December 29, 2021 – On today’s podcast we welcome special guest, Chibi Labs Founder Mat Sposta. Chibi Labs has created three futuristic NFT collections featuring cool 3D characters.

On the show, Mat discusses:

  • His path from Wall Street to NFTs (or TradFi to DeFi)
  • What is an NFT and why should people want to own them
  • Chibi Labs roadmap in 2022
  • The future of the NFT market and the metaverse
  • And more

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Welcome investors to The Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies, your hosts, Julian Klymochko, and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by Accelerate Financial Technologies. Accelerate because performance matters. Find out more at

Julian Klymochko: All right. Really excited to have Matt on the show. And we’re talking about everyone’s favorite subject these days, NFTs or non-fungible tokens. Prior to getting into the whole NFT world. What you’re up to at Chibi Labs? I wanted to touch on your career trajectory. You did come from a traditional finance background, stints at Lehman Brothers, Barclays, Wells Fargo. Do you want to talk to us about your career prior to getting into NFTs and what you were up to before Chibi Labs?

Mat Sposta: Yeah. So, thank you for having me. Really excited to be here. I’m Matt Sposta, as you mentioned, I’m one of the founders of Chibi Labs. I did start my career on Wall Street. I started at Lehman Brothers when I was six. And as most of you can imagine that was a really fun time to get into finance. The first year of my career was amazing. I mean, Lehman the culture, everything about it was just such a welcoming place. And that was like the hay day of finance too. Late, 2007, 2008 rolled around and, you know, watching 60% of the workforce get laid off leading into, you know, the recession, all the craziness that happened with the bankruptcy, I’d say probably one of the best lessons I could have learned in my career.

Definitely a character-building exercise. I was retained, we were acquired by Barclays. But it really taught me a lot about risk management. And it was kind of just like, you know, getting thrown in the fire really early in your career definitely helped me, you know, build certain disciplines. And it’s definitely gotten me to where I am today. So as terrible as that kind of moment in time was, I think it was definitely something that really kind of helped with my maturation. You know, my experience on Wall Street. Most of my career in wealth management with kind of an institutional twist on it though. My partner, you know, used to run a convertible bond desk for Lehman Brothers over in London. So, I had a lot of expertise in markets, so it was really kind of a market slash relationship type role.

But I always had kind of that entrepreneurial spirit. Really kind of ahead of the curve in technology and innovation. I got into Bitcoin and crypto in 2013, pretty early considering, and understanding the way those markets were working and just give them sort of my background in traditional finance. You know, it really got me thinking about how this market could be impactful and disruptive in the future. And also, I mean, I was just an action junkie and the fact that it was a 24/7 market was amazing. So, the Bell would close and, you know, the crypto markets would kick in. So that was something that was always really exciting to me. About five years ago, two guys in my high stakes fantasy football league approached me. They were thinking about doing something in the space, needed a big idea. I came along with big idea, which was building fantasy sports on the blockchain. So, since 2017, which was my first kind of foray into the blockchain space, you know, my first startup in the blockchain world exposed me to this entire space. We went out and raised pretty significant capital behind that business. And I had to tell my wife, I was leaving my high-profile Wall Street job for a startup in the fantasy football space.

Julian Klymochko: Must have been a tough conversation.

Mat Sposta: Yeah, I mean, now she looks back and she obviously enjoyed the ride, but not all the ups and downs, you know, being a founder and kind of being in the entrepreneurial role. But, you know, I wouldn’t trade it for anything. I’m, you know, ditching my suit five years ago and entering this world has really opened up my eyes and it’s allowed me to do a lot of things I wouldn’t have otherwise been able to do in the finance world. So that company, I actually sold a year and a half ago to what was at the time, a private company, which is the [Inaudible 00:04:04] the pro football hall of fame. They ended up going public through a back merger that summer in July and becoming HOFD, which some of your audience may be familiar with. And I just recently launched that league in September the start of the football season. And yeah, we’ve been building the league from within that public company ever since.

