on Sandbox, in particular. And Bittrex Global recently listed the SAND token, which we’re very, very excited about. But I wanted to check and see how did you guys come up with the idea to create your own utility token? And what will the uses for that token in the Sandbox ecosystem be?
Sebastien: That’s a great question. And from the very beginning, as I mentioned, towards the end of 2017, we already had that idea, let’s combine user generated content with NFTs. We also immediately thought about on our platform should have our own utility token that will enable, as a medium of exchange, the artist to sell their NFT to the game creator, the game creator to monetize their game as players enjoy the experiences as well as taking participation in the governance of our virtual world or even, early on, by staking as well, even before DeFi became so big last year, and we’ve seen more and more DeFi gaming was part of the initial white paper of Sandbox.
However, we waited, we decided on purpose to wait until the time was right to finally launch the SAND token. So we only introduced the SAND token towards August of last year, after we’ve shown to everyone in the communities that we were able to build the platform and the vision, releasing several of our products in beta, having already grown a large community. So by then it was a little bit more than 10,000 users. Now we have over 200,000 users following us and hundreds of thousands of active wallets on our platform.
We also had success with some of our LAND presale. So we released part of our virtual world in different, four rounds of LAND presales, and some of them have been sold out within minutes, literally. So really showing that we were able to build that community, to build that product and progressively…what’s our vision, bringing onboard more and more members with it, bringing onboard creators and artists and brands to attracting new people, not necessarily originally from the crypto industry, into adopting that.
Then more naturally, SAND token listed through an IEO on Binance Launchpad toward…it was on August 14 last year. And from there, SAND has been widely adopted, it’s been listed as of 18 global exchanges today. And we’re really excited to be on Bittrex Global as the last one. And people are using SAND, also. We’ve shown that SAND was a token with a utility, where you could buy SAND to acquire the LAND or buy the NFTs on our marketplace. Artists and creators are being supported in SAND via our Creator Fund and our Game Maker Fund, that are two funds from our foundation that is helping creators to bring their ideas and their games to life and help them to launch those content once we go public a little bit later this year. So really proving that the whole ecosystem could be enjoyed by the user and the token fitted naturally within it.
[17:29] The Future of NFTs
Tom: Well, that’s very impressive growth and it certainly makes a lot of sense for why the token exists and what you’re using it for and powering that entire ecosystem. And even with that really impressive growth, what do you see as the biggest challenge now to get more people into the ecosystem, to get more people to adopt NFTs, and to move into the space?
Do you think education on NFTs in general, education on differences between how the physical “real world” versus the new digital world works? Yeah, I’d definitely be very curious to get your take on those challenges.
Sebastien: Yes, definitely. What you’re pointing to is right, one of the main challenges has been, essentially, to enlarge the market and bring you a chance to enjoy the benefit of NFTs. So we’ve put a lot of effort into, as you say, educating users. We’ve launched the largest learn and earn campaign on CoinMarketCap, where we’ve had over 40,000 unique users who watch videos, participate in quizzes, created an account on Sandbox, created their avatar on Sandbox, and earn SAND tokens. So educating them about the benefits of NFTs.
We’ve also brought all those major brands and reached out through the plans of those brands, the users who finally can create their own games and stories using the NFTs from the brand with our Game Maker. We also…and something quite important. You mentioned earlier the NFT industry is booming. We are seeing more than $4 trillion of trading volume in 2021. But one thing…everyone is only paying attention at is like, record sales. Like, “Hey, this NFT has been selling for over $100,000, this one for more than $300,000.” So everyone is really focused on “Oh, when will be the first NFTs that will be selling for $1 million.” It’s great. It’s a great achievement. And I’m really excited and hyped by that.
But me, the main focus I have is when do I make an NFT or a set of NFTs that is owned by 1 million users. That’s really what I’m aiming for. And I’m leveraging the force, the community of creators of this creative force to build all those NFTs that Sandbox calls assets that will be owned, indeed, by more than a million players and creators. I’m working with major, even major brands that I’m really looking forward to announce the partnership with Sandbox so that yes, anyone that, not even remotely connected to the crypto industry, when they will see that they will want to own such an NFT and participate in Sandbox.
Tom: Yeah, absolutely. And, you know, in 2020, we saw so many institutional players jump into Bitcoin and start to recognize the value that crypto has, Bitcoin, in particular, as a store of value, a hedge against inflation, all those sorts of things.
And you’ve mentioned that you’re working with a lot of big brands, major brands to move into the NFT space. But do you think that in 2021, we’re going to see the similar institutional movement into NFTs, like we saw into crypto in general in 2020?
