Our next also extraordinary person, Devon, do you want to come on up? Everyone, can you welcome Devon Finzer, please? Devon's been a friend and a buddy and one of the founding people of NFT NYC. We had Italian food together many years ago and said, 'Let's start a conference.' So, big thank you for being a partner and helping us put the event on. I'm going to start by saying I'm not sure that we all appreciate how difficult it is to be a CEO of a company that goes from zero to a billion in 12 months and then goes through some up and downs. What's it been like to navigate those amazing seas?
Well, yeah, it's been an incredible journey for me personally and for everyone at OpenSea. I think one of the biggest lessons for me is just how important it is to build for a long-term horizon. So thinking about things from like how do we really create a sustainable product, a product that's going to be around for a long time, and then also from a team perspective, having people who believe in what we're doing has been really critical. Because I think one of the things that happens when a company has overnight success is inevitably you have people who are there for the ride up and the excitement and the rocket ship part, but they're not necessarily there for the right reasons. And so a big piece of what we've been focusing on at OpenSea is really just going back to our roots and saying let's actually build with the people that want to be here for the long term and let's build amazing product experiences both for the people who are in the space today and using NFTs and trading tokens, but also thinking about the next incremental user and how we take this to a broader audience over time.
I think you must have nerves of steel, Devon. We were talking about learning to fly off stage and sort of Tom Cruise nerves of steel to fly through this extraordinary industry we've had. And you've recently got married and I think you said to me that your nerves of steel and your calmness through all of this is very much supported by your new wife.
Oh, 100%. Yeah. I mean I think it's really important for anyone operating in the world today when everything in technology is moving so quickly and it's super exciting. I think the most important thing you can invest in in your life, in your career, is sort of a stable psychology that is able to weather whatever life gets thrown at you. And yeah, for me that's been a huge part of that has been my wife. And you know, I just think that's a big part of the process for everyone who's either an entrepreneur or builder or founder or what have you is building that kind of mental resilience over time.
And the momentum that we're seeing back in the industry. You've seen a regulator do a complete 180 degrees. Do you agree that the encouragement that we're seeing from the current regulator is going to help the industry?
100%. I mean, one thing that really blew my mind, back when the SEC sort of had this extremely aggressive, unfair posture towards crypto companies, which was basically to go and say, look, every single major player or good actor in the space, we're going to hit with an investigation and a Wells notice because we just don't like crypto, essentially. Now that has completely turned around. A lot of the folks who were sitting on the sidelines and saying look this is actually too regulatory, I just don't really understand what's going on here, now they're getting excited again. And back when the SEC took that posture I would literally talk to artists, creators, builders, people who wanted to do NFTs and they were like I just don't understand what's going on with this regulation stuff. It's scary. And I think what's interesting now is that there's sort of an overhang from that. Not everyone who's an artist is going to follow the news and kind of understand the regulatory environment. So it's our job to really go and kind of bring this thing back in a sense and recover from a lot of the bruises that the industry has weathered as a result of essentially unfair regulatory posture towards the space.
And so what's your wish going forward because I know we're seeing this turnaround in federal regulation but we still have this extraordinary variation in state regulation and I know you operate in jurisdictions around the world. What is your wish for smart regulation?
I mean, I think things are moving in the right direction. And the overarching philosophy behind good regulation is really just that it shouldn't be one-size-fits-all. For NFTs, for example, the vast majority of NFTs are art collectibles. They're obviously not financial assets like securities. And so to go and sort of make blanket statements would obviously be a really unthoughtful approach to regulation. So there's a lot of details, a lot of nuance to it, but I think the most important thing for me is really just that it's not a one-size-fits-all. And I think what's really exciting is that when you talk to government officials, regulators, one thing that's really amazing to see is that they now understand the technology at a much more sophisticated level. They understand the difference between a decentralized exchange and a centralized exchange and non-custodial versus custodial. That is extremely cool. It's extremely impressive. Some of the folks that I've talked to in Congress, for example, have demonstrated a really great understanding. So, I think it's all moving in the right direction.
Well, it might interest you to know that the person from the SEC that we have speaking in a couple of hours, Mike Selig, he actually attended our first NFT NYC event and a year ago, he was hired by the SEC, which goes exactly to your point.
Yeah, that's really great.
So you've recently started selling ERC20s or being an exchange for ERC20s. Is that because it increases deal flow for NFTs? Talk to us about that.
Yeah, it's a great question. So, I think it really comes back to what is the mission of OpenSea as a whole. And I've actually never seen as much of a clear separation between the NFT space and the token trading space. I've really seen it as kind of the tokenization of everything. And some of those things are financial assets or stablecoins and some of them are art and collectibles and gaming items. And some of them are fungible, some of them are non-fungible, some of them are somewhere in between. With an NFT collection there's often some sort of fungibility at the floor especially when it's a mint and things are unrevealed. So I've actually always seen OpenSea as playing a role in the whole spectrum of trading across everything. And our mission statement now is really to be the best place to discover, own and trade on-chain. And that really covers everything under the sun. And the recent upgrade that we've made to the product expands our offering into token trading. And we've put out a preliminary product there. We're continuing to improve and iterate on it. And we really want OpenSea to be the best possible home for your web3 on-chain experience. We want people to be able to go there and manage their portfolio, trade anything, explore, discover, and also for it to be sort of a cultural hub for web3. And I think that's really what NFTs have captured in the imagination of all of us. And token trading is a big part of that, too.