Julian Klymochko: Nice. And so, the goal of having you on the show is to open the audience’s eyes to the world of NFTs, non-fundable tokens. So just to set the stage, can you talk to us about what exactly is an NFT and why should people want to own them?

Mat Sposta: Yeah, so I think everyone, especially your audience would be very familiar with the term fungible. And I think everyone understands, you know, a fungible token in the cryptocurrency world would be considered a Bitcoin or Ethereum or something else. That’s ultimately fungible. I mean, we could go into the definition, but I think people should be familiar. What makes NFTs unique is they’re non fungible, which makes every NFT unique in its own right. NFTs at the highest level are digital assets because they’re non fungible each one is unique in its own, right, and has its own properties. When you look at kind of the early iterations of NFTs, crypto kits was probably the most popular in 2017, 2018 then came along CryptoPunks which from, you know, an art standpoint or kind of known as cultural, historical, you know, time pieces for digital art.

And since then, you’ve seen the popularity grow through Bored Apes and some, you know, other big projects. The thing that drew me back into NFTs was really NBA Top Shot. I’m a sports fanatic. I come from the sports world, and I saw that Top Shot got into the space by partnering up with the NBA, getting IP and licensing rights from the NBA players association, and basically digitizing these moments which are really video clips and selling them out as almost unique collectibles. When I first started buying them, everyone told me I was crazy. I told them, well, people have been buying sports cards for 50 years. So, what’s the difference? And, you know, a year later, Top Shot has definitely had its ups and downs, but Dapper Labs, the company behind Top Shot just released their NFL all products.

And it’s just a thriving business right now. And that really kind of opened my eyes to what the space could be. The next product that I got into was ZED Run. If you’re familiar, it’s the horse racing game. And again, my background’s really in sports and gaming. And when I saw the gamification properties that came out of ZED Run, and the ability to own these kinds of unique digital assets. These unique digital assets were horses. They had their own, you know, rare traits and attributes that dictated their ability to race and compete against other horses. You basically could take your horses and you could race them. You could hold them, you could breed them, but it created this beautiful ecosystem. And, you know, people started doing things they were never able to do before, like take these NFTs, these collectibles and put them up against other people’s horses and race. And there were purses for each race. So it was almost like a, you know, gambling meets, you know, video games with crypto tall tied into it. And that was just so fascinating to me. And then the next iteration and mind you, this has all happened within the last year. So, if you think about how many iterations and how quickly the space is evolving. It’s become really fascinating.

Julian Klymochko: Right.

Mat Sposta: But this is kind of leading me to where I am today, which is kind of the digital art revolution that you’re seeing right now. And, you know, what really caught my eye, with the Bored Apes. I got very involved in sort of PFPs, I’d say March or April time, which is very early considering the type of move the space has had, but what really attracted me to this is not necessarily the art, but the communities that were formed around the art was the economies that were formed around this, the ability to trade, the ability to buy and sell, the ability for there to be zero friction when transacting. The 24/7 nature of these markets, and also the behavioral stuff that was generated from these markets. And it’s like nothing I’ve ever seen before, you know, because I come from a market’s background. So, you know, take the equity markets and the bond markets and then enhancing them. The crypto markets became kind of the influence the community had over those crypto markets. And then adding one additional layer here to which is the art or the utility that’s coming from NFTs, which I really think was the one thing for me that I saw the future for this as being something really unique and something that we’ve never experienced before, and I became fully immersed in it and I’ve never looked back.

Michael Kesslering: NFTs, it seems really go hand in hand with something called the metaverse and I’ve heard plenty of varying definitions of what the metaverse actually is, in your opinion. What’s your definition of the metaverse?