Sebastien: I think it will be coming. One thing, if you look at the Sandbox map, that map of 166,464 LANDs, we already have major institutional partners, we actually have Binance as one of the largest exchanges, which is, I think, the second largest, or the first largest LAND owner. We have other exchanges from the crypto space that also have a point of presence. We are now getting celebrities and other brands to buy their LAND and own their point of presence in the virtual world, in the metaverse.
So just the mere fact that people are seeing the value of being present, owning this NFT, this unique, scarce resource that they can collect, that they can own forever and potentially even resell at a certain increase as an important piece of that story.
Tom: How do you see the adoption of NFTs going over the next three years to five years? I love to ask people that question about cryptocurrencies in general and in Bitcoin, I mean, projecting even out six months is very, very hard to do. But I’d love to get your take on that both for the broader blockchain industry and for NFTs in particular. Where do you see this field and this industry going in the next 5 to 10 years?
Sebastien: We’ve been pioneers in this space for over three years. And we’ve been seeing what I would call a bear market, where it was harder to get attention, to get traction on projects, some projects that started to build in the NFT space, they didn’t have a value proposition that was strong enough. And unfortunately, they are no longer here today. But that doesn’t mean that…on the contrary, now that it’s a great moment in terms of crypto and the market is hiking up again and NFTs are booming, we’re getting more and more attention.
And this, the curve of adoption has been really accelerating. Like every month, you can see the increase of users, the increase of wallets that participate in those games. Also, it took a while to create game experiences. So that’s why in 2020 and 2021, finally, we have great games, fun, engaging, with NFTs that people want to own, collect, and trade. There’s so much experiments happening now because, well, more people coming into the space and curious to introduce new mechanics regarding staking plus NFTs.
So NFT mining through staking, as an example, is just one example of DeFi gaming. There’s more complex mechanics through values, new dapps that popped up, but we’ve seen it as a new side game for Sandbox that worked well.
So just last week, we introduced three liquidity mining rewards pools, where by staking SAND and other tokens, you could be rewarded exclusive NFTs that you couldn’t own any other way. And the engagement with those has been really high. So we’ve doubled the size of those liquidity pools, for example, and we see the community is going to really engage strongly with it.
Tom: What you guys are doing at Sandbox is amazing. That’s so cool, how it’s growing and the things you’re doing. But in terms of the overall ecosystem, I’d love to hear if there’s one or even more other NFT projects that you’re interested in or that you think are doing cool things, as well. So people can check those out in the space as they get more interested in NFTs.
Sebastien: I’m a big fan of Sorare, Gods Unchained, Axie Infinity. So the first one is a football trading card game and football collectible. The second one is a game where you breed and collect creatures that look like small, cute Pokemon like creatures. Gods Unchained is the equivalent of Hearthstone on the blockchain with TCG.
I am also a superfan of Formula 1 Delta Time, which is with the REV token. It’s basically a simulation/management game where you build your own F1 car, you upgrade it, you participate in racing, but you can also buy or own the race, the tracks where the race is happening, and receive, as such, part of the earnings from tournaments and races, time laps based.
Tom: The space is amazing. It’s so cool.
Sebastien: Yes, definitely. And involving, basically, those games are moving along this new business model called play to earn, where, essentially, by engaging time in the game players can actually win rewards that, because they are tokens, those rewards can be exchanged on traditional exchanges like Bittrex and converted to fiat.
Or you could trade those NFTs among each other. Like we used to be trading like Magic cards or Pokemon cards when we were younger. So there’s a lot of things in the ecosystem happening and lots of collaboration as well among the different actors, and I’m really happy to see this happen in my position of President at the BGA.
Tom: That’s great. Yeah, well, it’s always great when you can name such a large number of projects that are doing interesting things. It really bodes well for the ecosystem.
Sebastien, thanks so much for coming on the podcast and talking with us about NFTs, an extremely interesting space to be watching in the coming months and years. And we’re really, really looking forward to hearing more great news from Sandbox, from NFT spaces in general, and from you guys, in particular. So thank you so much.
Sebastien: It’s been a pleasure, Tom. Thank you for your support. And yes, we’ll keep the Bittrex community updated about the latest developments and coolest gaming happening in the space.
Tom: Perfect. Thank you so much, really appreciate it.
Thanks for listening to The Bit, the Bittrex Global podcast. Our guest today was Sebastien Borget, co founder and Chief Operating Officer of Sandbox. To learn more about Sandbox, visit www.sandbox.game and check out their token SAND. That’s S-A-N-D on Bittrex Global. To learn more about Bittrex Global, visit global.bittrex.com. And please make sure to subscribe to our podcast. You can find us wherever you get your podcasts. Thank you for listening and for making The Bit one of the fastest growing podcasts in the world of crypto. I’m Tom Albright, the CEO of Bittrex Global.