And so, being now very involved in token trading, you've probably seen some of your competitors in that space, they use centralized wallets. They don't use or many of them don't use self-custodial wallets. That must have created quite a lot of internal discussion for you, the tension between self-custodial and centralized wallets. Can you tell us about that?
It's an excellent topic because I think the big trend, and perhaps a little bit of an obvious trend at this point but an extremely exciting trend, is that liquidity is moving on-chain and permissionless. And if you look at the share of exchange volume, it's still overwhelmingly centralized exchanges but the percentage of share that is captured by DEXs and on-chain liquidity is growing rapidly over time. And why is that? Well first of all, permissionless liquidity, if you can get the user experience good enough, is actually just way better. It allows you to trade anything. You don't have to worry about where your funds are managed. You don't have to go through this sort of arduous setup process with centralized exchanges which can, we saw with a bunch of these big centralized exchanges, there have been some massive security breaches. And there's a lot of problems to solve in the decentralized world with regards to security too but it's a very different kind of set of solutions that you can introduce that I think are longer term more sustainable. Now, the tradeoff you get with decentralized liquidity is that there's still a lot of improvements that need to be made to the user experience. If you go and try to trade millions of dollars of Ripple on a decentralized exchange, you probably have a tough time because the liquidity is not necessarily there. But this is a problem that's being solved. And with Hyperliquid coming and bringing on-chain order books and just all of the technology that's being developed in the decentralized exchange world, this is starting to be a real competitor to centralized exchanges and we're long-term believers in that. We're long-term believers in people being able to have more control over the experience, being able to experience web3 in a way that doesn't feel just like a bank, but really feels like a fun consumer application. And we think that the self-custodial model, especially with things like Privy coming online and making it a lot easier, is going to really power that over time.
And just to be clear, I think we're using the words permissionless, decentralized, and self-custodial all to sort of mean the same thing, right? And to explain the technology, all three things mean that a smart contract that is running on many servers, decentralized, is end to end controlling the transaction. So that there's no single company or single centralized authority that does it. Would that be fair?
Yeah, that's about right. I would say you're right. There's a lot of different ingredients to this, because there's what wallet the user is bringing, where's the liquidity coming from, what chain are they on, but I think at the end of the day, it's really what you said, which is that you're able to plug into a permissionless liquidity pool that is sort of powered by a blockchain underneath the surface. And there's all sorts of different interfaces to that, but that model I think is just incredibly exciting. The other thing I would call out here is it's incredibly exciting for agentic trading. So if you think about now people are using AI for so many things in their lives, it makes a lot of sense that you would want to have at least some AI assistance in your trading behavior and it's way easier to plug an agent into decentralized liquidity pools than it is to pull from centralized exchanges for example.
I love it that you're speaking about agentic AI because in my intro I said wouldn't it be wonderful if we used NFTs to identify agentic AI and to keep track of their provenance and history so that when an agentic AI knocks on my door I know whether it's a good person or a bad person. I mean, I deeply believe that in a what are we? We're conference number eight. By conference number 10, I think there could be more agentic AIs in the world than people. What do you reckon? What do you think about that?
Sounds about right to me. It's possible. It's also hard to define, right? Because even at OpenSea internally we're constantly spinning up agents to go and perform work. And one of the really powerful things that this has enabled is it's allowed some of our non-engineers to go and build little projects within the company without any coding knowledge. So I wouldn't be surprised if by some measurement what you're saying is already the case which is that there's already all of these agents going out there. Now there's only a subset that are sort of fully autonomous and have a Twitter account and an on-chain address and NFTs and all those sorts of things and I think it's going to be really fun to see those grow. And I think NFTs are this really, as you said, sort of perfect identity layer for saying okay this agent here has this collection of NFTs, they have some sort of reputation in the space and that can be factored into my trust model for them as well.
And when you were describing your platform as a platform for really any digital asset, were you suggesting that you may be trading agentic AIs?
Totally. I mean, if you represented I think there's a couple projects like this where the agent is represented as an NFT. You can buy and sell it. Maybe these are early. But I think you could probably do that today on OpenSea. It's just with all of these things it's usually a situation where the future is here, the technology is here. It just hasn't been fully distributed. But I mean, we've been saying this since 2017. The beautiful thing about NFTs and tokens is that you can literally represent anything and create a market for it. And you can represent ownership of an agent. And I think those sorts of things are just super fun and super cool.