Mat Sposta: Yeah, you know, it’s funny there. I think the perception of the metaverse right now is, what is it? Where is it? How could I find myself in a metaverse and what does it mean to be there? I have a really loose definition of the metaverse. Like I consider what we’re doing right here, almost like being in the metaverse, right. It’s a digital or virtual environment where we’re interacting. So, it’s not this intimidating. It has to be like, you know, decent central land where you’re in this closed ecosystem environment. But if you even look at what’s happened with Clubhouse and Twitter spaces and forget it even going much bigger and broader to something everyone’s familiar with but Zoom calls. I mean, you know, it’s fascinating, but we’ve made this transition.

And COVID really helped accelerate it. But people have moved from in person meetings to Zoom calls. People have moved to seeing their family in person to using FaceTime. And as scary as the sounds, I see a world in, you know, five to ten years where we have our VR headsets on, or our kids have their VR headsets on. They’re sitting on the couch; they do their classes all morning. Then they play video games with their friends and then they, you know, interact with their friends and watch sports and watch TV all within a one foot by one foot radius. And it scares the crap out of me because it’s like, you know, we’re moving towards this world where we could get everything from an experiential standpoint that we need in our lives, right at the tip of our fingers. And it’s a scary thought because obviously we grew up in a time where we’d run down the street and play sports with our friends and, you know, people would rather stay in and play Fortnite with their friends, with their headsets on, but we’re seeing this shift happen.

And the shift that you’re seeing is a shift into meta behavior and meta interactions. And it’s already been happening for many years right now. Now people have, you know, coined the term metaverse and you have, you know, folks like mark Zuckerberg coming out and basically justifying this transition. So, I think the validations occurring from like, you know, all the big players in the space and the transitions actually happening. I think the bridge between the NFT space and the metaverse is a different conversation though.

Julian Klymochko: Yeah, I believe that NFTs will play a major part in the so-called metaverse, which will only become more and more popular in the future. So, I wanted to talk about your involvement as the founder of Chibi La and just to give some context and disclosure. So, I’m a fan of the project. I do own the Chibi Abe and then recently mint the Chibi Galaxy, which is always fun. So, its super fun, collecting the NFTs and I’m sure developing it was a blast for you. Do you want to talk about the idea behind its founding and how it came together?

Mat Sposta: Yeah, sure. So, as I mentioned, I was just a collector and a really passionate collector, and my partner and I actually stumbled across the art. There was an early collection of Chibi Genesis that was put out by, you know, the original artist as Fabs. Fabs is now our partner, my third partner and I started buying up the collection and we loved the art. We loved kind of the 3d nature of the art. And I’ll mention some of the reasons why in a minute, but we reached out to the founder, and we said, hey, you know, what does your roadmap look like? What are your plans for the future? And he’s just like, I have to be honest with you guys, like I’m having trouble building a community, I’m having trouble marketing the project.

And we’re like, you have some of the best art in the space. And he’s like, do you guys think you could help me with that? And this was around July time. The space was really kind of growing and coming together. And, you know, we had an idea, obviously just given the popularity of the Apes. We said, hey, you know, let’s look to roll out a new collection of Chibi Apes. And we created collection size and we created some of the art and the traits, and we set a date and we said, hey, let’s take this out to market in September and see what we could do. So, you know, we basically went out to all of our network, got in Twitter spaces, we got on YouTube, and we just started peeling back the layers and unlocking our network in different ways and really marketing this just because the world kind of needed to see this artwork. And you know, at that point that was kind of early August. We had about 250 people in our discord. Five weeks later, we go to mint in the first week of September, we built the discord up to 15,000 people. We sold out in a matter of 30 seconds.

Julian Klymochko: Wow.

Mat Sposta: And we were kind of like the most talked about. The most exciting drop that had happened several weeks. And at that moment in time, I said, holy crap. I said, I am no longer, you know, just a collector and not even just a founder, but I now feel as if I am a fiduciary to our collectors because our collectors are almost like our investors. And the analogy I always use is, this is like crowdsourced way of raising capital. It’s almost like raising an IPO. The only difference is your shareholders are now these collectors that could literally DM you in discord at any given moment throughout the day.

And you know how scary that could be at that point I took on the responsibility of, hey, you know, we’re founders of this project. We have a really passionate community and audience built around this and you know, this is one of the most exciting things I’ve ever been a part of. You know, I’ve built communities in my career, and I’ve never built such a passionate community in such a short amount of time. And you know, those are the things that got me really excited about the NFT space kind of being beyond being a collector. And just to go back to something that I had mentioned. The thing that drew me to this art in the first place, the 3d nature of it. Our artist Fabs is so forward thinking that, you know, even his early drops, he built a 3d AR viewer.

So, you could take your Chibi and you could view the 3d files. You could download the 3d files and you could see them in augmented reality. And the characters are also rigged, which is a technical term, meaning they could be used for 3d motion graphics and animation, and then also for metaverse applications. So, we like to say that our characters or metaverse ready but a lot of the metaverses aren’t ready for us. So, you know, we like to think of ourselves as the bridge between NFTs and the metaverses that we currently see today. And the exciting thing for us is for our collectors to be able to take their NFTs and their avatars, and basically port them into whatever metaverse they’re going into because at the end of the day, NFTs are really just a flex, right? Everyone wants to flex their ownership of their NFT, whether it’s unique, whether it’s valuable, whether it’s a CryptoPunks and you don’t own a CryptoPunks because, you know, a couple hundred thousand dollars and that’s what this is all about.

So, you know, for us, we see a huge play into the metaverse. We see a huge play into AR and AR integration. We just did a really fun partnership with Jadu hologram who’s behind the jet packs and the hover boards. They just launched their hover boards. They chose five projects who basically be their partners. These are all 3d projects and they’ve integrated all of our characters into their platform. And then they offered our holders the ability to get onto their presale. And it’s just been such a huge success, but again, you know, seeing Chibis in all these different environments to me is kind of what really excites me about the future of this space. And then kind of beyond that, you know, I look at this space and I think a lot of people are skeptical about the current in art and the current utility and application for this art.

Julian Klymochko: Right.

Mat Sposta: My feeling is this, my feeling is that moment when we sold out the Chibi Apes, I said, you know, this is no longer an art project. This is a business. And I will put on my operator cap, and I will run this like a business because you know, for this business to have legs and to have one long term viability, we need to commercialize our IP.

Julian Klymochko: Right.

Mat Sposta: We need to find, you know, new ways to sell this IP and we need to find new ways to monetize, but ultimately who owns the IP, it’s the collectors. So, I’m really working for our collectors and our shareholders to really build this brand, sell this IP and monetize for everyone who’s in the ecosystem.

Julian Klymochko: Yeah. And I’m super stoked that you guys do, you know, grant the intellectual property to the token holders, the NFT holders, and not all projects do that. We have seen some controversy regarding the CryptoPunks lately just around the commercialization, right? So that’s always something that’s appreciated as a collector, but Mat, you mentioned a number of keys to success for having a collection, an NFT collection that can really take off. Number one is the art. Obviously it needs to be aesthetically pleasing. And number two is the community. You mentioned, you built that. And the third thing that it would be awesome to discuss further would just be, you know, what’s in store for their future? You mentioned now treating this like a business and working for the NFT holders. What can we expect the roadmap and what can we see for what’s in store for 2022?

Mat Sposta: Yeah. So, so another one of the key pillars, because you touched on two of them, art, and community. I think are two of the most important, I think the third one, which we’re starting to see become more apparent is the team behind it.

Julian Klymochko: Right.

Mat Sposta: And you know, I think there’s been a lot of issues with teams and founders that are anonymous and there have been some situations where you know, there have been scams. You know, from the very beginning, I’ve been very kind of vocal and in the public about, hey, we’re a group of [Inaudible 00:19:19] founders. I’ve been extremely accountable and transparent with our community base too. And I think they really like that. I think they also really appreciate that, you know, were not just some Devs that launched an art project, we’re actually, you know, real life entrepreneurs. So, I think the team is really meaningful and I’m not trying to toot my own horn here, but I’ve seen a lot of projects fail because they didn’t have the right team in place.

Julian Klymochko: Right.

Mat Sposta: But when I think the future success of our project and our business, ultimately as I mentioned, I think the ability to monetize our IP. I think we’ve developed a really passionate community. We have, you know, close to 60,000 people in our discord, close to 25,000 people on Twitter. People are really passionate about our art and our characters. They talk about how their kids love it. You know, I want to become a household brand and you know, it’s not going to happen overnight. I mean, you catch lightning in a bottle sometimes like the Bored Apes have. But you know, I’ve been talking to several brands, and this is kind of my background, you know, developing partnerships and things like that. I’ve been talking to several brands about becoming brand partners for us. And I think that creates a real opportunity to legitimize ourselves. I bring us to the mainstream and kind of bridge the gap with the average consumer. I have some really kind of unique ideas and thoughts around, you know, our IP holders and collectors could actually monetize, you know, one of the big ideas that I have is, you know, if a brand were to come along and say, hey, we’d love the Chibis. And we’d love to take this Chibi. And they pick one out and they say, hey, that’s the one that we want to use for our commercial or for our animated series or whatever.

It would kind of almost be unfair to those folks who aren’t a necessarily entrepreneurial and weren’t able to, you know, develop a relationship with the brand in their own way. I have ideas around creating certain things like staking pools or casting pools, where you contribute your Chibi into those pools. And if they get selected for any sort of commercialization, the entire pool would end up, you know, monetize as a result. So, this becomes a community exercise. You know, I have aspirations of taking this brand to levels, you know, and you may laugh, but levels seen by, you know, things like Pokémon and what Pokémon’s been able to do with, you know, their collectibles, with their animated series, with their physicals, things like that. And people may laugh, but you know, just imagine the ability for a company like Pokémon to rise to the level it did with it being owned ultimately and holy by the public.

It’s completely different. It aligns different incentives. And what’s unique about these communities in the NFT space is because the ownership is democratized. Ultimately it creates a lot more velocity when developing, you know, engagement and spreading the word. And, you know, if all of a sudden, we do release a children’s book around Chibi, you better believe that every single person in our community that owns a Chibi or a friend of a friend will hear about it because, you know, they’re ultimately connected to the IP. And that’s truly how you develop network effects. So, you know, I think going even back to the original question is, like why NFTs? And I spoke very highly about the community. I think the community is going to create ambassadors and investors like we’ve never seen before. And yeah, you’ve seen it maybe historically with things like The Green Bay Packers, where they sold, you know, their team for actually to their fans. But you don’t see it. You’ve seen it maybe a little bit in public markets with people showing up for the Apple event, but you don’t see people really coming out as passion as you do in the NFT community for some of these brands and projects that we have.

Julian Klymochko: And you mentioned something that is really notable in the NFT space and that is of network effects where you kind of create ambassadors for the brand just by them holding it because everyone’s incentivized to build that community and see the entire value of that collection grow just because it affects the value of their own investment or their own collection. So that is super interesting. And one thing that I wanted to touch on and as a project founder, I’m getting kind of bombarded with new NFT projects every single day. And it seems like the markets so saturated. I was wondering how do you guys stand out and differentiate your project from other NFT projects? And in addition to what you already mentioned, any other things that you’re doing, that’s unique that really helps you stand out in the marketplace and get collectors attention?

Mat Sposta: Yeah, I think some of the things that have become pretty standard amongst our collections, like the AR viewer and the 3d files and things like that is something that you haven’t seen before in the space. And you know, again, we rely heavily on our community to do certain things. Like we have contests where a community takes their 3d files and creates amazing videos and animations. And when you see that coming out of a community, you say, hey, who are these guys? What are they all about? And I think it’s one of those things when I talk about aligning incentives, you know, if you get people excited about some of the things that you’re doing, if you’re offering things that are you unique, you grab attention from a lot of folks within the community. You know, with that being said, I think that’s only the start of things.

That’s how you really grow the community. But ultimately, I think it’s really having the long-term vision that we have. And you see a couple teams out there with really strong roadmaps. I didn’t even put out a roadmap. I put out a one-year business plan and people are like, oh my God, that’s accountability. You know, they’re putting out a business plan to the end of 2022. But we discuss some of the things that we’re trying to do. We want to host a Chibi con for all of our collectors, which is a live event where they’ll all come out. You know, we’ll have tons of partners there, we’ll have, you know, a lot of really fun experiences. We’re looking to build a studio ultimately, which is really aligned around you know, our ability to leverage our 3d files and our IP to create content and media and things of that nature. There’s something fun that we’ve been discussing around building Chibi experience. You know, all of these things I think are, you know, may not sound so innovative in the grand scheme of things, but when you tie in the NFTs, when you tie in the technology that powers them and tie in the communities that are associated with them. It really kind of creates a unique experience for everyone because you have this democratized ownership, you have these new ambassadors you know, you have leaders and operators running the company, and it’s creating a new form of startup that we’ve never actually seen before.

Michael Kesslering: And because you have the background on Wall Street, when you’re looking at, I guess when you’re collecting with other projects and things like that, what sort of metrics are you looking at when you’re looking at valuation of a project?

Mat Sposta: Oh, it’s really tough because I throw all kind of traditional business metrics out the window when I’m looking at some of these things. I mean, I think a lot of people could relate. There’s kind of the short-term trading versus kind of long term you know, buy and hold. You know, the data that exists in the space right now is somewhat non-existent. You can only go based stuff, some of like historical sales and things of that nature. I think it’s important to kind of track behavior. And when I say behavior, I’m talking more about like, you know, buying and selling trends based on historical projects that we’ve seen. I look at this less from the trading lens as I would, you know, as I would, as an investor, if I was, you know, investing in startups, right.

So, I look at this as more of, you know, what’s the team? What’s the IP? Is it differentiated? Does it long term viability? Defensible? Things like that? So, I really look at each of these projects almost as their own kind of like mini startup companies, businesses, more so than I would a public company. Now here’s where it lies the problem. And I use the analogy for startup companies. This is like if a startup company that had a concept or idea and memo went out and raised, you know, a couple million bucks. And then all of a sudden, the investors had daily liquidity and the ability to buy and sell you know, the underlying equity of that project. It creates this really kind of scary precedent and the perception becomes reality sometimes. So, you know, I hate to say, but the valuation for a lot of these projects is usually viewed upon by the floor.

And those who don’t know, floor just happens to be the lowest price. Now, the lowest price to me is typically representative of the people who are looking to sell and get out the project. And depending on how many people are trying to sell and get out of the project, you could have them undercutting, you know, project to a really low point at sometimes. Now what typically happens is if there’s value investors, someone will come in and sweep the floor, as they say, or they’ll buy some of the lowest listed ones. And the floor jumps all the way up. This creates a really interesting dynamic, and this is not typical because you don’t have, you know, market makers in this market. So, it’s a little bit different. But again, this is such a nascent space marketplace right now that it’s going to become more efficient over time. And you’re probably going to see market makers come into the market at some point. So, it’s all happening. It’s just not there yet.

Julian Klymochko: Yeah. Speaking of market makers, I do know some that make markets on OpenSea, and the Bid-Ask Spread are probably like 30% if not higher. The inefficiencies in the NFT market remind me of not like I was around for equities 40 or 50 years ago, but I’m sure it was very similar. Now, looking out into the NFT universe, not including Chibi Labs, what would be one of your favorite projects right now and why as a collector?

Mat Sposta: Oh man. As a collector, the project that’s really caught my eye is Doodles. And, you know, when I look across the ecosystem and I told you what I kind of look for in a project. The founding team from Doodles is great. They’ve been around the space for a really long time, they’re operators. They come from the Dapper Labs world. They were around for the first launch of NFTs, because they launched CryptoKitties. The art itself, I look at the art and some of the animation and creative assets that they develop. It touches me, like I see it and I could see it being kind of like a cultural movement. I just see the whole aesthetic being something that could be really enticing to non NFT holders in the future.

So that’s one that I’ve really kind of taken a liking to lately. And the more I dig in, the more I really like the community and I love some of the things they’ve done, the experiences that they’ve created, the one they just did at Art Basel was really fascinating. So, I think they’re doing all the right things and they’ve been around for, I think maybe only like seven to eight weeks at this point. And you know, they’ve become, I think in my eyes and also the eyes of the community, really the blue chip.

Julian Klymochko: Hmm, interesting. Thank you for mentioning Doodles. Now, say one of our listeners is intrigued by NFTs. Haven’t traded in any yet but are thinking about it. What are perhaps some risks and challenges when allocating to NFTs?

Mat Sposta: Yeah, so I’d say the biggest risk is, you know, just like any kind of early marketplaces like this, there are definitely scammers out there. And there are people who are looking to kind of hack your wallets and things of that nature. It’s happened by clicking on bad links and discord or Twitter or other places. So, I’d say that’s probably the biggest issue and the biggest concern right now, if you’re just getting into the space. It’s just like be vigilant, learn what you need to learn in terms of securing yourself and protecting yourself. I’d say kind of the biggest pain point in the industry right now from an adoption standpoint is the friction that exists when trying to actually buy an NFT. It’s a little bit of a complicated process, like just walk through it at a high level, but you have to have basically you’re on ramp, which is a place where you could, you know, bring bank money from. Like that would be like a Coinbase or a Gemini or marketplace like that to actually buy your Ethereum because you need Ethereum to buy NFTs then you’re going to need to create your meta mask wallet, which is something that could be scary.

You’re basically downloading an extension that attaches to your browser. And then you have to send the Ethereum, from your exchange to your meta mask wallet, which is always a scary proposition, depending on how much money you’re sending. And then just kind of understanding the nuances of it. So, like the meta mask is your wallet. It’s where your NFTs and your crypto is actually held. OpenSea is the marketplace right now where you trade them, buy, and sell. OpenSea shows your profile, and it actually displays the contents of your meta mask. So, you know, just kind of getting the lingo down and really understanding, you know, how all these different parts operate and communicate with each other, I think is really important. But once you’re on the OpenSea marketplace, it becomes, I think, really easy to navigate and to understand how to buy and sell things. The last thing I’ll mention, which is the biggest surprise once people get through all those steps is when they go to buy something, and they see the gas associated with buying something.

Julian Klymochko: Yeah.

Mat Sposta: I think one of the biggest challenges, because I’ve gotten people over that point that they’re like, I’m not paying $150 in gas. I don’t even understand that. So, from people listening. Ethereum gas is what powers transactions, what makes the Ethereum blockchain secure? Is there are people behind the scenes working to confirm those transactions and you’re paying them a fee to do so. Gas prices are now exorbitant because the price of Ethereum has gotten so expensive. So, if you think about it, it’s a toll you have to pay and it’s what keeps your transaction secure

Michael Kesslering: And along a similar thread, what’s one of the biggest misconceptions of the NFT industry that you hear regularly?

Mat Sposta: One of the biggest misconceptions is that I think people think there are a lot of scammers out there, a lot of money grabbers, but like, you know, you look at any new market and any new industry, and there’s always going to be bad actors that come in and look for opportunities to make money. The people that I’ve met so far in the space, there’s a lot of really talented people on the art side. There’s a lot of really talented people on the technology side. But I think the sophistication, ultimately from a business standpoint for the project founders and operators is ultimately not there yet and it’s coming. So, I think there are a lot of smart people coming closer to the space and that’s definitely happening over time.

Julian Klymochko: Yeah. Well, it’s really cool about the NFT market is I believe we’re still in the first innings, really, really early stages. I think it’s probably analogous to crypto say in 2013. If you think about how many people actually own an NFT globally. It’s probably in the, you know, tens of thousands, probably not even more than a hundred thousand yet. So, a lot of growth potential Mat. I was wondering, what do you think the NFT market is going to look like in 10 years?

Mat Sposta: Yeah, so, the current NFT market as we know it right now and I think the layer of art that we see right now is I think just kind of an early first use case to kind of prove the viability of this model. The underlying technology that powers NFTs is going to be something that disrupts many different industries. And I could give you some of the use cases. But I think in the communities that are developed, I think in democratized ownership, and you know, the way that people approach commerce now going forward is going to be changed forever because, you know, it’s creating these amazing marketplaces for people to interact, engage, and exchange goods. I think, you know, NFTs that we see as art right now are probably not the future.

I think, you know, what you’re starting to see, whether it’s kind of the utility that I’ve talked about, some of the access that you’re seeing, I think [Inaudible 00:36:21] has done a really great job of kind of dispelling that myth, that it’s not just about the art, but the utility of actually owning it is giving you access to certain things, whether it’s to Gary, whether it’s the [Inaudible 00:36:32] things like that. And I think that’s ultimately the future. I think they’re going to be really fascinating use cases that come out of this, especially in traditional markets, whether it’s titles or deeds that are then, you know, basically built along the blockchain and people have access to that. And it creates the ability to kind of, you know, buy and sell homes without going through the whole legal process. People have talked about insurance. People have talked about, you know, real estate, even the ability to buy and sell real estate by itself could be really another interesting use case. But I think about, you know, the way this is impacted art and art in the kind of digital form, I think it’s going to have the same meaningful impact on music. I think the ability for artists to get recognized in this market, this new NFT market, and for them to potentially sell their art and make money and make royalties each time it’s sold is such a fascinating concept. When you think about how music grow royalties have been handled for, you know, however many years, the ability for you to put whether it’s an original song or audio file that then gets used as a jingle for commercial or used for a video or something like that, it’s only right that the original artist gets paid their royalties, and then you’re no longer dealing with the licensing issues that sometimes people get cease and assist for. So, it’s just making our markets more efficient. I think the technology’s going to unlock a lot of different things that we’ve never seen before. And I’m really excited for the future of it.

Julian Klymochko: Yeah, I agree with your viewpoints there, with respect to the liquidity that NFTs and tokens can bring to what used to be illiquid assets. For example, if you tried buying and selling music royalties, it’s a huge pain, but if these were structured as NFTs, bringing more liquidity, it would just increase efficiencies way more and eliminate so much paperwork and things of that nature. So super excited for the future of NFTs. Matt, thanks for coming on the show, explaining it to us and our audience. And also, what’s in store with Chibi Labs. It’s super exciting stuff. So, wish you the best of luck and looking forward to seeing the 2022 roadmap.

Mat Sposta: Thank you so much. Thank you for having me. I appreciate your sport of Chibi, obviously, and you know, hoping your audience and your listeners come out and maybe make it their first NFT.

Julian Klymochko: Okay. Awesome. Well, thanks so much. Take care. Bye everybody.

Mat Sposta: Thank you guys.

Thanks for tuning in to the Absolute Return Podcast. This episode was brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at The views expressed in this podcast to the personal views of the participants and do not reflect the views of Accelerate. No aspect of this podcast constitutes investment legal or tax advice. Opinions expressed in this podcast should not be viewed as a recommendation or solicitation of an offer to buy or sell any securities or investment strategies. The information and opinions in this podcast are based on current market conditions and may fluctuate and change in the future. No representation or warranty expressed or implied is made on behalf of Accelerate as to the accuracy or completeness of the information contained in this podcast. Accelerate does not accept any liability for any direct indirect or consequential loss or damage suffered by any person as a result relying on all or any part of this podcast and any liability is expressly disclaimed.


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